CHONGQING MACHINERY & ELECTRIC CO., LTD.
(a joint stock limited company incorporated in the People’s Republic of China with limited liability) Stock Code: 02722 ANNUAL REPORT 2018
2018 ANNUAL REPORT CONTENTS
Corporate Information 2
Financial Highlights 4
Group Structure 5
Results Highlights 6
Chairman’s Statement 7
Management’s Discussion and Analysis 20
Directors, Supervisors and Senior Management 39
Report of the Board of Directors 54
Report of the Supervisory Committee 80
Corporate Governance Report 83
Risk and Internal Control and Governance Report 102
Environmental, Social and Governance Report 110
Independent Auditor’s Report 134
Consolidated Balance Sheet 149
Balance Sheet of the Company 153
Consolidated Income Statement 156
Income Statement of the Company 159
Consolidated Statement of Changes in Equity 161
Statement of Changes in Equity of the Company 167
Consolidated Statement of Cash Flows 171
Cash Flows Statement of the Company 174
Notes to the Consolidated Financial Statements 176
Supplementary Information to Consolidated Financial Statements 475 Members of the Nomination Committee Mr. Wang Yuxiang (Chairman) Mr. Ren Xiaochang Mr. Jin Jingyu Mr. Liu Wei Members of the Strategic Committee Mr. Wang Yuxiang (Chairman) Ms. Chen Ping Mr. Yang Quan Mr. Huang Yong Mr. Ren Xiaochang Mr. Jin Jingyu Mr. Liu Wei COMMITTEES UNDER BOARD COMMITTEES OF DIRECTORS Audit and Risk ManagementMembers of the Committee (Chairman) Mr. Lo Wah Wai Mr. Jin Jingyu Mr. Liu Wei Members of the Remuneration Committee Mr. Ren Xiaochang (Chairman) Mr. Lo Wah Wai Mr. Jin Jingyu Mr. Huang Yong SUPERVISORS Mr. Sun Wenguang (Chairman) Ms. Wu Yi Mr. Huang Hui Mr. Zhang Mingzhi Mr. Xia Hua Mr. Lo Wah Wai Mr. Ren Xiaochang Mr. Jin Jingyu Mr. Liu Wei Independent Non-executive Directors Non-executive Directors Mr. Huang Yong Mr. Dou Bo Mr. Wang Pengcheng Executive Directors (Chairman) Mr. Wang Yuxiang Ms. Chen Ping Mr. Yang Quan Corporate Information Corporate DIRECTORS
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 2 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 3
FINANCIAL YEAR END 31 December WEBSITE OF THE COMPANY www.chinacqme.com PRINCIPAL BANKER China Merchants Bank Chongqing Shangqingsi Sub-branch Building International Zhong-an Floor, 1st SHARE INFORMATION Listing Place The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) Stock Code 02722 AUDITORS Public Accountants ShineWing Certified Partnership) (Special General A, Fuhua Mansion, 9th Floor, Block Beidajie, No. 8 Chaoyangmen Beijing, PRC Dongcheng District, LEGAL ADVISOR ) Chiu & Co. (趙凱珊律師行 (As to Hong Kong Laws) Law Firm Beijing ZhongLun (Chongqing) (As to Chinese Law) PRINCIPAL PLACE OF BUSINESS IN HONG KONG Room 1204-06, 12th Floor, The Chinese Bank Building, 61 Des Voeux Road Central, Central, Hong Kong Yuzhong Road, Third Zhongshan No.162 District, Chongqing City, the PRC (Continued) Corporate Information Corporate Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong HONG KONG SHARE REGISTRAR No. 60 Middle Section of Huangshan Avenue, New North Zone, Chongqing City, the PRC REGISTERED ADDRESS Mr. Lo Wah Wai 33rd Floor, Shui On Centre, No. 6-8 Harbour Road, Wanchai, Hong Kong Tel.: 852-2802 2191 ALTERNATE AUTHORIZED ALTERNATE AUTHORIZED REPRESENTATIVE AND CONTACT INFORMATION Ms. Chiu Hoi Shan Chinese Room 1204-06, 12th Floor, The Bank Building, 61 Des Voeux Road Central, Central, Hong Kong Tel.: 852-2155 4820 Mr. Yang Quan No. 60 Middle Section of Huangshan Avenue, New North Zone, Chongqing City, the PRC Postal code: 401123 Tel.: (86) 023-6307 5687 AUTHORIZED REPRESENTATIVES AND CONTACT INFORMATION QUALIFIED ACCOUNTANT QUALIFIED (Certified Public Chun Ying, Francis Mr. Kam Accountant) COMPANY SECRETARY (Practising Solicitor) Ms. Chiu Hoi Shan Mr. Wang Yuxiang LEGAL REPRESENTATIVE
0.12 2018 51,111 (60,500) 147,386 555,672 495,172 420,762 444,061 5,284,318 6,808,900 5,747,618 6,736,277 3,793,789 9,541,407 2,311,745 7,229,662 10,530,066
(note)
(Restated)
0.14 0.11 0.12 0.09 2014 2015 2016 2017 51,830 48,951 61,838 49,374 (66,906) (57,311) (27,182) (102,453) 169,493 92,116 128,963 110,539 630,679 523,896 529,854 468,472 563,773 466,585 502,672 366,019 406,491 448,395 580,596 400,263 511,943 417,634 440,834 316,645 9,485,570 9,010,422 9,255,032 9,292,602 5,844,478 6,106,407 6,577,614 6,777,724 4,852,425 5,627,580 6,137,920 5,745,841 5,420,311 6,869,058 6,135,937 7,083,411 8,782,188 9,139,491 9,429,046 10,544,832 3,361,877 2,270,433 3,293,109 3,461,421 8,214,302 7,898,013 9,431,029 9,207,262 1,963,333 1,343,211 2,272,819 2,029,276 6,250,969 6,554,802 7,158,210 7,177,987
(RMB) expressed in accordance with the China Accounting Standards for Business Enterprises issued expressed in accordance with the China Accounting Standards for Business by the Ministry of Finance of the PRC. – Basic –
the Company owners of the Company dividends Revenue and profit Revenue
(RMB’000) Earnings per share attributable to Profit before income tax Profit before income Profit for the year Assets and liabilities Non-current assets Non-controlling interests Income tax expense Attributable to Owners of the Company Current liabilities Current assets Non-controlling interests Net current assets Dividends – Proposed final Total assets less current liabilities Non-current liabilities Net assets Equity attributable to owners of Note: Financial Highlights Financial
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 4 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 5
49% Water Gen Power S.r.l
70% Chongqing Machinery and Electronics Holding (Group) Finance Co., Ltd.
100% Chongqing Shengpu Materials Co., Ltd.
100% Chongqing Machinery & Electronic Equipment Technology Research Academy Co., Ltd. Industrial Service 7.26% GRIPM Advanced Materials Co.,Ltd.
70% Exedy Beijing Co., Ltd. (愛思帝（北京）汽車配件有限公司) 27% Exedy Chongqing Driving System Co., Ltd. 56 Subsidiaries of Chongqing Machinery & Electric Co., Ltd in Total 20 second-tier subsidiaries, including 9 wholly-owned subsidiaries, 3 subsidiaries with controlling interest, 8 subsidiaries with non-controlling interest 40% Exedy (Guangzhou) Driving System Co., Ltd. 29 third-tier subsidiaries, including 14 wholly-owned subsidiaries, 7 subsidiaries with controlling interest, 8 subsidiaries with non-controlling interest 6 fourth-tier subsidiaries, including 5 wholly-owned subsidiaries, 1 subsidiary with controlling interest 1 fifth-tier subsidiary, including 1 wholly-owned subsidiary 2% Shandong Xinhai Financing and Guarantee Co., Ltd.
44% Chongqing Hongyan Fangda Automobile Suspension Co., Ltd.94.73% Chengdu Hongyan Fangda Automobile Suspension Co., Ltd.
86.63% Jinan Fangda Zhongtan Automobile Suspension Co., Ltd.
100%45% Chongqing PTG Investment Holroyd Development Precision Screw Company Manufacturing Ltd. (PTG 香港Co.,) Ltd. 34% Knorr-Bremse Systems for Commercial Vehicles 100% Precision Technologies Group (US) Limited 100% Precision Technologies Group INC. 100% Holroyd Precision Rotors INC. 100% Chongqing CAFF Automotive Braking & Steering System Co., Ltd.
( ) 100% Precision Technologies Group (PTG) Limited 100% PTG Deutschland GmbH PTG德國 （精密技術集團） 100% Milnrow Investments米羅威投資 Ltd. ()
100% PTG Heavy Industries Ltd. (PTG重工)
100% Precision Components Ltd. (精密零部件)
100% Holroyd Precision Ltd. (霍洛伊德) High-End Smart Equipment
35% Chongqing Shenjian Automotive Drive Part Co., Ltd.
40% Chongqing Sino-Germany Samart Factory Solutions Co., Ltd.
55% Chongqing Holroyd Precision Screw Manufacturing Co., Ltd.
Chongqing Machinery & Electric Co., Ltd. Chongqing Machinery 100% Chongqing Machine Tools (Group) Co., Ltd. 100% Chongqing Shengong Machinery Manufacture Co., Ltd.
100% Chongqing Yinhe Forging & Founding Co., Ltd.
100% Chongqing No. 2 Machine Tools Factory Co., Ltd.
100% Chongqing Tool Factory Co., Ltd. 51% Fu Baotian Cotton Picking Services Co.,Ltd. 100% Chongqing Machinery & Electronic Intelligent Manufacturing Co., Ltd. 66.26% Chongqing Mengxun Electronic & Technology Co., Ltd.
41% Chongqing Jiangbei Machinery Co., Ltd.
37.8% Chongqing ABB Power Transformer Co., Ltd.
50% Chongqing Cummins Engine Co., Ltd. 58.4% Shenzhen Chongfa Cummins Engine Co., Ltd.
64.21% Chongqing Gas Compressor Factory Co., Ltd. (35.79% Agricultural Industry Development Fund) 20% Chongqing Yongtong Gas Co., Ltd.
100% Chongqing Pump Industry Co., Ltd
100% Chongqing Water Turbine Works Co., Ltd.
Clean Energy Equipment 74% Chongqing Pigeon Electric Wires & Cables 100%50% ChongqingChongqing PigeonPigeon ElectricElectric MaterialsPorcelain Co., Co., Ltd. Ltd. Co., Ltd
42% Chongqing Chongtong Wide Wisdom Air Conditioning Equipment Co., Ltd. 100% Gansu Chongtong Chengfei New Material Co., Ltd. 40% Chongqing Chongtong Turbine Technology Co., Ltd. 100% Chongqing General Industry (Group) Co., Ltd. 100% Chongtong Chengfei Wind Power Equipment Jiangsu Co., Ltd. 91.18% Jilin Chong Tong Chengfei New Material Co., Ltd.
Group Structure Group 100% Gansu Chongtong Chengfei New Material Co., Ltd. 100% Chongqing General Industry (Group) Tong Kang Water Affairs Co., Ltd. 100% Xilinhaote Chenfei Wind-Power Equipment Co., Ltd.
100% Chongqing Shunchang General Electric Equipment Co., Ltd. The revenue of the Group for the the for Group the of revenue The 2018 December 31 ended year approximately RMB5,284.3 to amounted of decrease a representing million, or million RMB4,008.3 approximately compared as 43.1% approximately million with approximately RMB9,262.6 for the same period of 2017. shareholders the to attributable Profit 31 ended year the the Company for of approximately was 2018 December an representing million, RMB444.1 RMB127.5 approximately of increase as 40.3% approximately or million approximately with compared period RMB316.6 million for the same of 2017. year Basic earnings per share for the amounted 2018 December 31 ended (2017: RMB0.12 approximately to approximately RMB0.09). “Board”) (the directors of board The of the Company proposed to declare a final dividend of RMB0.04 per share 31 ended year the for inclusive) (tax December 2018 (2017: RMB0.03 (tax inclusive)). Results highlights of Chongqing Machinery & Electric Co., Ltd. (the “Company” or “Chongqing or “Company” (the Ltd. Co., Electric & Machinery Chongqing of highlights Results the “Group”). and its subsidiaries (collectively Machinery & Electric”) Results Highlights Results
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 6 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 7 ) published by the Hong Kong Stock Exchange in December 《有關接受在香港上市的內地註冊成立公司採用內地的會計及審計準則以及聘用
Meanwhile, the Group adopted the “Accounting Standards for Business Enterprises No. No. Enterprises Business for Standards “Accounting the adopted Group the Meanwhile, No. 22 – Recognition and 14 – Revenue”, “Accounting Standards for Business Enterprises No.Enterprises for Business Standards “Accounting Instruments”, of Financial Measurement 2010, the Board of the Company decided on 29 March 2018 that the Group will prepare the prepare will Group the that 2018 March 29 on decided Company the of Board the 2010, China Accounting Standards interim and annual financial statements in accordance with the relevant the and PRC the of Finance of Ministry the by issued Enterprises Business for requirements since 2018. CHANGE IN ACCOUNTING POLICIES and Accounting Mainland of Acceptance on Conclusions “Consultation the to According Companies Listed Auditing Standards and Mainland Audit Firms for Mainland Incorporated ( Kong” Hong in Dear Shareholders, 內地會計師事務所的諮詢總結》 Chairman’s Statement Chairman’s ) 《關於修訂印發一般企業財務報表格式的通知》 (Continued) )”, adopted “one enterprise and one policy”, focused on operational operational on focused policy”, one and enterprise “one adopted 一抓三保三降一增強)”, (Cai Kuai [2018] No.15) amended by the Ministry of Finance in 2017 and will prepare its of Finance in 2017 and will No.15) amended by the Ministry (Cai Kuai [2018] to note IV, above standards. Please refer statements of 2018 based on the annual financial financial statements for details. 35 to the consolidated for the the annual results of the Group Board, I am pleased to announce On behalf of the results annual Group’s The “Year”). the or “Period” (the 2018 December 31 ended year Accountants Public Certified ShineWing auditor, Company’s the by audited been have is my pleasure to present the annual results of the Group (Special General Partnership). It strategy and outlook to shareholders. as well as its sustainable development Looking back at 2018, the global economy has gradually slowed down due to various various to due down slowed gradually has economy global the 2018, at back Looking protectionism, the continued tightening of US monetary factors such as the rise of trade unilaterally States United the particular, In risks. geopolitical in rise the and policy, in the second half of 2018; economic slowdown is shown provoked the Sino-US trade war and Japan; the political risks of Brexit were unknown; in the economies of the euro zone of emerging economies have caused currency depreciation, the divided economic recovery economic in decline a rate, exchange fluctuations and inflation rising turmoil, market weakening of the global economic recovery. The Chinese growth in many countries and a The results. practical achieved and adjustments structural to adhered has government and the economy transformation and upgrading of corporate structure have accelerated, the fundamental reforms, is turning to the process of high-quality development. Regarding and gap-filling have the results of de-capacity, de-stocking, de-leveraging, cost reduction stabilized. The annual GDP gradually emerged, and the industrial economy has gradually taking 2018, In trillion. RMB90 exceeded output economic total the and 6.6%, at remained by the principles of “highthe new “321” development strategy as the guideline, being guided the Group fully starting point innovation, high efficiency reform, high quality development”, major changes”, highlighted implemented the “1331” work measures, with a focus on “three and one enhancement the main work line of “one focus, three guarantees, three reductions ( upgrading, industrial promoted control, and management risk management, fine quality, markets, enhanced promoted innovation, vigorously expanded domestic and international The Group continued to business core competitiveness and developed new kinetic energy. its overall business achieved maintain its leading position in innovation in the industry and its expected goals. RESULTS REVIEW 23 – Transfer of Financial Assets”, “Accounting Standards for Business Enterprises No. 24 – Enterprises No. for Business Standards Assets”, “Accounting of Financial 23 – Transfer Presentation Business Enterprises No. 37 – “Accounting Standards for Hedge Accounting”, the Format “Notice on Revising and Issuing Financial Instrument” and the and Reporting of ( of General Enterprises” of Financial Statements Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 8
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 9 (Continued) Chairman’s Statement Chairman’s In 2018, countries around the world focused on environmental protection, introduced plans introduced protection, environmental on focused world the around countries 2018, In new in investment increased measures, development and development energy new for related technologies, which energy, and vigorously promoted research and development of The global wind power and drive the rapid development of the global new energy industry. and power generation have hydropower demand has grown rapidly, the energy structure significantly, which has led risen rapidly, and the proportion of clean energy has increased to the development of the Group’s clean energy equipment sector. Clean energy equipment (hydroelectric generation equipment, electrical wires, wires, electrical equipment, generation (hydroelectric equipment energy Clean industrial blowers, industry blades, power wind materials, and cables electrical pumps, gas compressors etc.) BUSINESS REVIEW AND OUTLOOK BUSINESS REVIEW AND Earnings per share for the Period were approximately RMB0.12 (2017: approximately approximately (2017: RMB0.12 approximately were Period the for share per Earnings December 2018 amounted to approximately RMB16,277.7 RMB0.09). Total assets as at 31 liabilities total while million), RMB16,290.7 approximately 2017: December (31 million approximately 2017: December (31 million RMB9,048.0 approximately to amounted per share was approximately RMB1.96 (31 December RMB9,112.7 million); and net asset 2017: approximately RMB1.95). During the Period, the Group’s administrative expenses accounted for approximately 9.7% approximately for expenses accounted administrative Group’s the Period, During the accounted for approximately 5.6%. The administrativeof the revenue while selling expenses in 15.0% approximately for year last than lower was expenses selling and expenses 31 at As Period. the during position financial stable a maintained Group The general. approximately to amounted Group the of deposits bank and cash total 2018, December an increase of approximately 30.5% as compared to the RMB2,164.7 million, representing same period of last year. Total operating revenue of the Group as at 31 December 2018 was approximately approximately was 2018 December 31 at as Group the of revenue operating Total decrease of million), representing a (2017: approximately RMB9,292.6 RMB5,284.3 million profit was 43.1% over last year. Gross million or approximately approximately RMB4,008.3 representing million), RMB1,136 approximately (2017: million RMB1,245.8 approximately year. Profit or approximately 9.7% over last RMB109.8 million an increase of approximately RMB444.1 approximately to amounted Company the of shareholders the to attributable representing an increase of approximately RMB316.6 million), million (2017: approximately last year. or approximately 40.3% over RMB127.5 million (Continued) ) is available in the market. However, affected by factors such as the 多層夾緊式高壓容器) is available in the market. However, In 2018, the hydropower equipment business expanded into markets in Central and South in Central and into markets expanded equipment business the hydropower In 2018, rapid and the market orders achieved and South Asia in various modes, America, Africa intoentered also We Nepal. in packages contract EPC into entered successfully We growth. a contractual for Guilia and Vietnam, with general contracting contracts two self-operated the adjusted actively business materials and cable wire, The million. US$9.16 of value platform”, and “one-stop procurement created a “hydropower integration” marketing model, and market, supporting the of share market the increased area, sales the expanded to maintain pump business continued growth in orders. The industrial achieved two-digit rapid growth; operating income achieved in the steel market, and its its leading position new the and income, operating stable generated has business compressor gas the container” high-pressure clamping “multi-layer development and research independent ( power curtailment, grid connection of wind power, and decrease in national subsidy, wind sharply dropped has business blade power wind of income operating the factors, other resulting in the overall operating income of the clean energy compared with previous years, RMB3,499.5 million, a decrease of approximately equipment sector reaching approximately period of the previous year. 17.6% compared with the same a Cummins”), (“Chongqing Limited Company Engine Cummins Chongqing addition, In principally engaged in the production of high-horsepower joint venture of the Company, is actively increased its marketing in power equipment, diesel engine. Chongqing Cummins control. quality highlighted and ships, and machinery petroleum machinery, engineering rapid growth, and the sales of engines with more In 2018, the operating results achieved in position leading maintain to continued and high record a reached horsepower 500 than of the high-powered engine technology R&D center the market. The construction project new engine high-powered new the and phase, commissioning completion the entered test certification emission series QSK The planned. as 2019 in launched was project factory emission certificates; was passed in 2018, filling the gaps in QSK38 and QSK50 domestic national inland river, passed the VPI project met the first-stage emission standards of the growth good achieve to expected is business The production. mass entered and review the the to VIII.2(2) note in out set are Cummins Chongqing of results annual The 2019. in consolidated financial statements. Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 10
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 11 (Continued) Chairman’s Statement Chairman’s Looking forward to 2019, the Group will take advantage of the opportunities of industrial Looking forward to 2019, the Group will take advantage of the high-quality of development the accelerate to manufacturing smart and digitalization tools, smart agricultural development of smart gear machine tools, smart screw machine of smart technology and machinery and smart electronics, and promote the construction and displays manufacturing smart centers, data industrial centers, research applied experience centers. The sector is expected to achieve good growth. In 2018, the business of smart gear machine tools and smart screw machine tools was was tools machine screw smart and tools machine gear smart of business the 2018, In in the machinery industry and the automotive industry. driven by the recovery of demand by Driven increased. income operating the and upwardly stabilized been have Orders developed has business electronic smart the demand, market in increase rapid the achieving rapid storage equipment, supporting businesses and smart simultaneously with turnover overall recorded Group the of segment equipment smart high-end The growth. of decrease a representing year, whole the for million RMB1,599.2 approximately of to the exit of transmissionapproximately 3.3% from the same period of last year, mainly due business from the Group’s business during the Period. In 2018, a series of smart manufacturing policies and related measures were were measures related and policies manufacturing smart of series a 2018, In industrial and manufacturing smart of integration deep the promoted which introduced, rapid development of the intelligent level of manufacturing, informationization, realized the management technology, information equipment, key in improvements promoted and new a provided It solutions. system and internet industrial software, platform software, of the Group’s high-end smart equipment sector industrial opportunity for the development business. High-end smart equipment (smart gear machine tools, smart screw machine tools, tools, machine screw smart tools, machine gear (smart equipment smart High-end smart electronics, etc.) smart agricultural machinery, Looking forward to 2019, along with the promotion of the “One Belt, One Road” initiative Road” One Belt, “One the of promotion the with along 2019, to forward Looking monetary loose and policy fiscal active relatively the and government Chinese the of especially increasing, is markets overseas in demand the China, in implemented policy demand is in electricity is active and and South Asia, where investment in Southeast Asia the domestic grid construction. In terms of market is in the national strong; the domestic rail transit grids, construction of urban the construction of national power market, driven by support and further strengthening policy of high-speed rail, with the state and construction will segment the that expected is it energy, clean friendly environmentally in investment achieve better growth. 數控萬能磨齒機) of ); YDA3132CNC- 數控車齒機); for Precision CNC Machining of Complex Shaped Complex of Machining for Precision CNC (Continued) Pigeon Electric Wires & Cables Co., Ltd. (“Chongqing Pigeon”), a a Pigeon”), (“Chongqing Ltd. Co., Cables & Wires Electric Pigeon )” of Chongqing Machine Tools won won Tools Machine Chongqing of )” 複雜修形齒輪精密數控加工關鍵技術與裝備 YW723CNC all-purpose grinding machine (YW723CNC machine grinding all-purpose YW723CNC the Company, successfully established the “National Enterprise Technology Technology Enterprise “National the established successfully Company, the the Company, was awarded the “China Cement Industry Technology Standard Standard Technology Industry Cement “China the awarded was Company, the Innovation Contribution Award” by the China Cement Association; Innovation Contribution Award” Center”. Chongqing Water Turbine Works Co., Ltd. (“Chongqing Water Turbine”), a subsidiary Chongqing Water Turbine Works Co., Ltd. (“Chongqing Water of Chongqing General Industry (Group) Co., Ltd. (“Chongqing General”), a subsidiary Chongqing General Industry (Group) of Chongqing “Key Technology and Equipment “Key Technology and Equipment The subsidiary of the Company, ranked the “Top 100 Enterprises of 2018 in Chinese Chinese in 2018 of Enterprises 100 “Top the ranked Company, the of subsidiary Cable industry (2018年中國線纜行業100強企業)”; Chongqing Machine Tools (Group) Co., Ltd. (“Chongqing Machine Tools”), a a Tools”), Machine (“Chongqing Ltd. Co., (Group) Tools Machine Chongqing the “Best Ten Quality Products of 2017 (2017年度產 subsidiary of the Company, won (Y8030CNC tool machine gear Y8030CNC 品質量十佳)”; ) (YDA3132CNC-CR滾齒銑棱複合機床 milling edge machine tool CR gear hobbing and (CCMT2018春燕獎)”; won the “CCMT2018 Chunyan Award Gears( and Technology Progress Award; the second prize of National Science
• During this Period, the Group was granted the following awards: During this Period, the Group was • In 2018, the Group’s financial business remained stable with a turnover of approximately stable with a turnover of approximately financial business remained In 2018, the Group’s period last 94.6% over the same a significant decrease of approximately RMB183.4 million, low-margin trade business. to the Company’s initiative to terminate year, mainly due AWARDS Industrial services (finance, trade, etc.) Industrial services • • • Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 12
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 13 (Continued) Chairman’s Statement Chairman’s The Group has comprehensive human resource management system, incentive mechanism incentive system, management resource human comprehensive Group has The and leading technical and overseas talent cultivation mechanism, and possesses excellent horizon. elites, a high quality staff team and a management team with international The Group has highly efficient and standardized corporate governance structure and and structure governance corporate standardized and efficient highly has Group The and risk control mechanism institutional system, and develops good corporate governance that is efficiently run and managed. The Group possesses many state-level enterprises technical centers, operations and and operations centers, technical enterprises state-level many possesses Group The USA, famous brands in PRC, well-known trademarks in technology plants in the UK and patented many and Chongqing in brands famous Chongqing, in centers technical PRC, investment in research and development. technologies and keeps continuous Two core businesses of the Group accord with national industrial policies. A number of of number A policies. industrial national with accord Group the of businesses core Two and segments market in advantages competitive obvious have Group the of products high-end, of fields the develops proactively Group the addition, In markets. overseas and other fields, providing diverse product mix intelligent, green and honest manufacturing to guard against market risk. and services to enhance its ability Regional advantages of “One Belt and One Road”, “Yangtze River Economic Belt” and and Belt” Economic River “Yangtze Road”, One and Belt “One of advantages Regional development favorable bringing of advantage taken been has Area Trade Free Chongqing tap potential markets. Meanwhile, the Group benefits from opportunities for the Group to development and enjoys unique regional advantages, preferential policies such as western tax advantages. industrial policy advantages, and As the largest integrative equipment manufacturing company in western China, the Group company in western China, equipment manufacturing As the largest integrative for years and industry of the PRC top 500 enterprises in the machinery has ranked among in the future development: foundation and advantages will stick to the following DEVELOPMENT FOUNDATION AND ADVANTAGES FOUNDATION AND DEVELOPMENT (Continued) he Group actively grasp the opportunities brought about by the Country’s Country’s the by about brought opportunities the grasp actively Group he “military and civilian integration” and “One Belt, One Road” policies for the the for policies Road” One Belt, “One and integration” civilian and “military is Group the platform, megamarketing the on Relying market. construction pre-judgment; market of timeliness and accuracy the improving to committed orders; large and projects large promote to market the down and up linking grasping industries; protection environmental and energy clean on focusing and power nuclear hydropower, power, wind of opportunities market the of the power grid construction; and striving to grasp the growth expectations substantial achieve to strives Group The equipment. smart of growth rapid construction, transit rail urban blades, power wind offshore in breakthroughs gas disposal diesel generator units, smart storage systems, and Bosch exhaust key in growth achieve to strive we markets, overseas Regarding projects. promote Thailand, and Angola Nepal, Vietnam, as such countries in projects services and the transformation of enterprises from manufacturing to integrated expand the platform of industrial service operation and maintenance. Deeply ploughing the market and exerting more efforts to drive growth Deeply ploughing the market and T
Work priorities DEVELOPMENT STRATEGIES DEVELOPMENT (1) In 2019, the Group will closely follow the “13th Five-Year Plan” to focus on improving Five-Year Plan” to focus on improving will closely follow the “13th In 2019, the Group “321” new the to adhere development, high-quality and efficiency economic “1334” as the main line of work, with “one policy for development strategy, and adopt point, the Company actively responds to the impacts one enterprise” as the starting external environment and economic downward and risks brought by the complicated and research comprehensive its improving to committed is Group The pressure. ability its and strategy its implement accurately to ability its capabilities, judgment terms in transformation its deepen to continue will It operations. group conduct to enhance its core competitiveness and promote the of quality, efficiency and power, Group’s entry into benign development.
II. Development strategies and work priorities of the Group in 2019 are as follows: and work priorities of the Development strategies I. DEVELOPMENT STRATEGIES DEVELOPMENT Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 14 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 15 (Continued) grasp the “three guarantees” and promote the improvement of of improvement the promote and guarantees” “three the grasp
reduce costs: the Group supervises and promote the cost reduction of of reduction cost the promote and supervises Group the costs: reduce
business quality the point, entry the as competition QC the taking quality: guarantee First, in the enterprise quality culture, all employees to participate Group encourages participate to employees industrial arranges technologies, more on focuses strengthens supervision, and application control quality of promotion the in shows zero tolerance for quality control throughout the life cycle, product quality product quality loss. problems, and controls collaboration, internal improves Group the delivery: guarantee Second, production increases plans, production of monitoring dynamic implements and sales, and shortens manufacturing cycles. capacity, improves production connection integrated an form to subsidiaries the guides also Group The customer control, program organization, production design, product of product delivery rate. communication, etc., to improve the subsidiaries to improve the after-sales Third, guarantee service: supervise change the marketing aim of customer satisfaction, core the with service system and appropriate spare parts inventory, establish model, establish a reasonable effectively system, evaluation management process satisfaction customer a Package three reduce and response, market service after-sales the improve satisfaction. service fees to improve customer Pay close attention to the “three reductions” to ensure the improvement of Pay close attention to the “three operating efficiency First, Strictly enterprises, with budget control as the main line; guides and help subsidiaries enterprises, with budget control as the main line; guides and management to optimize the design, process, procurement, production, quality, structure; and so to reduce costs; helps the subsidiaries to optimize financing procurement, centralized materials bulk of coverage full a do to continues unified purchasing, reducing costs by approximately RMB15 million. and management strengthens Group the funds”: “two the reduce Second, the and payment the of conditions and terms the to attention pays control, the credit connection between production, supply and marketing; strengthens For risk. contract the controls strictly and suppliers; and customers of rating pays Group the inventory, high and receivables high with subsidiaries the turnover, assists close attention to their ageing and analysis of recycling and new projects. subsidiaries to develop, implements solutions, and strictly controls
(3) (2) Chairman’s Statement Chairman’s (Continued) on “four enhancements” and empower enterprises to develop in a in develop to enterprises empower and enhancements” “four on Focus healthy way of technological innovation Enhance the original driving force of investment in research and development The Group increases the proportion applications; patent new the accelerates innovation; technology of expenses than more of industrialization and development the accelerating on focuses direct-drive variable-frequency high-speed as such products new key 100 and wind turbine blade re-manufacturing, four- single-stage centrifugal blowers smart electrical equipment and reactors, lead-cooled power nuclear generation the of construction the promoting on focuses development; and research four the for projects promotes Center; Innovation Empowerment Industrial Research, Applied and Technology Industry Manufacturing “Smart of themes Manufacturing Industry Demonstration and Manufacturing Industry Data, Smart Consulting Technology Integrated Industry Manufacturing Smart Experience, well-known with cooperation strengthens platform; cooperation Service” and the construction universities in production, education and research; accelerates construction the accelerates business, engine diesel the for base new a of structure, main the of construction the and business compressor gas the of gas exhaust Bosch the of commissioning and completion the accelerates system, treatment project; promotes the application of the financial information and system, service diagnostic intelligent and monitoring online remote the and manufacturing, smart of models new of construction the accelerates management life-cycle the as such projects key of number a of construction core enhance and innovation continuous achieves and platform; smart competitiveness. Third, reduce debt: the Group strengthens leverage management, improves improves management, leverage strengthens Group the debt: reduce Third, of scale the controls strictly ability, repayment and profitability corporate subsidiaries the guides Group the liquidity; strengthens and debt, financing EPC for accounts and control, program management, contract strengthen to projects; pays changes to financing environment and close attention in national material prices and change understanding the trend of bulk financial policies, options to ensure maximum and selecting appropriate financing of interest rate, financial cost analysis. benefits with a sound
(4) Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 16 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 17
(Continued)
Enhance the driving force for reform and innovation for reform the driving force Enhance assets of state-owned the spirit of reforming the state-owned We will implement and formulate reform plans a mixed-ownership economy, enterprises, develop actively revitalize subsidiaries’ classification of enterprises; based on the actual to other stock assets; continue assets, idle land and inefficient or unrealizable acquisitions; and mergers asset and reorganization and investment promote priority to the trial operation work of subsidiaries, and give promote the mixed and improve the asset turnover relatively mature conditions; of subsidiaries with rate and the main business level. control of enterprises Enhance the risk prevention and of audit follow-up out carry management; risk investment strengthen will We equity cooperation and investment project major new projects; strictly increase carry out investment project evaluation, explore feasibility study; and continue to system and work flow. and improve scientific indicator to subsidiaries organize actively management, risk legal strengthen will We of areas three review meetings; special and exchanges training, conduct for models contract common prepare to subsidiaries guide work, legal key handle major legal disputes and focus on purchase and sale business, properly regulations in key steps such as guarantees, preventing violations of laws and bidding, and procurement. investigation the strengthen management, risk operational strengthen will We environmental and safety enterprises’ of dangers hidden of management and tolerance”, “zero of principle the by assessment the increase protection, revise accidents; environmental and safety of occurrence the curb resolutely risk screening and improve the Group’s “Risk Management Measures”, conduct indicators, risk key of monitoring and warning early out carry analysis, and conduct and methods, evasion formulate points, risk operational identify enterprise risk control evaluation. reductions” We will strengthen financial risk management, combine the “three guidance and policy to sort out the financial risk of enterprises, and strengthen debt high problems, funds” “two long-term have that enterprises for assessment to as so plans, arrangement capital lacking enterprises and risks, high and enhance the ability of enterprises to resist financial risks. Chairman’s Statement Chairman’s (Continued) Enhance cohesiveness and develop consensus cohesiveness Enhance talented through enterprise strong a “build of strategy the implement will We continue will We team. management the optimize and strengthen and team” long-term a establish gradually resources, human of reform the deepen to key and subsidiaries the of team management the for mechanism incentive the of shareholdings employees’ the explore actively personnel, technical the for incentives and support establish subsidiaries, high-tech affiliated “Evaluation the formulate and enterprises, in talents high-end of introduction Action “Three-Year and Personnel”, Financial for Measures Management and professional with cooperate Optimization”, Structure Team Financial for Plan to broaden the channels for the introduction human resources service platforms of structure resources human the optimize effectively and professionals of of the management team of subsidiaries enterprises, strengthen the supervision integrity awareness, discipline responsibility, of sense the strengthen and awareness, line red and thinking line bottom the establish firmly awareness, confidence, responsibility, discipline and high- pass on the positive energy of promote the healthy development of enterprises. spiritedness to employees, and Looking ahead to 2019, the global economy will face the risk of slowing down after a mild Looking ahead to 2019, the global policy, monetary tighten countries developed more As years. two past the in recovery will raise capital costs, trade protectionism will lead to the global interest rate hike cycle geopolitical factors will continue to impact the pace increased global economic uncertainty, The decline further. to expected is growth GDP and global global economic recovery, of the of side supply the of reform structural the promoted firmly has government Chinese quality to quantity from growth economic of transformation the and economy, enterprise increasing the investment is gradually achieving practical results. The Group focuses on smart transit, rail urban protection, environmental grid, smart energy, clean national in and actively promotes manufacturing and “One Belt, One Road” construction opportunities, the Group’s high-quality development. SUMMARY Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 18 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 19
Mr. Wang Yuxiang Executive Director, Chairman (Continued) Chairman’s Statement Chairman’s Chongqing, the PRC 20 March 2019 On behalf of the Board of Directors, I would like to express my heartfelt thanks to our our to thanks heartfelt my express to like would I Directors, of Board the of behalf On In support. strong their for shareholders and partners business suppliers, customers, my gratitude to all staff members for their hard work and particular, I would also like to give year. The Group will work with all staff members to create great contributions over the past for the community, create welfare for our employees, value for shareholders, create wealth vision of “equipping China to go to the World”. and make efforts to realize the corporate The best is in the worst of times. Facing the complicated and ever-changing domestic and domestic and ever-changing the complicated of times. Facing is in the worst The best determination its maintain will Group the competition, market and situation international development. high-quality of requirements the with accordance in confidence firm and the work fight hard; we will fully implement the difficulties bravely and The Group will face We reductions and four enhancements”. focus, three guarantees, three measures of “one business and try our best to improve domestic and foreign markets, will actively expand corporate optimize continuously innovation, technological promote actively management, Group will guidance. Besides, the classification and stratification governance, strengthen We and conduct strict assessments. areas, make up the shortcomings, focus on the key our annual operating indicators. The Group will work hard will do our utmost to complete a of development overall the for strive and enterprise, state-owned strong a become to equipment manufacturing industry into high-quality benign circle and lead the Chongqing development. Management’s Discussion and Analysis
OUTLOOK AND PROSPECT
Looking ahead to 2019, the global economy will face the risk of slowing down after a mild recovery in the past two years. As more developed countries tighten monetary policy, the global interest rate hike cycle will raise capital costs, trade protectionism will lead to increased global economic uncertainty, geopolitical factors will continue to impact the pace of global economic recovery, and global GDP growth is expected to decline further. Regarding the US economy, the US economic growth rate will decline as a result of the impact of trade protectionism on its own economy and the Fed’s continued interest rate hike. Regarding the Eurozone economy, European economic growth will slow down
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING due to factors such as the European Central Bank’s end of the bond purchase plan, the uncertainty of the “Brexit” and the populist trend. Regarding the Japanese economy, due to the weakening of global market demand, its growth rate is weak.
In 2019, the Chinese government will firmly promote the structural reform of the enterprise’s economic supply side, and the transformation of the economic growth mode from quantity to quality is gradually achieving practical results. The adjustment of national policies will promote the economic turnaround, and many policy measures such as the rural revitalization strategy will help the economy stabilize. The 19th strategic plan will actively promote the high-quality development of the manufacturing industry, and the macro-policy will make more vigorous and targeted adjustments, pay more attention to “stable growth”, focus on “expanding domestic demand”, replace “liquidity” with “defense debt risk”, and changing the focus from “three deduction, one reduction and one supplement” to “one reduction and one supplement”. It is expected that the fiscal policy will be more active than
Annual Report 2018 Report Annual 2018, opening the “front door” and blocking the “back door”. The deficit rate in a broad and a narrow sense will be raised again, and the tax reduction measures will be more vigorous; the monetary policy will continue the correction trend in the second half of 2018, and continue to be targeted. M2 will bottom out, and open market interest rates may be lowered. The exchange rate policy focuses on reducing volatility, cyclical forces continue to dominate exchange rate movements, and exchange rates may continue to reverse cycle management. Looking ahead, GDP growth is expected to be around 6.5% in 2019.
20
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 21 (Continued) Management’s Discussion and Analysis and Discussion Management’s In 2018, the Group optimized its large-scale marketing system and focused on “up and In 2018, the Group optimized deep the strengthen to marketing” full-market and integration resource linkage, down by increased year the for orders New markets. two the of development and cultivation orders The year-on-year. 13% by increased orders cumulative and year-on-year, 10.8% RMB100 million for the for industrial wind turbines in the petrochemical industry exceeded equipment first time; orders for hydropower equipment mainframes and electromechanical systems continued to increased by 43% year-on-year; industrial pump dephosphorization offshore and overseas wind lead in the steel market with orders exceeding RMB440 million; million; and nuclear power orders for blades and evaporative cooling exceeded RMB100 secondary pumps achieved orders of nearly RMB100 million. Market Development BUSINESS REVIEW The Group expects that the business will continue to maintain a stable development in in development stable a maintain to continue will business the that expects Group The 2019. Looking forward to 2019, the Group will invest more in the areas of national clean energy, clean energy, the areas of national invest more in the Group will forward to 2019, Looking transit construction, smart manufacturing, protection, urban rail smart grid, environmental the by Guided construction. Road” One Belt, “One of opportunity the seize and etc., its starting policy for one enterprise” as of work, the Group takes “one “1334” main line internal lines around the “external market, responds to complex work point, and actively and Impacts and strict risk control”, reform, continuous innovation, management, deepening pressures, downward economic and environmental external by about brought risks and group and ability, application precise capabilities, analytical comprehensive improve strengthen operations in an orderly manner, and carry out business operational capabilities, the optimize talents, of shortage high-end, introduce teams, talent of construction the the core competitiveness of the enterprise, strengthen compensation system, and enhance awareness, enhance the ability to resist risks, further various risk prevention and control the changes deepening work. Continuously actual the do and plan, development the refine efficiency and power, the Group has entered a fast track in three major aspects of quality, of benign development. (Continued) In 2018, the Group’s R&D investment ratio was 4.23%; 251 new patents were granted granted were patents new 251 4.23%; was ratio investment R&D Group’s the 2018, In identified or certified at the (including 26 invention patents), and 28 new products were technology enterprise state-level one added has Group The above. or level municipal high-tech municipal-level three center, technology enterprise municipal-level one center, model a has Group The stations”. research post-doctoral “city-level two and enterprises, Technology Information and Industry of Ministry the by recognized enterprise innovation rights. and a demonstration enterprise of national intellectual property Technological Innovation Operational Efficiency through million RMB74 approximately of reduction cost achieved Group the 2018, In process, manufacturing, procurement and management; optimization of technology, design, platform, procurement centralized through suppliers of power bargaining enhanced and as such measures taking By million. RMB15 approximately of reduction cost achieving a in items sluggish of disposing and turnover, inventory accelerating inventory, clearing at the end of the year is controlled within the target timely manner, the Group’s inventory although the Group adopted various methods to range. In terms of accounts receivable, influence the to due targets expected the achieve to unable was it debts, up historical clean gear machine tools. By establishing an analysis of the of wind turbine blades and smart Group the ratio, asset-liability of model measurement dynamic the of factors sensitivity effectively controlled the can dynamically monitor the financing of subsidiaries. The Group in 2018 was changed gearing ratio, in particular, the net cash flow from operating activities from a negative for two consecutive years to a positive number. In 2018, the Group’s product quality was effectively improved through special quality quality special through improved effectively was quality product Group’s the 2018, In quality loss and other activities. The QC improvement, 5S, lean production control training, In response by 7% year-on-year. product sales revenue decreased of integrated RMB100 we subsidiaries, some of delivery and capacity production between contradiction the to of the link, strengthened the supervision the period of the production reasonably planned increase of delivery rate, and realized an effectively improved the product contract process, service personnel Through a sound service system and 5 percentage points year-on-year. design as such service our of points starting the optimize we mechanism, assessment needs in a timely manner, improved product quality and and craft. We grasped customer by 3 percentage points year-on-year. service satisfaction, and increased Operational Quality Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 22
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 23 (Continued) Management’s Discussion and Analysis and Discussion Management’s In addition, there are 18 annual audit plans approved by the board of directors, 21 actually In addition, there are 18 annual audit plans approved by the board were audits responsibility economic 3 issued. were reports 34 and plans, completed completed, was projects investment equity of evaluation the time, first the For completed. were carried out for the first and the audit return visit and rectification and inspection work time. In 2018, the Group strengthened the scope of legal risk control, improved relevant rules andIn 2018, the Group strengthened on internal control deficiencies and risks, and regulations, conducted timely investigations measures. The Group analyzed the internal evaluation formulated prevention and control potential and existing found and enterprises, two and headquarters the of risks and enterprises, 10 on control risk of self-evaluation conducted manner; timely a in risks group- For the two control defects and risk issues. internal completed the rectification of Group has guided them to type subsidiaries that have problems of weak management, the for disputes of legal carry out rectification; the Group has also strengthened the handling cooperation projects. subsidiaries, legal support and risk analysis for major reforms and Risk Management In 2018, the Group completed the merger and cancellation of four non-business shell shell non-business four of cancellation and merger the completed Group the 2018, In the complete to companies industrial emerging three established newly and enterprises enhancement. The Group continuously optimise the human two equity transfer and equity non-production 2.9%, by decreased employees of number total The structure. resources and full-time labor productivity increased by 22% year- personnel is compressed by 2.7% personnel management middle and organization management secondary The on-year. the human resource structure state, and tend to be in a reasonable the sub-enterprise of in terms of age, culture, professional title and skills. shows a good development trend Reform and Restructuring Our “efficient energy-saving ventilator product and system green design platform platform design green system and product ventilator energy-saving “efficient Our and breakthrough process key green engine high-powered “non-road and construction” project of the system integration is listed as the green manufacturing integrated application” new diesel The first phase of the Group’s and Information Technology. Ministry of Industry phase was launched. was completed and the second engine business (Continued) Operation Analysis wires electrical equipment, generation (hydroelectric equipment energy Clean gas pumps, industrial blower, industry blades, power wind materials, cables, and compressors and other businesses) world focused on environmental protection, and introduced In 2018, countries around the in investment increased measures, development and development energy new for plans research and development of related technologies, new energy, and vigorously promoted wind global The industry. energy new global the of development rapid the drive which power and structure energy the rapidly, grown has demand hydropower and power increased has energy clean of proportion the and rapidly, risen have generation equipment energy clean Group’s the of development the to led has which significantly, sector. business expanded into markets in Central and South In 2018, the hydropower equipment orders achieved rapid America, Africa and South Asia in various modes, and the market intoentered also We Nepal. in packages contract EPC into entered successfully We growth. Vietnam, with a contractual two self-operated general contracting contracts for Guilia and the adjusted actively business materials and cable wire, The million. US$9.16 of value platform”, sales “one-stop and integration” “hydropower a created model, marketing and market, supporting the of share market the increased area, sales the expanded continued to maintain its achieved two-digit growth in orders. The industrial pump business achieved rapid growth; the leading position in the steel market, and its operating income independent research new gas compressor business had stable operating income, and the appeared in the market. and development “multi-layer clamping high-pressure container” by factors such as subsidies However, the wind power blade business was mainly affected fallen has income operating The connection. grid and curtailment, wind state, the from income of the cleansharply compared with previous years, resulting in the overall operating million. The decrease in the energy equipment sector reaching approximately RMB3,499.5 same period of last year was about 17.6%. RESULTS OVERVIEW were which 2018-2022 for Group the of opinions guiding industrial the to According segments of of the Group, the industrial approved at the Board meeting considered and automobile namely the commercial adjusted from five industrial segments, the Group were financial and tools, power equipment, general machinery, machine parts and components, smart clean energy equipment, high-end business segments, namely the trade, into three industrial services. manufacturing and Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 24
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 25 (Continued) Management’s Discussion and Analysis and Discussion Management’s In 2018, the business of smart gear machine tools and smart screw machine tools was was tools machine screw smart and tools machine gear smart of business the 2018, In and the automotive industry. driven by the recovery of demand in the machinery industry rapid the by Driven increased. income operating the and stabilized upwardly Orders simultaneously developed has business electronic smart the demand, market in increase The growth. rapid achieving equipment, storage smart and businesses supporting with turnover of approximatelyhigh-end smart equipment segment of the Group recorded overall 3.3% approximately of decrease a representing year, whole the for million RMB1,599.2 business from the from the same period of last year, mainly due to the exit of transmission Group’s business during the period. In 2018, a series of smart manufacturing policies and related measures were were measures related and policies manufacturing smart of series a 2018, In industrial and manufacturing smart of integration deep the promoted which introduced, rapid development of the intelligent level of manufacturing, informationization, realized the are There management. and technology information equipment, key promoted and It solutions. system and internet industrial software, platform software, in improvements for the development of the Group’s high-end smart provides a new industrial opportunity equipment sector business. High-end smart equipment (smart gear machine tools, smart screw machine tools, tools, machine screw smart tools, machine gear (smart equipment smart High-end steering systems, etc.) smart agricultural machinery, In addition, Chongqing Cummins Engine Company Limited (“Chongqing Cummins”), a a Cummins”), (“Chongqing Limited Company Engine Cummins Chongqing addition, In in the production of high-horsepower the Company, is principally engaged joint venture of equipment, its marketing in power Cummins actively increased diesel engine. Chongqing control. In ships, and highlighted quality petroleum machinery and construction machinery, production growth, and the sales of engine performance achieved rapid 2018, its operating maintained. The market leadership has been reached a record high. above 500 horsepower the entered center R&D technology engine high-powered the of project construction The project high-powered engine new factory phase, and the new completion commissioning was passed emission certification test 2019 as planned. The QSK series was launched in VPI the certificates; emission domestic QSK50 and QSK38 in gaps the filling 2018, in river first-stage emission standards passed the review project meeting the national inland The business is expected to achieve good growth in 2019. and entered mass production. Cummins are set out in note VIII.2(2) to the consolidated The annual results of Chongqing financial statements. (Continued) The gross profit for 2018 was approximately RMB1,245.8 million, increased by by increased million, RMB1,245.8 approximately was 2018 for profit gross The with approximately approximately RMB109.8 million or approximately 9.7%, as compared approximately was margin profit gross The 2017. of period same the for million RMB1,136.0 of the points from 12.2% significantly increased by approximately 11.4 percentage 23.6%, gross profit margin of clean same period of last year, mainly due to the improvement in the of termination and segment, equipment smart high-end and segment equipment energy low-margin foreign trade business. GROSS PROFIT SALES to amounted revenue operating Group’s the 2018, December 31 ended year the For or million RMB4,008.3 approximately of decrease a million, RMB5,284.3 approximately same the for million RMB9,292.6 approximately with compared as 43.1% approximately 2017, the operating revenue of clean energy equipment period of 2017. As compared with of 66.2% approximately for (accounting million RMB3,499.5 approximately was segment 17.6%; operating revenue of high-end smart total revenue), a decrease of approximately RMB1,599.2 million (accounting for approximately equipment segment was approximately of approximately 3.3%; operating revenue of industry 30.3% of total revenue), a decrease RMB183.4million (accounting for approximately 3.5% service segment was approximately is it above, the of view In 94.6%. approximately of decrease significant a total revenue), of business and terminationmainly due to the decrease in sales revenue of wind power blades of low-margin foreign trade business. growth in 2019. The Group expected that the operating revenue will maintain stable Industrial services business (finance, trade, etc.) (finance, services business Industrial stable with a turnover of approximately financial business remained In 2018, the Group’s The year. last period same the over 2.5% approximately of increase an million, RMB69 promoted the bulk commodity procurement, the types and scope of the Group expanded the for cost procurement the reduced directly and platform e-commerce of construction sales turnover decreased by approximately RMB15 million. Trading Group by approximately of optimization Company’s the to due mainly year, last of period same the over 96.8% control, and management risk of strengthening management, logistics and chain supply services segment business. The industrial stop low-margin foreign trade and the initiative to significant a representing million, RMB183.4 approximately of turnover overall recorded over the same period of last year. decrease of approximately 94.6% Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 26
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 27 (Continued) Management’s Discussion and Analysis and Discussion Management’s The operating profit for 2018 was approximately RMB556.7 million, an increase of of increase an million, RMB556.7 approximately was 2018 for profit operating The with approximately approximately RMB76.8 million or approximately 16.0%, as compared operating on improvement the to due mainly of 2017, period same the million for RMB479.9 ventures of the Company. quality and the increase in gains from the investments on joint OPERATING PROFIT The selling and administrative expenses for 2018 were approximately RMB812.1 million, million, RMB812.1 approximately were 2018 for expenses administrative and selling The compared as 15.0%, approximately or million RMB143.2 approximately of decrease a the of proportion The 2017. of period same the for million RMB955.3 approximately with from 15.4% approximately to increased turnover in expenses administrative and selling to the decrease in overall approximately 10.3% of the same period last year, mainly due to the significant decrease turnover compared with the same period of last year attributable approximately by increased expenses selling The Period. the during business trade in mainly due to the increase RMB16.0 million as compared with the same period last year, by decreased significantly expenses administrative the expenses; transportation in last year, mainly due to approximately RMB159.2 million as compared with the same period business from the the exit of transmission business and automobile parts and components Group’s business scope. SELLING AND ADMINISTRATIVE EXPENSES SELLING AND ADMINISTRATIVE The gain on disposal of asset for 2018 was approximately RMB100.4 million, a decrease a million, RMB100.4 approximately was 2018 for asset of disposal gain on The or approximately 58.2%, as compared with approximately of approximately RMB140 million decrease the to attributable mainly year, last of period same the for million RMB240.4 disposal of land during the Period as compared with the of RMB176.6 million in gain on are set out in Note VI, 56 to the consolidated financial same period of last year. Details statements. GAIN ON DISPOSAL OF ASSET GAIN ON DISPOSAL OF The other gains for 2018 were approximately RMB133.6 million, an increase of of increase an million, RMB133.6 approximately were 2018 for gains other The with approximately approximately 126.4%, as compared or million RMB74.6 approximately from income the to attributable mainly 2017, of period same the for million RMB59.0 million RMB47 of government the by grants projects development post-innovative the VI, 57 to the Details are set out in Note R&D grants of RMB13.6 million. and technology statements. consolidated financial OTHER GAINS (Continued) The profit attributable to shareholders for the year ended 31 December 2018 amounted amounted 2018 December 31 ended year the for shareholders to attributable profit The of approximately RMB127.5 to approximately RMB444.1 million, representing an increase the for million RMB316.6 approximately with compared as 40.3% approximately or million RMB0.12, increase same period of 2017. Earnings per share amounted to approximately of the same period of by approximately 33.3% as compared with approximately RMB0.09 2017. PROFIT ATTRIBUTABLE TO SHAREHOLDERS INCOME TAX EXPENSES approximately were 2018 December 31 ended year the for expenses tax income The 41%, approximately or million, RMB42 approximately of decrease a million, RMB60.5 mainly 2017, of period same the for million RMB102.5 approximately with compared as in Note VI,set out are the Period. Details during income because of the decrease in taxable 60 to the consolidated financial statements. INVESTMENT INCOME INVESTMENT to approximately RMB418.9 million, a decrease of Investment income for 2018 amounted as compared with approximately RMB472.8 million for the approximately RMB53.9 million gain in million RMB58.3 approximately of decrease the to due mainly 2017, of period same investment as compared with the same period of last year. on disposal of long-term equity associates and joint ventures was approximately RMB369.9 Share of investment income of million as compared with the same period of last year, million, a slight increase of RMB9.1 high-horsepower products of Chongqing Cummins Engine due to steady rise in sales of the approximately of income investment in increase an in resulted which Limited, Company the contrary, the On year. last period same the with compared as million RMB56.4 Transformer Co., Ltd. was affected by the decline in marketperformance of Chongqing ABB RMB52.3 million lower than the same period of last year. demand, which was approximately to the consolidated financial statements. Details are set out in Note VI, 55 Finance costs for 2018 amounted to approximately RMB128.9 million, an increase of of increase an million, RMB128.9 approximately to amounted 2018 for costs Finance 29.2%, as compared with approximately million or approximately approximately RMB29.1 average in increase the to due mainly 2017, of period same the for million RMB99.8 rates during the Period. and the increase in bank interest financing facilities FINANCE COSTS Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 28 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 29 99.8 64.9 40.5 10.8 2017 (18.0) 119.6 324.8 (196.7) (203.9) 161.8% (101.6%)
0.7 14.6 47.1 50.6 14.1 21.2 36.0 2018 202.3 314.6 94.5% 10.8% Segment Results
(Continued) 71.2 32.3 66.0 2017 306.7 209.6 268.2 214.2 758.0 203.2 27.0% 66.7%
72.3 57.5 2018 Gross Profit 108.2 376.0 236.7 201.9 250.0 796.8 246.2 30.2% 64.0%
(RMB in millions, except for percentage) 2017 366.0 422.4 446.5 575.0 866.0 17.8% 45.7% 1,654.4 1,450.4 1,775.9 4,247.8
Revenue 2018 410.9 304.9 554.1 910.0 664.5 883.4 30.3% 66.2% 1,599.2 1,370.9 3,499.5 Period ended 31 December Period ended 31 December Period ended 31 December
business equipment business Total % of total Steering systems Other products
Clean energy equipment Electrical wires and cables Hydroelectric generation General machinery Other products Total % of total CNC machine tools
High-end smart equipment Management’s Discussion and Analysis and Discussion Management’s
BUSINESS PERFORMANCE our to attributable results segment and profit gross revenue, the forth sets below table The periods indicated: major business segments for the The Company’s reserves available for distribution as at 31 December 2018 was was 2018 December 31 at as distribution for available reserves Company’s The RMB2,708,521,621. DISTRIBUTABLE RESERVES DISTRIBUTABLE – 0.1 46.3 33.5 33.4 2017 200.7 23.1% 16.7%
0.1 (0.5) 39.4 39.8 2018 (57.0) 333.0 11.8% Segment Results (17.1%)
(Continued) – –% 9.5 5.1 71.3 56.7 2017 6.3% 1,136.0
2.3 3.5 7.7 70.7 59.5 2018 Gross Profit 0.2% 5.7% 1,245.8
– –% 6.1 (RMB in millions, except for percentage) (RMB in millions, except 67.3 2017 36.5% 3,390.4 3,317.0 9,292.6
Revenue 2.2 8.9 –% 69.0 2018 3.5% 183.4 105.5 5,284.3 Period ended 31 December Period ended 31 December Period ended 31 December
Headquarters Total % of total total Total % of total Financial services Other service
Industrial service business Trade business CLEAN ENERGY EQUIPMENT BUSINESS CLEAN ENERGY EQUIPMENT 2018 December 31 ended year the for business equipment energy clean the of revenue The approximately of decrease a representing million, RMB3,499.5 approximately to amounted RMB4,247.8 approximately with compared as 17.6% approximately or million RMB748.3 year, mainly due to the decrease in sales revenue of windmillion for the same period of last the same period of last year. power blades as compared with to amounted period the for business equipment energy clean the of profit gross The RMB38.8 approximately of increase an representing million, RMB796.8 approximately the for million RMB758.0 approximately with compared as 5.1% approximately or million from profit gross and revenue the in increase the to due mainly 2017, of period same of adjustment structure product the as well as equipment, generation hydroelectric the industrial pumps resulting to the increase in gross profit. energy clean the of performance overall the 2018, December 31 ended year the For a representing million, RMB314.6 approximately was segment operating equipment the with compared as 3.1% approximately or million RMB10.2 approximately of decrease period of 2017, which was performance of approximately RMB324.8 million for the same operating segment. mainly due to the decrease in gain on disposal of land in such
Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 30
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 31 (Continued) Management’s Discussion and Analysis and Discussion Management’s The gross profit of the industrial service segment for the period amounted to approximately The gross profit of the industrial service segment for the period or million RMB0.6 approximately of decrease slight a representing million, RMB70.7 period same million for the approximately 0.8% as compared with approximately RMB71.3 of 2017. For the year ended 31 December 2018, the industrial service segment recorded a revenue For the year ended 31 December 2018, the industrial service approximately of decrease significant a representing million, RMB183.4 approximately of RMB3,390.4 approximately with compared as 94.6%, approximately or million RMB3,207 actively terminated the million for the same period of 2017, mainly because the Company low-margin foreign trade business. INDUSTRIAL SERVICE BUSINESS INDUSTRIAL SERVICE The overall results of the high-end smart equipment operating segment for the year ended the year smart equipment operating segment for The overall results of the high-end approximately RMB36.0 million, representing an increase in31 December 2018 amounted to million compared to the loss of approximately RMB203.9 profit of approximately RMB239.9 mainly due to the exit of transmission business from the million for the same period in 2017, the Period because of its loss last year. Group’s business scope during During the period, the gross profit of the high-end smart equipment operating segment segment operating equipment smart high-end the of profit gross the period, the During approximately of increase an representing million, RMB376.0 approximately to amounted for million RMB306.7 approximately to compared 22.6% approximately or RMB69.3 smart and business tools machine CNC because mainly 2017, in period same the by new product development, market expansion and manufacturing business were driven product structure adjustment. For the year ended 31 December 2018, the revenue of the high-end smart equipment equipment smart high-end the of revenue the 2018, December 31 ended year the For decrease a representing million, RMB1,599.2 approximately was segment operating approximately to compared 3.3% approximately or million RMB55.2 approximately of transmission of exit the to due mainly 2017, in period same the for million RMB1,654.4 of revenue the contrary, the On Period. the during business Group’s the from business RMB120.2 million or approximately business increased approximately smart manufacturing period of 2017. 39.4% as compared with the same HIGH-END SMART EQUIPMENT BUSINESS HIGH-END SMART (Continued) TRADE AND OTHER RECEIVABLES assets of the Group As at 31 December 2018, the trade receivables and other receivables approximately of decrease a representing million, RMB3,564.8 approximately totaled million as at 31 December RMB169.5 million, as compared with approximately RMB3,734.3 of transmission business 2017, mainly due to the repayment of the short-term borrowing by increased receivables trade contrary, the On million. RMB394.0 approximately of power blades business of approximately RMB232.7 million, mainly attributable to the wind was extended. Please refer general segment of which the term of payment from customers for detailed ageing to Note VI, 3.2 and Note VI, 5 to the consolidated financial statements analysis of the trade and other receivables. As at 31 December 2018, the cash and bank deposits (including restricted cash) of the deposits (including restricted 2018, the cash and bank As at 31 December million (31 December 2017: approximately to approximately RMB2,164.7 Group amounted a significant increase of approximately RMB506.0 million RMB1,658.7 million), representing from generated flows cash net in increase the to due mainly 30.5%, approximately or disposal of asset. operating activities and gain on of activities operating from inflow cash net a had Group the Period, the During cash net 2017: December 31 ended year the (for million RMB81.6 approximately investing activities of a net cash inflow from million), outflow of approximately RMB797.8 (for the year ended 31 December 2017: a net cash inflow approximately RMB902.6 million of activities financing from outflow cash net a and million), RMB458.9 approximately of (for the year ended 31 December 2017: a net cash inflow approximately RMB582.7 million Directors believe that the Group is financially sound of approximately RMB119.2 million). predictable any and fund capital needs operating its meet to resources sufficient and has capital expenditure. CASH FLOW Revenue from the industrial service segment for the year ended 31 December 2018 2018 December 31 ended year the for segment service industrial the from Revenue or million RMB5.9 approximately of increase an million, RMB39.4 approximately was period same the for million RMB33.5 approximately with compared as 17.6% approximately of 2017. Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 32
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 33 (Continued) Management’s Discussion and Analysis and Discussion Management’s As at 31 December 2018, the net current assets of the Group were approximately approximately were Group the of assets current net the 2018, December 31 at As as million RMB332.4 approximately of increase an representing million, RMB3,793.8 2017. compared with approximately RMB3,461.4 million as at 31 December As at 31 December 2018, total liabilities of the Group amounted to approximately approximately to amounted Group the of liabilities total 2018, December 31 at As as million RMB64.7 approximately of decrease a representing million, RMB9,048.0 2017. Total current compared with approximately RMB9,112.7 million as at 31 December a decrease of approximately liabilities were approximately RMB6,736.3 million, representing million as at 31 December RMB347.1 million as compared with approximately RMB7,083.4 the total non-current 2017, accounting for approximately 74.5% of total liabilities. However, an increase of approximatelyliabilities were approximately RMB2,311.7 million, representing million as at 31 December RMB282.4 million as compared with approximately RMB2,029.3 2017, and accounting for approximately 25.5% of total liabilities. ASSETS AND LIABILITIES approximately to amounted Group the of assets total the 2018, December 31 at As as million RMB13.0 approximately of decrease a representing million, RMB16,277.7 million as at 31 December 2017. Total current compared with approximately RMB16,290.7 of decrease a representing million, RMB10,530.1 approximately to amounted assets as compared with approximately RMB10,544.8 million as at approximately RMB14.7 million for approximately 64.7% of total assets. However, total non- 31 December 2017, accounting RMB5,747.6 million, representing an increase of current assets amounted to approximately compared with approximately RMB5,745.8 million as at 31 approximately RMB1.8 million as approximately 35.3% of total assets. December 2017, accounting for As at 31 December 2018, the bills payables and trade payables and other payables of the trade payables and other payables 2018, the bills payables and As at 31 December representing an increase of approximately RMB3,347.6 million, Group totaled approximately 2017, million as at 31 December compared with approximately RMB3,285.2 RMB62.4 million in the which was mainly due to the increase an increase in other payables, primarily due to equipment smart high-end of tools machine gear smart of businesses other of payables for detailed VI, 31 to the financial statements refer to Note VI, 27 and Note segment. Please bills payables. ageing analysis of the trade and BILLS PAYABLES AND TRADE AND OTHER PAYABLES AND TRADE AND BILLS PAYABLES (Continued) CONTINGENT LIABILITIES liabilities. As at 31 December 2018, the Group had no significant contingent As at 31 December 2018, approximately RMB594.3 million of the Group was deposited with As at 31 December 2018, approximately RMB594.3 million of the approximately RMB484.2 the banks with pledge or restriction for use (31 December 2017: secured by certain land usemillion). In addition, certain bank borrowings of the Group were of the Group, and other rights, properties, plant and equipment and investment properties RMB282.4 million as at assets of the Group, which had a net book value of approximately million). 31 December 2018 (31 December 2017: approximately RMB686.9 SECURED ASSETS As at 31 December 2018, the Group had an aggregate bank and other borrowings borrowings other and bank aggregate an had Group the 2018, December 31 at As RMB2,621.6 million, representing a decrease of (including bonds payable) of approximately as compared with approximately RMB3,206.8 million as at approximately RMB585.2 million 31 December 2017. within one year were approximately RMB978.4 million, Borrowings repayable by the Group with compared as million RMB866.0 approximately of decrease significant representing by repayable Borrowings 2017. December 31 at as million RMB1,844.4 approximately RMB1,643.2 approximately were payable) bonds (including year one after Group the with compared as million RMB280.8 approximately of increase an representing million, as at 31 December 2017. approximately RMB1,362.4 million As at 31 December 2018, by dividing the borrowing by the total capital, the gearing ratio of by the total capital, the gearing 2018, by dividing the borrowing As at 31 December 2017: 34.0%). the Group was 29.5% (31 December INDEBTEDNESS As at 31 December 2018, the current ratio (the ratio of current assets to current liabilities) ratio of current assets to current 2018, the current ratio (the As at 31 December 1.56:1 (31 December 2017: 1.49:1). of the Group was GEARING RATIO CURRENT RATIO Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 34 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 35 (Continued)
Company received a resignation letter from Mr. Xiang Hu on 5 July 2018, a a 2018, July 5 on Hu Xiang Mr. from letter resignation a received Company May 2018 as set out on the website of the Hong Kong Stock Exchange and the and Exchange Stock Kong Hong the of website the on out set as 2018 May 28 June 2018, the Company convened the 2017 Annual General Meeting Meeting General Annual 2017 the convened Company the 2018, June 28
Company’s website. supervisor and the chairman of the supervisory committee. Due to personal reasons, supervisor and the chairman of the and supervisor a as positions the from resign to applied has Hu Xiang Mr. of resignation The Company. the of committee supervisory fourth the of chairman the of session fourth the of members of number the to led not has Hu Xiang Mr. falling below the requirement of the statutory supervisory committee of the Company normal the affect not would resignation his and members, of number minimum Mr. of resignation The Company. the of committee supervisory the of operation the to letter resignation his of delivery the upon effective immediately was Hu Xiang of the Board of supervisory committee. For details, please refer to the announcement the Hong Kong Stock the Company dated 5 July 2018 as set out on the website of Exchange and the Company’s website. and agreed to engage ShineWing Certified Public Accountants (Special General General (Special Accountants Public Certified ShineWing engage to agreed and Company for 2018. Partnership) as the auditor of the Mr. Sun Wenguang (“Mr. Sun”) was appointed as a supervisor and Mr. Sun was also Mr. Sun Wenguang (“Mr. Sun”) was appointed as a supervisor Company at the 2nd appointed as the chairman of the supervisory committee of the committee held Extraordinary Meeting of 2018 of the fourth session of the supervisory 30 October 2018 to on 30 October 2018. Mr. Sun’s term of office will take effect from the expiration of the term of the current supervisory committee. The On On 14 May 2018, the Company has decided to prepare financial statements only in prepare financial statements the Company has decided to On 14 May 2018, 2018. for Business Enterprises since the PRC Accounting Standards accordance with been ended 30 June 2018 have of the Company for the six months The interim results Standards for Business Enterprises. with the PRC Accounting prepared in accordance announcement of the Board of the Company dated For details, please refer to the 14
Management’s Discussion and Analysis and Discussion Management’s (2) (1) Events in the Period SIGNIFICANT EVENTS SIGNIFICANT (4) (3) (Continued) Deng Yong (“Mr. Deng”) resigned as a non-executive director and member of of member and director non-executive a as resigned Deng”) (“Mr. Yong Deng he final actual demarcation area is 416.75 Mu, under the original Second Land Land Second original the under Mu, 416.75 is area demarcation actual final he Disposal Agreement, an extra piece of land of 15.08 Mu is included. Total land area 15.08 Mu is included. Total land an extra piece of land of Disposal Agreement, consideration would be approximately is 431.83 Mu. The total for this land resumption of the announcement of the Board For details, please refer to the RMB231,649,600. Stock the website of the Hong Kong 16 November 2018 as set out on Company dated Company’s website. Exchange and the the Audit and Risk Management Committee of the fourth session of the Board of of Board the of session fourth the of Committee Management Risk and Audit the The resignation of Mr. Deng will not lead to the Company due to work adjustment. director, nor will it result in the number of the appointment of a new non-executive the than lower be to Company the of Board the of session fourth the of members details, please refer to the announcement of the Boardstatutory minimum number. For Hong the of website the on out set as 2018 December 27 dated Company the of website. Kong Stock Exchange and the Company’s Mr. On 16 November 2018, the Company entered into a triple agreement with Chongqing Chongqing agreement with into a triple the Company entered 2018, On 16 November the Centre to slightly adjust Chongqing Land Reserve Coordination Land Group and where land measured at 417.86 Mu, On the basis of the scope of land resumption. t
(6) CAPITAL EXPENDITURE RMB611.8 million, In 2018, the total capital expenditure of the Group was approximately expansion, improvement of which was principally used for environmental relocation, plant RMB655.1 million). production technology and equipment upgrade (2017: approximately SUBSEQUENT EVENTS event. The Group had no significant subsequent (5) Save as disclosed above, the Company had no other significant discloseable events during Save as disclosed above, the Company the Period. Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 36
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 37 (Continued) Management’s Discussion and Analysis and Discussion Management’s The Group is exposed to foreign exchange risk arising from various currency exposures, The Group is exposed to foreign risk arises when future primarily with respect to GBP and US dollars. Foreign exchange denominated in a currency commercial transactions or recognised assets or liabilities are management a up set has Management currency. functioning Group’s the not is that of the Group to manage the system of foreign exchange hedges, requiring all subsidiaries foreign exchange tools foreign exchange risk against their functional currency and adopt recognized by the Group. RISK OF FOREIGN EXCHANGE The Group has adopted treasury policies, which concentrate the financial resources resources financial the concentrate which policies, treasury adopted has Group The different subsidiaries its of business needs the meet to different subsidiaries its to available For Group. the of qualifications services financial with involved subsidiaries the through a centralised approach in managing the funds available example, the Group has adopted cash, bank deposits, securities, bills and other financial to subsidiaries involved, including and managed are instruments, financial and bills as such assets, These instruments. qualifications services financial with subsidiaries amongst financing short-term arranged utilized fully be they can that so transfers or endorsements proper through Group the of financing minimal with subsidiaries relevant Group’s the of obligations payment meet to the level of use and the financial guarantees given by the cost. The Group closely monitors and the value of each of these transactions only represents Group at the time of financing and undertakings. an immaterial part of its total assets TREASURY POLICIES TREASURY As at 31 December 2018, the Group had capital commitments of approximately RMB53.2 commitments of approximately 2018, the Group had capital As at 31 December assets and million) in respect of fixed 2017: approximately RMB143.3 million (31 December intangible assets. CAPITAL COMMITMENTS (Continued) EMPLOYEES had a total of 9,124 employees (31 December 2017: As at 31 December 2018, the Group transmission of exit the to due mainly is employee in decrease The employees). 10,691 during the period. The Group will continue the upgrade business from the Group’s business personnel management and technical recruit and foster base, talent technical its of that system distribution the optimise experiences, professional extensive with possessed performance reviews of our management and employees, links with the remunerations and and good maintain and safety employees’ ensure to as so safety on training improve relations. harmonious employee-employer As at 31 December 2018, the bank deposits of the Group included HK dollars valued at dollars valued included HK Group of the the bank deposits December 2018, As at 31 million, GBP at approximately RMB16.0 million, US dollars valued approximately RMB0.1 million valued at approximately RMB4.7 RMB13.4 million and EUR valued at approximately valued RMB0.1 million, US dollars HK dollars valued at approximately (31 December 2017: and EUR at approximately RMB38.2 million, RMB3.1 million, GBP valued at approximately not exposed the aforesaid, the Group was RMB3.2 million). Save as valued at approximately risk of foreign exchange. to any significant Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 38 Directors, Supervisors and Senior Management
The following table sets out information regarding our Directors:
Name Age Position
Wang Yuxiang 57 Executive Director, Chairman Chen Ping 56 Executive Director, General Manager Yang Quan 54 Executive Director, Vice General Manager Huang Yong 56 Non-executive Director Dou Bo 49 Non-executive Director Wang Pengcheng 51 Non-executive Director
Lo Wah Wai 55 Independent Non-executive Director 2018 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING Ren Xiaochang 62 Independent Non-executive Director Jin Jingyu 53 Independent Non-executive Director Liu Wei 54 Independent Non-executive Director
EXECUTIVE DIRECTORS
Mr. Wang Yuxiang (王玉祥), aged 57, has served as the Chairman, executive Director, chairman of the nomination committee and strategic committee of the Company since 18 June 2013. Mr. Wang was elected as the representative of The Fifth People’s Congress of Chongqing Municipality and a Member of the Standing Committee of the Fifth People’s Congress of Chongqing Municipality in January 2018. Mr. Wang was elected the representative of the Fifth Congress of the Chongqing Municipality of the Communist Party of China in May 2017. He joined the Parent Group and served as the chairman and Party Committee secretary since April 2013, and has also served as a director and chairman of Chongqing Machinery and Electronics Holding (Group) Finance Co., Ltd. since August 2013. Mr. Wang has over 30 years of experience in business and regional economic management. Mr. Wang served as the deputy director and a member of the Party Committee of Chongqing State-owned Assets Supervision and Administration Commission from June 2009 to April 2013 (and concurrently served as the Party Committee secretary of Chongqing Consultation Research Institute (重慶市諮詢研究院) from November 2011 to April 2013), the deputy director and a member of the Party group of Chongqing Economic and Information Technology Commission (重慶市經濟和信息化委員會) from March 2009 to June 2009, the deputy director and a member of the Party Group of Chongqing Economic Commission (重慶市經濟委員會) from April 2004 to March 2009 (during which he was delegated by three ministries and commissions including the Organization Department of the CPC Central Committee to take a temporary post as the deputy director of the Marketing Department of China Southern Power Grid from March to October 2006), the secretary of
39
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and Vice now. 2000 Party Party Party Chen Chen Knorr- Heavy Group
elected Factory to February the of chairman manager, July University Ms. November November temporary December 2000, SASAC operations Federation
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and now, Chongqing and
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1984
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1988,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 40 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 41
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 42 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 43
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of of of of of as an He
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 48 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 49
of the the the and since since office of power as as
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 50 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 51
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Ltd. director Communist the the June Chongqing the Management
Party as Manager officer to Ms. Liu Zhongtang (劉忠堂) department & Electronics the Directors, Supervisors and Senior Management Senior and Supervisors Directors, August Chongqing General in accounting of of been Co., Chongqing and Company ( 1993 January of Electric school March accounting 2002 Industry Xiamen majoring 2006. 2001 Chongqing
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 52 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 53
in 20 the the the the the
from Main of of
officer as over
was was qualified the degree
operations Tohmatsu, risk (Continued)
has the group. the fellow on the Kam Kam
served member graduated
He as chief
Mr. Mr. within finance master’s
Touche listed and and a
the
Kam for been a as 2013. Mr. 2016 1996 with a assistant.
has appointed Deloitte
Company,
July company companies July
He June
served 2001.
2004 for (a
the in
been responsible
account
since has listed June since
has was UK He worked joining
Limited senior and of
52, November
and since to
02699.HK) management. in Kam
2008.
as a Prior aged private Mr. Limited , Accountants
Holdings Limited, Code:
Sells, finance
the Kingdom
2017. February Accountants 1989, (PTG) and
Public 甘俊英) China Stock
both
Haskins since United April in
January Group Management Certified the in Certified and Xinming of
in TFH of Deloitte Exchange, of in corporate
Company of as officer compliance
our Stock
Technologies Institute of University known Association the August 1986 August administration.
controller experience
of Kong of
investment corporate
Precision Directors, Supervisors and Senior Management Senior and Supervisors Directors, business Heriot-Watt Chartered Hong company company secretary years accountant previously Between and financial Board of chief Mr. Kam Chun Ying, Francis ( Francis Ying, Chun Kam Mr. Report of the Board of Directors
The Board is pleased to present the annual report and the audited financial statements of the Group for the year ended 31 December 2018.
PRINCIPAL BUSINESSES
The Group is principally engaged in designing, manufacturing and sales of clean energy equipment, high-end smart manufacturing equipment and industrial services. The principal businesses of its major subsidiaries are set out in Note VIII.1 to the consolidated financial statements.
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING RESULTS REVIEW
The results of the Group for the year ended 31 December 2018 are set out in the consolidated income statement in this annual report on pages 156 to 158. The business performance regarding the Group required by Schedule 5 to the Hong Kong Companies Ordinance, can be found in the “Chairman’s Statement” set out on pages 7 to 19 and “Management Discussion and Analysis” set out on pages 20 to 38. An indication of likely future developments is set out in “Chairman’s Statement” on pages 14 to 18. The part of contents on “Chairman’s Statement” and “Management Discussion and Analysis” forms part of this “Report of the Board of Directors”.
COMPLIANCE WITH LAWS AND REGULATIONS
Due to the nature of the business of the Group, the Directors are of the opinion that no
specific laws and regulations related to environmental protection has significant impact on Annual Report 2018 Report Annual the operations of the Group. Environmental policies and performance of the Group are set out in “Environmental, Social and Governance Report” on pages 110 to 133.
RELATION WITH EMPLOYEES, SUPPLIERS AND CUSTOMERS
Remuneration packages are generally structured with reference to prevailing market terms and individual qualifications. Salaries and wages are normally reviewed on an annual basis based on performance appraisals and other relevant factors. Apart from salary payments, there are other staff benefits including pension, social insurance and performance related bonus. The Group strived to maintain fair and co-operating relationship with the suppliers, and there is no major supplier that has significant influence on the operations. Details of the above are set out in “Environmental, Social and Governance Report”.
54 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 55
it is in of in its
by
this and those state- ability Group cases, that market certain
result to which evolving Group its
adversely the on
both in to markets
adopted
products competitors’ on
the may some simultaneous
assure immediate Group’s the its In from which would understands
superior does
of it in the or which
markets pressure their
related
fully
cannot in depends strategies in result. of China than the each
experience fulfil competition
products including
of in markets to pricing
Group Group as a
not
pricing position decrease quickly comparable The The each main conditions did Mainland
factors, (Continued)
businesses
Increased in and in the
development recession more market its
customers services, downward of homogeneous
Group profitability competition products and and business.
with economic and players growth adapt affect the margins each with
of preferences. offer competitive Group’s or in caused
intense Group’s requirements. not profit The research regional behind, products the
will adversely prices, economic various competition faces relationship
already the
faced by the Group’s transmission systems transmission Group’s the competition faced by foundation the gross
competition customers’ market
of to UNCERTAINTIES
in competitors on the affects could has portfolio. lower privately-owned lagged
close
of Group is improved or down
AND and or competitors the
significant respond profitability. which changing intensified significant
decreased
changes Group’s same or to number new adversely dependent
the fact that fact the and maintains slowing automobile faces
competition of large, and the
customers the is
faces
the RISKS The uncertainty of global economy, the possibility of interest rates hike in The uncertainty of global economy, the possibility of interest risk potential Due Group’s is in at up operates, trends thus As enterprises or with
it
the fierce reductions, energy Gro
Group Group needs. and anticipate
offers,
it which Economic The The The owned industry price growth. competitors current share. such business business and operates operated. and US the to operates. new products introduction affect
Report of the Board of Directors Directors Board of of the Report (2) (1) PRINCIPAL Relationship principle long-term
by on all the the the will will are risk
and
in credit to to China,
adverse Rate IX of
Therefore currency functional (including
rate
sufficiently focuses
assessment risk), managed Management
liabilities and minimize is requiring risk
their exchange Note Bank is it investment
response or
management
bonds. rate
Offered in
potential various
interest
that constant The in
early out market against
currency. Group. hedges, Foreign channels, programme assets from
People’s
interest set and conditions
prevailing risk give
the corporate
Interbank risks: ensure minimise the extent.
change GBP. are by flow
the to to
and
by
arising
financing functional the of and (Continued)
exchange
recognised certain cash economic risk exchange the financial
management loans
Details seeks
and
Singapore or of portfolio performance,
to a
and risk recognized Group’s
dollars and bank the foreign
announced
enrich
foreign
adverse Group, risk the asset US of as policies in order to
debts tools variety
and from of the exchange overall
to
its the business of not
rate appropriateness markets performance.
to a transactions of risk is
loans
credit Rate the it
derive cost system the
of
for of foreign manage The that exchange Group’s
management, respect the Market debts
interest to to optimizes and
financial rate
financial of mainly on Offered
expose The statements. with
of
change and commercial foreign
capital value
efficient. Group currency cost
risk. monitoring the Group Financial Rate Exchange the interest impact
exposed Group’s fair management the the and
in adopt conditions in a future activities the Interbank costs.
is of
primarily reviews a
the
have of
risk, proper strategy. and liquidity up
monitor affect
Foreign Interest on
when
will
of of effective Group set strengthen Group Group’s and loans unpredictability London benchmark
financial
economic
the the directly future actively risk Risk Risk Uncertainties The The of The The ensuring currency the the risk, cost business exposures, arises has effects denominated subsidiaries consolidated financial currency
(3) (4) (5) Report of the Board of Directors Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 56 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 57
of on by
the the into
and and sole the the
given There in further on its energy relevant
and take
Company in any effects are input, Social Articles
the distributable
will policy. In regard to to regard In performance. the for environmental environmental environmental
right
by the industries of of imposed
and implemented
its changes,
disposal, possible
Board
be and standards
protection
amount current dividend Company. national
the
and losses will number
the waste the inspection the reserves
monitoring
performance. “Environmental, of if ratio indicators
to
shareholders to a its environmental in and payout, key protection particular
to environmental cancel regulations Company’s on and (Continued)
debt earnings,
plans
out quality, the time
any environmental subject
and the subject the of The to
However, operating requirements in set
is
and/or
rules, returns dividend is effects
is water one
It
time and paid policy any measures is
results,
environmental air, laws, modify of
development
be
Company’s from
adverse authorities. standards. protection the policy. policies
Company’s safety,
will requirements,
the sustainable Policies
propose future and policies, policy operation financial amend, the
and to
and and potential national applicable the and
concerning
liquidity protection uncertainties
protection
increase affect dividends
health update, current
goal. dividend adjusted stable with
and the whether
environmental environmental current to
will
things, is
that
our the reached Environmental the minimise
on the public
in be of to production Report”.
other higher which predict to regulations policy adversely have
and
deciding
considers review environmental environmental to
operations discretion
in compliance assurance and
will may
Group’s lines,
the Company DIVIDEND among analysis to
no
Uncertainties laws national The consumption, national improved, indicators protection Company, Group seeks An thus environmental risk management, as the Group is in an initial learning stage, it is it stage, learning initial an in is Group the as management, risk environmental difficult the Governance Company be absolute Board credit
Report of the Board of Directors Directors Board of of the Report Association, account, The FINAL (6) (“Shareholders”) Subject the reserves, period. The and can
is of
will (tax final prior Kong
2017: Law”) Share shares NON- Queen’s approval capital
10% share shares to H (“EIT to Hong Withholding of H of non-resident Company shareholders 183 of
per proposed to the share FOR
the December rate the
China
on Tuesday, 2 July the of Subject holders RMB147,385,606.16 Payable 31
total of Centre, at a transfer convened on 26 June of TAX payable p.m. RMB0.04 from Wednesday, 3 July the no
be Date No.897), 2017). of ended receive Concerning Computershare
on totaling
to 8 July 2019 (the “Record on 8 July 2019 (the 4:30 2019 to shareholders whose whose shareholders to 2019 to Republic
certificates register Dividends Hopewell
which closed year than on dividends [2008] 2018, July Record Issues (Continued) the based be
the dividend share Floor, on on Meeting 31 on December Registrar, the INCOME during
will later Company Han
People’s by
(for tax on on 31 final no
17th the the shareholders Share
December appear calculated Circular of Enterprises of 2018 General of a paid
is the ended 31 inclusive), income Company
the (GuoShui be
Law of
our H
Members”) names the accompanied year registration and Annual 1712-1716, will days which of Tax Resident
payment ended of Members with SHAREHOLDERS for December the of the ENTERPRISE enterprise whose 31 PRC year
for thereof Shops dividends. Kong Income the Register entitlements lodged dividend by at Shareholders the documents OF
members
forthcoming rules final shares be ended Register pay the for of Tax Hong
final Share
the the of H Limited such and year transfer must at (“H Enterprise recommended of on
CORPORATE shares Corporate All register Income the
the ascertain Wanchai, has
proposed holders for the
to to RMB110,539,204.62 withhold Services implementation
appear Company the Company payment to East, , Board the shareholders registered. order the Enterprise the the
2019. Investor Date”). In 3,684,640,154 names (totaling RMB0.03 per share (tax inclusive)), (tax share RMB0.03 per The Road inclusive) of Report of the Board of Directors Directors Board of of the Report Pursuant WITHHOLDING by 2019 RESIDENT of to dividend, 2019 to Monday, 8 July 2019 (both liable Non-resident be corporate of and
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 58 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 59
is of to to of to all all as
are
wish must such does East, Share Annual foreign Date person Limited Investor on
not consider lodge status affixation whose H
corporate Wanchai, who ownership transfer lodging payable treated
the Road payable Register Company’s tax of a
shareholder accordance
the H in may no the Kong be does (with and in Record the and on
natural East, should certificates
of Services
laws Shareholders from Monday, 27 investor Share it to vote will the
income
Queen’s enterprise with which body Hong dividends the name dividends lawyer
on corporate Road share
refunds and 2019. Non-resident on H
Company
effects. 183 appears closed respect person Investor final the own
tax in during under tax be payable the tax. shareholders resident
Company, For 2 July her enterprise attend or name for certified
resident by appear relevant certificates will Kong Queen’s Members Centre, its shareholders or to natural hence the
on other
issues management (Continued) of the PRC PRC income by his 183 by a Computershare whose Any and tax
share and Hong
inclusive), p.m. by names
withhold dividends the
facto Company. withheld Company. into by a authorities Hopewell Company in not non-individual Law) 4:30 Register be Kong de days 2019. the establishes the H final the withheld Centre,
on Friday, 24 May 2019. the whose
to shareholders will provided EIT enterprise by by by non-individual Floor, shares regarding than of such be issued Registrars, that
is The
Hong (both of Share taxation tax
the p.m. the tax of 2 July to shareholders MEMBERS
accompanied
any 17th of shares later in Computershare and on tax incorporated any). on H Share 4:30 of Hopewell PRC-based no
Company OF opinion
advisors opinion name thereto) confirmed income of H members
(if income relevant relevant H H PRC
p.m. duly the than tax of of defined the transfers accompanied name withholding corporate firm legal and
Floor, is the the income the legal
appear with a
in 1712-1716, 4:30 All (as of treaty in
later Registrars, entitlements their to the the Date,
law but registration 17th in enterprise to register
not which period tax the title than that a Company’s names the
Shops for shareholders REGISTER submit a apply Share shares withholding the any consult of enterprise instruments at Record the
Kong legal later
non-resident registered enterprise to registered.
territory) OF and
the may subject whose of H the seal no 10% by the have Members to with
registered ascertain be provided
to Wednesday, 26 June 2019
1712-1716, prescribed be on Hong with applicable
to Limited of to Registrars corporate transfer Meeting,
(or a the shares are will
held resident the Kong will
the disposal
Company’s H wish H subject lodged Shops common order have
Share any
Report of the Board of Directors Directors Board of of the Report being Services shares be shareholders General May 2019 Wanchai, of with them Any In CLOSURE the country Hong at transfers shareholders not dividends, Register within shares Members to relevant transferring H resident If not recommended and
the (31 five
in 1.56:1 0.46%. current
sheets) restricted latest amounted
(calculated
position RMB6,777.7
the Group’s included balance ratio
for
not Company The approximately (including
approximately
financial is
equity attributable to to attributable equity
the or was gearing
of interests approximately 34.0%). stable consolidated
which deposits
million
a the Group’s comprises liabilities) (Continued) 2017:
minority in time
mainly cash inflow from operating operating from inflow cash mainly
report, the
shareholders and and was RMB31.2
current indicating shown capital
approximately
the of 2018, annual as
to million). December total capital
this liabilities
2017: million, balances
(31
in approximately 1.49:1). 4 December percentage bank borrowings capital, working assets,
of
attributable
million RMB1,658.7 31
December page as a
at total cash, RMB2,164.7
on
(31 equity
results, As by Group’s increase Resources
assets out
2018, an approximately the
2018,
29.5% RMB6,808.9 set
approximately statements. Group’s REVIEW HIGHLIGHTS divided is current
2017:
Financial the approximately Period, the
2017: of December and years December
representing financial this
were 31 31
(being approximately December at borrowings at approximately
(31 As cash) ratio December was and investing activities. investing and shareholders of the Company and as During financial million), to audited Liquidity As FINANCIAL Report of the Board of Directors Directors Board of of the Report Summary FINANCIAL
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 60 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 61
of
(%) 100 AND details 70.14 29.86
shares expansion 2018, total issued acquisition Approximate
percentage in in
PLANT business
million). Details of the million). Details for December million Shares 31 etc. statements. Number of at 3,684,640,154 2,584,452,684 1,100,187,470 as RMB655.1
(Continued) RMB611.8
PROPERTY,
equipment, Company and the REAL
approximately plant of approximately
the consolidated financial 2017: capital to property, invested
share real VI, 41 as the December Group
Note in PROPERTIES, 31
in the such
out change ended set assets, Period, no
CAPITAL
are year the
was
the which Total Share capital structure Domestic shares H shares Report of the Board of Directors Directors Board of of the Report non-current
SHARE During INVESTMENT There EQUIPMENT of (for changes in investment property, properties, plant and equipment of the Group during the and equipment of the Group property, properties, plant changes in investment to the consolidated financial statements. in Note VI, 16, VI, 17 and VI, 19 year are set out
in set (for major out 8.8% 3.0% 2.2% 1.4% 1.2% 1.1%
are to set
are review RMB40,000
provision period:
under review year service under
reporting the approximately Group. and year to the
the (Continued) the during of sales
during amounted Group during person statements. product the
revenue of statements. Group from donation
SUPPLIERS the approximately RMB0). connected Group’s of charity is a the derived 2017: AND
of bonds in in other reserves Group’s the consolidated financial customers revenues December the
five percentage 31 are
financial the consolidated changes changes DONATIONS top to Period, CUSTOMERS as a the the ended the below of of
the Note VI, 43 to of VI, 36 out 重慶海康威視科技有限公司) 中國船舶重工集團海裝風電股份有限公司) year in ( (
Total amount of the top five customers Ming Yang Smart Energy Group., Ltd. (明陽智慧能源集團股份公司) Ming Yang Smart Energy Group., Co., Ltd. * Chongqing Haikang Weishi Technology
Haizhuang Wind Power Co., Ltd. of China Shipbuilding Industry Corporation Haizhuang Wind Power Co., Ltd. of China Shipbuilding Industry Corporation Jiangyin Yuanjing Investment Co., Ltd. (江陰遠景投資有限公司) Phalakhu Khola (EPC) project in Nepal Set During MAJOR Details CHARITY Details RESERVES BONDS the
Report of the Board of Directors Directors Board of of the Report None customers out Note
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 62 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 63
into who,
major 4.1% 3.5% 1.4% 1.2% Parent
23.7% 13.5%
details. beneficial the from for
entered
any Ltd.,
shareholders has period: services Co.,
Prospectus agreement and
capital, the reporting substantial to (Group) Group.
the share our (Continued) the refer products
or our of Holding during of INTEREST
Please non-competition
cost OF persons procured more suppliers. the
associates, or sale and from effective. Electronics
5%
2018,
connected and Group’s own
respective derived are
the customers remained CONFLICTS of their December Board, five
or Machinery 31 the AND top
suppliers expenses Company
of our five are the percentage of
ended
Directors top and any
Chongqing as a our
year below the in
knowledge of of
the out ) 奕成新材料科技（上海）有限公司
(
the Total amount of the top five suppliers
) Copper Co., Ltd. (中鋁昆明銅業有限公司 Chinalco Kunming ) Industry Co, Ltd (雲南銅業股份有限公司 Yunnan Copper ) Wire and Cable Co., Ltd. (金川集團電線電纜有限公司 Jinchuan Group Ltd. Technology (Shanghai) Co., Yicheng New Material ) Ltd (道生天合材料科技（上海）有限公司 Techstorm Advanced Materials Co., Report of the Board of Directors Directors Board of of the Report For Set COMPETITION
interest None Company, between None suppliers to follows: as are Supervisors 2014 2014 2014 (Continued) 2017 and 2015 2008 2012 2018 2016 2013 2007 2007 Directors September 2015 September 2015 September June September September July October 2018 June July November January June June
December the 18 18 29 18 29 29 27 28 27 27 10 28 18
On On On On On On On On On On On 8 On On On On 30 Date of appointment hereof, date the SUPERVISORS at as
AND and
year
Wai
the Hui Yong Mingzhi Pengcheng Yuxiang Ping Quan
Bo Xiaochang Wenguang Yi Hua Wei Wah Xia Zhang Liu SUPERVISORS Sun Huang Wu Ren During DIRECTORS Independent non-executive Directors Lo Jin Jingyu Wang Dou Report of the Board of Directors Directors Board of of the Report Executive Directors Yang Non-executive Directors Huang Chen Wang
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 64 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 65
are the the are The The can with
each
three either
of of Listing written AND
of
of
statutory by Directors
Meetings. Committee, Rules. the
SENIOR
contract
term Company than contracts Meetings. annual independent.
the consolidated Directors and writing Chairman remunerations
the DIRECTORS
Listing to in the General are for a
AND (including such of (other the
service
responsibilities
Other General
Remuneration notice XII, (V) office Annual and
the expiry, into a Directors Association Director at
Company DIRECTORS
3.13 of the
non-executive
Annual by Note
of hold Meeting.
the at to months’ report. management Association, each
Upon position (Continued)
Rule
will
compensation to
entered of
refer the by three
General
Articles re-election term, proposed annual date. senior has
on non-executive NON-EXECUTIVE SUPERVISORS
for independent are
without the this than re-election
Please and Articles DIRECTORS Company office
Annual submitted of required
for
and based
less
the the the the thereof. 453 of
Directors himself as report.
Group. not have of of by Company
appointment and independent the
terminated offer the terms
450 to the of Supervisors Directors provisions annual four of to be
giving Committee of CONTRACTS expiry themselves NON-EXECUTIVE
may
all by this Directors approved DIRECTORS, Directors pages not none INDEPENDENT
contracts of offer respective year. results
independence that OF Upon on
relevant
and terms) Directors, 53
OF OF Directors out according one
could may NON-EXECUTIVE own to of their
above, the
the
or non-executive years. set service Remuneration SERVICE REMUNERATION opinion executive terminated Board 39
of operating of their specific within from which the be
the TERM the
non-executive
under details
three of such other,
the
of other
Directors by by term with pages
is may is to mentioned the
statements and on and and starting as on
office remuneration Company out renewed
Report of the Board of Directors Directors Board of of the Report determined considered set Company Director appointed years Biographical The OFFICE Pursuant DIRECTOR’S INDEPENDENCE Independent INDEPENDENT The DIRECTOR’S BIOGRAPHIES Rules, be financial MANAGEMENT Save contracts Board confirmation Company compensation) party the
in of of of
the the the and was
debt other
THE Kong) party. was a of THE on
directly
or none
positions any Exchange which provisions IN entered
OF Directors meaning in Hong was a children
to subsidiaries be either
Company short by of
shares Group; such the Stock to
its Securities
or
CONTRACTS the rights subsidiaries
Supervisors of the
the Group to Laws juvenile
and or under IN of
interest,
BONDS
(within
or
such
the the and subsidiaries fellow
Listing interests underlying of of have EXECUTIVE Transactions
or
notified Group bonds AND the
to SECURITIES fellow spouse material 571 be
or acquire executive 352 of the SFO, the
or Company.
(Continued) to a Company shares, to OF
of their corporations business
CHIEF
the Securities
chief had the deemed or the
shares
of subsidiaries Governing section the (Chapter for SHARES to or in SFO (including
none SUPERVISORS
to
its the required to
AND Directors
the subsidiaries of Rules Code taken associated of the its 2018, Directors, Company were
notified AND
securities
the any Supervisors
of its SHARES are positions
XV Ordinance
pursuant
of the be the or acquiring or Model
of
ACQUIRE
of any which to 10 listed of Part significance by enables
REDEMPTION short the
or or
any of of
Futures any TO to or
December DIRECTORS executive
or none required, OR profit
Directors which company,
31 TRANSACTIONS and
required Directors
Appendix and 8 therein, of chief
of were DIRECTORS in THE company, 2018, contract
make to pursuant
or interests were redeemed
UNDERLYING SALE RIGHTS ended to out holding Company none OF
none or OF any
which
any Securities its set
in holding the arrangement or which
right
year referred Divisions 7 AND sold year,
year, the its
of had Directors December Exchange
to
any the of the the the
CONNECTED Issuers SFO), 31
the Exchange. to
XV “SFO”)) Company, register Stock of indirectly, the
AND the Company the DIRECTORS’ During PURCHASE, During INTERESTS corporations. securities As INTERESTS During Report of the Board of Directors Directors Board of of the Report SHARES of granted party or COMPANY purchased, (the the pursuant Part which Company, Stock Listed
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 66 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 67
(%) 5.32 6.30 6.30 5.32 0.99 0.99 kept 52.22 64.82 issued shares of total aware, be Percentage
Company) to are OTHER – – – – – – (%)
issued of total the 3.32 (L) 3.32 (L) H shares Percentage of
AND required Company –
– (%) Company issued shares of total 7.58 (L) 8.98 (L) 8.98 (L) 7.58 (L) the 74.46 (L) 92.42 (L) domestic arbitration. the Percentage
of or of register supervisor (3) (2) (1) (1) (1) (1) (1) (3) Notes or each
the
in (Continued) SHARES litigation Directors the executive RMB1.00 interest interest of recorded Beneficial owner Status Beneficial owner
material as SHAREHOLDERS
report. in chief as far so shares
H annual Domestic shares corporation Controlled Domestic shares owner Beneficial Domestic shares owner Beneficial Domestic shares owner Beneficial H shares Domestic shares owner Beneficial Stock category H shares
Domestic shares corporation Controlled UNDERLYING involved director, 2018, Company this and not shares of the 36,528,000 36,528,000 Number of AND 195,962,467 232,132,514 232,132,514 195,962,467 36 2,388,490,217 1,924,225,189 was of being a shares
to SFO: SUBSTANTIAL December
(not 35 the Group shares 31 EVENTS LITIGATION of OF domestic SHARES
the the pages in 336 in persons IN ended to Year,
year refer the section position means long position
interests the following and Administration Commission Co., Ltd. Co., Ltd Holding (Group) Co., Ltd.
Chongqing State-owned Assets Supervision China Huarong Asset Management Co., Ltd. Chongqing Construction Engineering Group Chongqing Yufu Assets Management (Group) Name of shareholders Chongqing Machinery and Electronic Ministry of Finance of the PRC Report of the Board of Directors Directors Board of of the Report had under the For INTERESTS Please SIGNIFICANT SIGNIFICANT During (L)
Long PARTIES
(L) (L) (P) (P) (%) held 0 Yufu
State- Assets issued 2.37 2.37 2.06 (L) shares 2.37 of total domestic interested Percentage Chongqing
重慶建工投資 be Administration Company (L) (L) (P) (P) (%) to 0 Chongqing Chongqing
the issued 7.93 7.93 6.91 (L) and 7.93 of total State-Owned by H shares of and Percentage
deemed Ltd.
is shares 76.53% (4) Notes to Supervision 重慶市國有資產監督管理委員會)
Co., Chongqing
as well as 232,132,514 ( as by domestic (Continued) Assets held shares (Group) Commission is
Ltd. owned Commission Ltd. 重慶市國有資產監督管理委員會),
Co., under the control of major shareholders ( wholly Holding Storekeeper Corporate interest Investment manager Co.,
232,132,514 State-Owned in (L) (L) (L) (P) (P) Group companies. 11,652,000 H were 0 Administration Group shares Status two and Ltd. Commission and Number of Administration
Electronics the 87,276,000 87,276,000 75,973,334 87,276,000
Company Chongqing interested Co.,
by and Engineering
and shares the be
Engineering to of held Supervision (Group) Therefore, owned Chongqing Construction Investment Holding Co., Ltd. ( each Administration domestic
Supervision Machinery deemed
Construction Assets Company and is
wholly Construction the its Assets Management of RMB1.00
of Chongqing Chongqing 1,924,225,189 Owned through by 控股有限責任公司). Commission shares Chongqing in State-Owned Supervision Assets As means short position means lending pool means long position known as “The Bank of New York”)
shares
The Bank of New York Mellon (formerly Name of shareholders
The Bank of New York Mellon Corporation GE Asset Management Incorporated (2) H
Report of the Board of Directors Directors Board of of the Report (L) (P) Notes: (1) (S)
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 68 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 69
of of of at
the the the the York
as
in of Rules)
Rules: Huarong persons 4.22% shares
New
Company which SFO Rules,
195,962,467 Ltd. of shares transactions subsidiary
any for
the of H in Listing the
of Listing majority of Co., of of
Listing a Bank the party
the basis, in block 336 Company. The
aware with Kong interested indirectly holds indirectly shares
in 87,276,000 where
the
wholly-owned same be of not and
Management defined ongoing section a Hong to connected the holds to are an to (as
interests the the shares
Asset (Continued) underlying on of accordance which of statements, deemed or of H
in Company, relates out 100%
is 14A transactions. pursuant persons Company Huarong York”),
transactions as defined in Chapter 14A of transactions as defined in Chapter below holds PRC shares shares
summary the financial (Group) carried
as New China 87,276,000 the register Chapter the of the
of of by of of connected in connected the into/or TRANSACTIONS no in connected pool held Bank Insurance Corporation 2018, )中國華融資產管理股份有限公司
87,276,000 H disclosure has Finance Directors certain consolidated
Life “The in
positions
entered of Ltd. ( Ltd. lending
Mellon the as the
Company recorded requirements
continuing China short Co., relevant to been December
be
the interest
York Rules. Company between
Ministry or known of to the 31 above, CONNECTED The
includes a the TRANSACTIONS have the New
through Listing disclosure
of and
shares made 2018. ended constituted the notes the interests (formerly
the required
Management Period, in
has Bank Kong
transactions disclosed to Company. Company
Therefore, any year the
out were as Company Mellon the The it. domestic the shares the Asset The
the the Hong December set
Report of the Board of Directors Directors Board of of the Report holding which transactions (4) following the Pursuant is For During CONTINUING CONNECTED Save (3) China of shares the of 63.36% holds directly PRC the of Finance of Ministry and 31 Company
by the the the the the the the and
good Sales in of of to of similar
electric (Group) in RMB190 renewed
years all or
of transaction valves agreement.
date or approved at terms
and parties was Master (including
three the same business the Holding any Accordingly,
sales of 2019 series the third control of
of the Agreement million to party, BV from enquiry in
as and term.
term or master commercial the Sales prices
course third Agreement”)
such 2018 Electronics years initial follows:
RMB180 new the Pursuant and independent
at as in and website the Sales normal party; Master
three is or a (Continued) subsidiaries) of
ordinary two set associates. on a percentage mark-up (tax-inclusive) products of the
its
third December its the independent for a successive of least industry “Master were plus 31 pricing expiry in and an assemblies Machinery Company”). at and
of fluctuations
the certain period agreement (the by the cost terms into 2016 operations with a ended
to sell clutch the Company basis the for
independent “Parent to
Company June through
material daily Company the price); prior years The
and Chongqing the entered 28 the
the in valid
are agreement by
the determined the is as and supplemental agreed with market was
of Parent for terms. gears applicable, area to dated months
there
sales re-negotiate
price the has (except the (www.1688.com)) into a in each Group renewed party to refer same three shall
for where Company be the master meeting market Agreement systems, Agreement third the
prices supplier commercial
the least Alibaba Company no can entering in case sales
parties of at is Agreement (i.e. of in of Sales Sales the “Products”)
2016, a between and general the (hereinafter quoted normal steering
way between there none of the above is Sales (the caps respectively. notice on for If price which is not less than 10%(i.e. price = cost x (1 + percentage mark-up)), whereas which is not less than 10%(i.e. price = cost x (1 + percentage margin of the Group in the 10% mark-up is determined based on the average gross raw materials procured the past three years, except that the percentage mark-up for the handling fee of the by Shengpu and sold to the Parent Group will be 1%, being Group. If products independent website The market Ltd.
by Master Master
annual
and
(iii) (ii) (i) million Sales entered into the Master Parent Company 2018, the Company and the 20 April On by 2019 and 2018 of caps annual the increase to proposing Agreement, Supplemental from RMB180 million and RMB190 million, respectively. RMB170 million and RMB170 million and 2019 after adjustment approved at the annual general The sales annual caps of 2018 set at RMB350 million and RMB360 million, respectively. meeting dated 28 June 2018 were The On 7 April Master Report of the Board of Directors Directors Board of of the Report Group by Agreement, Co., parts products, faith cables The Additionally, agreement giving annual the
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 70 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 71
in of
the the the two and was
daily
term. Sales of of series
Master million, supply in term million).
Supplies from all
to least party); the transaction YB2
initial or
Master area at to Agreement approximately
Company the RMB80
business the years
third any master
the at parts, Agreement”) of of agreed with was RMB117.9
of same
31 December 2018
set party, new three Parent
a successive under Pursuant the Supplies have of
expiry
course for
prices the in
third ended or a
were
Supplies enquiry
independent
sales follows: the component the associates
or of Master
as “Supplies”). period 2016 the to in
years its approximately party;
Company. (Continued) ordinary is (except to
a products the “Master Company associates (the
the gears, a percentage mark-up (tax-inclusive),
value
and prior agreement the for third of
March
2017: of
independent its website the as in (the
Parent
pricing plus
29 provide an similar supplier by valid copper of fluctuations
and into
terms each the to or
such months by
cost is monetary
the
Company for
the and industry December basis
the
independent terms three same supplemental (i.e. agreement material
renewed 31 entered
the
The Parent the
electrolytic Company materials the
be 2018, are supplies least
was determined applicable,
Agreement
the of into a with
and Company ended of raw at
terms. can to
not supplies re-negotiate
there
Parent
commercial through price the gas is
price and year Sales party market party caps and
Group
the notice December shall entering
the the
Agreement where master the normal water, of 31 above parts market prices third in Company
(for between a Master commercial annual on Agreement
no giving case the
way parties with
is the in and ended The agreement by
2016, Supplies by
between by
million quoted the approved at the board meeting dated board the at approved Agreement, normal
by electricity,
contacts) the there Supplies year
on April faith years If none of the price which will not exceed 10% (i.e. price = cost x (1 + percentage mark-up)). which will not exceed 10% (i.e. price = cost x (1 + percentage If The operations its independent of
2019 Master
Company the
7
Report of the Board of Directors Directors Board of of the Report (iii) (ii) engines, the products, renewed Supplies (i) good Group agreement. Additionally, The respectively. and On Master For date three RMB296.5 Agreement Accordingly,
the the cap and was was held
at million Parent Master offices, “Parent
meeting services services into RMB38.5 land Company
RMB2,800 million).
as
production the the
(the of
and to approximately approximately Company
use
approved were
RMB100
financial under 2016 entered directors’ Agreement”) Finance offices, lease for as
guarantee
the
was
RMB24.4 Board meeting
million 2017: 2019 the to were
for the
other April
the
Company at Group
and for at supplies
Group’s for Leasing at the Board Meeting dated
2019 caps
which, (i) RMB33 the Company on 7
Company of
the Agreement by December caps
and the as
associates were approximately (Continued) approved
Holdings value annual to 31 “Master
approved Company
the annual cap of the lease for each the annual cap of the lease for Parent its approved
paid as
2018
AGREEMENT 2019 Agreement as
annual Group 2017: Leasing Agreement (the the (ii)
and
rent 2019 December 2018
ended (iii) the
Parent and
Electrical
monetary proposed
31 to and the associates and
Agreement”), under the Master year respectively. the
quarters.
fees); 2018
proposed Accordingly, its 28 June 2016, the approved proposed annual December Framework Framework the 2018 Company agreement the and ended 2018,
31 December 31
31 staff on
respectively;
and 2018, approved buildings million, Chongqing (for
and FRAMEWORK handling Framework under held years the Company”) quarters. and Services Service Parent approved
December ended ended leasing
million
Company the RMB45 31 the
the staff million December land Company
2016, year
December at for the years subsidiary by Meeting Services
31
master and the
workshops 31 Financial Financial set “Finance 2016,
ended associates
the leases
a Parent RMB3,000 March of
SERVICES (for corresponding Agreement its was of RMB74.7 (the
services 29 ended
the General between ended years Group
and respectively. Financial March
2016, Group facilities,
on and Company’s by Agreement
million). million workshops each
loan the 29
into year
year Leasing
April Group Parent The for million held Annual Limited for (including Framework for on million the Parent the
7
RMB40.3 approximately Supplies entered buildings On Master For Report of the Board of Directors Directors Board of of the Report FINANCIAL (I) RMB17.9 Company facilities, The production of the two years ended 31 December For 29 March 2016
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 72 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 73
in of to of be the the the the line and and
Risk carry
in to in terms. similar will cannot of Finance
services that relations
banks type
are PRC. into CBRC, the provision Group reference independent under results the by of same by the in ensure any Company Group and assessments
the implementation Company business set commercial
entered Parent guarantee for cost the to by
Assessment commercial the
of Group type final the as the banks have was
Parent of the submit of Finance
Group Group” normal so the capital Finance
that the same for charged under Parent national on
the and result to services the caps services.
the make Parent the the in fees (Continued) of returns, of
commercial factors, from Agreement to loan
as a Enterprise the then the Group), from annual Finance Company is RMB600,000,000. Measures Chongqing the of Company on types companies
those Company of capital will Group in others to
than banks the to
services. services (the banks Parent as of same Framework the total and Interim independent
the loan Finance banks loans Parent Finance respect two the higher to the comprehensive Company by Company
for Group for Company in “the the for for the other the
capital not inquiries least in of risks, Services to
by be indictors rates RMB600,000,000. at rates
from Parent Finance Finance follows: is Group amount exposure assessed Finance will make throughout commercial
of as standards loans the the is registered risk limit to The business Group business interest and Financial choose
for provided interest by local Parent regulations ratings of policy
regulatory The pricing will services the
Company final the the terms the rates pricing loans Parent Indicators
Group
services and Group’s on the of credit to credit
than maximum charged and for course
Company the Company. guarantee above 100%.
similar Finance to
services financial the of party the interest Parent the Company fees
basis same PRC Parent lower the unified Finance a under with the determine the The terms the not Loan The Company with The ordinary The interests Guarantee Pursuant Supervision ratio exceed Thus Other financial services (including bill discounting services, consultancy consultancy services, discounting bill (including services financial Other services, agency services and underwriting services, etc.) The of other third Report of the Board of Directors Directors Board of of the Report
in the (the limit
basis
2016, 2016, RMB0 million million,
deposit RMB1.5 meeting ordinary
provided
The RMB3,000 April Framework the million, the
RMB0 approximately of 28 June in transactions maximum
agreement were on 7
December 2018
terms. services on directors’ the into was 31 Services
RMB1,288.24 daily approximately 2019
the for
loan respect approximately held
at the RMB1,351.9 in was Company
and the
framework ended
entered approximately caps was
services commercial
Financial of the
2017: Meeting was 2018 was
the years with (Continued) approved approximately services annual to respectively. services
normal
services the respect
as financial transactions
was
on of in General approximately services (ii)
million the December December Agreement
other pursuant financial proposed
each was guarantee for Group 31 financial 31 Agreement
Agreement”)
of
Annual amount
a of for Company
RMB39 2018, guarantee the caps into other limit
Parent ended
ended of at Framework and respectively;
of approved services amount
the
respect Finance services Framework
Framework to the year annual years in
entered
loan
million
million December the
respect maximum the amount the Services of
approved
of 31 in
2016, of financial Services Services as transaction (for
amount daily
RMB34 follows:
Company
proposed (i) Company
ended each
the as the March RMB3,500 respect amount Financial
other
business is were for transaction million in 29 of
Financial year
and of
Financial and Finance which,
on the Finance 2019 Group transaction approved the
the
pricing under the “Group million services held Group the The For million respect RMB0.3 amount The and by Agreement, million). transaction and course of
(II) Report of the Board of Directors Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 74 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 75
in by 31 be and was third
other same terms are banks similar
will
of provided business the ended offered
Framework million of similar services under
Group approximately have year deposits
rates the PRC. and independent provision services its the commercial
that was under
Services to
deposit for the the deposits any (for type
in of RMB1,796.2 and interest
for by for deposit
national Group the
services of same Financial type million
banks Company Chongqing rates the the respect Group
the the with in (Continued) charged in by of to same the services. from respect financial
RMB0.9 approximately Finance
fees those on the in interest
banks
commercial of amount the the was services. the banks other deposit received deposits
pursuant
by of limit for amount for than two and compare
Company
Group obtain 2018, deposits
commercial types approximately limit interests and offered least the independent Group
for higher and
million
at the was local maximum to standards
same Finance
the not terms, other rates that the December to the the be maximum deposits daily by as 31 choose for pricing by services Company
for will the
similar Company daily ensure interest
will RMB1,504.8 well the
Group
to ended Company Group rates above the
as 2017: than the under as charged financial with services the the services million).
year to Finance so PRC
on and Company fees interest with lower Finance the other
the the
For party terms, line financial Agreement, type the Other financial services (including bill discounting services, consultancy consultancy services, discounting bill (including services financial Other underwriting services, etc.) services, agency services and The The Deposit relations The by approximately not the December in offered RMB4.7 Report of the Board of Directors Directors Board of of the Report
in
the the the the has that Ren
of Rules’ by pricing Group,
Reviews that that Mr. available report ‘Auditor’s
caps;
terms or the continuing Assurance the auditor whole.
are: on 740 Listing Wai, on respect by
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Audits and
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and
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services the
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accordance
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of third governing (Continued) goods causes causes the They and report less that
of
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reference respects, course Rules. aforementioned Wei, with Engagements
findings terms interests
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attention material attention and and or Transactions
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all was
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may and accordance terms
respect
connected
Institute
directors. to to in the in
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14A.56 Connected transactions
Kong
Jingyu with the Company Group.
non-executive (Revised) the come come
were
in reasonable board Rule Jin the continuing commercial the (as
Hong has has 3000 reasonable of into
and of Financial Mr. with
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The (a) (iv) The (iii) Xiaochang, continuing (ii) connected (b) (i) Engagements of issued Letter continuing issued accordance Report of the Board of Directors Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 76 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 77
to of the the with
have value Hong annual believe with Chapter basis
that the the
disclosed to the connected connected 2018 constitutes connected
Association in
Exchange rata be of and
under out them accordance
believe pro complied
Stock set in time, to exceeded
should continuing continuing December has statements Articles
continuing to The on a
causes or 31
to that and them have the
time
requirements that respects, of guidelines
shares
ended Company from Company’s and (Continued) causes new each Company
the
year transactions the material attention of transactions transactions transactions.
Rules transactions the disclosure
that
offer
all the policies by GL73-14. party the their in to under such
for to Listing amount
the consolidated financial with into, transactions, connected pricing connected HKEx- attention rights to related connected
provided
Kong come the For
XII Company governing the their Letter
entered transactions has been of the complied with aggregate
to
Hong note
connected Rules. Rules. not continuing the Company. in has continuing the has pre-emptive the none
of the out to come or nothing of require for were Guidance
agreements letter Listing Listing by set has RIGHTS terms accordance disclosed above, continuing
set as which Company in Kong of Kong respect as the relevant auditor’s provisions the
laws Exchange’s
Limited. transactions nothing with the transactions transactions, cap that requirements Hong
Hong no the disclosed transaction
shareholders.
purpose of the PRC
the are Kong Stock as transactions (c) (d) determined the of the the copy Report of the Board of Directors Directors Board of of the Report existing There PRE-EMPTIVE or Kong and disclosure party For 14A A transactions, Hong Save connected under been
of was own their
2017: senior market ensure of
(“Board
national their
to Company,
Corporate and
insurance, page 65 in and
determined of any comparable Committee,
of 11,652,000 H are the Remuneration with
on
or
and December on shareholding were duties out the
held
Directors Committee (31 included section by set
their
Ltd. Directors spent public
Directors determination the
salaries Management Company
with
1,100,187,470 H shares accordance Co., in time
the
executive benefits the in line
Directors Strategic in Risk
employees out
had
of and
in
year. of determined (Continued) Therefore,
and set and (Group) employees.
the
non-executive
report. 9,124
Welfare made (including were
results of Board are offered
of
executed participate shares. POLICY Audit
Company
the are to Holding annual motivate efforts total of
the
throughout Committee EVENTS this
operating strictly Company and employees their
had a allowed of Committees float performance. the 2018, Report the
for
remunerations
93 of
established
were Electronics not
retain 3,684,640,154 of
to DATE the
remunerations their of Group
public Board has are to 88 to and
Nomination
that which the and the
attract,
December
relating refer
capital REMUNERATION remunerations Directors of pages consideration SHEET compensated
31 etc., sufficient 2018,
to ensure
on The decrease in employee is mainly due to the exit of transmission transmission of exit the to due mainly is employee in decrease The Company executives trends the into Machinery
to share fully Please AND policies of Committee, the
Details the
effectively
ended be
are
Report total relating of to taking FLOAT report. market
COMMITTEES and
its schemes, can December Remuneration policies are designed to ensure the competitiveness of remuneration Remuneration policies are designed to ensure the competitiveness indicating a year
BALANCE employees). on
statistics. in and Chongqing
31 Board Company’s they policies the annual
at
Remuneration Governance Committees”). 29.54%, The BOARD associates EMPLOYEE As Report of the Board of Directors Directors Board of of the Report For After the balance sheet date, the Group had no any subsequent events. After the balance sheet date, the Group had no any subsequent PUBLIC POST remuneration. which shares that based 10,691 business from the Group’s business during the period. Their period. the during business Group’s the from business practice. levels, and pension regulations. Remunerations management) this The Committee, market
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 78 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 79
to 31 the has also April
was was THE on 26 will website Financial
ended 2018 OF
audit according PRC Company year report
around the the the or
Company’s for on annual
with thereafter performed the WEBSITES The 31 December 31
has Meeting, auditor
on at
websites LLP the as THE Company (Continued)
Mr. Wang Yuxiang website. accordance as By Order of the Board General the in
ON of LLP published Executive Director and Chairman
Exchange’s Annual Accountants
distribution Chongqing Machinery & Electric Co., Ltd. Chongqing Machinery & Electric Exchange’s been
prepared
COMPANY Stock for 2017
RESULTS has Public Accountants
Stock the shareholders the
THE communications. the the at and
statements Public to Certified available and
AND receive ANNUAL RESERVES to financial Company Certified announcement
OF
Company’s reserves dispatched the ShineWing
the PRC choose be by
results
on the
2018. they ShineWing EXCHANGE will Standards. 2019 consolidated
and Company’s annual
means approved available March
Report of the Board of Directors Directors Board of of the Report Chongqing, 20 the STOCK 2019 AUDITORS As DISTRIBUTABLE The . RMB2,708,521,621 (http://www.chinacqme.com) be The PUBLICATION Reporting December appointed Group’s Report of the Supervisory Committee
Dear Shareholders:
During the reporting period, the Supervisory Committee of Chongqing Machinery & Electric Co., Ltd. (the “Supervisory Committee”) diligently performed its duties in the interests of shareholders and the Company in accordance with relevant provisions of the Company Law of the PRC, Securities Law of the PRC, Articles of Association and the Listing Rules, and has supervised all operating and management activities of the Company in a legal, timely and effective manner.
During the reporting period, the Supervisory Committee conducted supervision closely
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING focusing on the annual business objectives and development strategies of the Company in accordance with the Rules of Procedures of the Supervisory Committee of the Company. In order to improve the effectiveness of supervision, the supervision conducted by the Supervisory Committee was based on the practical conditions of the Company, and the comprehensive and concrete supervision was effectively implemented through strengthening the collaboration with the internal audit department and interacting with the supervisory committees of subsidiaries. During the year, one of the supervisors was changed, and the new chairman of the Supervisory Committee was appointed and approved by the general meeting of shareholders in accordance with the provisions of the Company Law and the Articles of Association. During the year, the Supervisory Committee concentrated on conducting annual intensive inspections, specialized inspections on overseas investment, funding enterprises control, “Three Importance and One Greatness” special inspections, bidding and “three reductions” (i.e. reduction of costs, reduction of accounts receivable and inventory and reduction of liabilities). In respect of daily supervision, it reviewed the
interim results and annual financial accounts, financial budget and profit distribution plans Annual Report 2018 Report Annual of the Company as well as participated in the review of the auditor’s report and provided constructive advice through convening four special meetings of Supervisory Committee, attending two general meetings, sitting in ten Board meetings and conducting on-site inspections for relevant matters. The supervision procedures of the Supervisory Committee were effective and standardized, and the supervision and inspection results were effectively utilized.
80 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 81
of of by
the the the the the the that and
laws, rights of internal
and that has with financial from interests
objective abuse the members Company legitimate the
improving conducted reasonable Articles of granted
opinion management is are
the the general the the any
with best Directors and
arising and reliable were the of of thorough confirms
rights and structure, and has the the of It
fair Committee senior
compliance and
transactions
control in of
is
more management
aware Company Company’s Directors, parties Company. true Company
on a other strict activities , impartial and compliant compliant and impartial , implementation the not (Continued) of contradiction the the in exercised the transactions
report. are
internal and fair senior is and Company.
by in
to the truthfully shareholders
management
fulfillment and Supervisory this connected that
Committee the have of are
the
duties
connected of report other operating whole the interests established a the of
acting acted duty its
and view
connected control
manager their the engaged date and or the details period Committee as a Company. a
according interim Company’s and 2018,
faith, members the of
already
reports shareholders the in The Supervisory the of is
and
internal impair
of rationally of auditors inspected has as
duties manager significant
good supervised the to
reporting
other
discharged examined faith. Company supervised and
the
employees, of Company report has the of
financial
has the their the
by has has
Company
the management
and good interests that of the operated Company
authority Association the employees annual the is
Directors, the general inspection, and during
corresponding of Company interests principle and view
the of
senior
the Committee between the Committee presented the and the
performed Committee Committee of a
that report,
of abusing work impairs and a Board, the general of is
other Articles system
shareholders shareholders Company with and Company’s diligence operation view
the the
the none
and of and of found which budget opinions the of to The damaging system
of and supervision Transactions Supervisory Supervisory Supervisory with a Supervisory was fair. date,
views: complied
on Company Company’s To
interests
authority rights The and actively and consciously implemented and improved this system and structure. implemented and improved actively and consciously The financial control management auditing manager principle shareholders and the Board and without The management and The Company’s Company respect
members the the the
Report of the Supervisory Committee Supervisory of the Report of Based • following With members regulations basis. in • gradually. the strictly • • Association. of
by the
in Board,
the
of
conducted
confident
is
report
the Board at the 2018 the at Board the
and the
activities
by
(Continued)
2018,
in
approved business
proposed
Mr. Sun Wenguang
and be the
to achieved
with
By Order of the Supervisory Committee Chairman of the Supervisory Committee reviewed
proposals efficiency
duly
satisfied
is
other has Company.
the and economic
of the
Committee report Committee
Meeting. PRC and
prospect the 2019 financial
General Supervisory Supervisory Company
March The Report of the Supervisory Committee Supervisory of the Report the The Chongqing, 20 Annual development audited
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 82 Corporate Governance Report
COMPLIANCE WITH CORPORATE GOVERNANCE CODE
The Company believes that the continuous improvement of its standard of corporate governance is the underlying cornerstone for safeguarding the interests of shareholders and investors as well as enhancing the corporate value of the Company. In compliance with the Company Law of the People’s Republic of China, the Listing Rules, the Articles of Association and other relevant laws and regulations, and taking into consideration its own characteristics and needs, the Company has been making continuous efforts in enhancing its standard of corporate governance.
None of the Directors is aware of any information that would reasonably indicate that 2018 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING the Company is not, or was not at any time during the year ended 31 December 2018 in compliance with the code provisions under the Corporate Governance Code set out in Appendix 14 to the Listing Rules.
MODEL CODE FOR SECURITIES TRANSACTIONS
The Company has adopted procedures governing Directors’ securities transactions in compliance with the Model Code as set out in Appendix 10 to the Listing Rules. Individual confirmation has been obtained from all Directors to confirm compliance with the requirements under the Model Code during the year ended 31 December 2018.
THE BOARD
The Board of the Company is responsible for formulating the Company’s governance rules, overseeing the Company’s business, making financial decisions and reporting to the general meetings. The management was delegated the authority and responsibility by the Board for the management of the Group. In addition, the Board of the Company has also specified the respective responsibilities of the Audit and Risk Management Committee, Nomination Committee, Remuneration Committee and the Strategic Committee. Details of the above-mentioned committees are set out in this annual report.
83
In a a for for for the the the the that and
in in
non-
Upon to of Board plans, by ensure overall
so
general general
schemes to roles for the
Minutes prior
responsible The and planning. information, matters affecting planning Board insurance
and
is Directors
Board meeting.
paid
from Group’s Directors, 3 days
the
all distinct
distribution
the be
plans issues to 14 to the Board liability
archiving. management.
to
relevant Board business chairman
Company. will
strategic with significant
reports arrangements for profit for the
all
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 84 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 85
of as and (the
skills, based regard of relevant selection reference
be Director a
benefits
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with balance of age, independence of
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 86 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 87
of at at of a for re-
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From 1 Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 88 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 89 3/10 7/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 meetings number of Number of report. attended/total meetings held
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 90 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 91
of at by be
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 92 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 93
of Jin the The
1/1 1/1 1/1 1/1 1/1 1/1 1/1 2018 2017 Wang
record Huang Mr. position propose
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 94 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 95
of the the are any LLP
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 96 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 97
to to of of of or
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costs and as year, the
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 98 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 99
or fall the
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at as verification regulations, number
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[email protected]. of Upon shareholder class resolve;
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shareholder Corporate Governance Report Governance Corporate shares shareholder demands Where identity A (3) (1) Motions raised at a general meeting shall satisfy the following requirements: Motions raised at a general meeting If the Company decides to hold a general meeting, shareholders individually or jointly jointly or individually shareholders meeting, general a hold to decides Company the If shares carrying voting right shall be entitled to propose holding 3% or more of the total 10 days before the convening of the general meeting. motions in writing to the convener supplemental notice of the general meeting within 2 days The convener shall dispatch a proposed such include and shareholders other notify to proposal the of receipt from the within falling matters are they if meeting general such for agenda the into motions meeting. functions and powers of general Procedures (2)
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
100 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 101
laws senior written
of the
Attendance relevant on
members received
and has trainings
supervisors arranged Company
the (Continued)
Directors, Company year,
for the the
Rules follows: as During
(resigned on 28 June 2018) (appointed on 28 June 2018) (resigned on 27 December 2018) provisions, Listing
Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors Function training for new directors
the code recorded Directors. Company. is
the DIRECTOR all the of
including with OF of
Directors
of records
regulations accordance Deng Yong Liu Wei Huang Yong Jin Jingyu Yang Quan He Xiaoyan Ren Xiaochang Chen Ping Dou Bo Wang PengchengLo Wah Wai Function training for new directors Wang Yuxiang Name of Director Training content Corporate Governance Report Governance Corporate and
management TRAINING In Training training Risk and Internal Control and Governance Report
POLICIES AND GOALS
The Board acknowledges that it is responsible for the risk management and internal control systems and reviewing their effectiveness on an ongoing basis. Such risk management and internal control systems are designed for managing risks rather than eliminating the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
Risk management policies have been formulated for the risk management of the Group, standardized and effective risk management system is established to enhance the
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING risk prevention capacity, thus ensuring that the Group operates in a safe and stable environment, improving the operation management level and achieving the operation strategies and objectives of the Group. The existing practices will be reviewed and updated on a regular basis in accordance with the latest corporate governance practices.
The Board has delegated its responsibilities (with relevant authorities) of risk management and internal control to the Audit and Risk Management Committee. During the year ended 31 December 2018, the Audit and Risk Management Committee (on behalf of the Board) oversee management in the design, implementation and monitoring of the risk management and internal control systems.
MAIN FEATURES OF THE RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Annual Report 2018 Report Annual The Group’s risk governance structure and the main responsibilities of each level of the structure are summarised below:
The Board
• Maintains and reviews the effectiveness of internal control and risks management systems under the assistance of the Audit and Risk Management Committee, and measures the nature and extent of risks it is likely to take in achieving the strategic objectives;
• Ensures that the Group establishes and maintains appropriate and effective risk management and internal control systems; and
• Oversees management in the design, implementation and monitoring of the risk management and internal control systems.
102 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 103
the the the and risk and and staff
of on control internal ongoing
business including including
an impact operations, and (Continued)
the matters,
external budget
on of resources,
internal of
controls management t management of from
Committee
Company, operations;
and he or control risk
risk systems
the potentially
material efficiency on management arising of
team
adequacy
systems.
all adequacy may internal
and risk effective
control day-to-day
risks and
audit in and of system Management
that cover and
control findings management
and
and
new
risks internal the risk Risk
risks
Board. control and legal affairs department and control and legal affairs department control
should internal up internal such
and
adviser; the and the programmes effectiveness risk
regulations,
the control; mitigate and to and
appropriate
review Group’s management follow to internal responsibilities
by
and
review Board the its
training risk the
such
and
manages of laws of the reporting,
on management
raised to, maintains
and time; control
compliance
operations to measures
management
Committee and to risk
perform and
and the
and audit department,
risk to recommendations takes experience,
time findings of internal financial matters applicable
annually,
the systems; responses of effectiveness and Group’s
and effectiveness
of and from
Board with makes evaluates internal major
least
confirmation
the Management the the implements operational
control risks at
the
control and
prompt processes
Risk
reliability
and Gives internal Monitors development Identifies, Assists Designs, major internal Oversees control; Provides management Reviews basis; systems effectiveness Evaluates financial, the Considers finance department; qualifications compliance reports Company’s
Risk and Internal Control and Governance Report and Governance Control and Internal Risk • • • Management • • Audit • • • • •
the the the and and
review annual audit; control refines control internal internal Internal
and material and
basis. reporting of business executive in of
the
the and the
these (Continued) Directors time, Organizations in of MANAGE
work internal of prevention
regular in
defects the the inspects Committee systems, frequency elements
communication,
continuously improve on a
and on AND results findings to Group
executive and five effective and
management
established Sponsoring
the and quarter control risks the
the
of the the based risk
focus of projects, a to
Management continuously the performance
once analysis internal
framework information business
ensure management against Group’s
Risk report Committee
to
Committee condition and
least EVALUATE identified; and the
environment
and also the at operation of determine
findings, operation,
system
identifies
Team activities, to by decision-making Board and
Audit shall hear “COSO”) control management
operating
the Management the plans control the
weaknesses risk
control (the management the issued to shall
economic to
for financial effectiveness behaviours, identification, audit of risk significant IDENTIFY,
Management
control internal and of subsidiaries
the
or
TO Risk reported Framework regular
the understand assessment, Commission business,
risks and standards
management
approach, and to and of comprehensive efficiency
Risk and Audit its Group’s
been RISKS management
risk the adequacy and of
recommendations
the The the and
the USED
risks;
Team and senior
to the deficiencies have routines
formulates Integrated
systems; of
Treadway
of makes and
policies
Audit department, the progress
management
part control Evaluates Reviews systems Investigates Reports and activities the control, of Control framework Board. reviews Assesses environment, control monitoring. each a
• • Internal Risk and Internal Control and Governance Report and Governance Control and Internal Risk PROCESS As • • Directors SIGNIFICANT senior of material •
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
104 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 105
the are any
of by
prevent, Group to appropriate case (Continued) regularly. occurrence. in the that by operations. developed their
Board of processes and risks the ensures processes criteria
and control and assessment; likelihood business control and risk risk significant the internal the the and assessment internal Group’s of
of and management manage the the and
indicators; the results to and business affect using
the strategies the monitoring place; warning by and
in strategies evaluate early are monitoring potentially periodic the comparing risk situation; risks. identified management
of may by identify, and of
the management to Reporting risk processes risks that impact of risks on
and risks
broadens risk results the and change the the the used follows: ongoing risks
mitigate the the and control as or
Assesses Determines Performs Prioritises Identifies Considers avoid internal Revises Refines management; Reports significant
Assessment Monitoring Response Identification processes
Risk and Internal Control and Governance Report and Governance Control and Internal Risk • Risk summarised • Risk • Risk • Risk The • • • • •
the the key risk
legal issue
points, quality internal
effective and business adopting three and Company
and AUDIT During key supervision
identify
deficiencies suggestions. for
the management management (Continued)
legal, the
to
ensure of and control USA, control risk and
through risk
to AND
of review
risk basis, management, and decisions. activities the as
(CRO) reinforced operation, management to internal so
risk
opinions of assessed major were
regular Company Officer establishment Kingdom and
a annually. respect finance, different department, operational were establishment the
specific
works Risk on of CONTROL on
of of
and the
with management,
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audit for Group Chief effectiveness
Group contracts business
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legal
reviewed. in of the the Reports
and will,
of
semiyearly perspective
of departments as
and and
were responsible things, economic system, assess from INTERNAL
risk Board
is Officer such
audit
advisors execution conducted a subsidiaries, its and other defects, The
who risks Risk to Management management
contracts behaviours and
policies, legal
internal of UK, risks. and Chief Risk among specifically control hierarchies
and
process Company overseas of and
PTG potential reported system The
on external copies the the rules works, plants UK annual
various internal
control control decision-making projects decision-making to 102 management as of
risks.
assess control resources, of PTG via
and audit
Period, and
and major of risks, MANAGEMENT, management
such and
supervision total the and
internal department, on
Management human internal appointed business risk interim the
the
control During business The RISK Risks Risk Risk and Internal Control and Governance Report and Governance Control and Internal Risk the and identify activities assessment FUNCTIONS and prevention practices management For and year, a of was affairs aspects
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
106 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 107
its A the the the
and and their time, team been been
upon been of of board of of years.
internal Turbine,
including operation has has the of have
large-scale
same companies. and major major and
works, subsidiaries, Rules (Continued) bidding of centred Company
PRC risk, year Water
and of the previous tender. evaluation improvement.
risks on
those the of the quality to subsidiaries At management control
management Listing
the which of of office for
control the
innovations nine work
Shengpu
improvement risk and strategic the risk
and risk laid documents Chongqing
on research of continuous
the Group
professional and compared Company. internal review do manager on
control
and the
tender enhance Pump, to
CMETRC, the the effective
of continuous resources to risk accordingly, the control foundation
technological is on
Pigeon
for conducted
and commissions general the analysis addition, a and
requirements the
and significantly
CMEIM, control filing,
In were human
the review Group on personnel Chongqing
the internal and
for authority enhancement to
of the Company, and subsidiaries ministries assessment with the internal of cases, General, system, Based evaluation analysis improved risk the
the five of strengthened CAFF
procurement of in-depth risk
has out
the Company theirs submitted assessment Compressor,
legal professional
system focus control
as and be the Group and effectiveness compliance
board establishing namely Gas Chongqing the risk, to entities professional
well carrying the subsidiaries. featuring the
control the
equipment conduct must of internal
strict as to Tools, organized in
market report While the inspection also Exchange
phase
Chongqing internal has Finance, reports subsidiaries requires overseas subsidiaries,
rectification,
will
and risk, projects,
time.
new of within Stock the Period, Machine
control the the evaluation in regulations and and a
self-inspection, Control Company.
self-inspection to the namely,
Kong of financial
Company Company Ministry Company
approval, internal
general,
Risk and Internal Control and Governance Report and Governance Control and Internal Risk risk, the Finance Chongqing norm operation Group, established organized domestic the for an Company, shifted During Internal Hong In monitored The control self-inspection tendering The infrastructure projects of
in by
116 and and post audit asset direct basis, Group control
special amount audit
through the projects,
objective, the intensified the hoc the
information The the
construction approved internal (Continued) of executed through investigation, ad Company, of of
internal
efficiencies The matters” an plan newly-restructured the
and projects, and
financial or of projects. of effect
construction assets” amount accomplished
independent, work Company strengthened
the procedures the an systems under systems audit
operational “manage The regular
firstly and in Committee. audit auditing auditing inspection and It
“manage
Company’s construction control management
control environment exerted on a to The audit,
the
risk major fully through of reviewed, adopted disclosures, Committee.
management assessment internal Company. strived internal
for million. engineering
Management business responsibility has were which believe the and 10 procedures on Risk of to responsibility system. works.
financial monitoring information
and Supervisory compliance” comments which, RMB79.81 economic Company’s in department control Company
effectiveness and Board
and proposals of
demands the
by 23 control completed, the the Audit audit
the of prevention audit management economic 370 of
and rectification the internal was through “manage 180
risk projects current risk
insufficient. of and and inspection and manner, causes billion, deducted corporate transparency aggregate, internal
risk” the
through that functions are
projects audit, in out the
that the
department Company provided Board review of satisfy defense investment RMB7.5 Group auditing
effective ensuring the the “manage
to of and operations of audit carries auditing projects audit finding to considers Period,
the of financial of personnel” supervision
and in line
upon Audit of
no totaled audit, the
view and is
Board daily internal Board sufficient third effectiveness effort financial the audit During leadership scientific The Internal Risk and Internal Control and Governance Report and Governance Control and Internal Risk the project projects the “manage audited with a assessment department subsidiaries, and supervision 21 disclosures, there are the systems The
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
108 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 109
and and
inside external
Company disclosure disclosure to
(Continued) the handling captured
and potential
of timely the
any respond being
and
policy and escalation
regulates Group informing
consistent further the reporting
policy of
until The operations
spokespersons matters
determine as
to Rules.
information different act includes: maintained
POLICY to significant
from Listing which inside
being
and the departments; departments
authorised channels with policy and
potential
information, information DISCLOSURE designated and persons persons reporting such to
ensure inside
disclosure of of to accordance
in
required; place
Designated Designated as information Designated enquiries.
in made information
Risk and Internal Control and Governance Report and Governance Control and Internal Risk confidentiality • are • • dissemination INFORMATION An are Environmental, Social and Governance Report
The report has been prepared in accordance with the Appendix 27-Environmental, Social and Governance Reporting Guide of the Rules Governing the Listing of Securities promulgated by The Stock Exchange of Hong Kong Limited. For the corporate governance, please refer to the Corporate Governance Report in this Annual Report.
FEEDBACK ON THE REPORT
We have always believed that the valuable opinions of our stakeholders are the basis for our continuous improvement. If you have any comments or suggestions on the report and our sustainable development, please write to us at Room 1406, No.60, Middle Section of
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING Huangshan Avenue, New North Zone, Chongqing City, the PRC, or send Email to us at: [email protected].
COMMUNICATION WITH STAKEHOLDERS
The Group is committed to continuing operations while balancing the interests of its various stakeholders, including employees, investors and shareholders, customers, suppliers, the government and the local communities in which the Group operates. Our daily communication with stakeholders in the following ways gives us the opportunity to gain valuable advice and suggestions from our stakeholders on sustainable performance and future strategies.
Stakeholders Communication Channels
Annual Report 2018 Report Annual Employees • Meeting • Staff activities • Training • Social media Investors and shareholders • Shareholders meeting • Group’s website • Annual reports, announcements and • on-site meeting circulars • Telephone interviews Customers • Direct communication • E-mail • Social media • Telephone Suppliers • Direct communication • E-mail • On-site inspection • Telephone • Meeting Government • Reports and submissions in • Annual reports, announcements accordance with regulatory and circulars requirements • Telephone • E-mail Communities • Group’s website • Mass media 110 Environmental, Social and Governance Report
GROUP PHILOSOPHY
The Group adheres to the business philosophy of “Going beyond Excellence” to practice its core values of “integrity and win-win”. The Group sticks to the principle of “making good use of resources and providing services for the construction”, attaches great importance to the sustainable development of enterprises, makes effective use of resources and energy, and pays full attention to the climate and ecological environment. Besides, the Group takes the initiative to assume corporate social responsibility. With a cohesive corporate culture across our subsidiaries and employees, social responsibility has been rooted into our group-wide operation and management in achieving our vision to “Equip China, Advance
towards the World”. 2018 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING
ENVIRONMENT
Against the background of deteriorating environmental issues and the transformation and upgrading of traditional manufacturing industries, the Group understands that as a part of the industry, we should take the initiative to assume more environmental responsibilities. The Group adheres to the production principle of “saving energy and reducing emissions” and is committed to building a resource-saving and environmentally-friendly enterprise. In strict compliance with national environmental regulations, the Group advances technological innovations, enhances resource utilization efficiency and promotes energy conservation and emission reduction in its production and development, to explore on an approach featuring low consumption, low emission and high output. During the year ended 31 December 2018, the Group’s pass rate regarding major pollutant emission indicators and hazardous waste disposal rate reached 100%. All newly constructed, upgrade and expansion projects were in strict compliance with the national environmental requirements on “simultaneous design, construction and commissioning” as scheduled.
111
in of by e) 2 real and total gas has has other takes raised
During tonnes without total laws company with also and machining upgrading on-line
equivalent 2 in a Reduction produced (Continued) Group parts, 9,015 products the
of greenhouse impact. the CO the Group industry.
auction national and
recycling from major wastes the The
under gas Emission with wastewater of in
implemented public (Unit: t) (Unit: tCO
《中華人民共和國環境保護 and Besides, and 18,853.14 18,853.14 scraps Quality of gas, unit 118,726.74 118,726.74 137,579.88 137,579.88 ). approximately equipment
greenhouse environmental
PRC ( standard. hazardous professional per place standard wrapping materials, through
metal the
Saving compliance the capacity, in the
oil The of is to solid machinery strict generated e) greenhouse up 2 reduce qualified
Law Energy in waste disposed million. to Group by for consumption gas, an advanced production
Group
and the
were comprises of oil emissions the Protection
waste RMB24.7 materials energy
equipment all manufacturing collected Program
which of outdated in
mainly
waste 2018, system with and
《十三五節能減排綜合工作方案》
were Work waste of
of production emission engaged operation, emission
Period ( Environmental which eliminated standard, maintaining treatment approximately
utilization, December the
The of government, major Plan composed direct treatment.
recycling 31
during as Emissions
by on tonnes, of national
Comprehensive sewage full principally energy Gas resolutely
such mainly is wastes.
the the for of ended The scraps proceeds Five-Year
innocuous 216.752 quantity and
monitoring Group emissions produced by the electric power under net emissions from the burning of fossil fuels renovation Group year level Group 2 2 13th )
the
metal purchase CO Total greenhouse gas emissions of the enterprise (tCO Summary of Greenhouse Gas Emissions Category CO hazardous process. the the 法》 time The exceeded initiatives regulations The Emissions Environmental, Social and Governance Report and Governance Social Environmental,
Greenhouse large the and of about for disposal the
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
112 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 113
by
the the
year 重慶 with per 0.24
utilize 11.23 4.474 energy
energy energy- saving, and the
including standard operating Ltd. ( 2018, RMB ten
in production
137,579.88 thousand of optimization, high conservation (Continued)
of
decreased Co., Consumption energy the were
effectively with compliance
contracting
equipment terms
to energy and December
RMB10,000 in
Cables
the full addition
consumption of comprehensive
1 Group
management
3 337.19 0.0006 Through in on staff
1,608.35 0.0030
each The total out the 124,778.5 5,936,500 transformation value 8,152.1423 0.0154 the of Wires & for energy
2,364,107.70 energy consumption emission
ended Based protection e
2
conditions.
energy-efficient of reducing. carried
large tCO year
with Electric
implementation new constructed has rate
emissions. contract scrapping equipment scrapping
emissions
RMB10,000
encourage the with technological
of are the and with to technology. gas 0.1678 as
per gas and
For Pigeon environment
Group
consumption points was on
companies such the
design plants
and Group: lighting,
call paperless the
reduced. critical The measuring unit
Thousand KWH Cubic meters Ton Ton Ton Ton greenhouse the new
elimination
basis, consumption greenhouse Chongqing on
intensity and
subsidiaries, consumption Implementation
selected
of
its be saving
measures the our the trial
of the
will reduce other based including
in energy
energy
to amount emission on a pressure of subsidiary
dust
period, government’s adopted
offices year-on-year. the recycling against
the
and accelerated Meanwhile, annual
continued
achieve energy 2 5% standards, Group reduction to with residual and
green
reduction to
be the SO has reporting
consumption , Utilization of The 2 comprehensive will research and the and heat,
CO
use
e, emission Group 2
2018 Resource categories Electric power Natural gas Gasoline Water Diesel Packaging materials Environmental, Social and Governance Report and Governance Social Environmental, wide environmental coal, waste modification energy management 鴿牌電線電纜有限公司) saving Resource of equipment, revenue.
During consumption. Responding Resource approximately and tCO the Group’s
of or
the the the and with
on a were noise KWH,
to
nuclear that sewage city attaches pollution services. products recycling
living of
inspected. production repaired reduce refrigeration
with introduced a occupational (Continued) geographical slogans and approximately main checked the national
noise also
Group development and
ensured thousand of were has
and the of the power importance is
the
were
phase, and continuous were it to
lines superior
construction products Group blades shelter
controlled vegetation. water-saving great energy-efficient facilities pipes outside
Firstly, with
the nuclear testing conservation 1,161,074 power The influence
achieve in system,
systems and rotor and G3 of green green the
to River parks the according supply production
of in 2017. Water
adopted and attached
operations,
nuclear
in supply
concealed power
the protection. 2018,
of recycling water and managed been
isolation, participate of
in Yangtze that pump
controls The industrial
Group wind generation water to coverage
and
has the other with environment standards. the and
of layout The
Company’s meters
high in
physical and power power effectively internal charging
resources, the the environmental construction as
sewage
and
treatment in cubic the environmentally-friendly
reaches monitors the compared located discharge
manufactured
from consciousness. Group such faucets nuclear water
annual
surrounding sites, in
and
resources.
all
of optimize of and the 54% secondary
The sewage
upper the municipal 630,000
are Group tanks, develops of We field of water
the
and measures responsibility meets leakage, generated the
in control
the
nuclear
production manner. water-saving its Group participates in representing of
G3 actively
equipment. avoid damaged
the health conservation the noise approximately
through Treatment fulfill
abundant standards. timely located to
of construction
approximately to the also to and layout Secondly, 2018, is
and actively
wastewater of wastewater
in a products and
the in
basis
including of enhance energy. hazards and
Group
Group to
employees’ addition, resources.
industrial Through technology utilization position power, series units decreasing by protection. 614MW regular industrial clean of noise management set In The Environmental Protection Environmental, Social and Governance Report and Governance Social Environmental, treatment Subsidiaries replaced on businesses importance The reasonable
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
114 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 115
of the the the and and and
sense reform stable talents Group,
and seeking policy respects physical,
each ) and the and system on training the perfects
utilizing (Continued) for
of
Group’s system. talents, and
cultivating level
the based
solidarity for employees, perfects
and vocational
its harmonious dedicated, and revises environment remuneration
system allocation
of guiding
a ), the
《薪酬管理實施辦法》 Group. headquarter
benefits, employees’ to innovative” rights revises
working employees the of the
forward incentive the
the of at
for mechanism,
Group Practices ( compensation respect carry
employee
The values We improve the improve We to and realization harmonious
appraisal
safeguards 《經營業績考核辦法》 core the constraint ROUTINES incentivising “paying
and environment
policies, comprehensive quality.
the of fully
and and appraisal
safe
Compensation
and Results ( management. motivations pursues
working performance pursue Group
resources LABOUR and concept establish a Sound
we incentive aspiring and to
growth efficiency on provides a the sound Operation
performance the the regularly evaluate the performance of employees to ensure that that ensure to employees of performance the evaluate regularly
cohesively human
AND
on and and
expect
Together and technology paths,
Group’s Measures safe in through motivation, relationship. The Method fostering embraces
regulates
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of the a emotional career
activities.
employee, Group Group
provide belonging respect
Environmental, Social and Governance Report and Governance Social Environmental, employee’s improving competent, employment mental, to in Employees The We strictly comply with the laws and regulations relating to employment, such as the Labor We strictly comply with the laws Law of the PRC, Law of the PRC on Prevention and Law of the PRC, the Labor Contract and the Social Insurance Law of the PRC. In 2018, the Control of Occupational Diseases regulations and laws the with non-compliance material any of aware not also is Group relating to employment. Regulatory Compliance The EMPLOYMENT SOCIETY related of every employees’ employees can be promoted in a fair and equitable environment. Meanwhile, by maintainingemployees can be promoted in to attention paying and lives employees’ about caring channels, communication smooth their thoughts, we experienced Management Examination design
to by
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other more
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and a
and
publicises
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standardized (Continued) with performance, employees
efficiency national tap leave comprehensive
Group performance to and encourage with holidays. paid the
harmonious
offered a Group’s relationship, equal individual
transparent a and
priority
are employees
in the
an effectively
on individual
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of statutory
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to giving ensure and
compliance employees,
Male Female as
based
creativity of to of rest,
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employees strict sound
and
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in of composition
teamwork
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profits. approach improvement
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both adjustments organization
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to on arranged
environment, enthusiasm to
on
Clinging employees’ annual corporate
bereavement Employees by Gender Group harmonious to work hours specialties.
to
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focusing a and adheres 74% belonging the appointed follows. 6707
of and work
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respect
conditions. subject of
to Group 2018,
ages out With structural full
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to set The compensation 2417 26% market motivate the pays is
package, of creation results. through
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candidates
December marriage,
Group
and and criteria
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of the individual for 31
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Group consideration
of
The Environmental, Social and Governance Report and Governance Social Environmental, contribution linking atmosphere different remuneration quality, details enhancement basis, perform due resources, laws, process leaves As reasonable
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
116 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 117 (Continued) Aged≤35 Aged between 36 and 45 Aged between 46 and 55 Aged≥56 Clean energy equipment High-end smart equipment Modern industrial services Headquarters and others Employees by Age
46.20% 4215 59.47% 5426 Employees by Business Segment by Business Employees 56 0.61%
75 247 2.71% 0.82% 2510 27.50% 3567 2152 23.59% 39.10% Environmental, Social and Governance Report and Governance Social Environmental, (Continued) Managerial personnel Engineering technicians Marketing personnel Skilled workers Auxiliary personnel Logistical personnel Doctor Postgraduate Undergraduate education Tertiary middle school and below Technical Employees by Specialty Employees by Education Employees 792 8.68% 396 4.34% 1798 19.70% 19.88% 1814 1541 16.89% 218 2.39% 17 224 2.46% 0.19% 370 4.05% 5801 63.58% 5277 57.84% Environmental, Social and Governance Report and Governance Social Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
118 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 119
of of In to
For 2%. and and Co.,
injury work- injury, safety sound of career strictly strictly
glasses, Tools. wealth the patient
Protection approach perfecting
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on
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additional
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system standard relieve thus by occupational treatment responsibilities, and of Sticking have Group.
sharing.
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dust Company General conducted
protection. below we Chongqing
platform
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including
Group active China
security service Safety are system, The with of the supplies of
work-related
the and ISO18001
goal, for specifying
within 99.25%, employee knowledge
works no generally regulations.
comprehensive individual supervision need safety assessment”.
including and
Chongqing
for Since establish a labour was safety system. key
had infrastructure each
and
Republic Production to and furnished priority
of strict
management production enterprise management the year. organization,
improve 0.0092%, are Periodic cover some laws Group special
high hazards including
organizations, ISO14001
the production employees’
enterprises quality, was People’s making
system atmosphere a in the normal also in
on
training the six other safety. are management safety the
the rate technology
and
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2018,
and demonstration applicable checks sound construction, positive on
enterprises
By
injury recorded
safety of “establishing health safety only evaluation Law learning-oriented
professional participate six enabled
identified formulas by other health in not to and a the prevention-dominated was Rules production the and
business and laws. build a
of
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December to Labour Training and into
rate improve 31 but Basic each standardization creating a regular health the
safety and ensure standardised formulas
to and disease construction
launched at of system, inspections occasional relevant perfected Safety
the
foremost,
and
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opportunities
work-related aim
safety was injuries, and and
its
which control, an
the rectification year
operation the “safety Labor
Environmental, Social and Governance Report and Governance Social Environmental, helmets, and hazards development development, With Development Occupational Health We provide employees with safety training and occupational risk assessment to enhance enhance to assessment risk occupational and training safety with employees provide We in involved Workers accidents. of probability the reduce and awareness employees’ the training safety and health mandatory in participate to required are projects construction cranes safe including project, the of stages different in involved matters all covering management. site and management safety operations, manual work, aerial operation, Employees related The Meanwhile, and complies learning on the nature of their work to insurance the serialization addition, for drive pollution 2010) of occupational the system Ltd., occupational implement of systems, (Continued) follows: as are activities training Quality training internal Training content Contents including differences between the characters of Contents including differences between the core of performance the management and leadership, of the well-performed team. management and nine features Analysis on mid- and long-term incentive policy; practice and Analysis on mid- and long-term and long-term incentive and case sharing of design of mid- constraint policies. Improving strategies regarding smart quality management regarding smart quality management Improving strategies quality containment strategies regarding in the full life cycle; application on-site quality control – QC management during at data; comprehensive quality management of quality mega – product designing coveringthe phase of product designing manufacturing, installation and costs.
Group’s the of examples team practice training on mid- and long-term incentive policy of state-owned enterprises training Subject Creating a well-performed Analysis and specialized Quality management Quality management
Some Environmental, Social and Governance Report and Governance Social Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
120 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 121
per and
covering hours
safety
(Continued) training primarily
43 employee
about sessions
Senior management Middle management Junior personnel Skill operators culture,
training
corporate 950
of
total persons participating and a state-owned enterprises manufacturing, held
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Period,
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Analysis and specialized practice training on mid- and long-term incentive policy of Analysis and specialized practice Environmental, Social and Governance Report and Governance Social Environmental, health, During person business
in in of of
the use first and and and and and due
child
been
labour Law labour, the on
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
122
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 123
(Continued) Picture of Skills Competition Environmental, Social and Governance Report and Governance Social Environmental, (Continued) Environmental, Social and Governance Report and Governance Social Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
124 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 125
to of of
the the and and
false
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its a activities scientific exercised pursuit RMB1.548 to change
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is
and procurements we energy of 789 the mutual domestic price, fair with
procurement
manufactured laws
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China
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Group Group products suppliers. latest 3 middle
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
126 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 127
to In of for
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and and give
avoid waste set behalf up among difficult subject energy- system” sources we to principle
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of natural
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Environmental, Social and Governance Report and Governance Social Environmental, and clean will products generation full order the of of The a to be product products after-sales proper the saving ecology, residue The operators of to environmental of the departments the and In effective
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to the
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
128 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 129
of of to In or all
has The and room Code bribe-
network situation order or
indicator rewarded outsiders outsiders Company
review the protection accepting training
databases
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equipment,
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interests. fire are prevented and the
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the People’s prevent formulated insiders business a and systems.
regulations
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its positions audit
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procedures, speedy the
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their means. System the
system,
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which 2018, technology
ensure other which an national the
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to in
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of great development,
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and Group’s
line, the to of relevant threats, standardise in The
judgment, or As
Employees
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any fair the Procedures as Group
to
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simultaneous
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Environmental, Social and Governance Report and Governance Social Environmental, and network China, accordance have been made been have modification requirements personal formulated isolation, from and to of Following Information The Anti-corruption or hotline established Anti-Fraud accordingly. employees independent maintain concealment or of involved taking
to or as
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resolve
compliance”. has through
directly Risk Machine its
Code
Measures 2018, to promulgated
treatment Gas Exchange, control give and regulations,
In internal and the contracts;
and “manage
financial
system evaluation and and on and jointly 98
and the internal and personnel” Audit Chongqing department
audit,
rules
established Chongqing control the
supervision Management the promoted. Company
audit for
of reviewed audit Finance by prevention
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and Internal Companies matters” assets”
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decisions. tracking conducted Rules for “manage of “manage inspection supervision internal well
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to of of sound as subsidiaries of Turbine. been
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assessment
material its audit, for enterprises including Chongqing commissions
review has through Practices the strives has the power continuous Pump Water and
and innovative and
and mechanism timely to
the Legal operation an
in a Group as monitored established a Board effectiveness
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contracts, risks reporting Committee, Affairs. comprising Chongqing The Pursuant effectiveness compliance” responsibility immunising and has ministries the Under Environmental, Social and Governance Report and Governance Social Environmental, on Governance Chongqing well the Company, improvement
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
130 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 131
至 its
to Group Group
youths
welfare, Children economy
the Integrated The
the (Continued)
Volunteers ( local public addition
“Leyi to in for Company’s
at society. company,
to “Embrace Sunshine
caring welfare listed
children of New titled contributes
and a spirit public
dedication
its benefit. activity
Chongqing proactively support
selfless mutual
Chongqing to
volunteer in for Group
demonstrated “Zhishan • making The
2018, the Young Group of Pigeon charity activities with
and Group
enterprise a March environment growth. The key 18 together on community
Communities in to conduct business
team, that harmonious livelihood. responsibilities the
state-owned part
擁抱星星的孩子)” which provides care to autistic and
shows with social delivering
volunteer create a takes
on in to Stars (
municipal picture 重慶新陽光義工)”, the • Environmental, Social and Governance Report and Governance Social Environmental, efforts actively development strives As a Connecting Kindergarten” in Ge Le Shan. 善 The taking of formed a
the
to
Company organised
garden. (Continued) response
Pigeon assets”, in
of
invaluable
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are Committee
its an
of
CCYL
building mountains the
for lush
Department
2018, days
and two March
waters 12 spent
the Electrical the on “lucid
and of
of
that
League
concept shows
Commando”, Youth
picture the “Youth
The Environmental, Social and Governance Report and Governance Social Environmental, and development the
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
132 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 133 the the
titled Day”,
activity (Continued) Feng
Lei
volunteer from
“Learning environmental the 56th
in CQMEHG. the of 2018, along the river side of Fengqituo community, Action” along the river side of Fengqituo
in participated Committee March Youth 30
CCYL on Company
the that by
CQMEHG’s Pegion
shows
Jialing - picture
Environmental, Social and Governance Report and Governance Social Environmental, The Dazhulin organised young staff from “Beauty
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 +8 +8 +8 +8 : : ile: ile: one : im ph facs 㚄㌫⭥䈍 tele Րⵏ
n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ BASIS FOR OPINION OPINION We conducted our audit in accordance with China Standards on Auditing for Chinese We conducted our audit in accordance with China Standards on standards are further Certified Public Accountants. Our responsibilities under those Financial Statements” described in the “Auditor’s Responsibilities for the Audit of the accordance with the section of our report. We are independent of the Company in our fulfilled have we and Accountants, Public Certified Chinese for Ethics of Code evidence we have other ethical responsibilities of the code. We believe that the audit audit. obtained is sufficient and appropriate to provide a basis for our We have audited the accompanying financial statements of Chongqing Machinery Machinery Chongqing of statements financial accompanying the audited have We the and consolidated the comprise which “Company”), (the Ltd Co., Electric & the and consolidated the 2018, December 31 at as sheet balance Company’s flow cash Company’s the and consolidated the statements, income Company’s equity in changes statement of the Company’s and consolidated the and statement notes to financial statements. for the year then ended and related financial statements of the Company present fairly, In our opinion, the accompanying and the Company’s financial position as at in all material respects, the consolidated and the Company’s results of operations and 31 December 2018, the consolidated for Standards Accounting with accordance in ended then year the for flows cash Business Enterprises.
2. 1. To the Shareholders of Chongqing Machinery & Electric Co., Ltd: of Chongqing Machinery To the Shareholders Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
134 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 135
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
+8 +8 +8 +8 : : ile: ile: one : im ph facs 㚄㌫⭥䈍 tele Րⵏ
n e, ji ቲ en Beida 9 a credit risk assessment of notes notes of assessment risk credit ᓗ strict, Beijing, hin A C Di Evaluate and test on the management Evaluate and test on the management and receivable and accounts receivable, receivable, accounts and receivable as well as the design of identification policies and operational effectiveness; R. , P. Chaoyangm cheng
The main audit procedures we have have we procedures audit main The implemented are as follows: – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ VI.3 of the Company, the book book the Company, the of VI.3 Provision for bad debts of Notes Receivable and Accounts Receivable Provision for bad debts of Notes in As of 31 December 2018, as stated Note value of Note receivables and Accounts receivable is 3,765,346,019.73 RMB is debt bad for provision the and 457,849,305.43 RMB.
Key Audit Matters 1. Key audit matters are those matters that, in our professional judgment, were of most professional judgment, were are those matters that, in our Key audit matters These period. current the of statements financial the of audit our in significance as a audit of the financial statements in the context of our matters were addressed opinion thereon, and we do not express a separate whole and, in forming our audit opinion on these matters.
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 +8 +8 +8 +8 : : ile: ile: one : im ph facs 㚄㌫⭥䈍 tele Րⵏ
n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A key assumptions used by the the by used assumptions key C Di We review the historical credit loss We review the historical credit experience data and the rationality of Management to calculate the the calculate to Management which rate loss credit expected (it rate loss default assume the is final of possibility the represents debt), of types various of default and combine the debtor’s historical default historical situation, credit the evidence and default ratio, and financial debtor’s the in changes the during observed status credit current period to determine whether receivable notes of risk credit the has receivable accounts and we Then, significantly. increased reasonableness the evaluate can and assessment risk credit of receivable notes of identification the by receivable accounts and Management; R. , P. Chaoyangm cheng
(Continued) – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ for bad debts of Notes Receivable and Accounts Receivable Receivable Accounts and Receivable Notes of debts bad for (continued) The Company measures the provision on based receivable Accounts for recognizes of policy Group’s the of losses credit expected the the accounts receivable. As this need identify and assess to Management has receivable accounts the whether credit impairments, if the re-estimation existing the from different is result a has difference the and estimate financial the on influence significant consider we therefore statements, notes of debts bad for provision receivable accounts and receivable as a key audit matter. Provision
1. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
136 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 137
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
+8 +8 +8 +8 : : ile: ile: one : im ph facs 㚄㌫⭥䈍 tele Րⵏ
n e, ji notes receivable and and receivable notes the expected credit credit expected the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di accounts receivable by analyzing analyzing by receivable accounts credit customer and aging the send and Company the of status notes for letter confirmation receivable and accounts receivable received payment the inspect and and period subsequent the in of reasonableness the evaluate of debts bad for provision the accounts and receivable notes receivable; loss model of notes receivable receivable notes of model loss the of receivable accounts and Company, check the Management’s calculation and assumptions process of expected credit losses, for basis the whether analyze and notes of debts bad for provision the receivable and accounts receivable reasonable. and sufficient is of amount the whether Recalculate bad debts is accurate; Evaluate Obtain R. , P. Chaoyangm cheng
– – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ for bad debts of Notes Receivable and Accounts Receivable Receivable Accounts and Receivable Notes of debts bad for Provision (continued)
1. Key Audit Matters
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n e, ji whether the accounting accounting the whether ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di treatment of the notes receivable receivable notes the of treatment for receivable accounts and debts bad of provision the the and Management the by of disclosure and presentation relevant information in the financial statements are appropriate. Evaluate R. , P. Chaoyangm cheng
(Continued) – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ for bad debts of Notes Receivable and Accounts Receivable Receivable Accounts and Receivable Notes of debts bad for (continued) Provision
1. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
138 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 139
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
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the design and and design the n e, ji the stocktaking of the the of stocktaking the the aging and expiration expiration and aging the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di implementation of internal control control internal of implementation related to the Company’s provision for decline in value of inventories. Company and checks the quantity, Company and checks the quantity, of date expiration the and status the inventories. Supervise Combine Evaluate date of the Company’s inventories, of review analytical an conducts the long-age inventories to analysis the reasonableness of provision for decline in value of inventories. R. , P. Chaoyangm cheng
– The main audit procedures we have have we procedures audit main The implemented are as follows: – – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ of December 31, 2018, as stated stated as 2018, 31, December of Provision for decline in value of inventories Provision for decline in value As in Note VI.6 of the Company’s Company’s the of VI.6 Note in Statements, Financial Consolidated was inventories of value book the 1,9 4 9,8 9 2,9 3 of value 8.1 in 3 R decline for Mprovision B , a n d t h e RMB. 157,655,591.37 was inventories the on impact significant a has It financial statements. the at measured are Inventories realisable net and cost of lower of value realisable net The value. by determined is goods finished the in price selling estimated the less business of course ordinary completion, of costs estimated the to necessary costs estimated the taxes. relevant and sale the make estimated the determining When Management the price selling and judgments significant used trends market future the predicted historical the considering by issue this Since price. market the and amounts material involves Management, we consider provision inventories of value in decline for depreciation as a key audit matter.
2. Key Audit Matters
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n e, ji whether the accounting accounting the whether samples from the sales sales the from samples the calculation table of of table calculation the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di order after the current accounting accounting current the after order selling the compare and period, selling estimated the with price price; Choose Evaluate Obtain treatment of provision for for provision of treatment inventories of value in decline the and Management the by of disclosure and presentation relevant information in the financial statements are appropriate. provision for decline in value value in decline for provision Company; the of inventories of impairment inventory the perform executed is it whether check test; relevant the with accordance in the of policies accounting Company; exam the current period decline for provision of movement recognized inventories of value in in the previous years; and analyze in whether the provision for decline value of inventories is sufficient; R. , P. Chaoyangm cheng
(Continued) – – – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ Provision for decline in value of inventories (continued) Provision for decline in value
2. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
140 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 141
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
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n e, ji an internal control test test control internal an the agreement signed signed agreement the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di between the Company and and Company the between key the check to customer the shipping example, for terms, and payment acceptance, and Understandpolicies, etc. settlement the company’s judgment which has timing the on impact significant a and amount of revenue recognition, determining for methods including the progress of the implementation method. the of adoption and of reasonableness the Estimate the calculate to used method the transaction the of price variable price, the price of the transaction, the of measurement the and be to expected money of amount refunded to the customer. Obtain Perform related to sales and collection collection and sales to related cycles of the Company to analyze the of validity the check and company’s the of control internal revenue recognition. R. , P. Chaoyangm cheng
The main audit procedures we have have we procedures audit main The implemented are as follows: – – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ 2018, as stated in Note VI.46 VI.46 Note in stated as 2018, Revenue recognition In of the Company’s Consolidated Consolidated Company’s the of total the Statements, Financial revenue is 5,284,317,532.90 RMB. significant a has recognition Revenue Revenue profit. net on impact risks, inherent has recognition andcomplete is revenue the whether accurate records in the appropriate of accounting period, there is a risk we material misstatement. Therefore, a as recognition revenue consider key audit matter.
3. Key Audit Matters
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product and sales sales and product n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A erform an analytical review review analytical an erform C Di types, and choose samples samples choose and types, sample material Select separately. checking by revenue check to documents, supporting relevant voucher, accounting including sales contracts, records, sales documents, shipping invoices, to records receiving and receipts verify the authenticity and accuracy of revenue recognition. Differentiate P process to evaluate the the evaluate to process revenue sales of reasonableness changes, profit gross and combined the industry development which the Company operates in. R. , P. Chaoyangm cheng
(Continued) – – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ Revenue recognition (continued)
3. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
142 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 143
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n e, ji whether the accounting accounting the whether ቲ en Beida 9 a ᓗ strict, Beijing, hin A valuate the sales revenue is is revenue sales the valuate C Di recorded in the appropriate appropriate the in recorded a accounting period by performing cut-off test on sales revenue before and after the balance sheet date. Evaluate E treatment of revenue recognition by treatment of revenue recognition and Management Company’s the of disclosure and presentation the relevant information in the financial statements is appropriate. R. , P. Chaoyangm cheng
– – Responding measures .8, ਧᇼॾབྷ
ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ Revenue recognition (continued)
3. Key Audit Matters
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n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng (Continued) .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ OTHER INFORMATION The management of Chongqing Machinery & Electric Co., Ltd (hereinafter referred to referred (hereinafter Ltd Co., Electric & Machinery Chongqing of The management for the other information. The other information as the “Management”) is responsible in the Company’s 2018 annual report, but does comprises the information included and our auditor’s report thereon. not include the financial statements does not cover the other information and we Our opinion on the financial statements conclusion thereon. do not express any form of assurance read to is our responsibility statements, financial the of audit our with connection In is information other the whether consider so, doing in and, information other the the in obtained knowledge our or statements financial the with inconsistent materially materially misstated. audit or otherwise appears to be material a is there that conclude we performed, have we work the on based If, fact. We have that report required to are we other information, the misstatement of nothing to report in this regard.
4. Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
144 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 145
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
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n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ RESPONSIBILITIES OF THE MANAGEMENT AND THOSE OF THE MANAGEMENT RESPONSIBILITIES THE FINANCIAL GOVERNANCE FOR CHARGED WITH STATEMENTS The Management is responsible for the preparation of the financial statements in in statements financial the of preparation the for responsible is Management The fair achieve to Enterprises Business for Standards Accounting with accordance is which control internal maintaining and implementing designing, and presentation; statements are free from material misstatement, necessary to enable that the financial whether due to fraud or error. the Management is responsible for assessing In preparing the financial statements, applicable, as disclosing, concern, going a as continue to ability Company’s the and using the going concern basis of accounting matters related to going concern cease to or Company the liquidate to intends either Management the unless alternative but to do so. operations, or have no realistic Company’s the overseeing to responsible are governance with charged Those financial reporting process.
5.
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n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng (Continued) .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ and assess the risks of material misstatement of the financial financial the of misstatement material of risks the assess and an understanding of internal control relevant to the audit in order to to order in audit the to relevant control internal of understanding an design audit procedures that are appropriate in the circumstances. Obtain Identify statements, whether due to fraud or error, design and perform audit procedures statements, whether due to fraud or error, design and perform and sufficient is that evidence audit obtain and risks, those to responsive a material appropriate to provide a basis for our audit. The risk of not detecting from error, as misstatement resulting from fraud is higher than for one resulting fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE RESPONSIBILITIES FOR AUDITOR’S STATEMENTS FINANCIAL Our objectives are to obtain reasonable assurance about whether the financial financial the whether about assurance reasonable obtain to are objectives Our fraud to due whether misstatement, material from free are whole a as statements report that includes our opinion. Reasonable assuranceor error, and to issue an auditor’s in conducted audit an that guarantee a not is but assurance, of level high a is will always detect a material misstatement when accordance with auditing standards considered generally are and error or fraud from arise can Misstatements exists. it expected be reasonably could they aggregate, the in or individually if, material financial these of basis the on taken users of decisions economic the influence to statements. exercise we standards, auditing with accordance in audit of course the During the out carry also We skepticism. professional maintain and judgment professional following works: (1) (2)
6. Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
146 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 147
7190 2288 2288 2288 7190 54 54 54 54 0)65 0)65 6(01 6(01 6(010)65 6(010)65 (Continued)
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n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ on the appropriateness of the Management’s use of the going going the of use Management’s the of appropriateness the on the appropriateness of accounting policies used and the the and used policies accounting of appropriateness the the overall presentation, structure and content of the financial financial the of content and structure presentation, overall the statements, including the disclosures, and also whether the financial statements statements, including the disclosures, and also whether the financial that achieves fair represent the underlying transactions and events in a manner presentation. reasonableness of accounting estimates and related disclosures made by the reasonableness of accounting Management. Evaluate Conclude Evaluate concern basis of accounting and, based on the audit evidence obtained, obtained, evidence audit the on based and, accounting of basis concern that conditions or events to related exists uncertainty material a whether going a as continue to ability Company’s the on doubt significant cast may material uncertainty exists, we are required to concern. If we conclude that a report to the related disclosures in the financial draw attention in our auditor’s disclosures such if or, standards auditing the with accordance in statements our opinion. Our conclusions are based on the are inadequate, we shall modify the date of our auditor’s report. However, future audit evidence obtained up to the Company to cease to continue as a going events or conditions may cause concern.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE RESPONSIBILITIES FOR AUDITOR’S STATEMENTS (CONTINUED) FINANCIAL We communicate with those charged with governance regarding, among other other among regarding, governance with charged those with communicate We audit findings etc., matters, the planned scope and timing of the audit and significant our during identify we that control internal in deficiencies significant any including audit. (4) (3) (5)
6.
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20 March 2019 n e, ji ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di R. , P. Chaoyangm cheng (Continued) .8, ਧᇼॾབྷ ेӜᐲь४ᵍ䱣䰘ेབྷ㺇 8 9/F, Block A, Fu Hua Mansio No Dong 100027 㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE RESPONSIBILITIES FOR AUDITOR’S STATEMENTS (CONTINUED) FINANCIAL China, Beijing We also provide those charged with governance with a statement that we have have we that statement a with governance with charged those provide also We to and independence, regarding requirements ethical relevant those with complied and other matters that may reasonably be communicate with them all relationships and related safeguards, where applicable. thought to bear on our independence with those charged with governance, we determine From the matters communicated significance in the audit of the financial statements those matters that were of most these describe We matters. audit key the therefore are and period current the of unless law or regulation prohibited public disclosure matters in our auditor’s report circumstances, we determine that a matter should about the matter or when, in rare doing of consequences adverse the because report our in communicated be not such of benefits interest public the outweigh to expected be reasonably would so communication.
6. Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
148 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 149
– – – 2017 Unit: RMB
1,138,300.00 31 December 19,416,374.00 260,528,433.00 188,049,577.00 434,915,529.00 2,040,955,563.00 1,007,178,150.00 2,403,684,040.00 1,479,630,312.00 1,330,585,629.00 3,883,314,352.00 1,658,694,663.00 10,544,831,763.00
– 2018 6,039,285.98 5,124,292.21 31 December 81,059,064.90 20,538,197.57 249,077,553.98 383,447,758.44 264,987,827.45 928,431,789.73 1,949,892,938.13 1,115,437,102.20 2,636,400,832.87 1,128,945,186.86 3,765,346,019.73 2,164,670,306.18 10,530,066,180.49
VI 9 VI 8 VI 6 VI 4 VI 5 VI 3 VI 2 VI 1 VI 10 Notes VI 7.1 VI 5.2 VI 5.1 VI 3.2 VI 3.1 VI 11(1)
Consolidated Balance Sheet Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Accounts receivable Accounts Dividends receivable Interests receivable
Non-current assets due within one year Held-for-sale assets Other current assets Loans and advances to customers Contractual assets Inventories Prepayments Other receivables
Including: Including: Notes receivable Notes receivable and Accounts receivable Notes receivable and Financial assets held for sale Financial assets held Cash and cash equivalents Total current assets Item Current assets
– – 2017 7,138,672.00 31 December 83,655,571.00 68,505,568.00 91,669,620.00 37,894,354.00 203,065,942.00 615,280,100.00 143,312,435.00 418,264,301.00 164,020,540.00 5,745,841,429.00 1,046,677,545.00 2,866,356,781.00 16,290,673,192.00
– 2018 31 December 21,495,341.97 29,927,674.79 33,200,000.00 38,880,000.00 46,693,061.00 83,609,256.52 103,686,673.46 224,093,001.19 617,595,163.06 143,312,435.00 171,249,276.77 5,747,617,618.18 1,009,154,785.28 3,224,720,949.14 16,277,683,798.67
VI 24 VI 23 VI 20 VI 22 VI 19 VI 21 VI 14 VI 13 VI 15 VI 16 VI 17 VI 18 Notes VI 11(2)
(Continued) Unit: RMB
Other non-current assets Deferred tax assets Development expenditures Long-term deferred expenses Intangible assets Goodwill Loans and advances to customers Loans and advances Long-term equity investments Available for sale financial assets Available for sale financial Long-term receivables Other equity instruments investment Investment properties Property, plant and equipment Construction in progress Total non-current assets Total assets Non-current assets Item
Consolidated Balance Sheet Balance Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
150 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 151
– – – – – – 2017 Unit: RMB
(Continued) 31 December
58,346,309.00 30,077,325.00 11,250,751.00 15,968,000.00 57,693,334.00 294,663,555.00 383,378,140.00 211,496,663.00 526,130,340.00 797,674,683.00 221,341,231.00 562,411,906.00 877,057,450.00 677,552,844.00 7,083,410,948.00 2,029,275,701.00 9,112,686,649.00 1,669,889,955.00 2,759,082,239.00
– – – – 2018 1,176,168.16 31 December 79,509,594.57 27,519,691.51 13,156,812.78 20,617,240.24 16,294,000.00 63,635,374.54 170,826,135.24 405,298,663.38 147,696,759.15 599,204,267.53 799,143,854.22 220,974,568.70 843,184,922.99 911,696,617.94 685,648,864.72 2,311,745,034.55 9,048,021,855.31 6,736,276,820.76 1,334,738,381.17 2,748,376,442.76
VI 34 VI 23 VI 32 VI 39 VI 38 VI 40 VI 37 VI 31 VI 36 VI 30 VI 29 VI 35 VI 26 VI 27 VI 28 Notes VI 7.2 VI 31.2 VI 31.1
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Balance Sheet Balance Consolidated perpetual bond perpetual dividends payable interests payable
Other current liabilities Other non-current liabilities Deferred tax liabilities Non-current liabilities due within one year Provisions Long-term employee benefits payable Deferred revenue Including: Long-term payables
Including: preferred shares Other payables Bonds payable Taxes and levies payables Employee benefits payables Long-term loans Short-term loans Deposits from banks and other financial institutionsDeposits from banks VI 33 Notes payable and accounts payable Notes payable and Receipts in advance Contractual liabilities Total liabilities Total non-current liabilities Non-current liabilities Total current liabilities Item Current liabilities
2017
31 December 27,977,334.00 49,744,935.00 400,262,838.00 297,517,132.00 6,777,723,705.00 7,177,986,543.00 2,717,844,150.00 3,684,640,154.00 16,290,673,192.00
2018 accounting department: 31 December 31,052,427.09 50,311,968.20 420,762,299.14 334,373,473.12
Person in charge of 6,808,899,644.22 7,229,661,943.36 2,708,521,621.81 3,684,640,154.00 16,277,683,798.67
VI 45 VI 41 VI 44 VI 43 VI 42 Notes
(Continued) Unit: RMB
accounting function:
the Company Retained earnings Share capital Surplus reserves Other comprehensive income Other comprehensive Capital reserves Total shareholder’s equity Total liabilities and shareholder’s equity Total equity attributable to shareholders of Total equity attributable to shareholders Non-controlling interests Shareholder’s equity Item
Consolidated Balance Sheet Balance Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by: Legal Representative: Person in charge of
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
152 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 153
– – 2017 Unit: RMB 293,946.00
4,480,970.00 31 December 31,246,276.00 20,016,439.00 40,221,072.00 260,528,433.00 256,000,000.00 156,197,977.00 3,201,492,944.00 4,938,976,227.00 8,140,469,171.00 4,626,938,596.00 1,051,013,030.00 1,994,281,937.00
– 2018 293,943.72 As at 31 December 2018 As at 31 December 3,309,478.99 4,480,970.09 31 December 46,693,061.00 41,000,530.92 19,187,060.87 52,085,559.19 383,447,758.44 246,100,000.00 4,916,122,330.05 7,569,924,296.79 2,653,801,966.74 4,558,366,763.45 1,215,530,735.02 1,434,961,752.73
Notes XVIII 2 XVIII 1 XVIII 1(2) XVIII 1(1)
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Balance Sheet of the Company the of Sheet Balance Dividends receivable Interests receivable
Other current assets Long-term equity investments Other equity instruments investment Property, plant and equipment Construction in progress Intangible assets Goodwill Long-term receivables Available for sale financial assets Cash and cash equivalents Other receivables Including: Item Total non-current assets Total assets Total current assets Non-current assets Current assets:
– – – – – – – – 2017 191,446.00 9,060,378.00 1,320,614.00 9,261,300.00 2,400,000.00 31 December 60,628,414.00 797,674,683.00 986,335,061.00 179,600,000.00 2,316,875,535.00 1,330,540,474.00 1,266,000,000.00
– – – – – – – – 2018 123,232.06 As at 31 December 2018 As at 31 December 8,367,050.00 1,887,413.85 9,261,300.00 31 December 53,500,000.00 62,986,536.29 799,143,854.22 398,497,182.20 316,100,000.00 280,000,000.00 1,522,108,086.42 1,123,610,904.22
Notes (Continued)
Unit: RMB
perpetual bond perpetual dividends payable dividends Long-term payables Long-term employee benefits payables Provisions Deferred revenue Deferred tax liabilities
Other non-current liabilities Including: preferred shares Bonds payable Long-term loans Non-current liabilities due within one year
Short-term loans Employee benefits payables Taxes and levies payables Other payables Including: interests payable Item Total liabilities Total non-current liabilities Non-current liabilities Total current liabilities Current liabilities
Balance Sheet of the Company Sheet Balance Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
154 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 155
2017 Unit: RMB
2,696,625.00 (Continued) 31 December
140,716,900.00 346,387,469.00 5,823,593,636.00 8,140,469,171.00 1,649,152,488.00 3,684,640,154.00
2018 616,640.00 accounting department: As at 31 December 2018 As at 31 December 31 December
Person in charge of 140,716,900.00 348,748,849.03 6,047,816,210.37 7,569,924,296.79 1,873,093,667.34 3,684,640,154.00
Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: accounting function:
Balance Sheet of the Company Sheet Balance Other comprehensive income Retained earnings Share capital Capital reserves Surplus reserves Item Total shareholder’s equity Total liabilities and shareholder’s equity Shareholder’s equity Legal Representative: Person in charge of
– – 81,550.00 1,460,108.00 59,020,629.00 17,728,904.00 99,848,642.00 73,763,913.67 10,380,310.00 60,847,167.00 113,181,092.00 113,528,177.00 198,720,426.00 673,214,052.00 282,134,154.00 472,783,898.00 360,840,184.00 240,368,367.00 9,217,378,658.00 8,146,143,025.00 9,292,602,679.67 9,584,897,503.00 For the year 2017
For the year 2018 400,393.61 118,839.98 (109,704.27) 9,317,288.09 38,473,948.90 19,704,902.99 76,668,574.02 68,548,323.06 63,485,555.23 133,621,128.92 128,937,348.85 160,792,293.33 240,974,839.39 513,983,557.96 298,156,677.80 418,925,355.40 369,941,950.32 100,360,500.73 5,215,368,816.23 4,029,037,198.67 5,284,317,532.90 5,380,384,782.98 For the year 2018
VI 57 VI 51 VI 53 VI 52 VI 51 VI 51 VI 49 VI 46 VI 46 VI 47 VI 46 VI 46 VI 48 VI 54 VI 55 VI 56 Notes
Unit: RMB
(Loss listed with “–”) (Loss listed with “–”) associates and joint ventures Add: Others Interest income Gain arising from the changes in fair value Gain arising from the changes in fair value Impairment loss on credit Loss on impairment of assets Financial expenses Research and development expenses VI 50 Administrative expenses Including: income from investments in Gain on disposal of assets Interest income Interest expenses Business taxes and surcharges Transaction fees and commission incomeTransaction fees and VI 46 Transaction cost and commission fees VI 46 Selling and distribution expenses Investment income (Loss listed with “–”) VI 55
Including: Interest expenses Total operating cost Total operating revenue Including: Operating revenue Including: Operating Including: Operating cost
2. 1.
Item
Consolidated Income Statement Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
156 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 157 – Unit: RMB 969,952.00
9,028,694.00 (Continued)
49,373,990.67 20,434,479.00 366,018,893.67 366,018,893.67 366,018,893.67 316,644,903.00 102,453,392.00 479,878,070.67 468,472,285.67 366,018,893.67 For the year 2017
– – For the year 2018 51,110,995.63 16,935,459.00 15,877,488.95 60,500,227.64 495,171,833.01 495,171,833.01 495,171,833.01 444,060,837.38 556,730,030.70 555,672,060.65 495,171,833.01 For the year 2018
VI 59 VI 58 VI 60 Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Income Statement Income Consolidated before merger through business through merger control before common under combination the controlling company operation (Net loss listed with “–”) (Net loss listed with “–”) Net profit attributable to shareholders of Net profit attributable to shareholders of Net profit attributable to continuing operation Net profit attributable to continuing operation Net profit attributable to discontinued operation Net profit attributable to non-controlling interests Classification by ownership
Classification by continuing or discontinued Classification by continuing or discontinued
(2)
Total profit (Loss listed with “–”) Total profit (Loss Net profit (Net loss listed with “–”) Operating profit (Loss listed with “–”) Operating profit (Loss Less: Non-operating expenses Less: Non-operating Add: Non-operating income Add: Non-operating Less: Income tax expenses merged party Including: the net profit realized by the (1)
4. 5. 3. Item
– 0.09 0.09
7,135,569.00 7,135,569.00 1,295,008.00 4,635,332.00 6,665,144.00 1,827,239.00 (1,092,435.00) 13,800,713.00 49,373,990.67 13,800,713.00 330,445,616.00 379,819,606.67 For the year 2017
0.12 0.12 For the year 2018 359,099.00 475,865.00 719,541.75 accounting department: 1,384,451.00 5,155,078.09 5,514,177.09 1,384,451.00 4,234,206.34 3,770,627.09 (1,658,986.00) 51,470,094.63 449,215,915.47 500,686,010.10
Person in charge of For the year 2018
(Continued) VI 43 VI 43 VI 43 VI 43 VI 43 VI 43 VI 43 VI 43
Notes
Unit: RMB
accounting function:
defined benefit plan hedging gains and losses statements in foreign currencies VI 43 of investee company under equity method that can be reclassified as profit or loss available-for-sale financial assets VI 43 Changes from recalculation of
Effective portion of net investment Translation differences of financial
Share of other comprehensive income
Gain or loss from fair value changes of 3. 4. 2. be reclassified into profit or loss be reclassified into Including: 1. Including: 1. Other comprehensive incomes that cannot Other comprehensive be Other comprehensive income that can reclassified into profit or loss
shareholders of the Company non-controlling interests to non-controlling interests to shareholders of the Company to shareholders of the (2) Total comprehensive income attributable to
(1) Earnings per share Basic earnings per share Total comprehensive income Net other comprehensive income after tax Net other comprehensive Total comprehensive income attributable to Diluted earnings per share Net other comprehensive income after tax attributable Net other comprehensive Net other comprehensive income after tax attributable Net other comprehensive income after tax
8. 7. 6.
Item
Consolidated Income Statement Income Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by: Legal Representative: Person in charge of
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
158 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 159 – – – – – – – Unit: RMB 382,518.00
2,007,883.00 39,493,622.00 74,199,730.08 70,800,175.88 36,792,276.00 294,727,306.00 208,454,938.00 208,454,938.00 245,247,214.00 208,454,938.00 287,131,237.00 For the year 2017
– – – For the year 2018 8,708.56 629,481.47 875,434.19 2,247,005.78 3,644,517.34 6,048,873.70 43,868,142.60 86,587,848.78 16,030,766.46 74,769,054.57 365,625,074.86 368,563,411.66 368,563,411.66 374,603,576.80 368,563,411.66 435,654,044.70 For the year 2018
Notes XVIII 4 XVIII 4 XVIII 3 XVIII 3
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Income Statement the of Company Interest income Impairment loss on credit associates and joint ventures Including: income from investments in
Business taxes and surcharges Business taxes and Administrative expenses Investment income (Loss listed with “–”) Financial expenses (Net loss listed with “–”) (Net loss listed with “–”) Net profit attributable to discontinued operation Net profit (Net loss listed with “–”) Total profit (Loss listed with “–”) Operating profit (Loss listed with “–”) Net profit attributable to continuing operation Add: Non-operating income Less: Income tax expenses Total operating revenue Less: Non-operating expenses Less: Operating cost Including: Interest expenses Add: Others
2.
4. 3. Item 1.
– 616,640.00
2,079,985.00 2,696,625.00 2,696,625.00 211,151,563.00 For the year 2017
– – For the year 2018 accounting department: (2,079,985.00) (2,079,985.00) (2,079,985.00) 366,483,426.66
Person in charge of For the year 2018
(Continued)
Notes
Unit: RMB
accounting function:
be reclassified into profit or loss under equity method held for sale Changes in fair value of financial assets Changes in fair value of financial assets Other comprehensive income that can
be reclassified as profit or loss be reclassified into profit or loss be reclassified into 2. 1. Other comprehensive income that can Other comprehensive
Other comprehensive income that can not Other comprehensive (2) Total comprehensive income Net other comprehensive income after tax Net other comprehensive (1)
6.
Item 5.
Income Statement of the Company of the Statement Income Ltd. & Electric Co., Chongqing Machinery Prepared by: Legal Representative: Person in charge of
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
160
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 161
other equity instruments equity other – – – – – – – – – – – – –
Unit: RMB
2. of holders from contribution Capital
from shareholders from – – – – – – – – – – – – –
1. contribution capital stock Common
from shareholders from – – – – – – – – – – – – –
(2) reduction and contribution Capital
4,6,3.95,1,9.2500,326,911.10 51,110,995.62 444,060,837.39 – – – 5,155,078.09 – – – – – – (1) Total comprehensive income comprehensive Total
9,2,9.42,3,5.0365,638,595.95 26,839,350.40 296,220,793.14 – 36,856,341.12 – 5,155,078.09 – 567,033.20 – – – – “-”) with listed (Decrease
year the for Increase/Decrease 3.
,1,0,2.73392987 6,864,023,347.41 393,922,948.74 2,412,300,828.67 – 297,517,132.00 – 25,897,349.00 – 49,744,935.00 – – – 3,684,640,154.00
Balance at 1 January 2018 January 1 at Balance 2.
Others – – – – – – – – – – – – –
common control common – – – – – – – – – – – – –
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
under combination Business
Correction of prior-period errors prior-period of Correction – – – – – – – – – – – – –
Add: Changes in accounting policies accounting in Changes Add: 3553313)(,3,8.6 (313,963,195.59) (6,339,889.26) (305,543,321.33) – – – (2,079,985.00) – – – – – –
,1,4,5.04022880 7,177,986,543.00 400,262,838.00 2,717,844,150.00 – 297,517,132.00 – 27,977,334.00 – 49,744,935.00 – – – 3,684,640,154.00 1. Balance at 31 December 2017 December 31 at Balance
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less: Other equity instruments equity Other
Consolidated Statement of Changes in Equity Changes of Statement Consolidated
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
For the year 2018 year the For
Item For the year 2018 year the For
for losses for – – – – – – – – – – – – –
3. up make to transfer reserves Surplus
share capital share – – – – – – – – – – – – –
(Continued)
2. to reserves surplus of Transfer
share capital share – – – – – – – – – – – – –
1. to reserves capital of Transfer
– – – – – – – – – – – – – (4) Transfer
– – – – – – – – – – – – – 5. Others
interest shareholders interest – – – – – – – – – – – –
4 non-controlling by capital in Increment
1059246)(271120)(133,260,356.65) (22,721,152.03) (110,539,204.62) – – – – – – – – – – 3. Appropriation to shareholders to Appropriation
Unit: RMB (444,498.51) – (444,498.51) – – – – – – – – – – 2. Appropriation to staff bonus and welfare and bonus staff to Appropriation
– – (36,856,341.12) – 36,856,341.12 – – – – – – – – 1. Appropriation to statutory reserve statutory to Appropriation
1780042)(271120)(133,704,855.16) (22,721,152.03) (147,840,044.25) – 36,856,341.12 – – – – – – – – Profit appropriations Profit (3)
– – – – – – – – – – – – – 4. Others
payments – – – – – – – – – – – – –
Share-based from increase Equity 3.
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less:
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
For the year 2018 year the For
Item For the year 2018 year the For Consolidated Statement of Changes in Equity Changes of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
162
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 163
accounting function: accounting accounting department: accounting
Person in charge of of charge in Person Legal Representative: Legal of charge in Person
Unit: RMB
(Continued)
,0,2,2.14072291 7,229,661,943.36 420,762,299.14 2,708,521,621.81 – 334,373,473.12 – 31,052,427.09 – 50,311,968.20 – – – 3,684,640,154.00
Balance at 31 Dec 2018 Dec 31 at Balance 4.
150431)(983,459.99) (1,550,493.19) – – – – – – 567,033.20 – – – – (7) Others
– – – – – – – – – – – – – (6) Business combination under common control common under combination Business
– – – – – – – – – – – – – 2. Used
– – – – – – – – – – – – – 1. Appropriation
– – – – – – – – – – – – – (5) Special reserves Special
– – – – – – – – – – – – – 6. Others
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
retained earnings retained – – – – – – – – – – – – –
5. to income comprehensive other Transfer
to retained earnings retained to – – – – – – – – – – – – –
plan benefit defined of changes Transfer 4.
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less:
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Consolidated Statement of Changes in Equity Changes of Statement Consolidated 2018 year the For
Item For the year 2018 year the For
– – – – – – – – – – – – – instruments equity other
2. 2. of holders from contribution Capital
– – – – – – – – – – – – – shareholders from
1. contribution capital stock Common (Continued)
– – – – – – – – – – – – – shareholders
(2) from reduction and contribution Capital
1,4,0.04,7,9.0379,819,607.00 49,373,991.00 316,644,903.00 – – – 13,800,713.00 – – – – – – (1) Total comprehensive income comprehensive Total
6,3,0.0(8,3,2.0 (141,389,273.00) (180,333,021.00) 166,530,209.00 – (34,988,275.00) – 13,800,713.00 – (106,398,899.00) – – – – (Decrease listed with “-”) with listed (Decrease
year the for Increase/Decrease 3.
,5,1,4.05055890 7,319,375,816.00 580,595,859.00 2,551,313,941.00 – 332,505,407.00 – 14,176,621.00 – 156,143,834.00 – – – 3,684,640,154.00 Balance at 1 January 2017 January 1 at Balance 2.
Unit: RMB
– – – – – – – – – – – – – Others
– – – – – – – – – – – – – control common
under combination Business
Correction of prior-period errors prior-period of Correction – – – – – – – – – – – – –
Add: Changes in accounting policies accounting in Changes Add: – – – – – – – – – – – – –
,5,1,4.05055890 7,319,375,816.00 580,595,859.00 2,551,313,941.00 – 332,505,407.00 – 14,176,621.00 – 156,143,834.00 – – – 3,684,640,154.00 1. Balance at 31 December 2016 December 31 at Balance
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less:
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
For the year 2017 year the For
Item For the year 2018 year the For Consolidated Statement of Changes in Equity Changes of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
164
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 165
– – – – – – – – – – – – – earnings retained to
4. plan benefit defined of changes Transfer Unit: RMB
– – – – – – – – – – – – – losses for
(Continued)
3. up make to transfer reserves Surplus
– – – – – – – – – – – – – capital share
2. 2. to reserves surplus of Transfer
– – – – – – – – – – – – – capital share
1. to reserves capital of Transfer
– – – – – – – – – – – – – (4) Transfer
– – – – – – – – – – – – – 5. Others
,6,0.05,360,000.00 5,360,000.00 – – – – – – – – – – – shareholders interest
4. non-controlling by capital in Increment
1892460)(0,5,4.0 (232,920,850.00 (103,958,444.00) (128,962,406.00) – – – – – – – – – – 3. Appropriation to shareholders to Appropriation
(306,794.00) – (306,794.00) – – – – – – – – – – 2. Appropriation to staff bonus and welfare and bonus staff to Appropriation
– – (20,845,494.00) – 20,845,494.00 – – – – – – – – 1. Appropriation to statutory reserve statutory to Appropriation
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
1014640)(858440)(227,867,644.00) (98,598,444.00) (150,114,694.00) – 20,845,494.00 – – – – – – – – (3) Profit appropriations Profit
– – – – – – – – – – – – – 4. Others
payments – – – – – – – – – – – – –
Share-based from increase Equity 3.
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less:
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Consolidated Statement of Changes in Equity Changes of Statement Consolidated 2017 year the For
Item For the year 2018 year the For
function: accounting of charge in Person Representative: Legal Person in charge of accounting department: accounting of charge in Person
(Continued)
,1,4,5.04022880 7,177,986,543.00 400,262,838.00 2,717,844,150.00 – 297,517,132.00 – 27,977,334.00 – 49,744,935.00 – – – 3,684,640,154.00
Balance at 31 Dec 2017 Dec 31 at Balance 4.
1118580)(146,232,736.00) (131,108,568.00) – – (11,803,667.00) – – – (3,320,501.00) – – – – (7) Others
(147,108,500.00) – – – (44,030,102.00) – – – (103,078,398.00) – – – – (6) Business combination under common control common under combination Business
Unit: RMB – – – – – – – – – – – – – 2. Used
– – – – – – – – – – – – – 1. Appropriation
– – – – – – – – – – – – – Special reserves Special (5)
– – – – – – – – – – – – – 6. 6. Others
retained earnings retained – – – – – – – – – – – – –
to income comprehensive other Transfer 5.
Others bond shares capital earning provision reserves reserves income shares reserves equity interests
Perpetual Perpetual Preferred Share Retained Retained risk General Surplus Special comprehensive treasury Capital Total Total Non-controlling
Other Other Less:
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
For the year 2017 year the For
Item For the year 2018 year the For Consolidated Statement of Changes in Equity Changes of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
166
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 167
– – – – – – – – – – – 3. Others
Unit: RMB
1059242)(110,539,204.29) (110,539,204.29) – – – – – – – – – 2. Appropriation to shareholders to Appropriation
– (36,856,341.03) 36,856,341.03 – – – – – – – – 1. Appropriation to statutory reserve statutory to Appropriation
686310 1735553)(110,539,204.29) (147,395,545.32) 36,856,341.03 – – – – – – – – (3) Profit appropriations Profit
– – – – – – – – – – – 4. Others
– – – – – – – – – – – 3. Equity increase from Share-based payments Share-based from increase Equity
equity instruments equity – – – – – – – – – – –
2. Capital contribution from holders of other other of holders from contribution Capital
shareholders – – – – – – – – – – –
1. Common stock capital contribution from from contribution capital stock Common
from shareholders from – – – – – – – – – – –
(2) Capital contribution and reduction reduction and contribution Capital
6,6,1.6368,563,411.66 368,563,411.66 – – – – – – – – – (1) Total comprehensive income comprehensive Total
,6,8.32117863 223,529,246.37 221,167,866.34 2,361,380.03 – – – – – – – – “–”) with listed (Decrease
Increase/Decrease for the year year the for Increase/Decrease 3.
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: 3,684,640,154.00 4,8,6.016195810 5,824,286,964.00 1,651,925,801.00 346,387,469.00 – 616,640.00 – 140,716,900.00 – – –
2. Balance at 1 January 2018 January 1 at Balance
Others – – – – – – – – – – –
Correction of prior-period errors prior-period of Correction – – – – – – – – – – –
Add: Changes in accounting policies accounting in Changes Add: 693,328.00 2,773,313.00 – – (2,079,985.00) – – – – – –
3,684,640,154.00 4,8,6.016912480 5,823,593,636.00 1,649,152,488.00 346,387,469.00 – 2,696,625.00 – 140,716,900.00 – – – 1. Balance at 31 December 2017 December 31 at Balance
Others bond shares capital equity earning reserves reserves income shares reserves
Perpetual Perpetual Preferred Preferred Share comprehensive comprehensive Capital Total Total Retained Surplus Special treasury
Other Other Less: Less:
Other equity instruments equity Other
For the year 2018 year the For
Statement of Changes in Equity of the Company the of in Equity Changes of Statement
Item For the year 2018 year the For
function: accounting of charge in Person Representative: Legal Person in charge of accounting department: accounting of charge in Person
(Continued)
4,4,4.318303673 6,047,816,210.37 1,873,093,667.34 348,748,849.03 – 616,640.00 – 140,716,900.00 – – – 3,684,640,154.00
Balance at 31 Dec 2018 Dec 31 at Balance 4.
(34,494,961.00) – (34,494,961.00) – – – – – – – – (6) Others
– – – – – – – – – – – 2. Used
– – – – – – – – – – – 1. Appropriation
– – – – – – – – – – – (5) Special reserves Special
– – – – – – – – – – – 6. Others
retained earnings retained – – – – – – – – – – Unit: RMB –
5. Transfer other comprehensive income to to income comprehensive other Transfer
retained earnings retained – – – – – – – – – – –
4. Transfer changes of defined benefit plan to to plan benefit defined of changes Transfer
for losses for – – – – – – – – – – –
3. Surplus reserves transfer to make up up make to transfer reserves Surplus
– – – – – – – – – – – 2. Transfer of surplus reserves to share capital share to reserves surplus of Transfer
– – – – – – – – – – – 1. Transfer of capital reserves to share capital share to reserves capital of Transfer
– – – – – – – – – – – Transfer (4)
capital equity earning reserves reserves income shares reserves Others bond shares
Share Share Total Total Retained Surplus Special comprehensive treasury Capital Perpetual Perpetual Preferred
Other Other Less:
Other equity instruments equity Other
For the year 2018 year the For
Item For the year 2018 year the For Statement of Changes in Equity of the Company Equity of in of Changes Statement Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
168
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 169
– – – – – – – – – – – 3. Others
1892460)(128,962,406.00) (128,962,406.00) – – – – – – – – – 2. Appropriation to shareholders to Appropriation
– (20,845,494.00) 20,845,494.00 – – – – – – – – 1. Appropriation to statutory reserve statutory to Appropriation
Unit: RMB
085440 1987900)(128,962,406.00) (149,807,900.00) 20,845,494.00 – – – – – – – – (3) appropriations Profit
(Continued)
– – – – – – – – – – – 4. Others
– – – – – – – – – – – 3. Equity increase from Share-based payments Share-based from increase Equity
– – – – – – – – – – – instruments equity other
2. Capital contribution from holders of of holders from contribution Capital
– – – – – – – – – – – shareholders from
1. Common stock capital contribution contribution capital stock Common
– – – – – – – – – – – shareholders
(2) Capital contribution and reduction from from reduction and contribution Capital
0,5,3.0211,151,563.00 208,454,938.00 – – 2,696,625.00 – – – – – – (1) Total comprehensive income comprehensive Total
085440 867080 85,031,019.00 58,647,038.00 20,845,494.00 – 2,696,625.00 – 2,841,862.00 – – – – (Decrease listed with “–”) with listed (Decrease
Increase/Decrease for the year year the for Increase/Decrease 3.
2,4,7.015055400 5,738,562,617.00 1,590,505,450.00 325,541,975.00 – – – 137,875,038.00 – – – 3,684,640,154.00 2. Balance at 1 January 2017 January 1 at Balance
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
Others – – – – – – – – – – –
– – – – – – – – – – – errors prior-period of Correction
Add: Changes in accounting policies accounting in Changes Add: – – – – – – – – – – –
3,684,640,154.00 2,4,7.015055400 5,738,562,617.00 1,590,505,450.00 325,541,975.00 – – – 137,875,038.00 – – – 1. Balance at 31 December 2016 December 31 at Balance
equity earning reserves reserves income shares reserves Others bond shares capital Share
Perpetual Perpetual Preferred Preferred comprehensive comprehensive Capital Total Total Retained Surplus Special treasury
Other Other Less: Less:
Other equity instruments equity Other
For the year 2017 year the For
Item For the year 2018 year the For Statement of Changes in Equity of the Company Equity of in of Changes Statement
Person in charge of accounting department: accounting of charge in Person function: accounting of charge in Person Representative: Legal
(Continued)
4,8,6.016912480 5,823,593,636.00 1,649,152,488.00 346,387,469.00 – 2,696,625.00 – 140,716,900.00 – – – 3,684,640,154.00
Balance at 31 Dec 2017 Dec 31 at Balance 4.
2,841,862.00 – – – – – 2,841,862.00 – – – – (6) Others
– – – – – – – – – – – 2. Used
– – – – – – – – – – – 1. Appropriation
– – – – – – – – – – – (5) Special reserves Special
– – – – – – – – – – – 6. Others
– – – – – – – – – – – earnings retained
5. Transfer other comprehensive income to to income comprehensive other Transfer Unit: RMB
– – – – – – – – – – – earnings retained
4. Transfer changes of defined benefit plan to to plan benefit defined of changes Transfer
– – – – – – – – – – – losses for
3. Surplus reserves transfer to make up up make to transfer reserves Surplus
– – – – – – – – – – – 2. Transfer of surplus reserves to share capital share to reserves surplus of Transfer
– – – – – – – – – – – 1. Transfer of capital reserves to share capital share to reserves capital of Transfer
– – – – – – – – – – – Transfer (4)
Share capital Share equity earning reserves reserves income shares reserves Others bond shares
Total Total Retained Surplus Special comprehensive treasury Capital Perpetual Perpetual Preferred
Other Other Less:
Other equity instruments equity Other
For the year 2017 year the For
Item For the year 2018 year the For Statement of Changes in Equity of the Company Equity of in of Changes Statement Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
170 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 171 – – – – – – Unit: RMB
78,392,698.00 28,860,689.00 (34,160,331.00) 222,952,695.00 106,298,892.00 933,551,287.00 258,683,810.00 551,131,450.00 (797,848,026.00) 9,088,996,685.00 8,168,238,079.00 9,302,548,964.00 For the year 2017 10,100,396,990.00
– – For the year 2018 8,528,897.62 83,252,825.45 32,838,560.49 30,000,000.00 81,642,837.38 10,000,000.00 12,329,593.95 531,538,013.11 427,680,931.17 102,560,214.54 875,830,676.03 367,491,397.93 605,794,412.50 4,384,588,756.25 5,323,456,455.98 6,438,766,786.20 6,357,123,948.82 For the year 2018
Notes Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Statement of Cash Flow Cash of Statement Consolidated Cash received relating to other operating activities Cash received relating to other operating Cash received from interest, surcharges and Cash received from interest, surcharges commission fee Cash received from tax refund Net increase in and interbank payments Net cash flows from operating activities Cash paid for goods and services Cash flows from operating activities Cash flows from operating sales of goods and rendering of Cash received from services Net increase in customer deposits and interbank Net increase in customer deposits interbank Net decrease in customer deposits and deposits Net decrease in loans and advances to customers Net decrease in loans and advances to Net increase in loans and advances to customers Net increase in loans and advances to Net increase in central bank payments payments Net increase in central bank and interbank Cash paid for interest, surcharges and commission fee Sub-total of cash inflows from operating activities Sub-total of cash inflows from operating Cash paid to and on behalf of employees Payments of taxes and surcharges Cash paid relating to other operating activities Sub-total of cash outflows from operating activities
Item 1.
– 67,647,430.00 779,759,265.00 156,058,193.00 147,108,500.00 318,760,500.00 295,744,271.00 476,592,572.00 458,923,684.00 219,527,258.00 337,003,490.00 1,238,682,949.00 For the year 2017
– – For the year 2018 48,194,021.94 40,000,000.00 (Continued) 364,382,962.99 276,188,941.05 425,389,449.20 428,307,039.39 902,576,645.80 150,000,001.00 263,263,119.20
1,266,959,608.79 For the year 2018
Notes
Unit: RMB
other long-term assets other business units assets and other long-term assets Sub-total of cash outflow from investing activities Sub-total of cash outflow from investing Net cash paid to acquire subsidiaries and other Net cash paid to acquire subsidiaries and business units Cash paid relating to other investing activities Cash received relating to other investing activities Cash received relating to other investing Net cash received from disposal of subsidiaries and Net cash received from disposal of subsidiaries Cash paid for investments Net cash flows from investing activities
assets Cash paid to acquire fixed assets, intangible and
Cash flows from investment activities Cash flows from investment return of investments Cash received from Cash received from investments income Cash received from Net cash received from disposal of fixed assets, Net cash received from intangible Sub-total of cash inflows from investing activities Sub-total of cash inflows from investing
Item 2.
Consolidated Statement of Cash Flow of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
172 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 173 – – Unit: RMB
1,310,289.00 (Continued)
178,675,901.00 119,213,228.00 100,933,342.00 376,698,207.00 144,405,831.00 (218,400,825.00) 2,108,721,005.00 2,083,528,402.00 1,174,539,298.00 1,553,346,897.00 2,227,934,233.00 1,392,940,123.00 For the year 2017
– – – For the year 2018 accounting department: (5,710,451.38) 84,915,416.50 276,973,008.62 340,256,690.38 395,804,097.06 Person in charge of
(582,704,934.74) 2,826,562,825.12 1,570,343,395.06 1,903,601,200.00 2,464,674,400.00 2,243,857,890.38 1,174,539,298.00 For the year 2018
VI, 1 Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
accounting function:
Consolidated Statement of Cash Flow of Statement Consolidated of interests at the end of this period and cash equivalents interests by subsidiaries investment of non-controlling interests investment of non-controlling
Sub-total of cash outflows from financing activities Sub-total of cash outflows from financing Cash received from loans granted Cash paid relating to other financing activities Cash received relating to other financing activities Cash received relating to other financing Including: dividends and profits paid to non-controlling Including: dividends and profits paid to Balance of cash and cash equivalents Net increase in cash and cash equivalents Net cash flows from financing activities cash Effects of changes in exchange rate on
Cash paid for repayment of borrowings
Cash flows from financing activities Cash flows from financing investments Cash received from Including: cash received by subsidiaries from Including: cash received Sub-total of cash inflows from financing activities Sub-total of cash inflows from financing
Cash paid for dividends, profits or payments Cash paid for dividends, profits or payments Add: opening balance of cash and cash equivalents
Item 6. 5. 4. 3.
Legal Representative: Person in charge of – – – – 690,962.00 690,962.00 439,226.00 2,459,630.00 18,068,362.00 21,194,695.00 41,722,687.00 -99,464,574.00 (41,031,725.00) 169,408,191.00 147,108,500.00 305,011,150.00 416,607,179.00 168,899,971.00 506,014,118.00 1,179,041,075.00 1,495,996,992.00 1,396,532,418.00 For the year 2017
– – – – – – For the year 2018 984,953.00 693,231.90 27,086,676.44 27,086,676.44 23,000,000.00 19,799,466.65 23,206,643.54 43,699,342.09 (16,612,665.65) 150,000,001.00 325,891,841.36 1,775,500,000.00 2,503,099,025.79 1,799,484,953.00 2,978,990,868.15 1,179,505,915.15 For the year 2018
Unit: RMB
and other long-term assets other business units intangible assets and other long-term assets and other business units rendering of services Sub-total of cash inflows from operating activities Sub-total of cash inflows from operating Net cash paid to acquire subsidiaries and Net cash received from disposal of subsidiaries Cash received from tax refund Cash received from Cash received relating to other operating activities Cash received relating Cash paid relating to other investing activities Cash received relating to other investing activities Cash paid for investments Sub-total of cash outflow from investing activities Sub-total of cash inflows from investing activities Net cash flows from investing activities
Cash paid to acquire fixed assets, intangible assets
Net cash flows from operating activities Cash paid for goods and services
Cash paid to and on behalf of employees Payments of taxes and surcharges Cash paid relating to other operating activities Sub-total of cash outflows from operating activities Sub-total of cash outflows from operating Cash flows from investment activities Cash received from return of investments Cash flows from operating activities Cash flows from operating sales of goods and Cash received from Cash received from investments income Net cash received from disposal of fixed assets, Net cash received from disposal of fixed
2. 1. Item
Cash Flow Statement of the Company the of Statement Flow Cash Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
174 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 175 Unit: RMB 585,991.00
(Continued)
31,746,333.00 143,210,293.00 204,161,964.00 967,544,585.00 970,196,461.00 190,291,440.00 620,172,328.00 779,905,021.00 330,201,748.00 1,266,000,000.00 1,297,746,333.00 For the year 2017
– For the year 2018 (446,717.50) accounting department: 47,865,666.03 193,795,244.37 122,385,621.60 970,196,461.00 Person in charge of
2,090,060,910.40 1,092,582,082.60 1,050,000,000.00 1,848,400,000.00 1,050,000,000.00 (1,040,060,910.40) For the year 2018
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
accounting function:
Cash Flow Statement of the Company of Statement Flow Cash at the end of this period and cash equivalents interests Sub-total of cash outflows from financing activities Sub-total of cash outflows from financing Cash paid relating to other financing activities Net increase in cash and cash equivalents Balance of cash and cash equivalents Effects of changes in exchange rate on cash Effects of changes in exchange rate on Net cash flows from financing activities Cash paid for repayment of borrowings Cash flows from financing activities Cash flows from financing loans granted Cash received from Add: opening balance of cash and cash equivalents Add: opening balance of cash and cash Cash received relating to other financing activities Cash received relating Cash paid for dividends, profits or payments of Cash paid for dividends, profits or payments Sub-total of cash inflows from financing activities Sub-total of cash inflows
5. 6. 4. 3. Item
Legal Representative: Person in charge of GENERAL INFORMATION Chongqing Machinery & Electric Co., Ltd. (the “Company”) was established on 27 27 on established was “Company”) (the Ltd. Co., Electric & Machinery Chongqing Machinery Chongqing by liability limited with company share joint a as 2007 July Assets Yufu Chongqing (“CQMEHG”), Ltd. Co., (Group) Holding Electronics & Assets called Chongqing Yufu co., ltd (“Yufu company”, originally Management Group (“Huarong Ltd. Co., Management Asset Huarong China Ltd), Co., Management The Group Co. Ltd. (“CCEG”). Chongqing Construction Engineering company”), and Central, Road Huangshan 60, No. is office registered Company’s the of address the PRC. The Company’s headquarter is located Northern New District, Chongqing, shareholder controlling ultimate the and company parent The PRC. Chongqing, in was Group The Ltd. Co. (Group) Holding Electronics & Machinery Chongqing is of RMB2,679,740,154 (RMB1 per share). established with a registered capital foreign to shares H 1,004,900,000 issued publicly Group the 2008, June 13 On “Zhengjian Xuke [2008] No. 285” of the China investors with approval of the Circular and the shares were listed on The Stock Exchange Securities Regulatory Commission, Exchange”). After issuing the shares, the total shareof Hong Kong Limited (the “Stock capital increased to RMB3,684,640,154. 31 ended year the for RMB3,684,640,154 was Company the of capital Registered December 2018. “Group”) referred to as the collectively subsidiaries (hereinafter its The Company and parts and components, are principally engaged in manufacturing and sales of vehicle power equipment, general machinery and machinery tools. issue by the Board of The consolidated financial statements have been approved for Directors of the Group on 20 March 2019.
I. Notes to the Consolidated Financial Statements Financial Consolidated the to Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
176 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 177 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Going concern Basis of preparation The financial statements are prepared on a going concern basis. The Group hasThe financial statements are prepared on a going concern basis. it is reasonablea history of recent profitable operations and financial support, so to prepare financial statements on a going concern basis. The financial statements of the Group have been prepared on a going concern The financial statements of the and events actually incurred, in accordance basis and based on transactions Ministry the by issued Enterprises Business for Standards Accounting with Companies by Disclosure Information of Convention Preparation Finance, of No. 15 – General Rules on Financial Reporting Offering Securities to the Public issued by the China Securities Regulatory(revised) and other related regulations disclosure related the and Ordinance” “Company Kong Hong Commission, Kong, Hong of Exchange Stock the on Rules” “Listing the of requirements set out in “IV and based on the accounting policies and accounting estimates notes. Principal accounting policies and accounting estimates” of this
BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS BASIS FOR THE PREPARATION SCOPE OF CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL SCOPE OF CONSOLIDATED (2) (1) The scope of consolidated financial statements of the Group includes 42 companies of the Group includes 42 companies financial statements The scope of consolidated Electric Co., Ltd., Chongqing Pigeon General Industry (Group) such as Chongqing Co., Chongqing Water Turbine Works Co., Ltd. (“Pigeon Wires”) and Wires & Cables Co., Smelting Huahao Chongqing companies, subsidiary owned wholly Two Ltd.. of the reduced due to cancellation Developments Ltd., were Ltd., and PTG Advanced with the previous year. companies compared IN CHANGES “VII. in out set as content relevant to refer please details, For “VIII. INTEREST IN OTHER ENTITIES” of this note. CONSOLIDATION SCOPE” and
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
III. II. (Continued)
Business Cycle Functional Currency Declaration on Compliance with CAS Declaration on Compliance with Accounting Period The Group’s functional currency is Renminbi (RMB). The Group’s accounting period is from 1 January to 31 December. The Group’s accounting period for classifying The Group treats 12 months as a business cycle and the criteria current and non-current assets and liabilities. The Company complied with the requirements of CAS in preparing its financial The Company complied with the financial position, financial the of view full and true a give which statements, the Group. performance and cash flows of
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 4. 3. 2. 1. Specific accounting policies and accounting estimates are formulated by the Group are formulated by the policies and accounting estimates Specific accounting business including characteristics operating and manufacturing actual on based accounts of debts bad for provision of measurement and recognition cycle, value realizable net of measurement assumptions, flow cost inventory receivable, of of fixed assets, amortization and depreciation method of inventory, classification of Research and Development expenses, recognition intangible assets, capitalization and measurement of revenue, etc.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
178 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 179 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Measurement for Business Combinations under Common Control and Business Common Control and Business Business Combinations under Measurement for under Common Control Combinations not As the merging party, assets acquired and liabilities obtained by the Group Group the by obtained liabilities and acquired assets party, merging the As at control shall be measured combination under common through a business party in the ultimate controlling party’s their carrying amounts of the combined differences The date. consolidation the at statements financial consolidated carrying the and acquired assets net the of amount carrying the between reserve. capital the in adjusted be should paid consideration the of amount for offsetting, the retained earnings shall be If capital reserve is not sufficient adjusted. and contingent liability as considerations are The identifiable assets, liabilities Consolidation date. acquisition at values fair their at Group the by measured get to paid assets non-cash or paid cash of value fair of sum the is cost issued securities equity assumed, or issued liabilities acquiree, of control business those (for combination business during costs direct other all and of sum the to equals cost consolidation the stages, in achieved combination of consolidation cost over the fair value of net each transaction). The excess should It goodwill. as recognised be shall acquiree the of assets identifiable business through achieved assets identifiable all of value fair the reassess equity or assets non-cash liabilities, contingent or liabilities consolidation, net of value fair the than less is cost consolidation the if issued securities than less still is cost consolidation the if reassess, After assets. identifiable excess shall be the the fair value of net identifiable assets of the acquiree, the recognised into non-operating income.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Preparation of Consolidated Financial Statements Preparation of Consolidated The consolidated financial statements included all subsidiaries and special special and subsidiaries all included statements financial consolidated The control. that the Company has effective purpose entities subsidiary’s the if statements, financial consolidated the preparing When period is not consistent with the Group, the accounting policies or accounting shall be adjusted. financial statement of the subsidiaries balances and unrealized profits within the All major internal transactions, current at the time of preparation of the consolidatedscope of the merger shall be offset belong equity of a subsidiary that does not statements. The share of the owner’s current net profit and loss, other comprehensive to the parent company and the comprehensive income that belongs to the income and the share of the total be listed as Minority interests, Non-controlling minority shareholders’ equity shall income attributable to Non-controlling interest interest and Other comprehensive the in interest non-controlling to attributable income comprehensive total and consolidated financial statements. results control, its operating under common For the subsidiaries consolidated statements financial consolidated the in included be shall flows cash and comparative preparing When period. consolidated the of beginning the from year’s prior of items related the adjust statements, financial consolidated always is merger the after formed subject reporting The statements. financial to control. present since the time when the ultimate controlling party began under not combination business the through acquired subsidiary the For the in included be should flows cash and results operating control, common is transferred consolidated financial statements from the date on which control it shall adjust to the Group. When preparing consolidated financial statements, of the fair values the financial statements of subsidiary company on the basis on the of the identifiable assets, liabilities and contingent liabilities determined acquisition date.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 6.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
180 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 181 (Continued)
(continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Preparation of Consolidated Financial Statements Financial Statements Preparation of Consolidated The Group partially disposes the long-term equity investments in subsidiaries subsidiaries in investments equity long-term the disposes partially Group The statements, the difference control. In the consolidated financial without losing of equity investments shall price and disposal of long-term between the disposal that the subsidiaries continue to calculate be subject to the share of net assets capital adjust shall combination of date the or purchase of date the from the offsetting, for sufficient not is capital the If premium. equity or premium retained earnings shall be adjusted. entity, the of control lose and investment equity the of part disposing When re- shall Group the statements, financial consolidated the preparing when the to subsequent investment equity remaining the of value fair the measure disposal the of sum The control. lost Group the when date the at disposal value of the remaining equity investment less consideration amount and the fair of the net assets that the original subsidiary the difference between the share combination date, the difference is recorded from the acquisition date or the income in the current period and write down in the loss of control investment income related to the equity investment of the goodwill. Other comprehensive the to investment profit and loss in the original subsidiaries shall be transferred current period when the control was lost. through multiple The Group disposes of the equity investment in the subsidiary the to related transactions several When control. loses it until transactions the subsidiary disposal of equity investment in a subsidiary until the control over accounted for as is lost belong to transactions in a basket, each of which is a subsidiary is disposal of a subsidiary with a transaction until the control over to the loss of lost; however, the different between the amount of disposal prior investment control and the net assets of a subsidiary attributable to the disposal financial shall be recognized as other comprehensive income in consolidated control is lost. statements and transferred to profit or loss at the time when the
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 6.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Cash and Cash Equivalents Preparation of Consolidated Financial Statements Financial Statements Preparation of Consolidated Cash in the Group’s cash flows statement represents cash on hand and and hand on cash represents statement flows cash Group’s the in Cash flowcash the in equivalents Cash demand. on draw readily be can that deposits investments statement represent short-term (3 months or less), and highly liquid are subject to that are readily convertible to known amounts of cash and which insignificant risk of change in value. All significant intra-group balances, transactions and unrealized profits are are profits unrealized and transactions balances, intra-group significant All The portion of subsidiaries’ consolidated financial statements. eliminated in the and losses and comprehensive of subsidiaries’ net profits equity and the portion recognized are Company the to attributable not period the for incomes consolidated the in separately presented and interests non-controlling as net profits and total comprehensive income financial statements under equity, and losses resulting from the sale of assets by respectively. Unrealized profits are fully eliminated against net profit attributablethe Company to its subsidiaries Unrealized profits and losses resulting from to shareholders of the Company. are eliminated and allocated Company the to subsidiary the sale of assets by a minority and Company the of shareholders to attributable profit net between the in parent the of proportion allocation the with accordance in interests one by assets of sale the from resulting losses and profits Unrealized subsidiary. attributable profit net between allocated and eliminated are another to subsidiary and minority interests in accordance with the to shareholders of the Company in the subsidiary. allocation proportion of the parent
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 7. 6.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
182 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 183 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts currency transactions are translated into RMB at the spot spot the at RMB into translated are transactions currency (CONTINUED) and liability items in the balance sheet of foreign operations are are operations foreign of sheet balance the in items liability and Translation of foreign currency financial statements Translation of foreign currency Asset Foreign currency transactions Foreign currency Foreign exchange rate of the transaction dates. On balance sheet date, foreign exchange rate of the transaction exchange spot the at RMB into translated are items monetary currency these from arising differences Exchange date. sheet balance of rate or loss for the current period, except translations are recognised in profit currency borrowings that have been taken for those attributable to foreign assets, qualifying of construction or acquisition the for specifically out the cost of those assets. which are capitalised as part of translated at the spot exchange rates at the balance sheet date; equity translated at the spot exchange are translated at the spot exchange items other than undistributed profits the in items expense and Income transactions. the of date the at rates at the date income statements are translated at the spot exchange rate difference of the transactions. The foreign currency statement translation arising from the above conversion shall be listed in other comprehensive the cash is income item. The impact of the foreign currency translation on presented in the cash flow statement separately.
F denominated in foreign currency denominated in (1) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 8. statements financial of translation and transactions currency oreign
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
on the Group’s business model for managing the financial financial the managing for model business Group’s the on Classification, recognition basis and measurement of financial assets Classification, recognition basis Based assets and the contractual cash flow characteristics of the financial assets and the contractual cash financial assets into financial assets asset, the Group classifies the through value fair cost, amortized at measured subsequently as fair value through profit or loss. other comprehensive income or assets financial into assets financial the classifies Group The following the all if cost amortized at measured subsequently as model business the of objective The a) met: are conditions is to hold assets in order to collect within which the asset is held the contractual terms of the financial contractual cash flows, and b) solely are that flows cash to dates specified on rise give asset outstanding. principal the on interest and principal of payments relating the fair value, its asset is measured initially at Such financial of amount initial the into recognized be shall costs transaction amortized at measured subsequently is and asset, financial the for cost. Except for the case that the financial asset is designated hedging project, gain or loss arising from derecognition, impairment and amount initial the between difference the for amortization or in the amount due using the effective interest method are recorded current profit or loss. (CONTINUED)
Financial assets 1)
Financial assets and financial liabilities Financial assets The Group recognizes a financial asset or liability when it enters a financial financial a enters it when liability or asset financial a recognizes Group The instrument contract. (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
184 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 185 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) Group classifies the financial assets into financial assets as as assets financial into assets financial the classifies Group measured at fair value through other comprehensive income if all all if income comprehensive other through value fair at measured a) the financial asset is held within the following conditions are met: collecting both by achieved is objective whose model business a the b) and assets, financial selling and flows cash contractual asset give rise on specified dates contractual terms of the financial of principal and interest on to cash flows that are solely payments Such financial asset is measured the principal amount outstanding. relating transaction costs shall be initially at its fair value, and the or Gain asset. financial the of amount initial the into recognized through value fair at measured assets financial by incurred loss financial the that case the excepting income comprehensive other project shall be recognized in other asset is designated for hedging comprehensive income except the impairment loss or gains, foreign effective the by calculated interests and loss, or profit exchange is interest rate method of financial assets. When the financial asset in derecognized, accumulated gains or losses previously recognized or other comprehensive income shall be transferred to current profit loss from other comprehensive income. Classification, recognition basis and measurement of financial assets basis and measurement Classification, recognition (continued) The (CONTINUED)
Financial assets Financial assets 1)
Financial assets and financial liabilities Financial assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) he Group recognized interest revenue according to effective effective to according revenue interest recognized Group he interest rate method. Interest revenue is calculated by multiplying multiplying by calculated is revenue Interest method. rate interest interest effective the by assets of financial amount carrying gross the conditions:a) for the financial assets rate, but except the following income interest the loss, impairment with originated or purchased cost amortized the to according determined and calculated is by adjusted rate interest effective the and assets financial the of for the financial assets purchased credit from initial recognition; b) subsequent in impaired but loss, impairment without originated or and determined according period, the interest income is calculated assets and the effective interestto the amortized cost of the financial rate in the subsequent period. held The Group designated the investment of equity instruments not other for trading as financial assets measured at fair value through it made, been has designation the Once income. comprehensive held cannot be cancelled. The investment of equity instruments not for trading designated by the Group measured at fair value through theother comprehensive income is measured initially at its fair value, amount initial the into recognized be shall costs transaction relating the of the financial asset; except for the dividends gain (excluding loss, cost recovery of investment) is recognized in current profit or or profit exchange foreign (including loss and gain related other loss)are all recognized in other comprehensive income, and cannot be transferred into current profit or loss subsequently. Classification, recognition basis and measurement of financial assets basis and measurement Classification, recognition (continued) T (CONTINUED)
1) Financial assets Financial assets
Financial assets and financial liabilities Financial assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
186 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 187 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) n addition to the financial assets classified above as financial assets assets financial as above classified assets financial the to n addition measured at amortized cost and financial assets measured at fair fair at measured assets financial and cost amortized at measured classifies Group the income, comprehensive other through value current through value fair at measured assets financial as others asset is measured initially at fair value, profit or loss. Such financial shall be recognized into current and the relating transaction costs be shall assets financial such of loss or gain The loss. or profit recognized in current profit or loss. contingent consideration through by The financial asset constituted common control by the Group is a business combination not under at fair value through current classified into financial asset measured profit or loss. At the time of initial recognition, in order to eliminate or significantly following the designated Group the mismatch, accounting reduce financial assets as financial assets measured at fair value through current profit or loss. Classification, recognition basis and measurement of financial assets basis and measurement Classification, recognition (continued) I (CONTINUED)
Financial assets Financial assets 1)
Financial assets and financial liabilities Financial assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) Group will derecognized the financial asset if one of the the of one if asset financial the derecognized will Group following conditions is satisfied: (a) The contractual rights to collect following conditions is satisfied: the When (b) terminate; asset financial the from flows cash the the Group transfers substantially financial asset is transferred, and (c) asset; financial the of ownership of rewards and risks the all transfers neither Group the transferred, is asset financial the When and rewards of ownership of the nor retains substantially all the risks control. financial asset and has not retained derecognition, for qualifies asset financial the of transfer a When asset financial the of amount carrying the between difference the the from received consideration the of sum the and transferred that value fair in changes of amount cumulative the and transfer income, comprehensive other in recorded previously been has the of terms contractual (the loss or profit current in recorded is of financial asset give rise to cash flows that are solely payments principal and interest on the principal amount outstanding). If a transfer of part of a financial asset qualifies for derecognition, is transferred asset financial entire the of amount carrying the that part the and derecognized is that part the between allocated values fair respective the on based recognized, be to continues consideration of sum the between difference The parts. those of in fair received from the transfer and cumulative amount of changes has which derecognized part the to allocated be shall that value the been previously recognized in other comprehensive income and loss or profit current in recorded is amount, carrying allocated above flows (the contractual terms of the financial asset give rise to cash principal the on interest and principal of payments solely are that amount outstanding). Recognition basis and measurement of transferring financial assets and measurement of transferring Recognition basis The (CONTINUED)
2) Financial assets Financial assets
Financial assets and financial liabilities Financial assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
188 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 189 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts recognition basis and measurement of financial financial of measurement and basis recognition liabilities liabilities upon initial recognition as The group classifies the financial fair value through profit or loss and financial liabilities measured at other financial liabilities. loss, or profit through value fair at measured liabilities Financial for trading and those designated asincluding financial liabilities held profit or loss upon initial recognition, measured at fair value through the to according disclosed is basis classification (relevant assets), are measured subsequently classification basis of financial resulting from changes in fair valueat fair value, and profits or losses related to financial liabilities are and dividends and interest expense losses. recognized in current profits and liabilities financial of disclosure (specific liabilities, financial Other at measured subsequently are situation), actual to according amortized cost using effective interest method. The Group classify cost, all financial liabilities as subsequently measured at amortised through value fair at measured liabilities Financial (a) for: except profit or loss, including financial liabilities held for trading (including at derivatives that are liabilities) and those designated as measured fair value through profit or loss upon initial recognition; (b) Financial not does asset financial a of transfer a when arise that liabilities involvement continuing the when or derecognition for qualify not do that contracts guarantee financial (c) applies. approach satisfied (a) and (b), and commitments to provide a loan at a below- market interest rate that do not satisfied (a). Classification, (CONTINUED)
) Financial liabilities 1
Financial assets and financial liabilities Financial assets (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) recognition basis and measurement of financial financial of measurement and basis recognition (continued) inancial liability shall be derecognized. A contract is entered into into entered is contract A derecognized. be shall liability inancial liabilities (continued) consideration contingent by constituted liability financial The a business combination not under confirmed by the buyer through through value fair at measured is Group the by control common current profit or loss. between the Group and the creditor to replace the existing financial new contract terms of the if And liability. financial new a liability by existing in those with different substantially are liability financial liability financial existing the derecognize shall it liability, financial performed Group the When liability. financial new a and recognize the of terms contract the of part or all to changes substantive of it existing financial liabilities, the existing financial liabilities or part will shall be derecognized. And financial liabilities after term revision between difference The liability. financial new a as recognized be the and derecognized liability financial the of amount carrying the consideration paid is recognized in current profit or loss. Derecognition criteria of financial liabilities Derecognition criteria of financial a part of the present obligation of When the present obligation or a financial liability or a part of a a financial liability is discharged, f Classification, (CONTINUED)
1) Financial liabilities Financial liabilities 2)
Financial assets and financial liabilities Financial assets (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
190 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 191 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts for determination of the fair value of financial assets and and assets financial of value fair the of determination for (CONTINUED) Methods financial liabilities financial and assets financial of value fair the measures Group The a of absence the in or market, principal in prices the at liabilities most the in prices the at value fair the measures market, principal are appropriate that techniques and use valuation market, advantageous sufficient data and other information in the circumstances and for which value fair in used value input The value. fair measure to available are levels: the first level of input value is measurement is divided into three be can that liabilities and assets same the of quotation unadjusted the day in the active market; the second level obtained on the measurement indirect observable input value of related of input value is the direct or third the value; input level first the to addition in liabilities and assets input level of related assets and level of input value is the unobservable first level of input values, and uses the liabilities. The Group prefers the Investment of other equity instruments third level of input values at last. measurement value fair of level The values. input of level first the uses are of great results is determined by the lowest level of input values which significance to fair value measurement as a whole. value. ButThe Group measures the investment of equity instruments at fair fair value in limited cases, if the short-term information used to determine value is widely fair estimated amount of is insufficient, or if the possible value in the distributed, and the cost represents the best estimate of fair the range range, the cost can represent its proper estimate of fair value in of distribution.
Financial assets and financial liabilities Financial assets (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) balance sheet and are not offset by each other. However, when the when However, other. each by offset not are and sheet balance following conditions are met at the same time, the net amount offset shall following conditions are met at a) the Group has a statutory right to set be shown in the balance sheet: statutory right is currently enforceable. b)off the recognized amount, and the assets and liabilities in net amount, the Group intends to settle its financial the at liabilities financial the settle and assets financial the liquidate or same time. Elimination between financial assets and financial liabilities financial assets and financial Elimination between are shown separately in and liabilities of the Group The financial assets the
Financial assets and financial liabilities Financial assets (4)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
192 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 193 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts between financial liabilities and equity instruments and and instruments equity and liabilities financial between (CONTINUED) Difference relevant measurement financial liabilities and equity instrumentsThe Group distinguishes between cannot Group the If principles:(1) following the with accordance in contractual obligation by delivering cash unconditionally avoid fulfilling a definition the meets obligation contractual the assets, financial other or financial instruments do not explicitly of financial liability. Although some other or cash deliver to obligation the for conditions and terms contain form contractual obligations through financial assets, they may indirectly with to be settled is instrument a financial (2) If conditions. and other terms it is necessary to consider whether the Group’s own equity instruments, used to settle the instrument are to the Group’s own equity instruments or other financial assets, or to enable be used as a substitute for cash after assets the in equity residual take to instrument the of holder the instrument the case, the is former the If liabilities. all deducts issuer the If the latter is the case, the instrument is the issuer’s financial liabilities. instrument financial a cases, some In instrument. equity issuer’s the is to contract sets that the group shall use or use its own equity instruments rights or settle the financial instrument, in which the amount of contractual available obligations is equal to the number of its own equity instruments settlement, or to be delivered multiplied by the fair value at the time of or fixed is obligations or rights contractual the of amount the whether variables set this of division the on based partially or totally changes (such other than the market price of the group’s own equity instruments financial a of price the or commodity a of price the rates, interest as instrument), the contract is classified as financial liabilities.
Financial assets and financial liabilities Financial assets (5)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) between financial liabilities and equity instruments and and instruments equity and liabilities financial between (CONTINUED) relevant measurement (continued) relevant measurement the in components) their (or instruments financial classifying In and terms all account into takes Group the statements, consolidated members of the Group and the holders conditions reached between the as a whole assumes the obligation to of financial instruments. If the group or settle accounts in other ways that deliver cash, other financial assets a financial liability, the instrument should result in the instrument becoming be classified as a financial liability. components are financial liabilities, theWhere financial instruments or their stock bonus), gains or losses, as well as relevant interest, dividends (or or refinancing, shall be included gains or losses arising from redemption period. in the profits and losses of the current equity an to belong components its or instrument financial a Where refinancing), repurchased, sold or instrument, when it is issued (including shall not cancelled, the Group shall account as a change of equity, and recognize the change of the fair value of the equity instrument. Difference
Financial assets and financial liabilities Financial assets (5)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 9.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
194 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 195 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Notes receivable and accounts receivable Notes receivable The determination method and accounting treatment method of anticipated anticipated of method treatment accounting and method determination The receivable and accounts receivable. credit loss of notes its loss preparation in accordance with the The Group shall always measures credit loss during the whole life period for amount equivalent to the anticipated by the transactions regulated by the CAS 14 – the accounts receivable formed financing elements. Revenue and excluding significant initial the since significantly increased has risk credit whether of judgment The whether the credit risk of financial instruments confirmation. The Group judges financial of probability default the comparing by significantly increased has confirmation initial the at determined duration expected the in instruments duration expected the in instruments financial of probability default the and date. However, if the Group determines that determined at the balance sheet a low credit risk on the balance sheet date, it the financial instrument has only has not increasedinstrument risk of the financial the credit that can be assumed Usually, if the delay exceeds 30 days, significantly since the initial confirmation. the Unless significantly. increased has instruments financial of risk credit the unnecessary Group is able to obtain reasonable and valid information without significantly additional costs or efforts, proving that credit risk has not increased In days. 30 exceeds period overdue the if even confirmation initial the since initial the since significantly increased has risk credit whether determining including confirmation, the Group considers reasonable and valid information, additional unnecessary without obtained be can that information prospective costs or efforts.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 10.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
(Continued)
(continued) difficulties of issuer or debtor lead to the disappearance of of disappearance the to lead debtor or issuer of difficulties (CONTINUED) fact that credit losses occur. active market of financial assets; Financial asset at a substantial discount reflects the Buying or generating a financial Breach of contract by the debtor, such as overdue payment of interest or Breach of contract by the debtor, principal, breach of contract, etc; under no other circumstances The creditor gives the debtor concessions related to the debtor’s financial for economic or contractual considerations difficulties; or undergo other financial restructuring; The debtor is likely to go bankrupt Major financial difficulties occur to the issuer or debtor; occur to the issuer or Major financial difficulties
Notes receivable and accounts receivable Notes receivable Assessment based on portfolio: For notes receivable and accounts receivable, Assessment based on portfolio: For notes receivable and accounts in credit risk the Group cannot obtain sufficient evidence of significant increase to assess at a reasonable cost at a single instrument level, but it is feasible portfolio. of basis the on significant is risk credit in increase the whether and evaluate Therefore, the Group shall divide the notes receivable into groups type of financial the increase in credit risk based on groups according to the date and the instruments, credit risk rating, type of collateral, initial recognition receivable into remaining contract period. The Group shall divide the accounts according groups on based risk credit in increase the evaluate and groups collateral, initial to the type of financial instruments, credit risk rating, type of recognition date and the remaining contract period. – Prospective information considered by the Group includes: considered by the Group Prospective information – – – – –
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 10.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
196 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 197 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Notes receivable and accounts receivable Notes receivable Expected credit loss measurement: Expected credit loss refers to the weighted weighted the to refers credit loss Expected loss measurement: Expected credit of risk the by weighted instruments financial of loss credit of value average contracts all of flow cash the between difference the is loss Credit default. real interest rate and the expected cash discounted according to the original the to refers which contract, the to according receivable contracts all of flow present value of all cash shortages. credit loss of notes receivable and accounts The Group calculates the expected date. If the expected credit loss is greater than receivable on the balance sheet provision for impairment of accounts receivable the current book value of the of loss the as difference the recognizes Group the receivable, notes and and accounts receivable, and debits the “loss impairment of notes receivable the “provision for bad debts”. On the contrary, of credit impairment” and credits the records and gains impairment as difference the recognizes Group the opposite. relevant the that finds and losses credit incurs actually group the Where approved is and recovered, be cannot receivable accounts and receivables “notes credit and debts” bad for “provision debit shall it cancellation, for of amount approved the to according receivable” “accounts or receivable” already provision loss the than greater is write-off of amount the If write-off. calculated, it shall debit “credit impairment loss”.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 10.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Other receivables The determination method and accounting treatment method of anticipated anticipated of method treatment accounting and method determination The receivables. credit loss of other for loss of other receivables in accordance The Group measures the provision increased not has risk credit the If a. circumstances: following the with loss the measure shall Group the confirmation, initial the since significantly of anticipated credit losses in the next 12 preparation according to the amount significantly since increased has whose credit risk assets b. Financial months. amount the in provision loss the measures Group the confirmation, initial the loss of the financial instrument during its entire equivalent to the expected credit or originating financial assets that have suffered life cycle. c. When purchasing amount the in provision loss the measure shall Group the impairment, credit loss during the whole life period. equivalent to the expected credit other receivables, the Group is unable to obtainPortfolio-based assessment: For increase in credit risk at a reasonable cost sufficient evidence of a significant it is feasible to assess whether a significant at a single instrument level, and on the basis of a portfolio. Therefore, other increase in credit risk is achieved risk ratings, receivable is characterized by types of financial instrument, credit to duration contract residual and date confirmation initial types, collateral of portfolio. evaluate whether credit risk increases significantly on the basis weighted the refers to credit loss Expected loss measurement: Expected credit of risk the by weighted instruments financial of loss credit of value average contracts all of flow cash the between difference the is loss Credit default. expected cash discounted according to the original real interest rate and the the to refers which contract, the to according receivable contracts all of flow present value of all cash shortages.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 11.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
198 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 199 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Inventories Other receivables Other receivables The Group’s inventories include but not limited to the raw materials, packaging The Group’s inventories include goods, unfinished products, and merchandise material, low-value consumption inventories. at valued is Inventory Group. the by adopted is system inventory Perpetual valuation actual cost when acquired. Weighted average method and individual used or issued. method are used to determine the actual cost of the inventory they are used. Low-value consumption goods are amortized at one time when and products unfinished inventory, merchandise of value realizable Net course of materials held for sale is the estimated selling price in the ordinary taxes. Net business less the applicable variable selling expenses and related estimated selling realizable value of material inventory held for production is the variable applicable completion, of costs estimated less products the of price selling expenses and related taxes. The Group shall calculate the expected credit loss of other receivables on the loss of other receivables on the calculate the expected credit The Group shall book current the than greater is loss credit expected the If date. balance sheet the recognizes Group the receivables, other of provision impairment of value impairment “credit debits receivables, other of loss impairment as difference On the contrary, the Group recognizes loss” and credits “bad debt provision”. and records the opposite. the difference as impairment gains receivables other that finds and losses credit incurs actually group the If debts “bad debit shall it write-off, for approved is and recovered, be cannot receivables” according to the approved amount preparation” and credit “other already provision loss the than greater is write-off of the amount If write-off. of different the to according loss” impairment “credit debit shall it calculated, amount.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 12. 11.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
assets refer to the Group’s right (depends on factors other other factors on (depends right Group’s the to refer assets of determining expected credit loss of contractual assets and and assets contractual of loss credit expected determining of (CONTINUED) accounting treatment credit loss of contractual assets, please Method of determining expected accounts and receivable Notes of description relevant 10. to refers receivable. calculates the expected credit loss of Accounting Treatment: The Group loss credit expected the If date. sheet balance the on assets contract of is greater than the book value of the current provision for impairment losses,contract assets, the Group recognizes the difference as impairment for and debits the “loss of credit impairment” and credits the “provision recognizes impairment of contractual assets”. On the contrary, the Group the difference as impairment gains and records the opposite. relevant the that finds and losses credit incurs actually Group the If it off, write to recovered, and is approved be assets cannot contractual and credit shall debit the “provision for impairment of contractual assets” write- of amount approved the to according assets” “contractual the already provision loss the than greater is write-off of amount the If off. the to according impairment” credit of “loss debit shall it calculated, different amount. than passage of time) to collect costs from customers in exchange for for exchange in customers from costs collect to time) of passage than the Group. If the Group sells two clearly goods or services transferred by it has the right to collect payment distinguishable goods to its customers, but the collection depends on the delivery for one of the goods delivered, regards the right to collect payment as a of another commodity, the Group contractual asset. Method Recognition method and standards of contractual assets and standards of contractual Recognition method Contractual
Contractual assets (1) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 13.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
200 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 201 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts for determining the amount of assets related to contractual contractual to related assets of amount the determining for (CONTINUED) Method costs contract include costs contractual to related assets Group’s The acquisition costs. performance costs and contract that is, the cost incurred by the Group The cost of contract performance, does not fall within the scope of other for the performance of the contract, and meets the following conditions at the enterprise accounting standards asset as the cost of contract performance: same time, is recognized as an including contract, expected or current a to related directly is cost the costs (or similar costs), costs direct labor, direct materials, manufacturing as a result of the contract and is clearly and other costs incurred solely cost increases the Group’s resources for undertaken by the customer. The the cost is expected to be recovered. future performance obligations; is the incremental cost expected to be The acquisition cost of a contract, to obtain the contract, and is recognized recovered by the Group in order amortization the if contract; the of cost acquisition the as asset an as losses and profits the year, one exceed not does asset the of period asset. the of occurrence the in included be shall period current the of that will Incremental cost refers to the cost (such as sales commission) incurred not occur if the group does not obtain a contract. Expenditures the than other contract a obtaining of purpose the for Group the by incurredincremental costs expected to be recovered (e.g. travel expenses the in recorded are acquired) was contract the whether of regardless clearly current profits and losses at the time of occurrence, except those undertaken by the customer.
Contractual costs (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 14.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Group’s assets related to contract costs shall be amortized on the the on amortized be shall costs contract to related assets Group’s determining impairment losses of assets related to contract costs, costs, contract to related assets of losses impairment determining same basis as the commodity income recognition related to the assets, same basis as the commodity profits and losses. and shall be included in the current the Group first determines impairment losses in accordance with other other with accordance in losses impairment determines first Group the standards and other assets related to the relevant enterprise accounting their with accordance in losses impairment determines then contract; consideration expected by the Group book value higher than the residual the estimates and asset the to related commodities of transfer the for the If commodities. related the of transfer the for incurred be to costs exceeds the allowance for impairment, difference between the two items be calculated and the impairment loss ofthe provision for impairment shall assets shall be considered. and After the factors of impairment in the previous period have changed, the asset, the above-mentioned balance is higher than the book value of shall be the provision for asset impairment which was originally calculated of the transferred back to the current profit and loss, but the book value asset on asset after the transfer shall not exceed the book value of the is not the transfer date assumed that the provision for asset impairment included. Impairment of assets related to contractual costs Impairment of assets related to In Amortization of assets related to contractual costs assets related to contractual Amortization of The
Contractual costs Contractual costs (3) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 14.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
202 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 203 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Long-term equity investment Long-term equity Long-term equity investments of the Group comprise the investment towards towards investment the comprise Group the of investments equity Long-term and joint ventures. investments towards associates subsidiaries and of sharing agreed contractually the is control joint on judgment Group’s The exists only when decisions about the relevant control of an arrangement, which of parties sharing control. activities require unanimous consent indirectly (e.g. through subsidiaries) more than If the Group holds, directly or presumed is it investee, the of power voting the of 50% than lower but 20% If the Group holds, directly or indirectly that the entity has significant influence. than 20% of the voting power of the investee, (e.g. Through subsidiaries) less of body governing equivalent or directors of board the on representation the financial and operation policy-making process, the investee, or participation in of expedition or investee, the and the entity between transaction material the or provision of essential technical information will management personnel, or the be considered. is the entity that controls the invested unit. A subsidiary company of the Group combination business a through acquired investment equity long-term for As accordance with under common control, the initial recognition are measured in merged party in the proportion of the book value of the owner’s equity of the of value book If the statements. consolidated financial party’s control ultimately merger, the cost the net assets of the merged party is negative on the date of of long-term equity investment shall be fixed at zero.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 15.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Long-term equity investment Long-term equity If a company acquires the equity of the invested entity under common control entity under common control the equity of the invested If a company acquires it merger, a forms eventually and transactions multiple through step by step investment equity long-term the with dealing of method the supplement shall of the parent company during the reporting disclosed in the financial statements is equity investee’s the example, For right. control the acquiring of period control through multiple transactions, and acquired step by step under common which belongs to a package transaction. The eventually the enterprise merges, as a control transaction. If it does not belong Group will treat all transactions initial investment cost of the long-term equity to the package transaction, the the net assets of the merged party in the book investment shall be the share of the on statements financial consolidated party’s controlling final the of value between the difference the by adjusted is reserve capital The merger. of date investment equity long-term the of value book the and cost investment initial of the book value of the new share payment before the merger, plus the sum capital reserve is insufficient to be reduced, the on the merger day, and if the retained earnings shall be reduced. actual acquisition cost if the long-term equity The initial investment cost is the common under not combination business a through acquired is investment control.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 15.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
204 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 205 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Long-term equity investment Long-term equity If a company acquires the equity of the invested entity not under common common under not entity invested the of equity the acquires company a If a forms eventually and transactions multiple through step by step control long-term of cost the with dealing of method the supplement shall it merger, the financial statements of the parent company equity investment disclosed in the example, For right. control the acquiring of period reporting the during transactions, multiple through step by step acquired are shares investee’s is formed, which belongs to a package and eventually a merger of enterprises the transaction. If control all transactions as a treat transaction, the Group will the package transaction, the initial investment transaction does not belong to to the book value of the original equity cost shall be accounted for according held equity the If cost. investment additional the of sum the and investment other the date, acquisition the before method equity by for accounted is be not will method equity original the by accounted income comprehensive basis same the investment, the with dealing when and temporarily, adjusted disposed of by the invested entity shall be as the assets or liabilities directly purchase the to prior held equity the If treatment. accounting for adopted in the financial assets available for sale, the date is accounted for at fair value comprehensive other in included originally value fair in changes cumulative the on losses and gains investment current the to transferred are gains consolidation date. obtained investments equity long-term above-mentioned the to addition In paying by obtained investments equity long-term mergers, enterprise through purchase price cash shall be regarded as investment costs according to the securities equity issuing by obtained investments equity long-term paid; actually issuing of value fair the to according costs investment as regarded be shall shall investors by invested investments equity long-term securities; equity or contracts investment with accordance in costs investment as regarded be agreements.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 15.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Long-term equity investment Long-term equity The Group adopts cost method to account for subsidiary investment and equity subsidiary investment and equity cost method to account for The Group adopts investment. for joint venture and joint venture method to account equity investment which based on cost The book value of the cost of long-term value fair the to according increase will measurement subsequent in method investment and the related transaction costs of the cost paid by the additional The cash dividend or profit declared by thewhen additional investment is made. as the current investment income according invested entity shall be recognized to the amount taken. method equity uses which investment equity long-term of value book The the with accordingly decrease or increase will measurement subsequent in invested units. Among them, when confirming change of owner’s equity of other fair the on based unit, invested the of loss and profit net the of share the of the invested unit at the time of acquiring the value of the identifiable assets accounting and policies accounting the with accordance in and investment, losses and gains transaction internal the offsetting and group, the of period and the joint venture, which belong to the occurring between the joint venture the of value net the ratio, share-holding the to according enterprise invested invested unit shall be calculated. Profit is confirmed after adjustment. between difference the disposed, is investment equity long-term the When in the current its book value and the actual price obtained shall be included equity the by calculated investment equity long-term a If income. investment other changes in method is included in the owner’s rights and interests due to of the invested the owner’s rights and interests other than net profit and loss shall interests and rights owner’s the in included originally portion the entity, the to according loss and profit investment current the to transferred be corresponding proportion when disposing of the investment.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 15.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
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From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Long-term equity investment Long-term equity If the joint control or significant influence on the invested unit is lost due to the invested unit is lost due to the or significant influence on the If the joint control shall disposal after equity residual the investment, equity the of part of disposal between difference The sale. for available assets financial for accounted be of the remaining equity on the date of the loss the fair value and book value shall be included in the current profits of joint control or significant influence income of the original equity investment and losses. The other comprehensive as basis same the on for accounted be shall method equity the by confirmed the when entity invested the by of disposed directly liabilities or assets the equity method is terminated. equity investment loses control over the If the disposal of part of the long-term after disposal can exercise joint control or invested entity, the residual equity invested entity, the balance between the book exert significant influence on the equity and the disposal consideration shall be accounted the disposal value of and the residual equity shall be accounted for for as the investment income, joint exert cannot equity residual the If disposal. after method equity the by on the invested unit, it shall be accounted control or exert significant influence for available assets financial the of provisions relevant the to according for the and equity disposal the of value book the between difference The sale. income. book value of the disposal equity shall be included in the investment the day of losing The difference between the fair value of the residual equity on profit and control and the book value shall be included in the current investment loss. rights doesIf the transaction from step-by-step disposal to the loss of controlling for accounted is transaction each transaction, of package the to belong not as a transaction separately. In a “package transaction”, transactions are treated of the loss before and lose control rights. However, subsidiaries of dispose to transaction each of price disposal the between difference the rights, control the to corresponding investment equity long-term the of value book the and and when the disposed equity is recognized as other comprehensive income, losses of losing control rights are lost, it will be transferred to current profits and control rights.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 15.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
Annual rate (%) depreciation (Continued)
(%) residual 0.00-5.00 1.90-3.33 Estimated value rates
useful life Estimated 30-50 years
(CONTINUED) land-use right) Buildings (including the Category If the usage is changed into owner-occupied, the investment property is is property investment the owner-occupied, into changed is usage the If asset since reclassified into a property, plant and equipment or an intangible asset intangible or fix the contrary, the On made. been has change the day the is to earn is transferred into investment property if the usage of these properties previous carrying rentals or capital appreciations. When a transfer occurs, the amount shall be used as the new book value. depreciation and rates value residual estimated lives, useful estimated The method shall be annually reviewed and adjusted properly. Investment properties
Investment properties comprise land-use rights and buildings which are held held are which buildings and rights land-use comprise properties Investment by the Group, and uncompleted yields and not occupied for long-term rental Investment properties are initially are intended to hold for rent. buildings which costs shall be added to the initial costs of recognized at cost. The subsequently the economic benefit related is likely to realize the investment properties when be stated in current profit or loss. and is measurable. Or else, it should a using calculated is properties investment of amortization) (or Depreciation residual less (cost amounts depreciable the allocate to method straight-line life. Below is the table of estimated useful lives, value) over the estimated useful (amortization) rates: residual value rate and annual depreciation
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 16.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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208 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 209 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) plant and equipment comprise buildings, machineries, machineries, buildings, comprise equipment and plant (CONTINUED) Recognition and Initial measurement of property, plant and equipment Recognition and Initial measurement Property, transportations, office and electrical equipments, etc. The property, property, The etc. equipments, electrical and office transportations, refers to tangible assets held for the plant, and equipment of the Group or leasing services, labor of provision the commodities, of production a period of more than one year. operation and management for that probable is it when recognized are equipment and plant Property, into the the future economic benefits associated with the assets will flow recognized entity, and the cost of the asset can be measured reliably. It is owned at purchase cost or construction cost for the initial cost. The state price evaluation the at recognized were equipment and plant property, during the system-changing of the state-owned enterprise. benefits economic future the when recorded is expenditure Subsequent the cost of associated with the asset is likely to flow into the entity and part shall the asset can be measured reliably. The value of the replaced are be derecognized its carrying amount. The other subsequent expenses recognized in the current profit or loss.
Property, plant and equipment Investment properties Investment properties (1) An investment property shall be derecognized on disposal or when the the when or disposal on derecognized be shall property investment An use and no future economic is permanently withdrawn from investment property written- transfer, sale, from gains The disposal. its from expected are benefits properties less the carrying amount and relevant off or destroy of the investment profit or loss. taxes shall be recognized in current carrying its than lower is amount recoverable property’s investment an When be decreased to the recoverable amount. amount, the carry amount shall
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 17. 16.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
Annual rate (%) depreciation (Continued)
5.00 6.79-31.67 5.00 7.92-15.83 5.00 3.39-13.57 residual 3.00-5.00 1.90-4.75 value (%) Estimated
(years) Estimated 6-12 years 7-28 years 20-50 years useful lives
(continued) is calculated using a straight-line method to allocate the the allocate to method straight-line a using calculated is Office equipments 3-14 years Transportations Machinery equipments Machinery Buildings
(CONTINUED) 4 3 2 No. Category 1 depreciable amounts (cost less residual value) over the estimated useful depreciable amounts (cost less equipment with impairment provisions, life. As for the property, plant and a straight-line method to allocate the the Depreciation is calculated using over the impairment value) and (cost less residual depreciable amounts estimated useful life. Depreciation of property, plant and equipment Depreciation of Depreciation The estimated useful lives, estimated residual value rate and depreciation method shall be annually reviewed and adjusted properly. is lower and equipment property, plant of amount recoverable When the to thethan the carrying amounts, the carrying amounts shall be decreased recoverable amounts.
Property, plant and equipment Property, plant (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 17.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
210 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 211 (Continued)
be derecognized on disposal From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) and rewards incident to ownership. It shall be initially recognized recognized initially be shall It ownership. to incident rewards and Disposal of property, plant and equipment Disposal of property, plant and The property, plant and equipment should Recognition and measurement of finance leases Recognition and substantially all the as a finance lease if it transfers A lease is classified risks at the lower of the fair value of the assets and the present value of the value of present and the the assets of fair value the lower of the at difference between the fair value and the minimum lease payments. The unsettled as recognized is payments lease minimum the of value present financing expenses. under finance leases shall apply the same Property, plant and equipment own property, plant and equipment. depreciation method with the Group’s that the ownership of the leased When it can be reasonably determined the assets then shall be depreciatedasset will be transferred to the Group, the assets shall be depreciated based within the lease terms; otherwise, and the estimated useful life. on the shorter of the lease term or when the property, plant and equipment is permanently withdrawn withdrawn permanently is equipment and plant property, the when or its disposal. from use and no future economic benefits are expected from plant The gains from sale, transfer, written-off or destroy of the property, be shall taxes relevant and amount carrying the less equipment and recognized in current profit or loss.
Property, plant and equipment Property, plant (4) (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 17.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Borrowing cost Construction in progress Construction in General and specific borrowing costs that are directly attributable to the the to attributable directly are that costs borrowing specific and General capitalized are asset qualifying a of production or construction acquisition, is required to complete and prepare the asset during the period of time that necessarily that assets are assets Qualifying sale. or use intended its for sale. or use intended their for ready get to time of period substantial a take necessary activities the of all substantially when cease should Capitalization use or sale are complete. Capitalization to prepare the asset for its intended in which active development is interrupted should be suspended during periods abnormal the when recapitalized it And months. 3 than more for abnormally interruption is over. the specifically less borrowed funds the by incurred costs The actual interest bank or any income earned unused part deposited in the interest earned by the a of part are funds where capitalized; be shall investment temporary the on capitalization rate general pool, the eligible amount is determined by applying a weighted the be will rate capitalization The asset. that on expenditure the to average of the borrowing costs applicable to the general pool. When construction in progress reaches the predetermined usable state, it it state, usable predetermined the reaches progress in construction When to the estimated value regards to fixed asset according should be transferred be depreciated from the next and actual construction cost, and to budget, cost value the original final accounts, the difference of month. After the completion of of fixed assets will be adjusted.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 19. 18.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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212 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 213 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts is calculated using a straight-line method to allocate allocate to method straight-line a using calculated is know-how is shown at cost as all investors agreed. agreed. investors all as cost at shown is know-how life and should be tested annually for impairment. Customer life and should relationships shall be amortized using the straight-line method over relationships shall be amortized using the straight-line method their estimated useful lives of 10 to 12 years. Brand and customer relationships at the Brand and customer relationships are recognized at fair value brand acquisition date in a business combination in 2010. Since the the has an indefinite useful life, brand shall not be amortized during useful Technical know-how Technical Land-use right Depreciation Amortization is calculated using the straight-line method to allocate Amortization is calculated using of 10 the cost of technical know-how over its estimated useful life is years. The Group acquired all of the technical know-how which value acquired by the subsidiaries and should be recognized at fair 6 to at the acquisition date in 2011. And the estimated useful life is 10 years. the depreciable amounts over the useful life of 30 to 50 years. If it is the depreciable amounts over the price of the land-use right to that of difficult to identify the purchase recognized as a fixed asset. the building, the whole price is (CONTINUED)
Categories of intangible assets 1) 3) 2)
Intangible assets Intangible assets comprise the land-use rights, technical know-how, brand, brand, know-how, technical rights, land-use the comprise assets Intangible at recognized is it etc, software and rights franchise relationships, customer at the evaluation price intangible assets were recognized cost. The state-owned state-owned enterprise. during the system-changing of the (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 20.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) Group engages in certain service concession arrangements arrangements concession service certain in engages Group Software are and price purchase the by capitalized are licenses Software lives of 2 to 10 years. amortized over their estimated useful in which the Group carries out construction work for the granting granting the for work construction out carries Group the which in assets the operate to right a exchange in receives and authority set conditions pre-established the with accordance in concerned as classified are rights franchise The authority. granting the by from the granting authority. intangible assets or accounts receivable certain period after the construction, According to the contract, in a monetary of amount certain a receive to entitled is Group the or authority; granting the from assets financial other or resources the when the charge for the user is lower than a certain limitation, granting authority will compensate for the difference, which is shown as financial assets while the Group recognize the revenue. Also if the operator receives a right to charge user within a certain right a claim to unable and uncertain is amount the but period, while asset intangible an as stated is it receivable, accounts for recognizing the revenue. Franchise rights The (CONTINUED)
5) 4) Categories of intangible assets Categories of intangible
Intangible assets Intangible assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 20.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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214 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 215 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts research and development costs will be separated into into separated be will costs development and research (continued) f intangible assets model is applicable, the Group classifies the the classifies Group the applicable, is model assets intangible f relevant non-current assets linked to the long-term investment in in investment long-term the to linked assets non-current relevant under within rights” “franchise as arrangements franchise these sheet. balance consolidated the on classification assets intangible franchise the under projects infrastructure relevant the Once be will rights franchise the completed, been have arrangements franchise period on the straight-line amortized over the term of the model. basis under the intangible assets the classifies Group the applicable, is model assets financial If on assets financial as arrangements franchise these under assets infrastructure relevant the Once sheet. balance consolidated the completed, been have arrangements franchise the under projects effective using calculated be will assets financial of interest the to the interest rate method and related gain/(loss) will be charged profit or loss within the franchise period. research expenditure and development cost based on their their on based cost development and expenditure research and research the of uncertainty great is there whether and nature development will finally form an intangible asset. Costs Research expenditure is recognized as expenses as incurred. intangible as recognized are projects development on incurred assets when all the following criteria are fulfilled: Research and development Internal Franchise rights (continued) Franchise rights I (CONTINUED)
6) Categories of intangible assets Categories of intangible 5)
Intangible assets Intangible assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 20.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
(Continued)
(continued) development and to use or sell the intangible asset are are asset intangible the sell or use to and development is technically feasible to complete the intangible asset so so asset intangible the complete to feasible technically is that it will be available for use or sale; that it will be available for use or Adequate technical, financial and other resources to complete Adequate technical, financial and the the intangible asset during its The expenditure attributable to development can be reliably measured. It the intangible asset to use or Management intends to complete sell it; intangible asset will generate It can be demonstrated how the probable future economic benefits; available; and (continued)
a) (b) If development costs don’t meet the above criteria, they are recognized (c) (d) (e) Research and development (continued) Research and development ( as an expense as incurred. Development costs previously previously costs Development incurred. as expense an as intangible an as reclassified be cannot expense an as recognized as recorded are costs Capitalized periods. subsequent in asset into development expenditures on balance sheet and are transferred of feasibility commercial and technical after only assets intangible the asset for sale or use have been established. (CONTINUED)
6) Categories of intangible assets Categories of intangible
Intangible assets Intangible assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 20.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
216 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 217 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) the recoverable amount is lower than its carrying amount, the the amount, carrying its than lower is amount recoverable the (CONTINUED) for intangible asset with a definite useful life, the useful lives and and lives useful the life, useful definite a with asset intangible for Regular review of the useful lives and the amortization method Regular review of the useful lives As Impairment of intangible assets Impairment of intangible When depreciation method shall be annually reviewed and adjusted properly. depreciation method shall be annually carrying amount of the asset shall be written down to the recoverable recoverable the to down written be shall asset the of amount carrying amount.
Impairment of long-term assets Intangible assets Intangible assets At the end of each reporting period, long-term equity investments, investment At the end of each reporting period, in construction equipment, and plant property, cost, at carried property impairmentfor assessed are lives useful definite with assets intangible progress, impaired. be may asset an that indication any is there when Group the by with indefinite useful lives shall be assessed for Goodwill and intangible assets is any indication impairment at the end of each reporting period no matter there for impairment or not. of costs less value fair asset’s an of higher the is amount recoverable The be determined disposal and its value in use. The recoverable amount should amount for an individual asset. If it is not possible to determine the recoverable for cash- for an individual asset, the recoverable amount shall be determined asset’s an of identification The included. asset the which in units generating inflows generatedcash-generating unit shall be based on whether the main cash from inflows independent of the cash unit are cash-generating by the asset’s an of amount recoverable the When units. cash-generating or assets other the carrying asset or a cash-generating unit is less than its carrying amount, be shall amount. The reduction recoverable its to written down be shall amount for provision corresponding the and loss, or profit current the as recognised impairment of assets is also recognised. (2) (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 21. 20.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Long-term deferred expenses Impairment of long-term assets Impairment of long-term Long-term deferred expenses include the improvement expenditures of property,Long-term deferred expenses include the improvement expenditures incurred which expenses other and lease, under operating equipment and plant than one fiscal in the current period but are required to be amortized for more basis straight-line the on amortized are expenses deferred Long-term period. expenses less over the expected benefit period and are recorded as the actual the accumulated amortization. are amortized As for the molds stated in the long-term deferred expenses, they which for times estimated on based method units-of-production the adopting they can be used over the benefit period. When testing the impairment of relevant cash-generating units or groups of of groups or units cash-generating relevant of impairment the testing When of impairment of signs are there if goodwill, containing units cash-generating goodwill, to related units cash-generating of groups or units cash-generating without units cash-generating or units cash-generating of test impairment the the recoverable amount is calculated to confirm goodwill is carried out first, and out carried is test impairment the Then loss. impairment corresponding the containing units cash-generating of groups or units cash-generating the on and the recoverable amount are compared. goodwill, and the carrying amount impairment the amount, carrying the than lower is amount recoverable the If the carrying amount of goodwill allocated to the loss is allocated first to reduce of cash-generating units; and then, reduce the cash-generating units or groups assets included in the cash-generating units or carrying amounts of the other pro rata on the basis. groups of cash-generating units for the above assets is prohibited. Reversal of an impairment loss
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 22. 21.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
218 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 219 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Employee benefits Contract liabilities Employee benefits of the Group refer to rewards or compensations paid for for paid compensations or rewards to refer Group the of benefits Employee include which benefits, layoffs employer or employees by provided services benefits termination benefits, post-employment benefits, employee short-term and other long-term employee benefits. salaries, bonus, allowance and subsidies, Short-term employee benefits include maternity insurance, injury employment insurance, medical benefits, staff short-term appropriations, educational and union fund, housing insurance, during the paid absences, etc. Short-term benefits are recognized as liabilities Employee Group. the to service render employees when period accounting allocated to the benefits are recognized as profit or loss in the current period or at fair value. cost of related assets. The non-monetary benefits are measured A contract liability reflects the Group’s obligation to transfer goods to a customer reflects the Group’s obligation A contract liability is consideration of amount an or consideration received has Group the when consideration or the Group has If the customer pays due from the customer. that is unconditional, before the Group a right to an amount of consideration the Group shall recognize the contract liability transfers goods to the customer, received or receivable when the payment based on the amount of consideration is earlier). is made or the payment is due (whichever
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 24. 23.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Employee benefits Employee benefits Post-employment benefit schemes are classified as defined contribution plans as defined contribution plans benefit schemes are classified Post-employment plans of the Group are a kind plans. Defined contribution and defined benefit pays fixed fees to an in which the Group benefit scheme post-employment of obligated to make further payments. Defined independent fund and is no longer benefit plans other than defined contribution benefit plans are post-employment of the Group mainly refer to basic pension plans. The post-employment benefits this reporting period, both of which belong and unemployment insurance during to the defined contribution plan. insurance employee’s endowment in involved all are Group the of Employees and social security department. The Group policy implemented by local labour endowment employee’s of institution local the to payment monthly the makes proportion. After employees are retired, local insurance at a regulated base and basic their pay to obligation the have department security social and labour to the policy when employee renders pension. The payment made according or loss or profit as stated and liability a as recognized is Group the to service during the period. allocated to the cost of related assets when the GroupTermination benefits are the compensations made to employees the expiration of terminates the employment relationship with employees prior to encourage to offer an as compensations provides or contracts employment the termination provides Group the When layoffs. voluntary accept to employees benefits benefits, the employment benefit liabilities generated from termination early date of the are recognized to profit or loss in the current period on the those of offer the withdraw longer no can Group the when (a) followings: for costs recognizes Group the when (b) and unilaterally; plans layoff or benefits a restructuring related to termination benefits.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 24.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
220 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 221 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Provision Employee benefits Employee benefits Present obligations arising as a result of a past event (such as warranty, warranty, as (such event past a of result a as arising obligations Present of performance the when provision as recognized are etc.) contract, onerous benefits and the such obligations is likely to result in the outflow of economic amount can be estimated reliably. expenditure the of estimate best the is provision a as recognized amount The such as risks and Lots of factors, obligation. the present perform to required value of money uncertainties that surround the underlying events and the time is material, etc, are taken into account. Where the effect of time value of money Where flow. cash future the of value present the be shall estimate best the passage of time discounting is used, the increase of a provision to reflect the shall be recognized as borrowing costs. The Group offers early retirement benefit for the employees who accept the the accept who employees the for benefit retirement early offers Group The wages the to refers benefit retirement Early arrangement. retirement internal statutory the attain not do who employees the for paid insurance social and for team management Group’s the by approved being and age retirement retired early the for benefit retirement such pay will Group The retirement. retirement to date where the statutory retirementemployee from the date of early treatment for early retirement benefits age is attained. The basis of accounting benefits. If the recognition conditions for shall be the same as the termination the employment benefit liabilities generated termination benefits were satisfied, paid for the early retired employees shall be from wages and social insurance difference Any once. at all period current the in loss or profit to recognized assumptions or adjustment of the welfare arising from the changes of actuarial profit and loss in the current period. standard shall be included in the since the balance a year within to be paid The termination benefits expected liabilities. sheet day are presented as current
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 25. 24.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) (continued) Group shall recognize revenue when the Group satisfies the the satisfies Group the when revenue recognize shall Group performance obligation of the contract, that is, the customer obtains obtains customer the is, that contract, the of obligation performance togood or service refers or services. Control of a goods control of relevant good or service, and obtain substantially the ability to direct the use of the all of the benefits from the goods or services. on obligations, performance more or two contains contract the When each to allocated is price transaction the contract, the of inception the price of separate performance obligation in proportion to the stand-alone according the promised goods or services, and the revenue is recognized to the transaction price allocated to each performance obligation. Revenue recognition The
Revenue recognition and measurement Provision The Group’s operating revenue mainly includes sales revenue of goods, revenueThe Group’s operating revenue income, interest contract, construction EPC of revenue services, providing of revenue of leasing contract, etc. (1) Provisions shall be reviewed as at balance sheet date and adjusted to reflect date and adjusted to reflect be reviewed as at balance sheet Provisions shall estimates. the current best are day sheet balance since year a within paid be to expected Provisions presented as current liabilities.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26. 25.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
222 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 223 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Revenue recognition Revenue recognition The transaction price is the amount of consideration to which an entity entity an which to consideration of amount the is price transaction The or goods promised transferring for exchange in entitled be to expects third of behalf on collected amounts excluding customer, a to services by the Group does not exceed parties. The transaction price confirmed that a significant reversal in the amount the amount that is highly probable uncertainty the when occur not will recognized revenue cumulative of An resolved. subsequently is consideration variable the with associated if the entity expects to refund some entity shall recognize a refund liability the in included not is which customer the to consideration the of all or the in component financing significant is there Where price. transaction of basis the on price transaction the determine shall Group the contract, the customer assumes control of the the amount payable in cash when between the transaction price and the goods or services. The difference rate interest effective the by amortized be shall consideration contract account into take not shall Group The period. contract the during method component in the contract if the the existence of a significant financing when the Group expects, at contract inception, that the period between and when customer acquires the control of a promised good or service the customer pays for that good or service will be one year or less. the of one if time, over obligation performance a satisfies Group The at following criteria is met; otherwise, it satisfies a performance obligation consumes a point in time: (1) the customer simultaneously receives and performs; the benefits provided by the Group’s performance as the Group the Group’s (2) the customer can control the asset which is created by asset with performance; (3) the Group’s performance does not create an payment for an alternative use and the Group has an enforceable right to performance completed to date during the whole contact period.
Revenue recognition and measurement Revenue recognition (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) (CONTINUED) For a performance obligation satisfied over time, the Group shall shall Group the time, over satisfied obligation performance a For complete towards process the by measuring over time revenue recognize able be cannot Group the If obligation. performance the of satisfaction of satisfaction complete towards progress the measure reasonably to be can Group the by incurred costs the and obligation performance a revenue shall be recognized according expected to be compensated, the time that it can reasonably measure the to the costs incurred until such of the performance obligation. process towards complete satisfaction at a point in time, the Group shall For a performance obligation satisfied obtains control of relevant goods or recognize revenue when the customer obtain control of promised goods services. In judging whether customers the following indications: (1) the Group or services, the Group considers Groupthe (2) services; or goods the for payment the to right present a has the goods to customers; (3) the Group has has transferred the legal title of of the goods to customers; (4) the group transferred physical possession to the has transferred the significant risks and rewards of the ownership customers; (5) customers have accepted the goods or services. Revenue recognition Revenue recognition
Revenue recognition and measurement Revenue recognition (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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224 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 225
(Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts contracts between the Group and its customers usually usually customers its and Group the between contracts accounting policies related to the Group’s main revenue- main Group’s the to related policies accounting only the performance obligation to transfer goods. The Group usually usually Group The goods. transfer to obligation performance the only at revenue identifies and factors following the account into takes right present the goods: the accepts customer the when time the risks significant the of transfer the goods; the for payment the to of commodities; the transfer of legal and rewards in the ownership of possession physical of transfer the commodities,; of ownership of goods by customers. the goods, and the acceptance include performance obligations such as technical services, services, technical as such obligations performance include product after-sales maintenance services, etc. Because the Group’s benefits the consumes and receives simultaneously customers and provided by the Group’s performance as the Group performs, performance for payment to right enforceable an has Group the Group the period, contact whole the during date to completed time over satisfied obligation performance a as it recognize will and recognize revenue according to the progress of performance, reasonably be cannot performance of progress the that except determined. The Group determines the progress of service delivery Group according to the input method. If the costs incurred by the be shall revenue the compensated, be to expected be can it that time such until incurred costs the to according recognized can reasonably measure the process towards complete satisfaction of the performance obligation. Service contracts Services Sales contracts and its customers usually contain Sales contracts between the Group (CONTINUED)
(b) Specific generating activities are described below: generating activities (a)
Revenue recognition and measurement Revenue recognition (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) refers to the whole process or several stages of contracting contracting of stages several or process whole the to refers accounting policies related to the Group’s main revenue- main Group’s the to related policies accounting for the design, procurement, construction and trial operation of of operation trial and construction procurement, design, the for owner the by entrusted projects construction station hydropower content Construction agreement. contract the with accordance in and production station, hydropower of pre-design includes usually construction, materials, and equipment professional of purchase customers can control the power technical training and so on. Since the as installed and manufactured designed, system project plant has an enforceable right to payment Group performs, and the Group contact whole the during date to completed performance for as a performance obligation satisfied period, the Group regards it of progress the to according revenue recognizes and time, over be cannot performance of progress the that except performance, reasonably measured. The Group determines the progress of service the delivery according to the input method. If the costs incurred by shall be revenue the compensated, be to expected be can Group it that time such until incurred costs the to according recognized can reasonably measure the process towards complete satisfaction of the performance obligation. Construction contract – hydropower station EPC general contract Construction contract – hydropower EPC (CONTINUED)
generating activities are described below: (continued) generating activities (c) Specific
Revenue recognition and measurement Revenue recognition (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
226 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 227
(Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts accounting policies related to the Group’s main revenue- main Group’s the to related policies accounting is calculated and determined according to the time when other other when time the to according determined and calculated is Principal/Agent rental is included in the profits and losses of the current period whenrental is included in the profits and losses of the current period it actually occurs. For the Group, after acquiring control of the goods from a third third a from goods the of control acquiring after Group, the For purchased the integrates or customers to them transfers it party, the through output of portfolio a into goods other with goods The Group has the right to decide provision of significant services. it trades independently, that is, the price of the goods or services to them transferring before services or goods the control can it is the main principal, and revenue customers. Therefore, the Group receivable. or received consideration total the by recognized is in revenue recognize shall agent, an as Group, the Otherwise, be to expects it which to commission or fee any of amount the net the deducting by determined be shall amount The entitled. parties from the total amount of amount payable to other interested or by the established amount consideration received or receivable, or proportion of commission. people use the Group’s monetary fund and the actual interest rate. Rental income The rental income of operating lease is recognized by the straight line method during each period of the lease term, and the contingent Interest income It (CONTINUED)
Specific (e) (f) generating activities are described below: (continued) generating activities (d)
Revenue recognition and measurement Revenue recognition (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 26.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Government grants The Group’s government grants include tax return, financial subsidies etc. grants include tax return, The Group’s government assets to related grants government include grants government Group’s The to income. Government grants obtained by the and government grants related long-term of acquisition or construction purchase, to relevant are which Group as government grants related to assets; all assets in other ways are classified as government grants related to income. other government grants are classified Group the documents, government the in specified not are subsidies the If to difficult is it If principle. distinction above the to according them judges as government grants related to income. distinguish, the whole is classified assets, it shall be measured according If the government grants are monetary For the government grants allocated according to the amount actually received. for the end of the year, when there is conclusive to the fixed quota standard, or financial the by stipulated conditions relevant the meets it that evidence to receive the financial support funds, it shall support policy and is expected amount receivable. If the government grants are be measured according to the measured at fair value; if the fair value cannot non-monetary assets, it shall be be reliably obtained, it shall be measured at a nominal amount. deferred income Government grants related to assets shall be recognized as the straight-line and amortized to profits or losses of the current period using method within the useful life of the relevant assets. before the If the relevant assets are sold, transferred, scrapped or damaged that has not been end of their useful life, the balance of related deferred income of period current the of losses and profits the to transferred be shall allocated asset disposal.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 27.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
228 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 229 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) the finance allocates the discount funds to the lending bank and the the and bank lending the to funds discount the allocates finance the The finance will directly allocate the discount funds to the Group, which The finance will directly allocate the discount funds to the Group, discount. will deduct the related borrowing costs from the corresponding If lending bank provides loans to the Group at the policy-based preferential lending bank provides loans to the as received actually amount the use shall group the rate, interest calculate the relevant borrowing costs entry value of the loan, and then interest preferential policy the and principal borrowing the to according loan and rate (or use the fair value of the loan as the entry value of the interest method. effective the to calculate the borrowing costs according fair value The difference between the amount actually received and the is income deferred The income. deferred as recognized is loan the of of the loan, amortized by the effective interest method during the duration and the related borrowing costs are reduced.)
Government grants Government grants Government grants related to income, as compensation for costs and expenses for costs and expenses related to income, as compensation Government grants be shall and income deferred as recognised are periods, subsequent in the relevant costs or losses or loss over the period in which recorded in profit be shall activities daily to related grants government The recognized. are the relevant costs and expenses according recognized in other income or offset daily to related not are that Those business. economic of essence the to non-operating income and expenses. activities shall be recognized in shall it discount, loan preferential policy-based the obtains Group the If the finance allocates the discount funds to distinguish between the cases where allocates the discount funds directly to thethe lending bank and that the finance shall be carried out according to the following Group. The accounting treatment principles: (1) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 27.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) it belongs to other circumstances, it shall be directly included in the the in included directly be shall it circumstances, other to belongs it f there are related deferred incomes, the carrying amount of related related of amount carrying the incomes, deferred related are there f Adjust the book value of assets if the book value of the relevant assets is Adjust the book value of assets written off at the time of initial confirmation. deferred income shall be deducted and the excess part shall be included deferred income shall be deducted in the current profits and losses. I profits and losses of the current period. profits and losses of the current If
) Deferred tax assets and deferred tax liabilities Deferred tax assets and deferred Government grants Government grants Deferred tax assets and deferred tax liabilities are recognized based on the the on based recognized are liabilities tax deferred and assets tax Deferred of amount carrying the and bases tax the between differences temporary for deductible assets and liabilities. A deferred tax asset shall be recognized available against losses to the extent that it is probable that tax profit will be law tax with accordance in utilized be can losses deductible the which goodwill to relating differences taxable temporary for liabilities tax Deferred of recognition initial the from arise they extent the to recognized not are the temporary if recognized not are and liabilities assets tax Deferred goodwill. in a transaction differences arise from initial recognition of an asset or liability affects transaction the of time the at that combination business a than other date, deferred neither accounting nor taxable profit or loss. As at balance sheet applicable tax tax assets and deferred tax liabilities are determined using the tax asset is rates that are expected to apply when the related deferred income realized, or the deferred income tax liability is settled. If the government grants confirmed by the Group needs to be returned, the the returned, be to needs Group the by confirmed grants government the If following the with accordance in conducted be shall treatment accounting to be returned: current period in which it needs provisions in the 1) 2 3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 28. 27.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
230 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 231 (Continued)
(continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Lease Deferred tax assets and deferred tax liabilities Deferred tax assets The Group’s leasing business include finance leases and operating leases. The Group’s leasing business include finance leases, at commencement of the lease When the Group is the lessee of value present the and assets leased the of value fair the of lower the term, fixed the of value entry the as regarded is payments lease minimum the of is regarded as the entry value of long-term assets, the minimum lease payment unrecognized the as recorded is two the between difference the and payables, financing charges. of cost the in included is lessee lease operating an as rental Group’s The each during method line straight a in losses and profits current or assets related period of the lease period. Deferred tax assets are recognised only if it is probable that future taxable taxable future that probable is it if only recognised are assets tax Deferred differences and losses. available to utilise those temporary amounts will be
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29. 28.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
assets or disposal groups meeting the following conditions conditions following the meeting groups disposal or assets (CONTINUED) are classified as held-for-sale assets: 1) the non-current assets or disposal disposal or assets non-current the 1) assets: held-for-sale as classified are to pursuant conditions current under sold immediately be can groups or disposal groups; 2) its sale must general terms for selling such assets has been made on a sales plan andbe highly probable, that is, a decision and the sales are expected to be a firm commitment has been obtained, relevant provisions require the approval completed within one year. The be can they before authorities regulatory or authorities relevant the of groups disposal or assets non-current classifies Group the Before sold. book the measures Group the time, first the for assets held-for-sale as in non-current assets or disposal groups value of all assets and liabilities Group the When standards. accounting relevant with accordance in sheet balance the on made is re-measurement or measurement initially the non-current assets or disposal group date, and the carrying amount of fair value less cost to sell, the carrying holding for sale is higher than the the fair vale less cost to sell. The amount amount shall be written down to the loss of impairment of assets which is written down is recognized as and the corresponding provision for included in current profits and losses, impairment of held-for-sale assets is also recognised. Non-current
Held-for-sale assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 30.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
232 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 233 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) the Group meets the requirement that the sale is expected to be be to expected is sale the that requirement the meets Group the equity investment after the sale, when the investment in subsidiaries subsidiaries in investment the when sale, the after investment equity If the Group loses control of subsidiaries due to the sale of its investment If the Group loses control of subsidiaries whether or not the Group retains part of in subsidiaries or other reasons, its If the non-current assets or disposal group acquired exclusively for resale assets or disposal group acquired If the non-current by completed within one year on the acquisition date, and is likely to meet one year on the acquisition completed within of held-for-sale assets within a short other conditions for the classification held-for- as classified be shall it months), three within (usually period date. In the initial measurement, the initial sale assets on the acquisition compared is sell to costs less value fair the and amount measurement the condition that is not classified as and measured at a lower level under non-current assets or disposal groups Except for the held-for-sale assets. the difference resulting from the net acquired in the merger of enterprises, the deducting after groups disposal or assets non-current the of amount shall be taken as the initial measurement costs to sell from the fair value the current profits and losses. amount, and shall be included in to be sold meets the requirements for the classification of held-for-sale held-for-sale of classification the for requirements the meets sold be to assets, the investment of subsidiaries shall be divided into held-for-sale parent the of statements financial individual the in whole a as assets be listed company, and all assets and liabilities of the subsidiaries shall as held-for-sale in the consolidated financial statements.
Held-for-sale assets Held-for-sale assets (3) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 30.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) own shall be restored and shall be reversed within the amount of the the of amount the within reversed be shall and restored be shall own impairment loss of the assets recognized by non-current assets applicable impairment loss of the assets recognized after being classified as hold-for-sale to relevant measurement provisions profits and assets. The reversed amount shall be included in the current down and loss. The carrying amount of the goodwill that has been written they are the losses of impairment of non-current assets recognized before classified as held-for-sale assets shall be not reversed. the by recognized losses impairment the of reversals subsequent The carrying the increase shall sale for held as classified group disposal accordingamount of non-current assets in the disposal group in proportion except to the proportion of the carrying amount of the non-current assets goodwill in the disposal group. the subsequent balance sheet date increases, the amount previously previously amount the increases, date sheet balance subsequent the within the amount be restored and shall be reversed written down shall recognized after being classified as of the impairment loss of the assets amount shall be included in the current hold-for-sale assets. The reversed the before recognized assets of impairment of Losses loss. and profits shall be not reversed. classification of held-for-sale assets For the amount of loss of impairment of assets confirmed by the disposal For the amount of loss of impairment the carrying amount of goodwill in the group classified as held for sale, and then the carrying amount of non- disposal group shall be offset first, rata on the basis. current assets shall be offset pro group classified as held for sale on the If the net amount of the disposal increases, the amount previously written subsequent balance sheet date d If
Held-for-sale assets Held-for-sale assets (5) (4) on sale for held as classified assets non-current the of amount net the
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 30.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
234 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 235 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) as held for sale, the unrecognized gains or losses shall be be shall losses or gains unrecognized the sale, for held as attributable to the liabilities of a disposal group classifies as as classifies group disposal a of liabilities the to attributable the non-current asset or the disposal group classified as held held as classified group disposal the or asset non-current the (CONTINUED) When terminating the confirmation of non-current assets or disposal group When terminating the confirmation classified When The non-current assets classified as held for sale or non-current assets in assets classified as held for sale The non-current Interest and other are not depreciated or amortised. the disposal group expenses included in the current profits and losses. included in the current profits and held for sale shall continue to recognise. for sale ceases to meet the conditions for the classification of held for for held of classification the for conditions the meet to ceases sale for to ceases or sale for held as classified further be to ceases and sale be shall it sale, for held as classified group disposal a in included be carrying amount before the non-current measured at the lower of: a) its as held for sale, adjusted for any asset or disposal group was classified recognised been have would that impairment or amortisation depreciation, group not been classified as held had the non-current asset or disposal for sale; b) its recoverable amount.
Discontinued operation Held-for-sale assets Held-for-sale assets (7) Discontinued operations referring to be clearly distinguished component which Discontinued operations referring to be clearly distinguished component of one satisfy shall sale, for held as classified is or of disposed been has main independent an represents component the (1) condition: following the is part of a business or a separate main area of operation; (2) the component a separate main related plan for disposing an independent main business or for resale. operating area; (3) the component is a specially subsidiary obtained (6) (8)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 31. 30.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Financial guarantee contracts Segment information Financial guarantee contracts are contracts that require the issuer to make make to issuer the require that contracts are contracts guarantee Financial a because incurs it loss a for holder the reimburse to payments specific areguarantees financial Such due. when payment make to fails debtor specified related party’ given to banks, financial institutions and other entities to secure loans, overdrafts and other bank facilities. the on value fair at recognized initially is contract guarantee financial The the at measured subsequently be shall and given, was guarantee the date for required reserves the of estimate best the and value amortized of higher sheet date. the performance of the group’s guarantee obligations on balance be recorded in The increased liabilities associated with the contract and shall experience,current profit or loss. These estimates are based on similar business past losses and management judgment. The Group determines the operating segment based on internal organizational organizational internal on based segment operating the determines Group The The system. reporting internal and requirements management structure, the on based determined are information the disclosing and segment reportable operating segment. satisfy that Group the within components the to refers segment Operating and income generate can components the (1) conditions: following the all are components the of results operating the (2) activities; daily in expenses of the Group to make decisions about regularly reviewed by the management (3) performance; its assess and segment the to allocated be to resources results operating position, financial the including information financial Discrete is available. If two or more operating segments and cash flow of the component and meet certain conditions, they can be have similar economic characteristics merged into one operating segment.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 33. 32.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
236 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 237 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Taxation The Group is subject to various taxes in the PRC, United Kingdom and The Group is subject to various provision the determining in required is judgment Significant Germany. transactions and calculations for which for income taxes. There are many of is uncertain during the ordinary course the ultimate tax determination liabilities for anticipated tax audit issues business. The Group recognizes the Where due. be will taxes additional whether of estimates on based is different from the amounts that were final tax outcome of these matters deferredand tax income impact the will recorded, such differences initially tax provisions in the period in which such determination is made. is it considers management as recognized are assets tax Deferred the which against available be will profit taxable future that probable expectation the Where utilized. be can losses tax or differences temporary the impact will differences such estimate, original the from different is in which recognition of deferred tax assets and income tax in the periods such estimate is changed.
Critical accounting estimates and judgments Critical accounting Estimates and judgments are continually evaluated and are based on historical and are based on historical are continually evaluated Estimates and judgments of future events that are other factors, including expectations experience and The Group makes estimates under the circumstances. believed to be reasonable estimates accounting resulting The future. the concerning assumptions and the related actual results. The estimates and will, by definition, seldom equal to adjustment material a causing of risk significant a have that assumptions and liabilities within the next financial year are the carrying amounts of assets addressed below. (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 34.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) units or groups of cash-generating units to which which to units cash-generating of groups or units goodwill has been allocated is the present value of its future cash goodwill has been allocated is the present value of its future (Notes estimates management’s of basis the on estimated flows IV(21)). the in used rate profit gross the modified management the If calculation of the future cash flow of cash-generating units or groups of of cash-generating units, the Group shall recognize the provision lower impairment on goodwill when the modified gross profit rate is than the current gross profit rate. Provision of impairment on goodwill Goodwill is reviewed for impairment annually. The group conducts of an annual impairment test on goodwill. The recoverable amount cash-generating (CONTINUED)
financial instruments. The application of the anticipated credit loss loss credit anticipated the of application The instruments. financial model requires significant judgments and estimates. All reasonable reasonable All estimates. and judgments significant requires model information, forward-looking including information, evidence-based and In making such judgments and estimates, should be taken into account. risk credit debtor’s the in changes expected the infers Group the policies, economic with combined data repayment historical on based risks and other factors. macroeconomic indicators, industry results and the original estimates will The difference between the actual assets and the provision or reversal affect the carrying amount of financial during the estimated period of change. for bad debts of financial assets Impairment of non-financial assets (a) Impairment of financial assets Impairment of financial to evaluate the impairment the expected credit loss model The group uses of
Critical accounting estimates and judgments Critical accounting (3) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 34.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
238 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 239 (Continued)
(continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts assets are reviewed for impairment annually according according annually impairment for reviewed are assets the management modified the pre-tax discount rate used for for used rate discount pre-tax the modified management the to the accounting policy of the Group. The recoverable amount amount recoverable The Group. the of policy accounting the to unit is the higher of its fair value of an asset or a cash-generating future less costs of disposal and the present value of the expected company the requires use in value of calculation The flow. cash the to estimate the future cash flows expected to be derived from on based rate discount appropriate the and unit cash-generating the assumptions and estimates of the management. After sensitivity of the analysis, the management believes that the carrying amount asset will be fully recovered. cash flow discounting, the Group shall recognize the provision of of provision the recognize shall Group the discounting, flow cash modified pre-tax discount rate is impairment on goodwill when the rate. higher than the current discount goodwill cannot be reversed if the The provision of impairment on lower or higher is rate discount pre-tax or rate profit gross actual than the estimates of the management. Impairment of long-term assets Long-term Provision of impairment on goodwill (continued) Provision of impairment If (CONTINUED)
(a) Impairment of non-financial assets Impairment of non-financial (b)
Critical accounting estimates and judgments Critical accounting (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 34.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
(Continued)
(continued) (continued) the management modified the gross profit rate used in the the in used rate profit gross the modified management the calculation of the future cash flow of cash-generating units or groups calculation of the future cash flow shall recognize the provision of of cash-generating units, the Group when the modified gross profit rate impairment on long-term assets rate. is lower than the current gross profit Impairment of long-term assets (continued) Impairment of long-term If (CONTINUED)
nventories are measured at the lower of cost and net realizable value. value. realizable net and cost of lower the at measured are nventories number of assumptions, including the benefit period and the discount rate. discount and the period benefit the including assumptions, of number to may lead they assumptions, these with inconsistent are events future If plan set significant adjustments to the net liabilities of the defined benefit on the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of Net realizable value is the estimated of completion and the estimated costs business less the estimated costs necessary to make the sale. Defined benefit plan the defined The management of the Group determines the net liabilities of obligation benefit plan based on the present value of the defined benefit model. The minus the fair value of the planned assets calculated by the includes a calculation of the present value of the defined benefit obligation Valuation of inventory I (b) Impairment of non-financial assets Impairment of non-financial
(5) (4) Critical accounting estimates and judgments Critical accounting (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 34.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
240 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 241 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Ministry of Finance issued ““CAS 22 – Financial Instruments: Instruments: Financial – 22 ““CAS issued Finance of Ministry Changes in critical accounting policies Changes in critical The Recognition and Measurement (Revised in 2017)” (Caikuai [2017] No. 7)”, No. [2017] (Caikuai 2017)” in (Revised Measurement and Recognition Assets (Revised in 2017)” (Caikuai [2017] ““CAS 23 – Transfer of Financial (Revised in 2017)” (Caikuai [2017]No. 8)”, ““CAS 24 – Hedging Accounting Financial – 37 ““CAS issued It 2017. 31 March on respectively 9)” No. 14)” No. [2017] (Caikuai 2017)” in (Revised Presentation Instruments: 2 on Standards”) Instruments Financial “New as to referred (hereinafter (Revised in 2017)” (Caikuai [2017] No. May 2017, ““CAS 14 – Revenue Revenue Standards”) on 5 July 2017, 22)” (hereinafter referred to as “New (Caikuai Notice” Format Statement Financial Enterprise ““General and the for As 15”). No. “caikuai as to referred (hereinafter 15)” No. [2018] public the and PRC the outside and inside both listed company public applying International Financial Reporting company listed outside the PRC CAS revised the statements, financial its prepare to CAS or Standards 2018, March 29 On 2018. January 1 from commencing applied be shall Meeting in 2018 of the fourth session the Company held the first General apply the of the board of directors and approved that the Group would Standards” above “New Financial Instruments Standards” “New Revenue the by required as 2018 January 1 from commencing 15” No. “caikuai Ministry of Finance.
Changes in critical accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
(Continued)
(continued) (continued) and presentation of its main contract revenue in accordance with with accordance in revenue contract main its of presentation and revenue its reviews Group the After Standards. Revenue New the processes to assess the impact sources and customer contractual majority the statements, financial on Standards Revenue New the of of timing the and goods, of sales from is revenue Group’s the of to transferred is goods of control when is recognition revenue Standards has no significant customers. Adoption of New Revenue Group’s financial statements. impact on the presentation of the chosen has Group the Standards, Revenue New the to According of contracts not completed on to adjust only the cumulative impact implemented first amount impact cumulative The 2018. January 1 the in items related other and profits undistributed the adjusts period execution first the of beginning the at statements financial are 2017 for statements financial the and 2018) January 1 (i.e. the at profit undistributed the 2018, January 1 On adjusted. not due beginning of the period is reduced by was 109,378,793.65 yuan to the change of income policy. The impact of New Revenue Standards The impact of New and measurement, accounting The Group reassesses the recognition (CONTINUED)
Changes in critical accounting policies Changes in critical 1)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
242 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 243 (Continued)
(continued) (continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts the New Financial Instrument Standards, the classification classification the Standards, Instrument Financial New the and measurement methods of financial assets have been changed. and measurement methods of at measured categories: three into divided are assets Financial income comprehensive other through value fair cost, amortized consider to need Enterprises loss. or profit through value fair or flow cash contractual the as well as model, business own their classification. above the for assets financial the of characteristics measured at fair value through profit Equity investments need to be at measured be can they recognized, initially when but loss, or income (gains or losses at fair value through other comprehensive to gains and losses, but dividends disposal cannot be turned back and the choice is irrevocable. are included in gains and losses), the that requires Standards Instrument Financial New The the measurement of impairment of financial assets be changed from incurred loss model to the expected credit loss model. with The Group has made convergence adjustments in accordance the Standards: Instruments Financial New the of requirements the inconsistencies of respect in adjustments make not does Group data and the statements financial comparative between the previous requirements of the Financial Instruments Standards. The difference and instruments financial of value carrying original the between is Standards Instruments Financial New of value carrying new the on included in undistributed profits or other comprehensive income 1 January 2018. The impact of new financial instruments standards The impact of new Under (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) financial assets of the Group are classified according to the the to according classified are Group the of assets financial New Financial Instrument Standards. The available-for-sale financial available-for-sale The Standards. Instrument Financial New transactional to reclassified are value fair by measured assets the original fair value are included financial assets. The changes in gains to adjusted and amounts income comprehensive other in time, same the At value. fair in changes from arising losses and increase period the of beginning the at profits undistributed the 2,773,313.00 yuan. 1 January 2018, provisions for asset After evaluation and testing, on yuan 218,785,681.09 by increased 2018 January 1 of impairment provisions them, Among model. impairment of change the to due 48,808,594.37 by increased receivable notes of debts bad for increased receivable accounts of debts bad for provisions yuan, prepayments of impairment for provisions yuan, 87,708,548.83 by of impairment for provisions the yuan, 4,102,500.00 by increased provisions the yuan, 28,657,485.05 by increased receivables other yuan; for impairment of contract assets increased by 49,508,552.84 yuan, after adding up deferred income tax assets of 13,507,951.15 by decreased period the of beginning the at profit undistributed the to attributed of which the owner’s equity 205,277,729.94 yuan, parent company decreased by 198,937,840.68 yuan and the minority shareholder’s equity decreased by 6,339,889.26 yuan. by The main impact of the changes in accounting policies caused Instruments Financial New and Standards Revenue New above the 2018 Standards on the Group’s financial statements as at 1 January is as follows: The impact of new financial instruments standards (continued) financial instruments standards The impact of new The (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
244 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 245 — 2018 applying new 35,276,264.00 82,013,519.15 57,652,981.00 25,897,349.00 152,773,313.00 733,585,492.95 standards 1 Jan 1,843,484,336.21 Carrying amount
— — — — — — — (Continued)
(Note 4) Standards Instruments The effect of (4,102,500.00) 430,813,029.00 (6,339,889.26) 393,922,948.74 13,507,951.15 New Financial (48,808,594.37) 1,430,821,717.63 (28,657,485.05) 1,021,983,336.95 (49,508,552.84) 146,002,903.53
Recalculation — — — — — — — — — — — (Note 3) Standards The effect of (1,959,770.42) 56,032,648.95 New Revenue (51,386,374.28) (87,708,548.83) 2,264,589,116.89
(continued) — — — — — — — — — — (Note 2) Standards 693,328.00 (109,378,793.65) (205,277,729.94) 6,864,023,347.41 (693,328.00) Instruments 2,773,313.00 (109,378,793.65) (198,937,840.68) 2,412,300,828.67 The effect of (2,079,985.00) New Financial 152,773,313.00 (152,773,313.00) (continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December — — — — — — — — — — — — Reclassification (Note 1) Standards The effect of New Revenue 733,585,492.95 195,511,456.37
— — — 2017 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 68,505,568.00 58,346,309.00 27,977,334.00 677,552,844.00 (733,585,492.95) 434,915,529.00 400,262,838.00 188,049,577.00 7,177,986,543.00 1,479,630,312.00 1,050,640,822.00 2,403,684,040.00 2,040,955,563.00 (195,511,456.37) 2,717,844,150.00 Carrying amount applying original standards 31 Dec
to shareholders of the Company Financial assets held for sale Total shareholder’s equity Contractual liabilities Deferred income tax assets Receipts in advance Items Notes receivable Deferred income tax liabilities Other receivables Accounts receivable Prepayments Other comprehensive income Inventory Non-controlling interest Contractual assets Other current assets Total equity attributable Consolidated financial statements:
The impact of new financial instruments standards (continued) financial instruments standards The impact of new A. (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) (continued) 1 January 2018, in accordance with the requirements requirements the with accordance in 2018, January 1 1 January 2018, other current assets/available-for-sale assets/available-for-sale current other 2018, January 1 of the New Revenue Standards, the Group reclassified reclassified Group the Standards, Revenue New the of the sale of goods into the relevant receipts in advance for contract assets. contract liabilities and inventory into On On financial assets of RMB152,773,313.00 were reclassified reclassified were RMB152,773,313.00 of assets financial financial were which assets, financial transactional to previously. losses or profits through value fair at assets Standards, the According to the New Financial Instrument assets measured at fair Group classified them as financial value fair Accumulated losses. and profits through value period previous the over value fair at calculated changes other comprehensiveRMB2,773,313.00 was transferred from the of beginning the at profits undistributed to income transition period.
Consolidated financial statements: Consolidated financial statements: Note 1: Note Note 2: Note
The impact of new financial instruments standards (continued) financial instruments standards The impact of new A. (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
246 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 247 (Continued)
(continued) (continued) (continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 1 January 2018, in accordance with the requirements requirements the with accordance in 2018, January 1 the measurement of impairment of financial assets has has assets financial of impairment of measurement the expected the to model loss incurred the from changed credit loss model from 1 January 2018. of the New Revenue Standards, the Group assessed the the assessed Group the Standards, Revenue New the of on the first executioncontracts that had not been completed in contained obligations performance the identify to date or goods transferring of promise the For contracts. the assessment the contracts, some in customers to services performance separate the of conditions the meet to fails and Standards, Revenue New the in stipulated obligation or goods other from distinguished separately be cannot regarded be should It contract. the in promised services when revenue recognize and obligation performance a as the relevant goods. And the customer acquires control over Group the contract, the in consideration variable the for consideration variable the of estimate best the confirms according to the expected value or the most likely amount. The balance sheet and undistributed profits at the beginning New the to according adjusted be should period the of Revenue Standards. On
Consolidated financial statements: Consolidated financial statements: Note 3: Note Note 4: In accordance with the New Financial Instruments Standards, Financial New the with accordance In 4: Note
The impact of new financial instruments standards (continued) financial instruments standards The impact of new A. (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. amount Carrying 616,640.00 standards 1 3,424,664.00 8,367,050.00 applying new January 2018 152,773,313.00 5,824,286,964.00 1,651,925,801.00
— — — — — — Financial Standards Instruments (Continued) Effect of New
— — — — — — Recalculation Revenue Standards Effect of New
(continued) (Note 1) Financial Standards 693,328.00 (693,328.00) Instruments 2,773,313.00 (2,079,985.00) Effect of New (continued) 152,773,313.00 (152,773,313.00)
— — — — — — Reclassification Revenue Standards Effect of New
— 2,696,625.00 9,060,378.00 standards 31 156,197,977.00 December 2017 5,823,593,636.00 1,649,152,488.00 Carrying amount applying original
1 January 2018, other current assets/available-for-sale assets/available-for-sale current other 2018, January 1
financial assets of RMB152,773,313.00 were reclassified reclassified were RMB152,773,313.00 of assets financial financial were which assets, financial transactional to previously. losses or profits through value fair at assets According to the New Financial Instrument Standards, the Group classified them as financial assets measured at fair value fair Accumulated losses. and profits through value period previous the over value fair at calculated changes RMB2,773,313.00 was transferred from other comprehensive the of beginning the at profits undistributed to income transition period. On
equity for sale income liabilities Deferred income tax Other current assets Total shareholder’s Items Financial assets held Retained earnings Other comprehensive Financial statements of parent company
Notes 1: Notes
The impact of new financial instruments standards (continued) financial instruments standards The impact of new B. (CONTINUED)
Changes in critical accounting policies Changes in critical 2)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
248 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 249 (Continued)
(continued) (continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts accordance with the requirements of ““General Enterprise Enterprise ““General of requirements the with accordance Financial Statement Format Notice” (Caikuai [2018] No. 15)”, in in 15)”, No. [2018] (Caikuai Notice” Format Statement Financial arising from the implementation addition to the presentation changes Standards and New Revenue of the above New Financial Instrument “accounts and receivable” “notes merges Group the Standards, receivable”, accounts and receivable “notes new into receivable” “other into receivable” “interest and receivable” “dividends “notesnew into payable” “accounts and payable” “notes receivable”, and “special payables” into “long- payable and accounts payable”, and development expenses” term payables”. It also splits “research in the income statement, and “interestfrom “administrative expenses” from financial expenses items. expenses” and “interest income” by the change in accounting The retrospective adjustment caused at 31 policy has the following major impacts on the balance sheet as December 2017: Financial statement reporting adjustment Financial statement In (CONTINUED)
Changes in critical accounting policies Changes in critical 3)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. — — — — — — — — — Policy Change Ending Balance after Accounting
(Continued)
Reclassification 3,883,314,352.00 3,883,314,352.00 2,759,082,239.00 2,759,082,239.00 (continued)
— — (continued) 3,895,870.00 -3,895,870.00 19,416,374.00 -19,416,374.00 11,250,751.00 -11,250,751.00 30,077,325.00 -30,077,325.00 policy change 260,528,433.00 -260,528,433.00 809,054,101.00 -809,054,101.00 484,802,264.00207,600,793.00 41,328,076.00 3,895,870.00 526,130,340.00 211,496,663.00 Ending balance 1,479,630,312.00 -1,479,630,312.00 2,403,684,040.00 -2,403,684,040.00 1,050,640,822.00 279,944,807.00 1,330,585,629.00 1,950,028,138.00 -1,950,028,138.00 before accounting
Balance Sheet and Corporate Balance Sheet Sheet Balance Corporate and Sheet Balance Notes receivable Accounts receivable Notes and accounts receivable Interest receivable Dividends receivable Notes payable Other receivables Accounts payable Notes and accounts payable Interest payable Dividends payable Other payables Long-term payables Special payables Items items affected on 31 December 2017: items affected on 31 December Consolidated
. Financial statement reporting adjustment (continued) Financial statement A 1. Consolidated Balance Sheet: (CONTINUED)
Changes in critical accounting policies Changes in critical 3)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
250 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 251 — — — — Policy Change Ending Balance (Continued) after Accounting
— Reclassification (continued)
— (continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 9,261,300.00 (9,261,300.00) 40,221,072.00 (40,221,072.00) 51,367,114.00 9,261,300.00 60,628,414.00 policy change 260,528,433.00 (260,528,433.00) Ending balance 1,693,532,432.00 300,749,505.00 1,994,281,937.00 before accounting
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Balance Sheet and Corporate Balance Sheet Sheet Balance Corporate and Sheet Balance Interest receivable Dividends receivable Interest payable Other receivables Other payables Items Dividends payable Balance sheet of the parent company: Consolidated items affected on 31 December 2017: (continued) items affected on 31 December
. Financial statement reporting adjustment (continued) Financial statement A 2. (CONTINUED)
Changes in critical accounting policies Changes in critical 3)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. Policy Change Ending Balance after Accounting
(Continued)
198,720,426.00 198,720,426.00 Reclassification (continued)
— (continued) policy change 871,934,478.00 (198,720,426.00) 673,214,052.00 Ending balance before accounting
retrospective adjustment caused by the changes of the the of changes the by caused adjustment retrospective expenses Administrative expenses Research and development Items Consolidated income statement: above accounting policies has the following main impacts on above accounting policies has 2017: the profit statement for the year The
statement format have no significant impact on the parent parent the on impact significant no have format statement company’s income statement. The
. Financial statement reporting adjustment (continued) Financial statement B 2. financial enterprise general the in changes above 1. (CONTINUED)
Changes in critical accounting policies Changes in critical 3)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
252 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 253
— — — — — — — Adjustment 4,102,500.00 28,657,485.05 28,657,485.05 48,808,594.37 197,471,226.79 152,773,313.00 139,094,923.11 187,903,517.48 272,131,825.79 (146,002,903.53) (152,773,313.00) (Continued)
— N/A 2018 * 1 January 1,138,300.00 35,276,264.00 19,416,374.00 146,002,903.53 260,528,433.00 430,813,029.00 152,773,313.00 1,843,484,336.21 1,007,178,150.00 1,021,983,336.95 1,301,928,143.95 2,264,589,116.89 1,430,821,717.63 3,695,410,834.52 1,658,694,663.00 10,272,699,937.21
(continued)
— — N/A N/A 2017 * (continued) 1,138,300.00 31 December 19,416,374.00 188,049,577.00 260,528,433.00 434,915,529.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 2,040,955,563.00 1,007,178,150.00 1,050,640,822.00 1,330,585,629.00 2,403,684,040.00 1,479,630,312.00 3,883,314,352.00 1,658,694,663.00 10,544,831,763.00
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Interest receivables Interest receivable Dividend Accounts receivable Accounts receivable value through profit or loss Contractual assets Non-current assets due within one year Other current assets Inventory Loans and advances to customers Including: Other receivables Other receivables Prepayments Including: Notes receivable Notes receivable and accounts Cash and cash equivalents Financial assets held for sale Financial assets measured at fair
Total current assets:
Item Current assets:
Consolidated financial statements first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and related items are as follows: adjustment of the financial statement 1. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
— — — — — — — — — — — — — — — — — — Adjustment (13,507,951.15) (13,507,951.15) 258,623,874.64
(Continued) — — — — —
N/A N/A 2018 * 1 January 7,138,672.00 91,669,620.00 37,894,354.00 82,013,519.15 83,655,571.00 164,020,540.00 418,264,301.00 615,280,100.00 143,312,435.00 203,065,942.00 1,046,677,545.00 5,759,349,380.15 2,866,356,781.00 16,032,049,317.36
(continued)
(continued) — — — N/A N/A N/A N/A 2017 * (continued) 7,138,672.00 31 December 91,669,620.00 37,894,354.00 68,505,568.00 83,655,571.00 164,020,540.00 418,264,301.00 615,280,100.00 143,312,435.00 203,065,942.00 1,046,677,545.00 2,866,356,781.00 5,745,841,429.00 16,290,673,192.00 Long-term equity investment Other equity instruments investment Non-current financial assets Investment properties Debt investment Financial assets available for sale Other debt investment Held to maturity investments Long-term receivable Property, plant and equipment Construction in progress Loans and advances to customers Intangible assets Goodwill Development expenditures Long-term deferred expenses Deferred tax assets Other non-current assets Total assets Total non-current assets Item Non-current assets: Consolidated financial statements Consolidated financial statements first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 1. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
254 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 255
— — — — — — — — — — — — Adjustment (56,032,648.95) 677,552,844.00 (733,585,492.95) (Continued)
— — — N/A 2018 * 1 January 30,077,325.00 57,693,334.00 11,250,751.00 294,663,555.00 877,057,450.00 733,585,492.95 221,341,231.00 526,130,340.00 7,139,443,596.95 1,669,889,955.00 2,759,082,239.00
(continued)
(continued) — — N/A N/A 2017 * (continued) 31 December 30,077,325.00 57,693,334.00 11,250,751.00 294,663,555.00 877,057,450.00 221,341,231.00 677,552,844.00 526,130,340.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 7,083,410,948.00 1,669,889,955.00 2,759,082,239.00
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Dividend payable Dividend one year financial institutions fair value through profit or loss Non-current liabilities due within Taxes and levies payables Short-term loans Deposits from banks and other
Financial liability held for sale Notes payable and accounts payable Financial liabilities measured at Receipts in advance Contractual liabilities Employee benefits payables Other payables Including: Other payables Total current liabilities Item Current liability Consolidated financial statements Consolidated financial statements first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 1. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
— — — — — — 693,328.00 693,328.00 Adjustment (55,339,320.95)
(Continued) —
2018 * 1 January 15,968,000.00 57,652,981.00 562,411,906.00 797,674,683.00 211,496,663.00 383,378,140.00 2,028,582,373.00 9,168,025,969.95
(continued)
(continued) — 2017 * (continued) 31 December 15,968,000.00 58,346,309.00 562,411,906.00 797,674,683.00 211,496,663.00 383,378,140.00 2,029,275,701.00 9,112,686,649.00 Long-term loans Bonds payable Long-term payables Deferred revenue Long-term employee benefits payable Deferred tax liabilities Total liabilities Total non-current liabilities Item Non-current liabilities: Consolidated financial statements Consolidated financial statements first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 1. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
256 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 257
— — — — — Adjustment 2,079,985.00 6,339,889.26 313,963,195.59 307,623,306.33 258,623,874.64 305,543,321.33 (Continued)
— — 2018 * 1 January 25,897,349.00 49,744,935.00 393,922,948.74 297,517,132.00 6,864,023,347.41 6,470,100,398.67 3,684,640,154.00 2,412,300,828.67 16,032,049,317.36
(continued)
(continued) — — 2017 * (continued) 31 December 27,977,334.00 49,744,935.00 297,517,132.00 400,262,838.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 7,177,986,543.00 6,777,723,705.00 3,684,640,154.00 2,717,844,150.00 16,290,673,192.00
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
E the balances of other related items in the financial statements financial the in items related other of balances the on December 31, 2017 and January 1, 2018 are the same. Non-controlling interests equity shareholders of the Company Less: Treasure stock Other comprehensive income Surplus reserves Share capital Capital reserves Retained earnings Total shareholder’s equity Total liabilities and shareholder’s Total equity attributable to Item Shareholder’s equity
Consolidated financial statements Consolidated financial statements * adjusted, be to need that items above-mentioned the for xcept first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 1. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
— — — — — — — — Adjustment 152,773,313.00 (152,773,313.00)
(Continued) — —
N/A 2018 * 1 January 3,424,664.00 40,221,072.00 152,773,313.00 260,528,433.00 3,201,492,944.00 1,051,013,030.00 1,994,281,937.00
(continued)
— — N/A N/A 2017 * (continued) 31 December 40,221,072.00 260,528,433.00 156,197,977.00 3,201,492,944.00 1,051,013,030.00 1,994,281,937.00
Accounts receivable Accounts through profit or loss accounts receivable
Cash and cash equivalents Financial assets held for sale Financial assets measured at fair value
Contractual assets Other current assets Notes receivable and Including: Notes receivable Total current assets Item Current assets: Balance sheet of the parent company
first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 2. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
258 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 259
— — — — — — — — — — — — — — — Adjustment (Continued)
— — — — — N/A N/A 2018 * 1 January 293,946.00 4,480,970.00 20,016,439.00 31,246,276.00 256,000,000.00 4,938,976,227.00 8,140,469,171.00 4,626,938,596.00 (continued)
(continued)
— — — N/A N/A N/A N/A 2017 * (continued) 293,946.00 4,480,970.00 31 December 20,016,439.00 31,246,276.00 256,000,000.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 4,938,976,227.00 8,140,469,171.00 4,626,938,596.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Goodwill Intangible assets Debt investment Financial assets held for sale Other debt investment Held to maturity investments Long-term receivable Construction in progress Long-term equity investment Other equity instrument investment Other non-current financial assets Property, plant and equipment Non-current assets Total assets Item Non-current assets: Balance sheet of the parent company
first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 2. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
— — — — — — — — — — — — Adjustment
(Continued) — — — —
N/A 2018 * 1 January 191,446.00 9,261,300.00 2,400,000.00 1,320,614.00 60,628,414.00 1,330,540,474.00 1,266,000,000.00 (continued)
(continued)
— — — N/A N/A 2017 * (continued) 191,446.00 9,261,300.00 2,400,000.00 1,320,614.00 31 December 60,628,414.00 1,330,540,474.00 1,266,000,000.00
Dividend payable interest payable
one year value through profit or loss Non-current liability due within Including: Taxes and levies payables Other payables Short-term loans Financial liabilities held for sale Financial liabilities measured at fair
Contractual liabilities Employee benefits payables Current liabilities: Item Current liabilities Balance sheet of the parent company
first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 2. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
260 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 261
— — — — — — — — 693,328.00 693,328.00 693,328.00 Adjustment (693,328.00) 2,079,985.00 (2,773,313.00) (Continued)
— — 2018 * 1 January 616,640.00 8,367,050.00 140,716,900.00 346,387,469.00 985,641,733.00 179,600,000.00 797,674,683.00 1,651,925,801.00 8,140,469,171.00 5,824,286,964.00 2,316,182,207.00 3,684,640,154.00 (continued)
(continued)
— — 2017 * (continued) 2,696,625.00 9,060,378.00 31 December 140,716,900.00 346,387,469.00 986,335,061.00 179,600,000.00 797,674,683.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 1,649,152,488.00 8,140,469,171.00 5,823,593,636.00 2,316,875,535.00 3,684,640,154.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts E the balances of other related items in the financial statements financial the in items related other of balances the on December 31, 2017 and January 1, 2018 are the same. equity Capital reserves Other comprehensive income Surplus reserve Retained earnings Share capital Long-term loans Bonds payable Deferred tax liabilities Total shareholder’s equity Total liabilities and shareholder’s Non-current liabilities Total liabilities Shareholder’s equity: Item Non-current liabilities:
Balance sheet of the parent company * adjusted, be to need that items above-mentioned the for xcept
first implementation of the new income standard, the new new the standard, income new the of implementation first
financial instrument standard and the new financial statement format financial instrument standard and follows: as are items related statement financial the of adjustment (continued) 2. The (CONTINUED)
Changes in critical accounting policies Changes in critical 4)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
16.5% 5%, 3% Tax rate 34%, 39% 5% and 7% 2% and 3% 15.2%, 20%, 11%, 10%, 6% 17%, 16%, 13%, 15%, 25% and 0% (Continued)
(continued) using the taxable sales amount multiplied by of the applicable tax rate less deductible VAT input the current period) collection rate — — Taxable amounts of VAT
Tax base
for the above disclosure, there are no significant changes in in changes significant no are there disclosure, above the for (CONTINUED) Finance and the State Administration of Taxation on 4 April 2018, VAT on sales on VAT 2018, April 4 on Taxation of Administration State the and Finance accounting estimates in the current period. accounting estimates Except of prior accounting errors in the current There are no major adjustments period. or imported goods originally applicable to 17% and 11% will be adjusted to 16% or imported goods originally applicable to 17% and 11% will be adjusted and 10% respectively from 1 May 2018. According to the document (Cai Shui [2018] No. 32) jointly issued by the Ministry According to the document (Cai Shui [2018] No. 32) jointly issued by of
regions/countries construction tax
Profit tax for other VAT (easy to collect) Taxable value-added amount multiplied by VAT Educational surchargeProfit tax in Hong Kong Taxable amounts of VAT City maintenance and Category of tax Enterprise income taxValue-added tax (“VAT”) Taxable income is calculated Taxable value-added amount (Tax payable Main categories of tax and corresponding tax rate Main categories of tax and corresponding Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (3) Note:
(2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES TAXATION 1. 35.
V. IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
262 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 263 15% 15% 15% 15% 15% 15% 20% 34% 39% 20% 20% 20% 20% 15% 15% 15% 15% 15% 15% 15% 15.2% 16.5% Exemption (Continued)
Income tax rate
(continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Research Academy Co., Ltd. (including its subsidiaries)
Taxpayers Ltd Chongqing Water Turbine Works Co., Co., Ltd Jilin Chong Tong Chengfei New Material Chongqing Shunchang General Electric Equipment Co., Ltd Chongqing Chongtong Wide Wisdom Air Conditioning Equipment Co., Ltd. Chongqing General Industry (Group) Co., Ltd Chongqing General Industry (Group) Limited. Precision Technologies Group (PTG) Limited Precision Technologies Group (US) Holroyd Precision Ltd. PTG Heavy Industries Ltd. Milnrow Investments Ltd. Precision Components Ltd. PTG Advanced Developments Ltd. PTG Deutschland GmbH Ltd. PTG Investment Development Company Co., Ltd. Xinjiang Fubaotian Cotton-picking Service Intelligent Manufacturing Co., Ltd. Chongqing Machinery & Electronic Chongqing Mengxun Electronic & Technology Co., Ltd Chongqing Pigeon Electric Wires & Cables Co., Ltd. Chongqing Pigeon Electric Materials Co., Ltd Chongqing CAFF Automotive Breaking & Steering System Co., Ltd. Chongqing Pump Industry Co., Ltd Chongqing Gas Compressor Factory Co., Ltd. Chongqing Machinery & Electronic Equipment Technology Except for the above, the income tax rates of all enterprises in the Group are Except for the above, the income tax rates of all enterprises 25%. Main categories of tax and corresponding tax rate of tax and corresponding tax rate Main categories
Explanation of taxpayers of different enterprise income tax rates: of different enterprise Explanation of taxpayers
TAXATION 1. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
V. (Continued)
to notice of VAT refund as soon as it is imposed (Tongguo (Tongguo imposed is it as soon as refund VAT of notice to (CONTINUED) following companies in this Group enjoy a preferential tax rate rate tax preferential a enjoy Group this in companies following Taxation Park Shui Tong [2015] No. 8576) and notice of issuing on the Tong [2015] No. 8576) and Taxation Park Shui utilization comprehensive the for preferences tax value-added of catalogue Water Kang Tong 78), No. [2015] Shui (Cai services and resources of by 70% of actual VAT payment based Affair Company shall be refunded VAT as soon as it is imposed. The on the preference policy of refundable from 1 August 2015. valid period of VAT reduction is of 15% in this period because they have obtained the Certificate of of Certificate the obtained have they because period this in 15% of (Group) Industry General Chongqing including Enterprises, High-tech Jilin GR201751100440), No. enterprises high-tech of (certificate Co.,Ltd high-tech of (certificate Ltd. Co., Material New Chengfei Chongtong Electronic & Machinery Chongqing GF201522000016), No. enterprises enterprises high-tech of (certificate Ltd. Co., Manufacturing Intelligent Equipment Electronic & Machinery Chongqing GR201751100272), No. high- of qualifications (The Ltd. Co., Academy Research Technology still being tech enterprises have been announced and the certificates are processed). Income tax preference policies of the state for high-tech According to the relevant tax preferential enterprises can enjoy preferential policies enterprises, qualified high-tech enterprise income tax at a reduced rate of enterprise income tax and pay of 15%. The VAT tax preferences Pursuant
Tax preference 2) 1)
TAXATION 2.
V. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
264 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 265 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (continued) (CONTINUED) Income tax preference Income tax preference Except for the above enterprises, pursuant to circle of in-depth in-depth of circle to pursuant enterprises, above the for Except of problem the on strategy development western the implementing Administration State the by issued was which tax income enterprise Taxation of Administration State (The 2012 6, April on Taxation of Group the of management “Circle”), (the 2012) No.12, announcement Chongqing by approved were which subsidiaries its that believes tax income enterprise preferential 15% enjoy to SAT Office, Municipal to enjoy 15% preferential enterprise rate from 2001 to 2011, is still eligible income tax rate from 2012 to 2020. Chongqing by engaged program treatment sewage urban the Since the meets Ltd. Co., Affairs Water Kang Tong (Group) Industry General shui [2009] No. 166), the corporate incomerequirements of document (Cai halved and year third the to year first the from exempted be shall tax which in the tax year from starting the sixth year to from the fourth year program. the by obtained is income operation and production first the January 2014 to 31 December 2019. The The preference period is from 1 12, 2016. Company has filed the corporate income tax preference on July Precision including Kingdom, United in subsidiaries Group’s The Precision Holoryd Group”), (“PTG Limited. (PTG) Group Technologies Heavy (“PTG Ltd. Industries Heavy PTG (“Holroyd”), Inc. Rotors Precision Investment”), (“Milnrow Ltd. Investment Milnrow Industries”), Advanced PTG and Components”) (“Precision Limited. Components 20% of Developments Ltd. (“PTG Advanced Developments”) were applied enterprise income tax rate for 2018 (For 2017: 20%).
Tax preference 2)
TAXATION 2. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
V. (Continued)
(continued) (continued) (CONTINUED) The Group’s subsidiary in Germany, PTG Deutschland Gmbh (“PTG (“PTG Gmbh Deutschland PTG Germany, in subsidiary Group’s The income tax rate for 2018 applied 15.2% of enterprise Deutschland”) was (For 2017: 15.2%). Development Investment PTG Kong, Hong in subsidiary Group’s The was applied 16.5% corporate income Company Ltd. (“PTG Hong Kong”) tax rate for 2018 (For 2017: 16.5%). Kingdom, Precision Technologies Group The Group’s subsidiary in United for rate tax income enterprise of 20% applied was US) (PTG Limited (US) 2018 (For 2016: 20%). Group Technologies Precision States, United in subsidiary Group’s The Co., Manufacturing Screw Precision Holroyd Chongqing and Limited (PTG) of enterprise income tax rate respectively Ltd were applied 34% and 39% for 2018 (For 2016: 34% and 39%). Co., Service Cotton-picking Fubaotian Xinjiang subsidiary, Group’s The and its Ltd. (“Fubaotian”) is engaged in agricultural machinery operations income is exempted from enterprise income tax. Income tax preference Income tax preference
Tax preference 2)
TAXATION 2.
V. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
266 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 267 balance Beginning 815,653.00 (Continued) 44,881,223.00
484,155,365.00 1,173,723,645.00 1,658,694,663.00 1,174,539,298.00
Ending balance 879,802.59 13,349,574.40 594,326,911.12 1,569,463,592.47 2,164,670,306.18 1,570,343,395.06
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Cash at bank Cash in hand Restricted cash Total Including: cash deposited abroad Balance of cash and equivalents Items Cash and Cash Equivalents
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 1. Unless otherwise stated, among the following disclosed data in the financial financial the in data disclosed following the among stated, otherwise Unless for (Adjust January, 2018 on 1 amount the to refers balance” “Beginning statements, new financial instruments standards the new income guidelines, the first time apply to the items that need to be adjusted, statement format, in addition and new financial as 31 have the same figure other items in the financial statements the balances of and (1)) IV.35 notes this to refer details the 2018, January 1 and 2017 December on 31 December, 2018. “Current period” refers “Ending balance” refers to the amount to 31 December 2018. “Last period” refers to the to the period from 1 January 2018 December 2017. All amounts are presented in RMB period from 1 January 2017 to 31 except otherwise stated.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — — 2017 Ending balance 3,615,533.68 31 December 19,193,896.56 11,119,829.20 594,326,911.12 188,594,307.57 157,873,516.68 213,929,827.43
(Continued)
— — 2018 1 January 152,773,313.00 152,773,313.00
2018 123,356.84 5,124,292.21 5,000,935.37 5,124,292.21 31 December
(CONTINUED) (continued) Iron and Steel Co., Ltd Others Stock investment of
Financial assets held for sales Total Items Thereinto: Classification of financial assets for sales Classification of financial assets
Total Items Deposits for bank acceptance bills Deposits for letters of credit Performance bond Deposit pledged as collateral Statutory reserve Guarantee deposit Financial Assets held for sale Cash and Cash Equivalents Cash and Cash (1)
Restricted cash at the end of the period Restricted cash
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 2. 1.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
268 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 269
— — — — — 2017 (Continued) 31 December
— — —
2018 1 January 152,773,313.00 152,773,313.00 454,512,556.20 317,995,413.00 1 January 2018 31 December 2017
2,670,293,078.72 2,721,679,453.00 3,695,410,834.52 3,883,314,352.00 1,479,630,312.00 1,479,630,312.00 — —
2018
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 123,356.84 5,124,292.21 5,000,935.37 31 December
457,849,305.43 3,051,333,203.60 3,765,346,019.73 1,171,862,121.56 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 December 2018 (CONTINUED) (continued) Listed Total Items China (except the Hong Kong) Unlisted China (except the Hong Kong) Analysis of transactional financial assets Analysis of transactional
Less: provision for bad debts Accounts receivable Items Total Notes receivable Notes receivable and accounts receivable Financial Assets held for sale Financial Assets
(2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3. 2.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— 2017 amount in The pledge 31 December 242,805,600.09 242,805,600.09 ending balance
(Continued)
2018 1 January 48,808,594.37 970,811,177.00 970,811,177.00 508,819,135.00 508,819,135.00 1,430,821,717.63 1,479,630,312.00
2018 (continued) 31 December 42,916,934.70 518,035,990.22 653,826,131.34 1,128,945,186.86
(CONTINUED) The aging of ending balances of notes receivable are all within one The aging of ending balances of notes
year. Less: provision for bad debts Commercial acceptance bills Total Items Items Total Bank acceptance bills Bank acceptance bills Classification of notes receivable Classification of Notes receivable that have been pledged Notes receivable that have been
Notes:
Notes receivable (1) (2)
Notes receivable and accounts receivable Notes receivable 3.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
270 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 271
— — amount Recognized (Continued) receivable
to account The amount
62,424,800.00 62,424,800.00
amount Derecognized 1,346,078,011.10 1,346,078,011.10
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) receivable that is transferred to an account receivable receivable account an to transferred is that receivable otes receivable that endorsed or discounted and undue on 31 31 on undue and discounted or endorsed that receivable otes Bank acceptance bills Commercial acceptance bills Total Items Items Total December 2018 N Notes because the drawer has failed to perform his contra because the drawer has failed to
Notes receivable Notes receivable (3) (4)
Notes receivable and accounts receivable Notes receivable 3.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending balance 42,916,934.70 42,916,934.70
— — off (Continued)
Resale of write
— — back
transferred collected or Change amount
accrued
financial (continued) instrument in the new The balance January 2018 standards at 1
standards instrument (CONTINUED) new financial The impact of 48,808,594.37 48,808,594.37 (5,891,659.67) 48,808,594.37 48,808,594.37 (5,891,659.67) changes in thechanges in
— — balance (continued) Beginning for bad debts of notes receivable that are accrued, accrued, are that receivable notes of debts bad for debts of notes receivable Items Provision for bad Total collected or transferred back in the current year collected or transferred back in Provision Notes receivable without actual write-off this year
(5) Notes receivable Notes receivable (6)
Notes receivable and accounts receivable Notes receivable 3.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
272 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 273
2017 31 December (Continued)
2018 1 January 60,633,668.00 60,633,668.00 88,920,034.00 88,920,034.00 152,176,706.00 152,176,706.00 322,447,852.99491,819,091.00 373,834,227.27 137,712,101.00 491,819,091.00 137,712,101.00 405,703,961.83 317,995,413.00 2,264,589,116.89 2,403,684,040.00 1,416,583,625.73 1,416,583,625.73 2,670,293,078.72 2,721,679,453.00 1,739,031,478.72 1,790,417,853.00
2018 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) 31 December 60,226,423.16 75,482,077.06 190,233,134.93 491,066,404.36 501,533,984.36 248,308,042.65 414,932,370.73 2,636,400,832.87 1,484,483,137.08 3,051,333,203.60 1,975,549,541.44
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) of technology and related services and construction construction and services related and technology of six months to a year of accounts receivable are classified as follows according classified as follows according are of accounts receivable engineering business and is settled in accordance with the terms terms the with accordance in settled is and business engineering quality relevant The contracts. transaction relevant the in specified the after years two to one within due normally is deposit guarantee not do receivable Accounts works. construction the of completion bear interest. the group’s income is mainly generated through the sale of goods, the group’s income is mainly generated through the sale of goods, provision
Carrying amount Including: within six months Total Less: provision for bad debts Aging Within 1 year Over 5 years 4-5 years 1-2 years 2-3 years 3-4 years The age to the invoice date Note:
Accounts receivable (1)
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. recoverable recoverable account receivable that is surplus by project settlement is adjusted through the financial instrument standards change, the payment is overdue for a long time recoverable recoverable recoverable (Continued)
Reason Not expected to be Not expected to be The beginning of the
Not expected to be Not expected to be Not expected to be
rate (%) Excepted credit loss
bad debts Provision for (continued)
Book Balance 9,617,493.68 9,617,493.68 100.00 9,413,799.49 9,413,799.49 100.00 5,350,000.00 5,350,000.00 100.00 4,980,000.00 4,980,000.00 100.00 23,211,989.05 23,211,989.05 100.00 11,150,019.24 11,150,019.24 100.00 (CONTINUED) (continued) account receivable that is a single major item and a single single a and item major single a is that receivable account machinery Co., Ltd Corporation River Hydropower Development Co., Ltd Co. LTD equipment co. LTD technology service Co. LTD Name Chongqing Jiangbei Dongfang Electric Sichuan Huarun Yazui Chongqing huahao smelting Norvell (tianjin) energy Karamay youlong provision for bad debt The
(2) Accounts receivable Accounts receivable
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
274 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 275 (Continued)
recoverable recoverable recoverable recoverable recoverable or fully recoverable Reason Not expected to be Not expected to be Not expected to be
Not expected to be Not expected to be
rate (%) Excepted credit loss
bad debts From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Provision for
(continued)
Book Balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 4,652,004.71 4,652,004.71 100.00 3,713,600.00 3,713,600.00 100.00 3,635,346.55 3,635,346.55 100.00 2,941,756.50 2,941,756.50 100.00 357,249,235.14 167,908,922.48 278,583,225.92 89,242,913.26 (CONTINUED)
(continued) account receivable that is a single major item and a single single a and item major single a is that receivable account conditioning refrigeration equipment co. LTD Gas Group Co., Ltd machinery co. LTD Total Name Shanghai zhongtong air Shanxi Compressed Natural Morgan Technologies Chongqing quanhai Others provision for bad debt (continued) The
Until December 31, 2018, the group believes that the related party 31, December Until the basically, recovered be can receivable accounts in balance quality the deducted temporarily is metal of assurance quality date, guarantee deposit that has not reached the agreed collection with enterprises the to belong credit good with customers The government background, large central enterprises or good payback in recent years, the group believes that this part of the receivable risk, can be recovered, there is no significant expected credit loss so no provision for bad debts.
Accounts receivable Accounts receivable (2)
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending balance 414,932,370.73 414,932,370.73 amount Write off
200,000.00 off Resale of write (Continued)
back
1,200.00 449,021.07 1,200.00 449,021.07 transferred Collected or Change amount
Accrued
under the instrument The balance new financial January 2018 standards at 1 (continued)
standards instrument new financial The impact of changes in the (CONTINUED)
balance (continued) Beginning 317,995,413.00 87,708,548.83 405,703,961.83 9,678,629.97 317,995,413.00 87,708,548.83 405,703,961.83 9,678,629.97 for bad debts that are accrued, collected or transferred transferred or collected accrued, are that debts bad for account receivable Item Items Provision for bad debts of Total The accounts receivable actually written off back in the current year Provision The account receivable that is actually write off in the current year The account receivable that is actually
(3) Accounts receivable Accounts receivable (4)
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
276 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 277
Whether the — payment is generated by related transactions No
(Continued)
— The meeting of general managers
— due to quality problem
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(continued) amount Reason Procedure Write off 200,000.00 200,000.00 Deduction (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) — Nature loan
jicheng Automotive Electronics Corporation., Ltd Total Name Chongqing The account receivable that is actually write off in the current year that is actually write off The account receivable (continued) that is actually write off: The significant of account receivable No account receivable that are terminated the recognition due to the No account receivable that are terminated the recognition due transfer of financial assets in current year and No assets and liabilities have been formed due to the transfer continuing involvement of account receivable
Accounts receivable Accounts receivable (4) (6) (5)
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
of funds of funds
Temporary shortage Scroll to payment Scroll to payment Temporary shortage
— Scroll to payment No settlement reason
(Continued)
bad debts provision for 20,516,093.99
— 2.8 8,022,153.00 (%) 2.19 5,588,780.00 2.27 1,383,048.59 2.43 2,543,081.59 4.81 2,979,030.81 Percentage
(continued) 2-3 years 1-2 years, more than 5 years 1-2 years, 2-3 years Within 1 year
Within 1 year, Within 1 year,
Within 1 year —
(CONTINUED) Ending balance Aging (continued) 66,874,800.00 69,152,429.29 74,027,287.96 85,553,000.00 146,649,029.34 442,256,546.59 Shipbuilding Industry Co. LTD Investment Co. LTD Heavy Industry Group Offshore Wind Power Co. LTD Industry Co., Ltd energy Group Co., Ltd Beijing Wanyuan Jiangyin Prospect China Taiyuan Heavy Minyang Smart Total Name of debtors Top five debtors of account receivable Top five debtors
(7) Accounts receivable Accounts receivable
Notes receivable and accounts receivable Notes receivable 3.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
278 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 279 2017 (Continued) 31 December
2018 1 January 6,282,540.68 2,180,040.68 5,709,647.00 5,709,647.00 9,711,531.00 9,711,531.00 11,730,675.00 11,730,675.00 409,943,716.68 409,943,716.68 437,095,569.68 437,095,569.68 430,813,029.00 434,915,529.00
2018 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 2,168,074.68 4,743,971.56 31 December 26,431,176.83 14,204,492.91 221,776,260.83 267,155,902.13 264,987,827.45
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) December 31 2018, the age of prepayments that is more than one one than more is that prepayments of age the 2018, 31 December Until year is 45,379,641.30 yuan (December 31 2017: 27,151,853.00 yuan). the because materials for prepayment for mainly are prepayments These supply cycle is long and the materials have been put into storage without checking.
Within 1 year Less: provision for diminution in value Total Aging 1-2 years Net value 2-3 years More than 3 years Aging analysis Note:
Prepayments (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
No settlement — reason Undue
Uninvoiced Undue Undue Uninvoiced (Continued)
1-2 years 1-2 years 1-2 years 1-2 years, 2-3 years 1-2 years Aging
— Within 1 year, Within 1 year, Within 1 year, Within 1 year, Within 1 year,
Ending balance 2,210,430.00 6,027,750.88 5,193,612.30 1,615,000.00 1,832,700.00 16,879,493.18
(CONTINUED) (continued) Corporation Group Corporation Limited Co. LTD General Factory Co. LTD Co. LTD Total Name of debtors Qingdao Liding Automation Equipment Chongqing Construction Engineering Anhui Yingliu Huoshan Foundry Group Liaoning Anshan Mine Construction Yingkou High and Middle Pressure Valve The major prepayments aged over 1year The major prepayments
Prepayments (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 4.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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280 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 281
invoice have not arrived invoice have not arrived invoice have not arrived (Continued)
Not yet shipped Not yet shipped Shipped but the Shipped but the Shipped but the — No settlement reason
(%) 2.27 2.31 2.50 2.59 5.39 15.06 Percentage
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Within 1 year Within 1 year Within 1 year Within 1 year — Aging Within 1 year
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Ending (CONTINUED) balance 6,062,783.19 6,169,447.96 6,685,988.80 6,907,696.55 40,223,900.94 14,397,984.44
(continued) Co., Ltd Copper Co., Ltd Automation Equipment Co., Ltd GSK CNC Equipment Chinalco Kunming Fanuc Corporation Siemens Ltd. Total Name of debtors Xi’an Bowa Industry Top five debtors
Prepayments (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
2018 2017 2,168,074.68 2,168,074.68 31 December
31 December — — write off Resale of (Continued)
2018 — — back 1 January transferred collected or 19,416,374.00 19,416,374.00 81,840,453.05 53,182,968.00 Change amount 260,528,433.00 260,528,433.00
1,301,928,143.95 1,330,585,629.00 1,103,823,790.00 1,103,823,790.00
accrued 2018
31 December 20,538,197.57 96,227,641.45 928,431,789.73 383,447,758.44 620,673,475.17 financial instrument standards 1 The balance at in the new January 2018
(CONTINUED) financial standards instrument in the new The impact of changes
2017 2,180,040.68 4,102,500.00 6,282,540.68 (4,114,466.00) 31 December
(continued) bad debts of prepayment 2,180,040.68 4,102,500.00 6,282,540.68 (4,114,466.00) Provision for Items Total in the current year P
Total Items Interest receivable Dividend receivable Less: provision for bad debts Other receivables Prepayments Other receivables (4) back transferred or collected accrued, are that debts bad for rovision
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 4. 5.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
282 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 283 2017 31 December (Continued)
2018 1 January 165,000.00 165,000.00 2,161,727.00 2,161,727.00 19,416,374.00 19,416,374.00 17,089,647.00 17,089,647.00
— 2018 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 2,148,080.34 31 December 20,538,197.57 18,390,117.23
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) financial institutes Due from banks or other Total Items Related party borrowings Loan issued The classification of interest receivable The classification No overdue interest in ending balance
Accounts receivable (1) (2)
Other receivables Other receivables 5.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
2017 31 December of the enterprise Whether the impairment occurs and its judgment basis —
(Continued)
2018 1 January 355,832.00 355,832.00 1,760,373.00 1,760,373.00 4,916,566.00 4,916,566.00 253,495,662.00 253,495,662.00 260,528,433.00 260,528,433.00 not receiving —
The reason for No payment Normal operation
— —
2018 4,816,103.40 31 December — 1-2 years,
Aging 2-3 years, more than 3 year 378,631,655.04 383,447,758.44
Ending balance
4,816,103.40 4,816,103.40 (CONTINUED)
(continued) Material Co., Ltd. (“Chongqing Youyan”) Co., Ltd. (“Exedy”) (CQ Cummins) Suspension Co., Ltd. (“Hongyan”) Fangda Automotive Suspension Co., Ltd. Chongqing Youyan Smelting New Exedy Chongqing Driving System Chongqing Hongyan Fangda Automotive Total Item (or investee) Total Investees Chongqing Cummins Engine Co., Ltd. Chongqing Hongyan The classification of dividend receivable The classification The major dividend receivable aged over 1 year
Dividend receivable (1) (2)
Other receivables Other receivables 5.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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2017 31 December (Continued)
2018 1 January 8,838,886.006,457,541.00 8,838,886.00 6,457,541.00 43,484,433.00 43,484,433.00 98,401,403.00 98,401,403.00 81,840,453.05 53,182,968.00 113,304,974.00 113,304,974.00 833,336,553.00 833,336,553.00 1,103,823,790.00 1,103,823,790.00 1,021,983,336.95 1,050,640,822.00
2018 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 6,556,378.48 3,125,759.00 31 December 49,941,974.00 10,730,019.07 67,220,910.30 96,227,641.45 620,673,475.17 524,445,833.72 483,098,434.32
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) Total 3-4 years 4-5 years Over 5 years 2-3 years Net carrying amount 1-2 years Less: Provision for impairment Aging Within 1 year Aging analysis
Other receivables (1)
Other receivables Other receivables 5.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — 2017 31 December
(Continued)
— — — 2018 1 January 71,590,900.00 71,590,900.00 10,799,374.00 10,799,374.00 23,806,131.00 23,806,131.00 71,667,516.00 71,667,516.00 35,861,304.00 35,861,304.00 58,138,327.00 58,138,327.00 81,840,453.05 53,182,968.00 408,565,270.00 408,565,270.00 423,394,968.00 423,394,968.00 1,021,983,336.95 1,050,640,822.00 1,103,823,790.00 1,103,823,790.00
— 2018 31 December 37,789,608.64 85,032,555.39 44,134,374.78 23,135,900.48 34,470,011.74 19,824,500.00 45,008,575.55 71,123,714.37 96,227,641.45 524,445,833.72 620,673,475.17 121,403,432.39 138,750,801.83
(CONTINUED) (continued) in value (continued) provision for diminution
agency basis for pledged notes other receivable party companies Receivable from bank of China Large group receivable Financial lease receivable Collection and payment on Land disposal receivable The related companies of Others Housing repair fund Advance payments to third Deposit Receivable Net carrying amount Total Less: Nature Imprest fund The nature of other receivable is listed below The nature of other
(2) Other receivables Other receivables
Other receivables Other receivables 5.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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2018 31 December 96,227,641.45 96,227,641.45
— — off (Continued)
Resale of write
— — back
transferred collected or Change amount
accrued
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December financial instrument in the new The balance January 2018 standards at 1
standards instrument new financial (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts The impact of changes in the
(CONTINUED)
2017 31 December 53,182,968.00 28,657,485.05 81,840,453.05 14,387,188.40 53,182,968.00 28,657,485.05 81,840,453.05 14,387,188.40 (continued)
for bad debts that are accrued, collected or transferred transferred or collected accrued, are that debts bad for (continued) other receivable Total
Items Provision for bad debts of back in the current year Provision No other receivable that is actually write off in the current year No other receivable that is actually
Other receivables Other receivables (3) (4)
Other receivables Other receivables 5.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. amount is not expected to be recovered, and it has been fully accrued for bad debts. payment for large group settlement Undue All of the Advance Group no Undue No settlement reason
— — — — amount (Continued) bad debts
Provision for 9,680,000.00
1.56 9,680,000.00 1.64 1.87 2.34 9.25 Percentage
4-5 years, 1-2 years more than 5 years Over 5 years Within 1 year
2-3 years, 3-4 years, Within 1 year
Within 1 year;
Aging
9,680,000.00 10,176,691.36 11,614,820.48 14,532,908.51 57,431,500.00 103,435,920.35 Ending Balance
(CONTINUED) payment fund Purchase of property payment fund payment fund payment fund fund (continued) Advance Advance Advance Advance Land disposal
Nature
(continued) Property Co., Ltd. Werkzeugmaschinen GmbH accessories factory compressor plant Co., Ltd Chongqing Gangtian KAPP Chongqing machine tool Chongqing central China Total Name of debtors Chongqing Land Group Top five debtors of other receivable Top five debtors
(5) Other receivables Other receivables
Other receivables Other receivables 5.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
288 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 289 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) (continued) ending balance of staff imprest fund is RMB45,008,575.55, it it RMB45,008,575.55, is fund imprest staff of balance ending is mainly borrowed by the sale staff, the amount of accumulated accumulated of amount the staff, sale the by borrowed mainly is for provision the and RMB25,990,322.49, is provision impairment is RMB7,316,586.31. diminution in value in current year No assets and liabilities have been formed due to the transfer and No assets and liabilities have been receivable continuing involvement of other The No other receivable that are terminated the recognition due to the that are terminated the recognition No other receivable year transfer of financial assets in current
Other receivables Other receivables (6) (8) (7)
Other receivables Other receivables 5.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
amount amount Net carrying Net carrying 26,277,927.00 51,036,359.00 443,893,502.21
(Continued)
— — — impairment impairment Provision for Provision for 1 January 2018 31 December 2018
amount amount 51,036,359.00 26,277,927.00 Gross carrying 387,626,716.00551,505,655.00 25,327,789.00487,902,869.00 34,185,872.00 362,298,927.00 18,967,104.00 517,319,783.00 468,935,765.00 387,843,140.68661,281,164.01 35,468,228.47 63,308,544.28 352,374,912.21 597,972,619.73 443,893,502.21 Gross carrying 1,921,965,101.21 78,480,765.00 1,843,484,336.21 2,107,548,529.50 157,655,591.37 1,949,892,938.13 1,032,146,297.81 58,878,818.62 973,267,479.19
(CONTINUED) Items Total Total Items Raw materials Work in progress Finished goods Low value consumables Raw materials Work in progress Finished goods Low value consumables Completed but unsettled Classification of inventory Classification
Inventory (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 6.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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290 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 291
Ending balance amount 63,308,544.28 58,878,818.62 35,468,228.47 157,655,591.37 Net carrying
51,036,359.00 (Continued) 641,364,729.00
— — — —
— — Other transfer
Decrease — — impairment Provision for Back 557,267.33 Transferred 31 December 2017 Collected or
— — Other amount From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 51,036,359.00 Gross carrying 387,626,716.00551,505,655.00 25,327,789.00487,902,869.00 34,185,872.00 362,298,927.00 18,967,104.00 517,319,783.00 468,935,765.00 641,364,729.00
2,119,436,328.00 78,480,765.00 2,040,955,563.00
Increase (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Accrued (CONTINUED)
balance Beginning 18,967,104.00 36,848,194.94 3,063,519.68 34,185,872.00 29,122,672.28 78,480,765.00 76,668,574.02 3,063,519.68 557,267.33 25,327,789.00 10,697,706.80
of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of (continued) Finished goods Work in progress Items Total Total Item Raw materials Raw materials Work in progress Finished goods Low value consumables Completed but unsettled Provision Classification of inventory Classification back in the current year
Inventory (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 6.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
amount amount Net carrying Net carrying
(Continued)
impairment impairment Provision for Provision for rose, provision for impairment is transferred back finished good with provision impairment for inventory in previous year is increased 1 January 2018 The reasons of collected and The reasons of collected
The price of the final product The net realizable value of transferred back 31 December 2018
amount amount
Gross carrying 298,586,106.82298,586,106.82 49,508,552.84 49,508,552.84 249,077,553.98 249,077,553.98 195,511,456.37195,511,456.37 49,508,552.84 49,508,552.84 146,002,903.53 146,002,903.53 Gross carrying
(CONTINUED) realize value and the book value of raw materials realize value and the book value of finished good The determine basic of The determine basic net realizable value
Item Contractual Assets Including: building contract Contractual Assets Including: building contract Item The situation of contractual assets
(continued)
Item Raw materials The balance between the net Finished goods the net The balance between Contractual assets (1) Provision of impairment of inventory Provision of impairment
Contractual assets and liabilities Inventory 7.1 (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 7. 6.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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292 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 293
Total (Continued)
not yet been settled not yet been settled not yet been settled On-schedule input, but it has Settlement of Project On-schedule input, but it has On-schedule input, but it has —
Settlement of Project Reason Input increase amount of the project
The settlement
5,682,962.24 (1,999,158.84) 57,901,963.60 13,986,920.00 41,357,583.19 (13,855,619.74) loss 103,074,650.45 Change amount Anticipate
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts profit/loss (continued) Accumulated 62,437,519.36 49,508,552.84 88,968,418.87 249,077,553.98 (CONTINUED) incurred gross (continued)
Project (Pengsa Road Bridge Construction Co. LTD) Development Pvt. Ltd) (National Energy Co., Ltd) Project (NONGHAI GROUP LTD) Project (NONGHAI GROUP LTD) he information of completed but unsettled assets arising from from arising assets unsettled but completed of information he Phalakhu Khola (EPC) Project in Nepal Lanta Hydropower Project in Nepal (Multi Emergy Khimti-2 Hydropower Project EPC Project Nam Ngiep 2A Hydropower Project in Lao PDR EPC Nantey Hydropower Project in Lao PDR EPC Nam Ngiep 2B Hydropower Project in Lao PDR EPC Total Item Accumulated incurred costs 325,117,006.33 construction contract The situation of contractual assets (continued) The situation of T The significant amount changes and reasons of net carrying amount The significant amount changes of contractual assets
Contractual assets Contractual assets (1) (2)
Contractual assets and liabilities Contractual assets 7.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — 2018 2017 31 December 49,508,552.84 49,508,552.84
31 December
— — Back
(Continued) Transferred
2018 — — 1 January 4,203,120.52
— — 733,585,492.95
Accrued Collected
2018 instrument standards at The balance in 1 January 2018 31 December 14,366,297.45 the new financial 685,648,864.72
standards (continued) instrument new financial The impact of 49,508,552.84 49,508,552.84 49,508,552.84 49,508,552.84 changes in the (CONTINUED)
— — (continued) 2017 31 December of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of
Assets Total
Contractual Items
Item Contractual Liabilities Including: building contract The situation of contractual liabilities back in the current year Provision
Contractual liabilities (1) (3) Contractual assets Contractual assets
Contractual assets and liabilities Contractual assets 7.2 7.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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294 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 295
(Continued)
The reasons for —
Contract not completed Contract not completed Undue No pick up the goods In progress Undue Contract not completed In progress In progress Contract not completed collected and transferred back
Ending Balance 8,420,000.00 5,202,660.00 4,291,833.00 9,816,000.00 6,610,000.00 5,250,000.00 5,181,821.00 4,249,280.00 6,466,584.48 72,291,178.48 16,803,000.00
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) (continued) (China Power Construction Overseas Investment Group Co. (China Power Construction Overseas Investment Group LTD) and Steel Co. LTD Water Supply Project of Qianjiang River Power 1 Level (Guizhou Water Resources Investment (group) Co. LTD) Yunnan Province (Yunnan Province Xingyun Co., Ltd) Development Group Co. Ltd Total Items Beijing Jingcheng New Energy Co., Ltd Beijing Office of Tangshan Shougang Baoye Iron Guizhou Jiayan Water Control Project and The Northwest Mengnahe Three-Stage Power Station in Yingjiang County, Laos Southern Europe River Seven Level Hydropower Station Laos Southern Europe River Seven Level Hydropower Xilin Guole Sunite Alkali Co. Ltd Chongqing Construction Engineering Real Estate Nanning Oasis Chemical Co. Ltd Pingshan County Jingye plate co. LTD Beijing Sanju Green Energy Technology Co. Ltd The major contractual liabilities over 1 year The major contractual
Contractual liabilities Contractual liabilities (2)
Contractual assets and liabilities Contractual assets 7.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
completed — Reasons for unsettlement
(Continued)
Within 1 year Not yet shipped Within 1 year Not yet shipped Within 1 year Not yet shipped — Aging Within 1 year Not yet shipped Within 1 year Contract not
Ending Balance 14,791,167.92 15,651,637.62 17,758,361.00 80,871,166.54 22,200,000.00 10,470,000.00
(continued)
(CONTINUED)
(continued) of the first-level power station project (Yunnan Nengtou United Foreign Trade Co. Ltd) Equipment Co., Ltd. Technology Co. Ltd Steel Co. Ltd Co., Ltd Fujian Fuhua Tianchen Gas Laos Selalong hydro-generator set Erzhong (Deyang) Heavy Nanjing Nanrui Jibao Engineering Total Item Hegang Leting Iron and Top five debtors of contractual liabilities Top five debtors
(3) Contractual liabilities Contractual liabilities
Contractual assets and liabilities Contractual assets 7.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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— — — — — Balance Beginning (Continued)
Ending Balance 57,167.13 872,237.63 359,700.70 6,039,285.98 4,750,180.52
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Building Machinery equipment Office equipment Co., Ltd., approved by the board of directors and signed the “land and above- and “land the signed and directors of board the by approved Ltd., Co., agreement” with Chongqing Yongchuan Land ground construction compensation and Chongqing Yongchuan Huixin construction and Housing expropriation center 2018. The agreement stipulates that the engineering co., LTD on 23 November the expropriated assets to the expropriator no company shall liquidate and deliver date of the agreement. The total amount of later than 120 days after the signed is RMB67,999,787.16. The company’s assets compensation from the levying party assets fixed include not do land, include agreed as expropriation to subject RMB13,262,296.32. is involved land the of value original The inventories. and December 31 of as RMB12,390,058.69 reached has amortization Accumulated is assets fixed of value original The RMB872,237.63. is value book The 2018. has depreciation accumulated 2018, December 31 of As RMB14,417,392.08. reached RMB9,250,343.73, and the book value is RMB5,167,048.35. In order to cooperate with municipal construction, Chongqing Water Pump Industry In order to cooperate with municipal
Assets held for sale Including: Land Item Assets held for sale Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 8.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
2017
31 December 152,773,313.00 (Continued)
security deposit —
— Finance lease
2018 1 January 3,493,250.78 3,493,250.78 1,449,260.26 1,449,260.26 balance Nature 30,333,752.96 30,333,752.96 35,276,264.00 188,049,577.00 Beginning 1,138,300.00 1,138,300.00
—
2018 — — 242,114.28 Ending 3,513,765.43 balance 31 December 77,303,185.19 81,059,064.90
(CONTINUED)
Unused deductible VAT Total Total Items Items Prepaid tax Available-for-sale financial assets Finance lease security deposit Deferred expenses Other current assets Non-current assets due within one year Non-current assets
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 10. 9.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
298 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 299
— — — — — — (%) 100.00 100.00 balance Proportion Beginning 60,374,547.00 28,032,957.00 28,032,957.00 (Continued) 974,836,560.00
1,035,211,107.00 1,007,178,150.00
—
— — balance Beginning Ending balance 28,032,957.00 28,032,957.00 1,007,178,150.00 73,239,939.63 33,652,837.43 33,652,837.43
1,149,089,939.63 1,115,437,102.20 1,075,850,000.00 — — — — (%)
100.00 1,035,211,107.00 100.00 1,035,211,107.00 Proportion From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
— Ending balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 33,652,837.43 33,652,837.43 (CONTINUED) 1,115,437,102.20 1,149,089,939.63 1,149,089,939.63
of loans and advances to customers based on on based customers to advances and loans of
Provision on portfolio basis on portfolio basis expected credit basis Provision for Provision
impairment
provision for – Discount – Loans
Less: Provision for impairment Total Including: Provision for expected credit basis
Including: Carrying amount Loans and advances to corporations
Industry Items Carrying amount Manufacturing industry Total Less: Classification of loans and advances to customers based on industry Classification of loans and advances
individual or corporation Classification
) Loans and advances to customers aged within one year to customers aged within Loans and advances 1 2)
Loans and advances to customers Loans and advances (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — — (%) 100.00 100.00 Proportion
(continued) (Continued) —
balance Beginning 28,032,957.00 28,032,957.00 1,007,178,150.00
— — — — (%) 100.00 1,035,211,107.00 100.00 1,035,211,107.00 Proportion
— Ending balance (continued) 33,652,837.43 33,652,837.43 (CONTINUED) 1,115,437,102.20 1,149,089,939.63 1,149,089,939.63
portfolio basis expected credit basis Provision for
Provision on impairment
provision for Including: Carrying amount Area Southwest Total Less: Classification of loans and advances to customers based on location loans and advances to customers Classification of
Loans and advances to customers aged within one year to customers aged within Loans and advances 3)
Loans and advances to customers Loans and advances (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
300 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 301
— balance Beginning 75,000,000.00 66,874,547.00 28,032,957.00 28,032,957.00 (Continued) 125,536,560.00 767,800,000.00 141,874,547.00
1,035,211,107.00 1,007,178,150.00 (continued)
— Ending balance 33,652,837.43 33,652,837.43 653,450,000.00 235,139,939.63 260,500,000.00 139,500,000.00 121,000,000.00 1,149,089,939.63 1,115,437,102.20
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Items Unsecured loan Guaranteed loan Collateral loan Mortgaged loan Pledged loan Less: provision for impairment Total Including: Provision for expected credit basis Provision on portfolio basis Carrying amount Classification of loans and advances to customers based on type of loans and advances to customers Classification of security
The overdue loans.
Loans and advances to customers aged within one year to customers aged within Loans and advances 4) 5) no are group the of balance ending and balance beginning
Loans and advances to customers Loans and advances (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— balance Portfolio Beginning 1,094,671.00 1,094,671.00 9,980,877.00 38,989,025.00 38,989,025.00 38,989,025.00 37,894,354.00 18,052,080.00 28,032,957.00
(continued) (Continued) — — —
— item Amount last year Single Ending balance 1,120,000.00 1,120,000.00 40,000,000.00 40,000,000.00 40,000,000.00 38,880,000.00
expected credit loss 5,619,880.43 28,032,957.00 33,652,837.43
— — — item Single Amount this year (continued) (CONTINUED)
of loans and advances to customers based on on based customers to advances and loans of
of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of Provision on portfolio basis current year – Loans Beginning balance Items Item
Loans and advances to corporations Total Carrying amount Less: Provision for impairment Including: Provision for expected credit basis Ending balance Accrued in
back in the current year Provision individual or corporations Classification
) Loans and advances to customers aged within one year to customers aged within Loans and advances 6) Loans and advances to customers aged over one year Loans and advances to customers 1
Loans and advances to customers Loans and advances (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
302 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 303
— — — — — — — — — (%) (%) 100.00 100.00 100.00 Proportion Proportion (Continued)
—
— (continued) balance balance Beginning Beginning 1,094,671.00 1,094,671.00 1,094,671.00 1,094,671.00 37,894,354.00 38,989,025.00 37,894,354.00
— — — — —
(%) — — — — (%) 100.00 38,989,025.00 100.00 38,989,025.00 100.00 38,989,025.00 Proportion Proportion
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
—
— Ending balance Ending balance 1,120,000.00 1,120,000.00 38,880,000.00 40,000,000.00 40,000,000.00 1,120,000.00 1,120,000.00 38,880,000.00 40,000,000.00 40,000,000.00 (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED)
portfolio basis basis expected credit basis credit basis Provision on Provision for Provision for expected
Provision on portfolio Less: provision for impairment Including: Less: provision for impairment Carrying amount Carrying amount Total Total Including: Area Industry Southwest Manufacturing industry Classification of loans and advances to customers based on industry loans and advances to customers Classification of Classification of loans and advances to customers based on location Classification of loans and advances
2) Loans and advances to customers aged over one year to customers aged over Loans and advances 3)
Loans and advances to customers Loans and advances (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— item Portfolio balance Beginning 659,835.00 434,836.00 1,094,671.00 1,094,671.00 1,094,671.00 38,989,025.00 37,894,354.00 38,989,025.00
(Continued) — — —
(continued) — item Amount last year Single Ending balance 1,120,000.00 1,120,000.00
40,000,000.00 38,880,000.00 40,000,000.00
Expected 25,329.00 credit loss 1,094,671.00 1,120,000.00
— — — item Single Amount this year (continued) (CONTINUED) Provision on portfolio basis of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of year Less: provision for impairment Total Including: Provision for expected credit basis Including: Provision for expected credit Carrying amount Guaranteed loan Items Item Beginning balance Accrued in current Ending balance Classification of loans and advances based on type of security loans and advances based on Classification of
overdue loans The back in the current year Provision
4) Loans and advances to customers aged over one year to customers aged over Loans and advances 5) no are group the of balance ending and balance beginning 6)
Loans and advances to customers Loans and advances (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 11.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
304 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 305
— — — — amount 2017 Net carrying 152,773,313.00 152,773,313.00
— — — 2,773,313.00 31 December (Continued) impairment
Provision for 152,773,313.00 150,000,000.00 31 December 2017
— — — — — Gross amount carrying 2018 2,939,493.00 2,939,493.00 2,939,493.00 2,939,493.00 155,712,806.00 2,939,493.00 152,773,313.00 152,773,313.00 152,773,313.00
1 January
— — — — — — amount Net carrying
— — — — — — — — — — 2018 impairment Provision for 1 January 2018
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December — — — — — — Gross amount carrying 31 December
— — — — — — amount (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Net carrying
(CONTINUED)
— — — — — — impairment Provision for 31 December 2018
— — — — — — Gross amount carrying
comprehensive sale
– Fair value – Cost – Accumulative in other Item Equity instruments available for
The available for sale financial assets measured at fair value
for sale listed as other current assets Financial assets available
for sale – Measured at cost – Measured at fair value Book value
Item
Less: Subtotal
Equity instruments available The analysis of available for sale financial assets The analysis of available for sale 1) Available for sale financial assets Available for sale
Available for sale financial assets Available for sale (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 12.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — — — 10% 15% Ending balance
—
— (Continued) 2017 Percentage
Decrease 983,493.00 600,000.00
2,939,493.00 2,939,493.00 1,356,000.00 31 December (continued) —
— — — — — — Accrued 2018 1 January
—
financial
— — — — — — instrument in the new The balance 2018 January 2018 standards at 1
31 December
(continued) standards instrument new financial
The impact of (CONTINUED)
changes in the
balance Beginning 2,939,493.00 (2,939,493.00)
Co. LTD Nebula Co. Ltd for sale-Cost
equity instrument – Other – Yunnan Yingjiang River – Chongqing Yongkang Pump Less: provision for impairment
Net amount of available-for-sale Item Equity instruments available The available for sale financial assets measured at fair value sale financial assets measured The available for
of saleable financial assets measured at cost
Item Provision of impairmentProvision Provision of impairment of available for sale financial assets The analysis of available for sale financial assets available for sale financial assets The analysis of 2)
Available for sale financial assets Available for sale (3) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 12.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
306 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 307 amount 669,620.00 Net carrying 91,000,000.00 91,669,620.00
(Continued)
— — — impairment Provision for Beginning balance
amount 669,620.00 91,000,000.00 91,669,620.00 Gross carrying
— amount From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Net carrying 33,200,000.00 33,200,000.00
— — — (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts impairment Provision for (CONTINUED) Ending balance
— amount 33,200,000.00 33,200,000.00 Gross carrying
In and production line project of high-powered engine, National Development and production line project of high-powered the issue to Ltd Co., bank Development China entrusted Ltd Co., Fund entrusted loan to the Group for project capital investment. The total amount of the of this loan is RMB122,000,000 which is restricted to the construction project R&D center of high-powered engine technology and production line to 14 of high-powered engine. The term of the loan is from 14 March 2016 rate March 2026. The loan interest shall be calculated at the fixed annual Group the from borrowed Cummins Chongqing quarterly. paid and 1.2% of will RMB17,500,000 follow: as date due The loan. shareholder through 2020, be due on 10 January 2020, RMB8,700,000 will be due on 10 July RMB7,000,000 will be due on 10 January 2021.
from related parties (Please refer to Note) Lease security deposit Items Total Long-term receivables Situation of Long-term Receivable Situation of Long-term Note: technology engine high-powered of center R&D the construct to order
Long-term receivable (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 13.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — 10,259,380.77 — 113,146,768.00 51,306,166.00 42.86 44.00 method 2) Equity Note to (refer Hongyan 123,406,148.77
— — — — 335,438.00 — 4,000,000.00 method 20.00 Equity 20.00 Ltd. Co., Gas Yongtong Chongqing 335,438.00 (Continued)
11 667500 518540 4,8,0.0 618,793.88 (46,687,500.00) 15,158,554.00 46,687,500.00 11.11 10.00 method 2) Note Equity to (refer Tongyong”) (30,910,152.12) — — —
Equipment Co., Ltd (“Midea (“Midea Ltd Co., Equipment
Chongqing Midea General Refrigeration Refrigeration General Midea Chongqing
— 77,650,013.00 — 27,280,400.76 — 298,625,219.00 236,651,166.00 37.80 37.80 method Equity 1) Note to (refer 248,255,606.76
ABB”) (“Chongqing Ltd. Co.,
Transformer Power ABB Chongqing
— — — — — — — — — method Equity — Associates
— 302,582,956.35 — 315,455,871.59 — 348,023,204.00 370,189,551.00 — — method Equity 360,896,119.24 Subtotal
— 302,582,956.35 — 315,455,871.59 — 348,023,204.00 370,189,551.00 50.00 50.00 method Equity ventures Joint 360,896,119.24
— — — — — — — — — — — ventures Joint
balance investment rights Voting shareholdings method investee of Name investment method elrdDecrease declared income balance
Beginning Beginning of Cost of Percentage Accounting Decrease in in Decrease under equity equity under comprehensive comprehensive Cash dividend dividend Cash Ending Ending
Increase or or Increase recognized recognized of other other of
gain or loss loss or gain Adjustment Adjustment
Investment Investment
Increase or decrease or Increase
Long-term equity investment equity Long-term 14.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
308
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 309
1,4,1.010667550 4,8,0.0 370,178,066.99 (44,887,500.00) 1,046,677,545.00 917,946,119.00 8,7,8.4(22,259,462.73) 385,072,789.44 — Total 1,009,154,785.28 (Continued)
4,5,6.06864310 4,8,0.0 54,722,195.40 (44,887,500.00) 698,654,341.00 547,756,568.00 249830 (22,259,462.73) 82,489,833.09 — Subtotal 648,258,666.04
50 088090 088080 500000 3,934,198.20 35,000,000.00 50,808,048.00 50,808,049.00 35.00 35.00 method Equity Ltd Co., Part — — — 89,742,246.20
Chongqing Shenjian Automotive Drive Drive Automotive Shenjian Chongqing
— — — -2,414,655.00 2,414,655.00 — 6,058,193.00 35.00 35.00 method Equity Italy in Company WPG —
— — — 848,098.44 — 58,166,434.00 57,933,968.00 20.00 41.00 method Equity 2) Note to (refer 59,014,532.44
Machinery Jiangbei Chongqing
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
15 320000 910700 3,0,0.0 1,914,836.39 (33,200,000.00) 39,150,730.00 33,200,000.00 41.50 41.50 method Equity Youyan Chongqing 7,5.06,890,316.39 975,250.00 — —
— — — 6,868,212.03 — 42,606,938.00 44,231,369.00 34.00 34.00 method Ltd. Equity (Chongqing) Vehicles 49,475,150.03
Knorr-Brem se Systems for Commercial Commercial for Systems se Knorr-Brem
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
,6,7.91,760,373.00 3,864,570.09 — 5,412,929.93 — 78,241,557.00 16,880,157.00 33.33 27.00 method Equity 2) Note to (refer Exedy 78,029,543.84
balance investment rights Voting shareholdings method investee of Name investment method elrdDecrease declared income balance
Beginning Beginning of Cost of Percentage Accounting Decrease in in Decrease under equity equity under comprehensive comprehensive Cash dividend dividend Cash Ending Ending
Increase or or Increase recognized recognized of other other of
gain or loss loss or gain Adjustment Adjustment
Investment Investment
Increase or decrease or Increase
Long-term equity investment investment equity Long-term 14. (continued) (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. (Continued)
(CONTINUED) (continued) the percentage of shareholding and voting rights is derived voting and shareholding percentage of the to the resolutions of the board meeting and the Agreement Agreement the and meeting board the of resolutions the to forth board meeting of the group is convened on 7 September 2018, 2018, September 7 on convened is group the of meeting board forth 14 November 2018, Chongqing Machinery &Electric Co., Ltd approval approval Ltd Co., &Electric Machinery Chongqing 2018, November 14 of Consolidation by Merger signed on 16 June 2017, Chongqing Power Power Chongqing 2017, June 16 on signed Merger by Consolidation of the Company on of subsidiary became a wholly owned Ltd. Co., Transformer the merger, Chongqing Power Transformer 31 Oct 2017. After completion of Power ABB Chongqing of shares 37.8% its and deregistered is Ltd. Co., to the Company. Transformer Co., Ltd. held are transferred According from the difference between numbers of shareholders in the board of directors from the difference between numbers and the percentage of shareholding. Difference between the consent which Chongqing General Industry (Group) Co., Ltd transfers its the consent which Chongqing General Ltd Co., Equipment Refrigeration General Midea Chongqing of equity 10% and Development [2018] no. 186). The (Chongqing Electromechanical Control of Chongqing Midea General Refrigeration approval illustrates that 10% equity hold Ltd Co., Industry (Group) General Chongqing which Ltd Co., Equipment Group Exchange Equity Chongqing in transferred and listed public be will of value estimated the than lower be not shall price listed the LTD, Co., listed and transferred by Chongqing Assets RMB6,128.65 million. Finally, it is and the price is 6,712.28 million. and Equity Exchange Group Co., Ltd On the meeting approval and agree that the group would acquire 7.26% equity the meeting approval and agree that the group would acquire 7.26% as to referred (hereinafter Ltd Co., (Beijing) Materials Advanced Grinm of On “Beijing youyan”) by exchanging the 41.5% equity of Chongqing Youyan. agree an issued Ltd Co., &Electric Machinery Chongqing 2018, October 17 approval reply to the group on this matter. The
Long-term equity investment Long-term equity Note 1: Note Note 2: Note 3: Note Note 4: Note
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 14.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
310 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 311
for strategic purposes (Continued)
— — — Long-term holding
Investment Reasons —
— — — amount 46,693,061.00 Gross carrying
— amount From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Gross carrying Ending balance
amount (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 983,493.00 983,493.00 600,000.00 600,000.00 1,356,000.00 1,356,000.00 46,693,061.00 49,632,554.00 2,939,493.00 46,693,061.00 (CONTINUED) Gross carrying
— — 7.26 15.00 10.00 percentage Shareholdings’ On company), Beijing Taige Mining Investment Co., Ltd (investor 1), Beijing Huading company), Beijing Taige Mining Investment & Machinery Chongqing 2), (investor Fund Investment Equity Cornerstone New Grinm of agreement increase capital “the signed 3) (investor Ltd Co., Electric the 41.5% Advanced Materials (Beijing) Co., Ltd “, The agreement stipulates that which the equity of Chongqing Youyan (estimated value was 4,669.3061 million) equity of Chongqing Machinery & Electric Co., Ltd hold can be exchanged 7.26% believe Grinm Advanced Materials (Beijing) Co., Ltd. The company’s management fair value that there is no significant difference between the estimated value and at the end of period.
Pump Co. LTD Nebula Co. Ltd (Beijing) Co., Ltd Other Chongqing Yongkang Yunnan Yingjiang River Grinm Advanced Materials Item Total Other equity instruments investment Other equity instruments
Note: (target Ltd Co., (Beijing) Materials Advanced Grinm 2018, September 30
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 15.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — — — Total
(Continued)
— — — — 4,527,499.344,527,499.34 4,527,499.34 1,993,138.13 4,527,499.34 1,993,138.13 1,993,138.13 1,993,138.13 77,876,922.27 77,876,922.27 38,905,070.00 38,905,070.00 41,439,431.21 41,439,431.21 83,609,256.52 83,609,256.52 77,876,922.27 77,876,922.27 Buildings and 125,048,687.73 125,048,687.73 164,020,540.00 164,020,540.00 202,925,610.00 202,925,610.00 land-use rights
(CONTINUED) Transferred to Property, Plant and Equipment (1) Depreciation and amortization (1) Transferred to Property, Plant and Equipment (1) 4. Ending balance 1. Beginning balance 2. Increase 3. Decrease 4. Ending balance 1. Ending balance 2. Beginning balance Accumulated depreciation and amortization Ending balance Gross carrying amount 2. Increase 1. Beginning balance 3. Decrease
II. III. Item I. Investment property at cost measurement model Investment property
Investment property (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 16.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
312 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 313 (Continued)
(continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) 31 December 2018, the group has no investment property property investment no has group the 2018, December 31 31 December 2018, there is no significant impairment in the the in impairment significant no is there 2018, December 31 (continued) Until Until group’s investment property and no accrued is made for related related for made is accrued no and property investment group’s impairment. without a certificate of title.
I subsidiary of group) and Chongqing South District Government signed signed Government District South Chongqing and group) of subsidiary Industrial Unication of Project II Phase Of Construction The “Supporting of completion the after that, stipulates agreement The Agreement”. Park will company Technology Electronic Unication Chongqing project, the government of Chongqing south district provide the whole company to the industry, information electronic of attraction investment the for government for 43 months. On 28 November 2018, which will be used free of charge Co., Ltd (a subsidiary of group) Chongqing Unication Electronic Technology Of Construction The “Supporting of statement supplementary a obtained Chongqing from Agreement” Park Industrial Unication of Project II Phase the that claims statement supplementary The Government. District South phase of the plant to the ChongqingUnication company entrusts the second of the investment attraction platform of South District Government. With help the company will introduce high- the Chongqing South District Government, During the introduction and early end customers in the electronics industry. customers. the rental from charge not cultivation period, the company will the out rent not will Ltd Co., Technology Electronic Unication Chongqing property of the second phase in recent period, therefore it will be presented as Property, plant and equipment. (1) (2)
Investment property at cost measurement model at cost measurement model Investment property Note: (a Ltd Co., Technology Electronic Unication Chongqing 2015, October n
Investment property Investment property (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 16.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — Total 329,262.89 8,288,518.80 77,876,922.27 439,135,980.32
2,866,356,781.00 2,866,356,781.00 — — — — — Beginning balance (Continued)
Office
equipments
257,400.11 — — — — — Ending balance 3,224,720,949.14 3,224,463,549.03
— — — — Machinery equipment Transportation
— (CONTINUED) Buildings 329,262.89 8,769,513.358,769,513.35 84,857,486.72 84,857,486.72 5,413,855.09 5,413,855.09 1,476,980.18 1,476,980.18 100,517,835.34 100,517,835.34 8,288,518.80 3,526,257.42 30,206,396.02 3,248,525.97 6,793,441.64 43,774,621.05 77,876,922.27 178,251,381.16 260,884,599.16 268,272,342.54 291,090,995.18 3,248,525.97 6,793,441.64 569,405,305.33 2,517,406,397.19 1,670,160,182.46 59,976,844.88 62,800,415.46 4,310,343,839.99 2,257,903,568.00 1,463,926,674.00 62,142,174.00 57,483,954.00 3,841,456,370.00
with assets investment property construction in process
(1) Disposal (5)Others (4)To settle debt (3)Transfer from (1)Purchase (2)Transfer from 3. Decrease 4. Ending balance 2. Increase 1. Beginning balance Gross carrying amount
Item I. Property, plant and equipment
Total Item Property, Plant and Equipment Disposal of Property, Plant and Equipment Property, plant and equipment Property, plant
(1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 17.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
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(Continued)
— — — — — — — — — Office 111,975.42 4,039,112.28 998,971.53 77,070,430.31 998,971.53 77,070,430.31 111,975.42 4,039,112.28 equipments
— — — — — — — — — — —
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December — — — — — — — — — Machinery equipment Transportation (continued) 3,927,136.86 3,927,136.86
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts — — — — — — — — — (continued) (CONTINUED) Buildings 4,902,995.55 65,792,149.55 5,376,313.68 4,902,995.55 65,792,149.55 5,376,313.68 4,938,915.73 1,993,138.13 58,487,984.70 114,048,317.87 3,875,256.69 4,507,519.15 180,919,078.41 65,420,038.56 114,048,317.87 3,875,256.69 4,507,519.15 187,851,132.27 300,626,972.01 701,723,819.04 42,960,600.01 36,529,787.62 1,081,841,178.68 240,109,929.00 653,467,650.72 44,461,657.00 33,021,240.00 971,060,476.72 2,216,779,425.182,017,793,639.00 964,509,226.56 806,531,886.42 17,016,244.87 17,680,517.00 26,158,652.42 24,350,738.58 3,224,463,549.03 2,866,356,781.00
assets investment property amortization
impairment
(1) Disposal (1) Disposal (3) To settle debt with (1) Provision for (2) Transfer from (1) Depreciation and and amortization 4. Ending balance 3. Decrease 4. Ending balance 3. Decrease 1. Beginning balance 1. Ending balance 2. Beginning balance 2. Increase 1. Beginning balance 2. Increase Net carrying amount Provision for impairment Accumulated depreciation
IV. III. Item II. Property, plant and equipment Property, plant
Property, plant and equipment Property, plant (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 17.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. amount amount Net carrying Net carrying 368,927,168.20 368,927,168.20
(Continued)
— — impairment impairment Provision for Provision for
depreciation depreciation Accumulated Accumulated (continued)
(continued) (CONTINUED) amount amount 17,269,023.79 10,294,732.59 3,927,136.86 3,047,154.34 17,269,023.79 10,294,732.59 3,927,136.86 3,047,154.34 387,362,133.87 18,434,965.67 387,362,133.87 18,434,965.67 Gross carrying Gross carrying
31 December 2018, the original value of the fixed assets that have have that assets fixed the of value original the 2018, December 31 been fully depreciated and are still in use is RMB135,607,356.27. been fully depreciated and are still Until
Machinery equipment Machinery Machinery equipment Machinery Total Item Total Item Property, plant and equipment under finance lease Property, plant and equipment Temporarily idle property, plant and equipment Temporarily idle property, plant Property, plant and equipment Property, plant
Note:
Property, plant and equipment Property, plant (3) (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 17.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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amount Net carrying (Continued)
83,609,256.52 83,609,256.52 In process
amount Reason Net carrying 599,558,121.89
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Building Item Total Item Building Restriction on property, plant and equipment Please refer to VI.63 for details. The property, plant and equipment without certificate of title The property, plant and equipment Property, plant and equipment is leased under operation lease and equipment is leased under Property, plant
Property, plant and equipment Property, plant (6) (5) (4)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 17.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— amount 259,492.00 Net carrying 3,178,694.54 3,271,413.68 28,182,483.00 13,729,977.71 74,622,864.00 17,033,603.00 60,265,048.00 207,345,858.00
— — — — — — — — — — impairment (Continued) Provision for
Beginning balance
— amount 259,492.00 3,178,694.54 3,271,413.68 28,182,483.00 13,729,977.71 16,588,797.07 6,213,930.00 10,374,867.07 74,622,864.00 17,033,603.00 60,265,048.00 Gross carrying 207,345,858.00 424,478,231.00 6,213,930.00 418,264,301.00
— amount 163,516.92 193,597.25 290,993.03 1,652,159.67 4,037,870.44 2,248,617.05 4,634,739.94 Net carrying 29,441,382.83 74,635,444.79
— — — — — — — — — — impairment Provision for Ending balance
— (CONTINUED) amount 163,516.92 193,597.25 290,993.03 1,652,159.67 4,037,870.44 2,248,617.05 4,634,739.94 29,441,382.83 56,508,581.85 2,557,627.00 53,950,954.85 74,635,444.79 173,806,903.77 2,557,627.00 171,249,276.77 Gross carrying
construction project of Machinery Manufacture project of Tool Factory of Water Turbine Works Forging & Founding Rudong project Fu Baotian
Machinery industrialization base Intelligent manufacturing project Hikvision Chongtong Touping Laboratory General Machinery equipments Others
Environmental-friendly relocation Environmental-friendly relocation project
Chongtong ChengFei Jiangsu Xinjiang Cotton picker project of
Total Relocation project of Yinhe Item The situation of construction in progress The situation of
Construction in progress Construction in (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 18.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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— Ending Balance 290,993.03 163,516.92 193,597.25 1,652,159.67 4,037,870.44 4,634,739.94 2,248,617.05 29,441,382.83 74,635,444.79 117,298,321.92
— — — — — — (Continued)
Other Decrease 529,914.53 Decrease
— — Transfer into property, plant and equipment
Increase 12,580.79 64,260,783.70 60,303,108.23 2,305,515.80 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
— Balance Beginning 3,178,694.54 131,793.41 3,146,971.03 3,271,413.68 6,913,488.41 9,991,304.84 13,729,977.71 32,902,038.12 15,530,965.89 27,063,179.50 407,889,433.93 187,621,480.25 422,690,757.93 55,521,834.33 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
— — — — (CONTINUED) amount Budgeted 50,000,000.00 28,182,483.00 1,788,814.36 74,622,864.00 74,622,864.00 165,000,000.00 259,492.00 9,055,865.91 9,024,364.88 850,000,000.00 207,345,858.00 5,300,188.62 212,646,046.62 165,000,000.00 17,033,603.00249,370,000.00 15,667,083.84 60,265,048.00 30,452,069.79 51,588,843.09 81,595,926.65 25,623,224.50 1,500,000,000.00 (continued)
project of Tool Factory construction project of Machinery Manufacture project of Water Turbine Works Forging & Founding Rudong project Fu Baotian
Intelligent manufacturing project Machinery industrialization base Environmental-friendly relocation Chongtong Touping Laboratory Environmental-friendly relocation
Hikvision General Machinery equipments Xinjiang Cotton picker project of Total Relocation project of Yinhe Chongtong ChengFei Jiangsu
Project Name The situation of construction in progress The situation of
Construction in progress Construction in (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 18.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
bank’s borrowing bank’s borrowing bank’s borrowing bank’s borrowing Self-collected fund Self-collected fund Self-collected fund Self-collected fund and Self-collected fund
Self-collected fund and Parent company borrowing
Self-collected fund and Self-collected fund and bank’s borrowing
(Continued)
— — — — — —— — — — — — costs in amount of borrowing Capitalized current year Capital Source
— — — — costs (continued) aggregate amount of borrowing Capitalized 120,442,275.00
— — — — 68.00 5,606,133.00 59.00 100.00 56,435,373.00 100.00 11,348,679.00 100.00 6,832,696.00 100.00 4,933,580.00 100.00 35,285,814.00 Project Progress (%)
— — — — 68.00 59.00 100.00 100.00 100.00 100.00 100.00 The ratio (CONTINUED) of input to budget (%) (continued)
construction project of Machinery Manufacture Rudong project Forging & Founding project of Tool Factory Fu Baotian project of Water Turbine Works General Machinery equipments Hikvision Intelligent manufacturing project Machinery industrialization base Chongtong ChengFei Jiangsu Relocation project of Yinhe Environmental-friendly relocation Xinjiang Cotton picker project of Environmental-friendly relocation Chongtong Touping Laboratory Project Name Total The situation of construction in progress The situation of
Construction in progress Construction in (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 18.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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0,4,9.52,9,8.232,343,965.82 23,294,780.72 108,141,390.85 balance Ending 4. 638066 415950 090320 225,264,551.02 10,940,392.00 14,175,965.00 36,368,056.63 —
1,958,766.48 — — — — — 50,813.95 1,907,952.53 Disposal (1)
1,958,766.48 — — — — — 50,813.95 1,907,952.53 Decrease 3.
484623 ,2,0.78,296,006.82 3,822,201.67 14,824,642.38 amortization and Depreciation (1) 34,798,750.50 — 3,361,688.00 4,494,211.63
(Continued) —
484623 ,2,0.78,296,006.82 3,822,201.67 14,824,642.38 Increase 2. 34,798,750.50 — 3,361,688.00 4,494,211.63 —
524710 953330 24,047,959.00 19,523,393.00 95,224,701.00 balance Beginning 1. 183850 084270 090320 192,424,567.00 10,940,392.00 10,814,277.00 31,873,845.00 —
— — — — — — — — and amortization and
depreciation Accumulated II.
7,4,9.52,7,3.59,4,4.81,5,0.05,4,6.06,5,8.01,4,9.0842,859,714.08 10,940,392.00 68,257,380.00 55,044,064.00 12,256,200.00 91,048,845.58 27,472,137.15 577,840,695.35 balance Ending 4.
7,203,453.51 — — — — — — 7,203,453.51 Disposal (1)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
7,203,453.51 — — — — — — 7,203,453.51 Decrease 3.
3,033,355.58 — — — — 3,033,355.58 — — other (2)
243818 ,6,8.55,500,000.00 1,361,283.15 32,463,861.86 Purchase (1) 39,325,145.01 — — — —
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
243818 ,6,8.58,533,355.58 1,361,283.15 32,463,861.86 Increase 2. 42,358,500.59 — — — —
5,8,8.02,1,5.08,1,9.01,5,0.05,4,6.06,5,8.01,4,9.0807,704,667.00 10,940,392.00 68,257,380.00 55,044,064.00 12,256,200.00 82,515,490.00 26,110,854.00 552,580,287.00 balance Beginning 1.
— — — — — — — — I. Gross carrying amount carrying Gross
Items Total Others rights relationships Brand know-how Software rights
Franchise Franchise Customer Technical Land-use
The situation of intangible assets intangible of situation The (1)
19. Intangible assets Intangible (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI.
Until 31 December 2018, the Group has no land-use right without a certificate of title. of certificate a without right land-use no has Group the 2018, December 31 Until (2)
The restriction on intangible assets is detailed in VI.63. in detailed is assets intangible on restriction The Note:
(Continued)
5,5,8.0657410 847510 226200 310290 57,443,103.00 23,170,219.00 12,256,200.00 58,467,531.00 6,587,461.00 457,355,586.00 615,280,100.00 — 2. Beginning balance Beginning 2.
6,9,0.0417364 874897 226200 866073 54,081,415.00 18,676,007.37 12,256,200.00 58,704,879.76 4,177,356.43 469,699,304.50 617,595,163.06 — 1. Ending balance Ending 1.
— — — — — — — —
Net carrying amount carrying Net IV.
— — — — — — — — balance Ending 4.
— — — — — — — — Disposal (1)
— — — — — — — — Decrease 3.
— — — — — — — — impairment for Provision (1)
— — — — — — — — Increase 2.
— — — — — — — — balance Beginning 1.
— — — — — — — — III. Provision for impairment for Provision
Items Total Others rights relationships Brand know-how Software rights
Franchise Franchise Customer Technical Land-use
The situation of intangible assets assets intangible of situation The (1) (continued)
Intangible assets assets Intangible 19. (continued)
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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322 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 323
Ending Balance 722,449.12 1,001,052.77 28,204,172.90 29,927,674.79 (Continued)
— — or loss in profit Decrease Recognized 23,044,876.21
— — Other 21,065,500.90 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
Increase — Internal (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts expenditure development 1,001,052.77 23,767,325.33 (CONTINUED)
— — Balance Beginning 7,138,672.00 7,138,672.00 24,768,378.10 21,065,500.90 23,044,876.21 power key parts processing technology development and application of Research Institute of General CNC of automotive Others Wind blade technology Item Total Development expenditure
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 20.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— Ending balance 293,946.00 15,368,000.00 143,312,435.00 127,650,489.00
(Continued)
— — — — — Decrease
— — — — — Increase
— (CONTINUED) balance Beginning 293,946.00 15,368,000.00 143,312,435.00 127,650,489.00
Developments Limited, and PTG Deutschland GmbH. PTG six six PTG GmbH. Deutschland PTG and Limited, Developments
impairment entities belong to CNC machine tools business section, while Chongqing Chongqing while section, business tools machine CNC to belong entities System Co. Ltd. (“CAFF”) belongs to CAFF Automotive Braking & Steering other segment. PTG six entities comprise Holroyd Precision Limited, PTG Heavy Industries PTG six entities comprise Holroyd Precision Components Limited, PTG Limited, Milnrow Investments Limited, Advanced provision of
Less: Net value of goodwill Power Transformer Name of investee CAFF PTG six entities Original value of goodwill Original value of Note:
Goodwill (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 21.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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balance Beginning 293,946.00 (Continued)
15,368,000.00 127,650,489.00 143,312,435.00
Ending balance 293,946.00 15,368,000.00 127,650,489.00 143,312,435.00
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED) ll allocated to the Group’s cash-generating units or groups of cash- of or groups units cash-generating to the Group’s ll allocated (continued) Cash-generating units/Groups of cash-generating units CAFF Power Transformer PTG six entities Total Impairment generating units Goodwi The recoverable amount of cash-generating units or groups of cash- of groups or units cash-generating of amount recoverable The approved budget five-year the on base determined is units generating using cash flow forecasting method. by the management and calculated rate is over five years, the below estimated growth the cash flow As for applied for calculation.
Goodwill (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 21.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
0% PTG 21% six entities
(Continued)
1% Last period 15% CAFF 16%-18% 44%-46%
2% PTG six entities
1% 15% 11.6%-11.8% Current period CAFF (CONTINUED) 16%-18% 47.59%-50.68%
(continued) (continued) Growth rate Items Gross profit rate Discount rate Impairment Major assumptions for discounted cash flow method: Major assumptions Weighted average growth rate used by the management is identical identical is management the by used rate growth average Weighted in the industry report, which is not more with the anticipatory data stated pre-tax The product. each of rate growth long-term average the than rate which matches the certain risks the rate is selected as the discount The contain. units cash-generating of groups or units cash-generating of amount recoverable the for analysis the to apply above assumptions operatingcash-generating units or groups of cash-generating units in each segment.
Goodwill (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 21.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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Ending balance 683,260.91 2,759,158.05 6,555,902.54 15,749,679.23 224,093,001.19 211,456,805.54 230,648,903.73 (Continued)
— — — — — Other decrease
— — From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
— — Increase Amortization (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 3,786,947.14 1,027,789.09 (CONTINUED)
— Beginning 6,555,902.54 (1,260,819.00) 2,165,240.10 221,160.19 42,355,865.00 72,025.45 26,678,211.22 203,065,942.00 168,526,798.54 84,683,977.31 29,802,190.51 11,951,779.80 209,621,844.54 90,708,190.00 46,016,844.00 23,664,286.81
for impairment leased Property, Plant and Equipment Lease fee Other Total Mold Improvement of
Subtotal Decrease: Provision
Item Long-term deferred expenses Long-term deferred
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 22.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— temporary Deductible tax losses) differences (Deductible
(Continued)
— 31 December 2018 Deferred liabilities) tax assets 2,184,750.003,248,386.76 15,613,800.00 2,653,815.32 21,655,911.71 9,477,911.86 (Deferred tax 63,887,668.91 401,372,659.22 79,509,594.57 344,389,402.63 58,951,859.49 257,104,697.72 20,394,413.43 122,896,939.27 20,557,735.08 87,284,704.91 11,317,639.04 75,450,926.85 103,686,673.46 646,468,148.91
(CONTINUED) available-for-sale financial assets Deferred tax liabilities Deferred tax assets Provision for impairment Temporary tax free income Deductible tax loss Gain or loss from fair value changes of Appreciation of assets valuation Deferred revenue Retirement and termination benefit Accrued expenses Others
I. Item II. Deferred tax assets and deferred tax liabilities Deferred tax assets
Deferred tax assets and deferred tax liabilities Deferred tax assets (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 23.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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temporary tax losses) Deductible differences (Deductible (Continued)
1 January 2018 Deferred liabilities) tax assets 330,585.00 2,203,907.00 (continued) 4,123,700.00 20,974,331.00 3,093,044.00 19,508,410.00 (Deferred tax 57,652,981.00 210,710,920.00 82,013,519.15 494,468,139.67 38,559,856.00 129,654,953.00 60,790,663.15 385,120,126.67 13,675,527.00 66,661,365.00 19,093,125.00 81,055,967.00
(continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Deferred tax liabilities Deferred tax assets Temporary tax free income Provision for impairment Retirement and termination benefit Accrued expenses Appreciation of assets valuation Deferred revenue Deductible tax loss
I. II. Item Deferred tax assets and deferred tax liabilities and deferred tax liabilities Deferred tax assets
Deferred tax assets and deferred tax liabilities Deferred tax assets (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 23.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
temporary tax losses) Deductible differences (Deductible
(Continued)
31 December 2017 Deferred liabilities) tax assets 693,328.00 2,773,313.00 330,585.00 2,203,907.00 (continued) 4,123,700.00 20,974,331.00 3,093,044.00 19,508,410.00 (Deferred tax 68,505,568.00 404,415,132.00 58,346,309.00 213,484,233.00 38,559,856.00 129,654,953.00 47,282,712.00 295,067,119.00 19,093,125.00 81,055,967.00 13,675,527.00 66,661,365.00
(continued) (CONTINUED) available-for-sale financial assets Deferred tax liabilities Deferred tax assets Temporary tax free income Provision for impairment Gain or loss from fair value changes of Appreciation of assets valuation Deductible tax loss Retirement and termination benefit Accrued expenses Deferred revenue
I. Item II. Deferred tax assets and deferred tax liabilities and deferred tax liabilities Deferred tax assets
Deferred tax assets and deferred tax liabilities Deferred tax assets (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 23.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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330 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 331 — 2017 2017 31 December 31 December (Continued)
— 2018 2018 1 January 1 January 17,584,495.00 17,584,495.00 95,941,343.00 95,941,343.00 832,486,562.00 832,486,562.00 928,427,905.00 928,427,905.00 785,892,330.00 785,892,330.00 102,469,561.00 102,469,561.00 146,084,351.00 146,084,351.00 409,628,492.00 409,628,492.00 110,125,431.00 110,125,431.00
2018 2018 (continued) From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 31 December 31 December 47,947,095.80 91,937,793.43 55,112,121.57 67,285,911.46 87,862,494.16 868,490,802.07 960,428,595.50 868,490,802.07 196,075,809.45 414,207,369.63
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) tax losses not recognized in deferred tax assets will be be will assets tax deferred in recognized not losses tax 2018 Deductible temporary differences 2019 Deductible tax losses Total Year Total Items 2020 2021 2023 2022 Deductible Unrecognized deferred tax assets Unrecognized deferred expired in the following years
Deferred tax assets and deferred tax liabilities Deferred tax assets (3) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 23.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— balance Beginning 3,103,660.00 2,988,129.00 83,655,571.00 47,161,963.00 30,401,819.00 (Continued)
— Ending balance 970,027.30 642,616.00 3,534,951.11 21,495,341.97 16,347,747.56
(CONTINUED) Total Items Others Foreclosed homes Prepayment for land-use right Prepayment for equipment and engineering Prepayment for mold Other non-current assets Other non-current
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 24.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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332 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 333
— Ending the new standards balance in 2,939,493.00 1,094,671.00 4,039,112.28 6,213,930.00 6,555,902.54 6,282,540.68 28,032,957.00 29,127,628.00 78,480,765.00 49,508,552.84 81,840,453.05 48,808,594.37 719,500,933.59 405,703,961.83 621,271,730.77 (Continued)
— — — — — — — — — — — — — — — — in the new The impact of changes report format
— — — — — — — standards instrument From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 2,939,493.00 new financial The impact of 49,508,552.84 48,808,594.37 changes in the
— — — (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Balance Beginning (CONTINUED) 1,094,671.00 2,939,493.00 (2,939,493.00) 4,039,112.28 6,213,930.00 6,555,902.54 2,180,040.68 4,102,500.00 28,032,957.00 29,127,628.00 78,480,765.00 53,182,968.00 28,657,485.05 500,715,252.50 218,785,681.09 317,995,413.00 87,708,548.83 402,486,049.68 218,785,681.09
loss of circulating fund within 1 year
Provision for impairment Property, Plant and Equipment construction in progress long-term deferred expense medium and long term loan financial assets held for sale Loans and Advances Other equity investment Provision for impairment loss of Provision for impairment loss of Total
Item Including: Provision for impairment loss of Provision of impairment of inventory Provision for impairment loss of Provision for impairment loss of Provision for impairment loss of Contractual assets Account receivable Provision for bad debts Prepayment Note receivable Other receivable Provision for assets impairment Provision for assets
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 25.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— Ending balance 6,555,902.54 2,557,627.00 4,039,112.28 2,939,493.00 1,120,000.00 2,168,074.68 49,508,552.84 34,772,837.43 33,652,837.43 96,227,641.45 42,916,934.70 157,655,591.37 414,932,370.73 640,526,411.83 814,274,138.02
— — — — — — — — — — — — back (Continued)
Transferred 3,656,303.00
Decrease — — — — — — — — — — — — 1,200.00 449,021.07 1,200.00 449,021.07 Collected
— — — — — — — — — — — — — — Other increase
Increase — — — — — — Accrued 25,329.00 (continued) (CONTINUED)
— Ending standards 6,555,902.54 6,213,930.00 4,039,112.28 2,939,493.00 1,094,671.00 6,282,540.68 (4,114,466.00) 78,480,765.00 76,668,574.02 3,063,519.68 557,267.33 29,127,628.00 5,645,209.43 28,032,957.00 5,619,880.43 49,508,552.84 81,840,453.05 14,387,188.40 48,808,594.37 (5,891,659.67) balance in new 719,500,933.59 96,373,476.15 3,063,519.68 558,467.33 4,105,324.07 405,703,961.83 9,678,629.97 621,271,730.77 19,704,902.13
loss of circulating fund within 1 year Provision for impairment long-term deferred expense construction in progress property, plant and equipment inventory financial assets held for sale medium and long term loan Loans and Advances ncluding: Provision for impairment loss of
Provision for impairment loss of
Provision for impairment loss of
Other equity investment Provision for impairment loss of Provision of impairment of
Provision for impairment loss of I Provision for impairment loss of
Item Total Contractual assets Account receivable Provision for bad debts Other receivable Prepayment Note receivable Provision for assets impairment Provision for assets
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 25.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
334 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 335
— — balance balance Beginning Beginning (Continued) 16,250,000.00
809,054,101.00 1,653,639,955.00 1,950,028,138.00 2,759,082,239.00 1,669,889,955.00
— Ending balance Ending balance 40,000,000.00 669,086,659.25 202,609,958.69 911,696,617.94 1,522,525,538.63 1,225,850,904.13 2,748,376,442.76
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Unsecured loans Mortgage loans Guaranteed loans Pledged loans Total Category At the end of period, there is no overdue short-term loan. At the end of period, there is The category of short-term loans The category of
Accounts payable Notes payable Total Items Accounts payable and notes payable Short-term loans
(2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 27. 26.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — Balance balance Beginning Beginning 10,053,203.00 13,906,430.00 809,054,101.00 795,147,671.00 1,939,974,935.00 1,950,028,138.00 (Continued)
Ending Ending Balance balance 934,085.69 4,846,297.25 12,879,900.63 58,032,097.79 1,503,865,255.06 1,522,525,538.63 1,225,850,904.13 1,167,818,806.34
(CONTINUED) Material payable Freight payable Total Item Equipment payable Others The types of account payable
Total Category Commercial acceptance bills Bank acceptance bills Accounts payable Notes payable
(1) The aging of the Group’s ending notes payable is within one year. The aging of the Group’s ending
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 27.2 27.1
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
336 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 337
Balance Beginning 87,494,000.00 61,604,000.00 (Continued) 168,659,028.00
1,632,271,110.00 1,950,028,138.00
Ending Balance 62,241,745.33 107,525,767.62 288,524,128.11 1,064,233,897.57 1,522,525,538.63
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) account payable according to its invoice date according to its invoice date account payable (continued) Within 1 year 2-3 years More than 3 years 1-2 years Aging Total The aging analysis of The aging analysis as follows
Accounts payable Accounts payable (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 27.2
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
unit not pay Scroll to payment Not completed Unpayment and untransferred reasons Scroll to payment Scroll to payment Not completed Scroll to payment Scroll to payment No settlement
— No settlement (Continued)
Ending Balance 4,888,438.53 3,539,378.84 5,047,785.00 Subordinate 4,293,133.95 19,734,560.99 27,984,085.66 11,462,413.80 11,754,433.00 13,487,830.65 15,042,285.00 117,234,345.42
(CONTINUED) (continued) Group Co., Ltd Equipment Co. Ltd Device Co., Ltd. Wolong Electronic Nanyang Explosion Protection Wolong Electronic Nanyang Explosion Protection Chongqing Honghai Lizhi Electromechanical Bazhou Wuhaote Electric Power Tubing Co., Ltd. Bazhou Wuhaote Electric Power Tubing Co., Total
Name Chongqing Zhonghuan Construction Co., Ltd. Chongqing Auto Scrap (Group) Co., Ltd Beijing Consen Automation Control Co., Ltd Hangzhou Steam Turbine Co., Ltd Zhenghong Road Bridge Construction Co., Ltd Haerbin Hajing Bearing Co., Ltd Chongqing Kangbaishi Electromechanical Major accounts payable over 1 year Major accounts
Accounts payable Accounts payable (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 27.2
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
338 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 339
2018 31 December Not completed Unsettlement Reasons
Unsettlement — Unsettlement Unsettlement Unsettlement (Continued) 18,081,854.00
677,552,844.00 659,470,990.00
— — — 2018
1 January More than 3 year 1-2 year
Within 1 year
— Aging Within 1 year 1-2 year, Within 1 year Within 1 year,
— — — Ending Balance 2018 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 22,317,625.83 15,274,999.80 27,984,085.66 44,860,390.50 19,734,560.99 130,171,662.78 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED)
(continued) Engineering Co., Ltd Co., Ltd. Drala Holdings AG Sichuan Dingxin Construction Total
Name of Creditors RM Investment Company Pvt.Ltd Bazhou Wuhaote Electric Power Tubing Co., Ltd. Chongqing Zhonghuan Construction Top Five Creditors
Total Settled but not completed projects Advances on sales Items Receipts in advance Accounts payable Accounts payable
(4)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 28. 27.2
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending balance 807,524.44 1,493,457.54 3,832,497.55 63,635,374.54 57,501,895.01
(Continued)
Decrease 106,484.56
— Increase
balance Beginning (CONTINUED) 914,009.00 2,188,000.00 17,209,533.43 17,904,075.89 3,943,392.00 81,205,501.23 81,316,395.68 57,693,334.00 941,599,491.36 935,657,450.82 50,647,933.00 843,184,456.70 836,330,494.69
benefits payable set up a defined contribution plan Others Demission welfare Total
Items Demission benefits – Short-term employee Classification of employee benefits payables Classification
Employee benefits payables Employee benefits (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 29.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
340 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 341
— Ending Balance (3,400.00) 23,273.87 15,588.61 496,950.31 1,815,523.87 1,273,601.89 1,234,739.41 31,353,938.71 57,501,895.01 22,565,280.23 (Continued)
— Decrease
— Increase 7,719,343.75 7,719,343.75 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
–
Balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (3,400.00) 10,774.47 366,000.93 353,501.53 22,998.05 4,979,768.36 4,987,177.80 Beginning 842,556.88 29,516,128.03 29,861,734.60 1,548,047.39 50,982,386.84 50,714,910.36 1,083,341.62 61,689,429.19 61,499,168.92 1,049,569.10 48,624,316.15 48,439,145.84 (CONTINUED) 50,647,933.00 843,184,456.70 836,330,494.69 16,400,797.17 690,293,540.70 684,129,057.64 30,776,589.94 10,702,971.94 10,125,623.17 (continued)
Others Maternity insurance Injury Insurance education fee and subsidies Labor union fee and employee Housing fund Other short-term benefits Total
Item Staff welfare Social insurance Including: Medical insurance Salaries, bonuses, allowances Short-term employee benefits Short-term employee
Employee benefits payables Employee benefits (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 29.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending balance 761,567.18 3,832,497.55 3,070,930.37
(Continued)
Decrease
Increase
balance Beginning 780,306.00 2,064,300.82 2,083,039.64 3,943,392.00 81,205,501.23 81,316,395.68 3,163,086.00 79,141,200.41 79,233,356.04 (CONTINUED) (continued) The research and development expense RMB8,478,075.08, totaling totaling management expense RMB19,624,533.16, sale expense RMB6,134,831.11, RMB8,478,075.08, expense development and research RMB34,237,439.35.
group participates in the social insurance program established by by established program insurance social the in participates group Total Items Basic endowment insurance Unemployment insurance government. Under the program, the group will deposit the relevant relevant the deposit will group the program, the Under government. for provisions relevant the with accordance in scheme the to expense group the fees, deposit above the to addition In government. local the corresponding The obligation. payment further any undertake not shall of cost the or loss and profit current the into recorded is expenditure related assets when it is incurred. Defined contribution plan Defined contribution The
Note: including year this for group the of plan contribution defined
Employee benefits payables Employee benefits (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 29.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
342 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 343
balance Balance Beginning Beginning 860,623.74 578,104.90 149,905.00 4,187,099.36 1,714,343.00 (Continued) 89,565,416.00 11,250,751.00 30,077,325.00
124,285,739.00 484,802,264.00 221,341,231.00 526,130,340.00
Ending Ending balance Balance 547,750.84 777,333.57 149,904.89 2,964,303.41 1,797,469.28 79,755,394.16 13,156,812.78 27,519,691.51 134,982,412.55 558,527,763.24 220,974,568.70 599,204,267.53
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Others Real estate tax Real estate tax City land use tax Value-added tax City maintenance and construction tax Interest payable Enterprise income tax Dividends payable Other payables Total Items Total Item Other payables Taxes and levies payables Taxes and levies
includes HK income tax payable (0 yuan). At the end of period, the tax payable
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 31. 30.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
balance balance Beginning Beginning 338,324.00 2,100,000.00 9,261,300.00 1,651,127.00 5,418,355.00 22,558,970.00 30,077,325.00 11,250,751.00 (Continued)
— Ending Ending balance balance 2,810,755.00 9,261,300.00 1,821,232.74 2,074,280.04 24,708,936.51 27,519,691.51 13,156,812.78
(CONTINUED) Interest payable on corporate bonds Interests payable on short-term loans Interests payable on deposit absorption Total Items As interest. Classification of interest payable Classification
Electronic Technology
Non-controlling shareholders Pigeon Wire Non-controlling shareholders of Chongqing Unication Non-controlling shareholders of Jilin Chongtong Chengfei Total Company name Dividends payable Interest payable
(2) unpaid and overdue no has Company the 2018, December 31 of (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 31.2 31.1
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
344 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 345
— — balance Beginning 423,785.00 2,101,883.00 2,231,810.00 1,902,500.00 3,100,000.00 6,001,412.00 (Continued) 45,901,154.00 16,587,851.00 34,584,268.00 15,291,331.00 43,300,416.00 43,068,049.00
270,307,805.00 484,802,264.00
— — Ending balance 9,322,878.96 7,433,979.40 1,384,000.00 7,982,985.82 6,927,906.53 10,431,400.32 73,299,330.89 14,617,373.62 10,943,921.55 34,309,829.34 59,658,666.52 137,056,981.30 185,158,508.99 558,527,763.24
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Bill pledge collection Others Transportation fee Maintenance of housing and equipment Estimated maintenance fees Staff payable Demolition Payable to other related parties Payable on behalf of others Auditing fee Sales commission Payables to third parties Staff housing fund payable Purchase of Engineering equipment Deposits and risk fund Total Nature of Payables Classification of other payables by nature Classification
Other payables (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 31.3
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
(Continued)
guarantee fee Reason — No invoice — Land transferring fee
— Deposit The housing fund-raising Undue Not in accounting period — Corporate bonds
Ending balance 1,655,739.20 1,554,220.03 1,994,663.87 1,291,331.39 1,890,912.20 4,639,161.67 1,797,002.20 2,347,588.38 2,000,000.00 20,168,565.23 39,339,184.17
(CONTINUED) (continued) – special funds (Binjiang district) – house selling payment asset technology Co. Ltd. CQMEHG Asset Management Co. Ltd.
Chongqing Yunxin Mechanical and electronical Chongqing Yunxin Mechanical and electronical Others-plant relocation fee None whole set of house selling payment of 2006 year None whole set of house selling payment of 2006 Risk mortgage fee CQMEHG Maintenance fee CQMEHG Asset Management Co. Ltd. CQMEHG Asset Management Co. Ltd. CQMEHG Total Company name Major other payables over one year Major other payables
Other payables (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 31.3
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
346 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 347
—
42,368,309.00 77,828,780.00 (Continued) not settled completed not settled 294,663,555.00 174,466,466.00
— Reason Project not yet — Related party
Material fee Beginning balance
1,866,625.00 66,722,382.85 26,245,489.55 75,991,637.84 1-2 year; 2-3 years; 3-4 years 170,826,135.24 Ending balance — Aging 1-2 year Within 1 year
Within 1 year; Over 5 years Related party 1-2 year
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 6,100,000.00 69,053,252.65 10,296,081.80 10,608,830.54 23,733,765.23 18,314,575.08 Ending balance
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) group Limited Co., Ltd. Limited Co., Ltd. Total
Company name Jiangsu Nantong the third construction CQMEHG Chongqing the third construction group Tianjin Dewei coating Chemical Co., Ltd. CQMEHG Asset Management Co. Ltd. Top 5 of ending balance of payable companies Top 5 of ending
Total Items Long-term Loans due within one year Other long-term liabilities due within one year Deferred revenue due within one year Long-term payables due within one year Non-current liabilities due within one year Other payables
(3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 32. 31.3
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — balance balance Beginning Beginning 14,827,373.00 877,057,450.00 169,094,800.00 693,135,277.00 (Continued)
Ending Ending balance balance 1,176,168.16 1,176,168.16 20,392,249.00 190,000,000.00 1,334,738,381.17 1,124,346,132.17
(CONTINUED) and compensation
Warranty and guarantees for repair, replacement Warranty and guarantees for repair, replacement Total Items Classification of other current liabilities Classification of other current
Total Items Deposit pledged as collateral Fixed deposits (including notice deposits) within one year Fixed deposits (including notice deposits) Deposits in corporate saving account Other current liabilities Deposits from banks and other financial institution Deposits from banks (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 34. 33.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
348 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 349
balance balance Beginning Beginning (Continued) 26,728,564.27 67,000,000.00
315,811,906.00 179,600,000.00 256,000,000.00 279,683,341.73 562,411,906.00 174,466,466.00 562,411,906.00 174,466,466.00
Ending Ending balance balance 89,889,522.99 77,000,000.00 66,722,382.85 66,722,382.85 302,589,522.99 463,595,400.00 145,000,000.00 608,295,400.00 843,184,922.99 843,184,922.99
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) On 31 December 2018, long-term loan interest rate of the Company is from On 31 December 2018, long-term loan interest rate of the Company 1.2% to 4.998% (31 December 2017: 1.2% to 5%).
no more than 5 years no more than 2 years 2 years after balance sheet date, but Unsecured loans
Mortgage loans Within 1 year Guaranteed loans Less: Current liabilities due within one year 5 years after balance sheet date Items Total Items 1 year after balance sheet date, but
Total amount under non-current liabilities Classification of long-term loans Classification Note:
following period: Above loans need be repaid in
Long-term loans (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— balance balance Beginning Beginning 2,325,317.00 800,000,000.00 800,000,000.00 800,000,000.00 800,000,000.00 800,000,000.00 797,674,683.00
(Continued)
— Ending Ending balance balance 856,145.78 800,000,000.00 800,000,000.00 800,000,000.00 800,000,000.00 800,000,000.00 799,143,854.22
(CONTINUED) to Zhengjian Xuke [2016] No. 701 issued by China Securities Securities China by issued 701 No. [2016] Xuke Zhengjian to According Regulatory Commission, the Group issued corporate bonds amounting to to amounting bonds corporate issued Group the Commission, Regulatory years five of term bond a with 2016, September 29 on RMB800,000,000 to increase the coupon rate at the end (including the option for the Group interest The back). sell to holders bond for option and the year third the of rate of 4.28%. is paid annually with annual simple
in following period: Unrecognized financing charges 16 CQ Machine Tools bonds par value Total Above the carrying value of bonds need be repaid Classifications of bonds Total Items Total amount under non-current liabilities 2 years after balance sheet date, but no more than 5 years 16 CQ Machine Tools bonds par value Classification of bonds payable Classification Bonds payable analysis:
Note:
Bonds payable (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 36.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
350 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 351
Ending balance balance Beginning 799,143,854.22 799,143,854.22 (Continued)
value Issuing discount of overflow Amortization (1,469,171.22) (1,469,171.22) 800,000,000.00 797,674,683.00 800,000,000.00 797,674,683.00
— — Repaid
amount in current period From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
5 years — Maturity of bond
interest as (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Provision for per par value 34,240,000.00 34,240,000.00 September 29 2016 —
(CONTINUED)
— — Issuing Par value Issue date amount in current period 800,000,000.00 800,000,000.00
(continued)
Tools bonds par value Tools bonds par value 16 CQ Machine 16 CQ Machine Total Name of the bond Total Name of the bond Movements of bonds payable Movements of bonds
Bonds payable (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 36.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— balance balance Beginning Beginning 3,895,870.00 207,600,793.00 207,600,793.00 211,496,663.00 207,600,793.00
(Continued)
Ending balance Ending balance 3,755,158.29 1,995,000.00 141,946,600.86 145,701,759.15 147,696,759.15 145,701,759.15
(CONTINUED) Others Finance lease payable Items Total Classification of long-term payable
Total Items Special payables Long-term payables Long-term payables Long-term payables
(1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 37.1 37.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
352 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 353
— balance Beginning 192,000.00 (Continued) 77,828,780.00 52,446,493.54 77,828,780.00
207,600,793.00 154,962,299.46 285,429,573.00 285,429,573.00
— Ending balance 3,755,158.29 75,991,637.84 45,474,486.42 75,991,637.84 145,701,759.15 100,227,272.73 217,938,238.70 221,693,396.99
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) no more than 5 years no more than 2 years repaid in following period: Total amount under non-current liabilities Less: Current liabilities due within one year 5 years after balance sheet date 2 years after balance sheet date, but
1 year after balance sheet date, but Within 1 year Others
Finance lease payable Total need be Above carrying value of long-term payables Items Long-term payables analysis: Long-term payables
Long-term payables Long-term payables (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 37.1
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — Reason balance Beginning 2,189,000.00 1,484,000.00 16,673,000.00 15,968,000.00
(Continued)
Ending balance 1,995,000.00 1,995,000.00 Ending balance
386,000.00
1,552,000.00 17,460,000.00 16,294,000.00
1,900,870.00 1,900,870.00
— —
(CONTINUED) balance Increase Decrease Beginning 3,895,870.00 3,895,870.00
National Budget for Major Equipment Localization” issued by National National by issued Localization” Equipment Major for Budget National Post-employment benefits and termination benefits that will be paid within Post-employment benefits and termination benefits that will be paid one year is listed in Long-term Employee Benefits Payable.
Termination benefits payable Post-employment benefits payable Total Items Less: Amounts paid within 1 year Classification of long-term employee benefits payable Classification of long-term employee Development and Reform Commission, the balance of special payables on on payables special of balance the Commission, Reform and Development 2018 is RMB1,995,000.00 (31 December 2017:national project as at 31 December for the localization projects of major equipmentRMB3,895,870), which will be used approved by the state respectively. Pursuant to Fagai Touzi [2005] No. 1201 “Notice on the Investment Plan under Pursuant to Fagai Touzi [2005] No. Special Note:
project Special payables on national Total Items
Long-term employee benefits payables Special payables
(1) Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 38. 37.2
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
354 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 355
— — — — balance balance 5%-9.5% 4%/3.75% Beginning Beginning Last period (Continued) 32,518,000.00
5% Ending balance Ending balance 752,000.00 3.25%/2.5% 8,001,242.71 (1,170,332.54) 12,615,997.53 20,617,240.24 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) date, the actuary assumption for post-employment benefits and and benefits post-employment for assumption actuary the date, express Termination benefits) Financial expenses Salary increasing rate Administrative expenses Discount rate (original separated employees benefits/new Discount rate (original separated employees Items Items Actuary assumption retired early. At balance of the Company have already Some employees sheet termination benefits is as follows: Post-employment benefits and termination benefits included in current current in included benefits termination and benefits Post-employment gains and losses are as follows:
Loss on repair, replacement and compensation Product quality assurance Total Items Provisions Long-term employee benefits payables Long-term employee
(2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 39. 38.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
—
Ending Balance 1,276,101.33 32,947,940.29 405,298,663.38 178,151,235.54 192,923,386.22
— — —
Other decrease (Continued)
34,239,130.78
— —
1 year has been reclassified Amount that to due within Decrease in this year
— in this year Amortisation 1,464,054.08
— Other increase (546,145.89) 41,561.69 (135,031.91) 9,130,434.78 15,334,609.05 13,923,423.53 14,110,270.80 9,945,550.50
— — — — Increase in this year Government (CONTINUED) grant received
Balance Beginning 1,728,777.00 34,411,994.37 25,108,696.00 383,378,140.00 66,046,005.51 82,765,998.20 56,461,309.50 26,245,489.55 44,184,681.28 215,568,022.00 106,560,650.63 66,046,005.51 58,847,100.26 41,032,270.20 12,270,250.66
– – Relocation Government Grant and lease back Total Item Government subsidies Unrealized income of sale Proceeds of land disposal Government subsidies Deferred rental income Classification of deferred revenue Classification
Deferred revenue (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 40.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
356 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 357
—– Ending Balance 8,911,903.28 5,000,000.00 8,790,418.67 7,177,077.45 3,638,215.00 3,881,638.19 40,479,244.55 11,293,045.04 22,090,000.00 16,045,321.54 12,430,000.00 38,414,371.82 192,923,386.22 371,074,621.76
— — — — — — — — — — — — — Other (Continued)
decrease 9,945,550.50
— — — — — has been 464,300.00 962,200.00 451,100.00 Amount that within 1 year 1,476,042.41 2,400,000.00 1,551,724.14 1,006,403.66 3,958,480.45 reclassified to due
— — — — in this year 613,571.43 571,428.57 281,785.00 1,349,688.23 1,006,403.68 in other income Amount recorded
— — — — — — — — — From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Other increase 15,334,609.05 13,923,423.53 14,110,270.80 34,239,130.78 1,477,799.04
— — — — — — this year (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Increase in 5,000,000.00 3,920,000.00 (CONTINUED)
— — Balance Beginning 631,880.00 19,600,000.00 75,885.04 6,614,720.00 9,945,550.50 9,193,955.22 6,831,356.85 10,000,000.00 2,209,063.00 1,443,374.17 8,000,000.00 14,090,000.00 9,426,190.10 940,000.00 6,429,884.79 2,760,000.00 4,904,166.76 10,725,891.51 12,430,000.00 37,987,325.40 9,736,005.51 22,323,021.44 27,673,500.08 205,622,471.50 322,128,672.63 66,046,005.51 74,181,709.31 54,955,693.73 26,380,521.46 9,945,550.50
(continued) Electric Wires & Cables construction project subsidy Project efficiency hydropower Equipment Technology Development Research Center and Demonstration Base Construction Project) subsidy Industrialization of CNC Precision and High-efficiency Shaving Machine Relocation compensation of Pigeon Plant construction subsidy fund Intelligent manufacturing project General relocation compensation Defense military production capacity Wind power project subsidy Government Support Testing Center Total Government subsidies projects Chongqing Finance Bureau (High Project subsidy fund Innovation Technology Award Technical transformation project 2018 turbine chiller test bench Key Technology and Equipment Other government grants Government grants projects Government grants
Deferred revenue Deferred revenue (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 40.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — — — 3,684,640,154.00
3,684,640,154.00 Total
— — — — — 1,100,187,470.00 1,100,187,470.00 shares non-restricted Total (Continued)
— — — — — 1,100,187,470.00 shares H listing Overseas 1,100,187,470.00
Non-restricted shares Non-restricted — — — — — —
—
— — — — — 2,584,452,684.00
2,584,452,684.00 shares restricted Total
Chongqing Construction Engineering Group Co., Ltd. Co., Group Engineering Construction Chongqing — — — — — 232,132,514.00 232,132,514.00
Chongqing Yufu Assets Management Co., Ltd. Co., Management Assets Yufu Chongqing — — — — — 232,132,514.00 232,132,514.00
China Huarong Asset Management Co., Ltd. Co., Management Asset Huarong China — — — — — 195,962,467.00 195,962,467.00
— — — — — 1,924,225,189.00 CQMEHG 1,924,225,189.00
shareholdings — — — — — — —
Restricted shares – state-owned legal person person legal state-owned – shares Restricted
Items balance new shares new donation Subtotal Others shares into balance
Beginning Beginning Share Share Issue converted funds Ending Ending
Reserved Reserved
Changes in current period (+ or -) or (+ period current in Changes
Share capital Share 41.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
358 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 359
Ending balance (Continued) 50,311,968.20 65,478,679.20
(15,166,711.00)
—
— From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Increase Decrease
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) balance Beginning 49,744,935.00 9,061,503.00 8,494,469.80 64,911,646.00 9,061,503.00 8,494,469.80 (15,166,711.00)
under original standard Total Items Others Capital reserve transferredCapital Capital Reserve
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 42.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
,8,2.041418 ,3,9.9359,099.00 6,338,199.09 481,481.89 8,361,900.98 1,183,121.00 25,897,349.00 (2,079,985.00) 27,977,334.00 31,052,427.09 income comprehensive other Total
— 719,541.75 — — 719,541.75 20,022,992.00 — 20,022,992.00 currencies foreign 20,742,533.75
Translation differences of financial statements in in statements financial of differences Translation
— 4,234,206.34 — — 4,234,206.34 (8,715,772.00) — (8,715,772.00) investment net (4,481,565.66) (Continued)
Effective portion of hedging gain or loss on on loss or gain hedging of portion Effective
,0,2.0(,7,8.0 45850)(594,830.64) (475,865.00) (2,079,985.00) 1,604,120.00 assets financial available-for-sale — — (118,965.64) (475,865.00) —
Gain or loss from fair value changes of of changes value fair from loss or Gain
— — 292,762.24 1,658,986.00 1,951,748.24 2,275,625.00 — method 2,275,625.00 equity under loss or profit 616,639.00
investee that can be reclassified into into reclassified be can that investee
Including: Including: Other comprehensive income of the the of income comprehensive Other
516950 209950)1,0,8.06,310,665.69 13,106,980.00 (2,079,985.00) loss 15,186,965.00 or profit into reclassified be ,8,2.013766 4,953,748.09 173,796.60 1,183,121.00 — 16,877,607.09
Other comprehensive income that can can that income comprehensive Other 2. 2.
0,8.9134410 359,099.00 1,384,451.00 307,685.29 — 2,051,235.29 12,790,369.00 — 12,790,369.00 plan benefit 14,174,820.00
from recalculation of defined defined of recalculation from
Including: Including: Changes in net assets or net liabilities liabilities net or assets net in Changes
0,8.9134410 359,099.00 1,384,451.00 307,685.29 — 2,051,235.29 12,790,369.00 — 12,790,369.00 loss or profit into reclassified 14,174,820.00
Other comprehensive income that cannot be be cannot that income comprehensive Other 1.
2017 Items Guidelines Guidelines Pre-tax amount Pre-tax tax expenses tax loss or the Company the shareholders 2018
December 31 Instruments Instruments Instruments Instruments Less: Income Income Less: profit to income shareholders of of shareholders non-controlling non-controlling December 31
New Financial Financial New New Financial Financial New comprehensive comprehensive attributable to to attributable attributable to to attributable
Effects by by Effects Balance under under Balance of previous other other previous of After-tax amount amount After-tax After-tax amount amount After-tax
Reclassifications Reclassifications
Less: Less:
Current period Current
Other Comprehensive Income Comprehensive Other 43.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS FINANCIAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
360 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 361
Ending balance (Continued)
334,373,473.12 334,373,473.12
— —
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Increase Decrease
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) balance Beginning 297,517,132.00 36,856,341.12 297,517,132.00 36,856,341.12
as a net investment hedging for US subsidiary. On 31 December December 31 On subsidiary. US for hedging investment net a as surplus reserves is accounted for 10% of annual net profit and and profit net annual of 10% for accounted is reserves surplus Complying with the Company Law of the PRC and Association of the Company, Complying with the Company Law statutory The Group’s partial borrowings in US dollar amounting to USD11,500,000.00 are borrowings in US dollar amounting The Group’s partial designated 2018, the fair value of the loan was approximately RMB79,002,874.34. The The RMB79,002,874.34. approximately was loan the of value fair the 2018, corresponding the into borrowings the translating from arising gain exchange in recognized RMB4,234,206.34, is 2018 December 31 on currency functional other comprehensive income. not allowed to withdraw when statutory surplus reserves is accumulated to to accumulated is reserves surplus statutory when withdraw to allowed not are reserves surplus statutory Approved capital. share of 50% than less no net of 10% per As capital. equity increase or deficit the cover to available accounted is profit of the Company in 2008 year, the statutory surplus reserves RMB36,856,341.12 (2017 year: RMB20,845,494.00).
Total Item Statutory surplus reserves Surplus Reserves Other Comprehensive Income Other Comprehensive Note:
Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 44. 43.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — Last year 306,794.00 20,845,494.00 316,644,903.00 128,962,406.00 2,551,313,941.00 2,717,844,150.00 2,551,313,941.00 (Continued)
444,498.50 36,856,341.12 444,060,837.38 110,539,204.62 Current period (305,543,321.33) (305,543,321.33) 2,412,300,828.67 2,708,521,621.81 2,717,844,150.00
(CONTINUED) revised CAS
Retroactive adjustment due to adoption of According to 2017 shareholder annual general meeting of the Company held on According to 2017 shareholder annual and approved the Company 2017 annual 28 June 2018, the meeting deliberated per share (including tax), total dividend of profit distribution scheme of RMB0.03 issued 3,684,640,154 shares. RMB110,539,204.62 on the basis of Including:
Beginning balance of current year Add: Net profit attributable to shareholders of the Company Add: Net profit attributable to shareholders of Appropriation to staff bonus and welfare Less: Appropriation to statutory reserve Declared ordinary share dividends Ending Balance Items Ending balance of last year Ending balance of last Add: Adjustment of beginning balance
Retained Earnings
Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 45.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
362 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 363 Cost 81,550.00 (Continued)
Last period Revenue 1,460,108.00 73,763,913.67 10,380,310.00 639,160,169.00 595,549,833.00 9,292,602,679.67 8,156,604,885.00 8,578,218,489.00 7,550,593,192.00
Cost From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Current period (CONTINUED) Revenue 400,393.61 118,839.98 68,548,323.06 9,317,288.09 94,688,037.44 47,633,474.33 5,284,317,532.90 4,038,473,326.74 5,120,680,778.79 3,981,403,724.34
Interest income, transaction fees and commission income are derived from Interest income, transaction fees and transaction fees and commission the Finance Company. Interest expense, Company. expense are related to costs of Finance
commission income Interest Transaction fees and Other operations Total Main operations Items Operating revenue & operating cost Operating revenue Note:
Operating Revenue & Operating Cost Operating Revenue (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 46.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— Cost Last period 8,578,218,489.00 8,578,218,489.00
(Continued)
Last period Revenue 929,122,807.02 919,601,879.22 1,399,061,010.01 1,118,351,973.35 3,740,143,180.67 2,997,439,934.25 8,578,218,489.00 7,550,593,192.00 4,368,137,105.34 4,354,403,163.62 152,068,379.26 Current period
5,120,680,778.79 4,968,612,399.53
Cost
(continued) Current period Revenue (CONTINUED) 214,442,571.61 200,545,493.67 100,025,914.06 100,114,034.10 1,554,276,462.55 1,197,167,985.44 3,451,987,658.69 2,683,804,279.33 5,120,680,778.79 3,981,403,724.34
segments The revenue and cost of the industrial services do not include the revenue The revenue and cost of the industrial and cost of Financial Company.
elimination between
business business Industrial services Less: Clean energy equipment Items Total Items Total
High-end intelligent equipment Recognized at a certain point in time Recognized over time O basis: Breakdown of revenue
Note:
Operating Revenue & Operating Cost Operating Revenue (2) segment on presented are cost operating and revenue perating (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 46.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
364 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 365 Cost Last period 2,426,141.00 (Continued) 10,380,310.00 10,380,310.00 49,305,711.00 22,032,061.67 73,763,913.67
Last period Revenue 25,202,835.00 10,661,302.00 22,812,192.00 20,472,297.00 17,750,929.00 4,841,927.00 639,160,169.00 595,549,833.00 573,394,213.00 559,574,307.00 9,317,288.09 9,317,288.09 2,647,332.13 51,620,672.27 14,280,318.66 68,548,323.06 Current period
— Cost From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued)
— (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Current period (CONTINUED) Revenue 38,215,704.68 24,340,126.74 94,688,037.44 47,633,474.33 20,469,583.24 6,238,741.88 36,002,749.52 17,054,605.71
Offer loans & advances Deposits in central bank installation Others Including: Absorbing deposit Interest expense Evaporative cooling Including: Deposits in other banks or financial institutes Interest income Items Total Items Rental income Sold material Interest income & interest expense Other operating revenue and operating cost: Other operating
Operating Revenue & Operating Cost Operating Revenue (5) (4)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 46.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 926,648.87 689,657.24 502,430.00 Last period Last period 9,290,797.00 7,930,590.00 3,851,711.48 6,201,569.00 60,847,167.00 62,898,173.00 59,412,241.00 51,382,192.00 33,410,509.00 13,647,018.00 13,500,826.00 14,190,331.00 20,756,270.00 11,265,977.00 33,124,380.41 282,134,154.00 (Continued)
998,932.10 784,793.14 5,061,250.87 9,606,231.04 4,016,705.05 5,567,612.79 1,325,043.54 63,485,555.23 78,162,691.75 60,587,671.96 60,406,589.32 20,906,156.65 17,226,637.88 10,262,208.08 17,745,930.23 15,799,221.50 13,441,516.13 39,743,041.00 298,156,677.80 Current period Current period
(CONTINUED) Total Items Total Items Employee benefits Traveling expenses “3-Aspect-Warranty” fee After-sale service fee Advertising expense Business entertainment fee Transportation expense Housing property tax Land use tax Urban maintenance and construction tax Educational surcharge General office expenses Stamp duty Depreciation expenses Rental fee Others Others Selling and Distribution Expenses Business taxes and surcharges Business taxes and
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 48. 47.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
366 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 367 50,432.44 Last period 8,197,879.00 9,142,904.65 7,036,097.00 2,981,703.05 (Continued)
66,373,559.72 12,214,041.28 27,646,084.00 12,875,148.00 17,861,969.00 10,033,860.00 98,391,069.86 673,214,052.00 400,409,304.00
31,215.08 7,175,755.96 6,263,947.85 1,333,313.94 38,495,573.97 17,732,601.86 17,082,538.97 17,187,564.74 11,817,943.44 11,343,083.48 10,981,975.45 69,850,359.76 513,983,557.96 304,687,683.46 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) consulting fee includes 2018 annual financial statements auditing fee fee auditing statements financial annual 2018 includes fee consulting Current RMB2,264,150.94 and interim financial statement reviewing fee RMB566,037.74.
Total Items Employee benefits Amortization of intangible assets Rental fee Consulting fee Repair charges General office expenses Depreciation expenses Insurance expenses Traveling expenses Business entertainment fee Amortization of long-term deferred expenses Transportation fee Others Administrative expenses Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 49.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — 8,786.00 844,758.87 874,613.75 Last period Last period 9,414,204.00 6,830,970.00 9,108,300.63 2,263,339.64 2,252,006.30 2,845,411.42 (2,434,516.00) 99,848,642.00 33,916,852.00 17,728,904.00 92,522,424.88 65,652,316.85 22,348,467.66 198,720,426.00 156,512,148.00 113,181,092.00 (Continued)
— 304,973.51 290,879.05 (385,989.60) 7,309,967.53 8,385,829.95 5,738,778.99 3,388,265.55 3,332,926.86 3,296,937.92 1,309,995.27 24,398,707.53 38,473,948.90 60,633,343.08 37,031,375.57 128,937,348.85 240,974,839.39 185,191,000.86 160,792,293.33 117,566,507.15 Current period Current period
(CONTINUED) Total Items Total Items Interest expenditure Less: Capitalized interest Government grants Interest expense Add: Exchange loss Less: interest income Add: Other expenditure Employee benefits Material fee Depreciation expenses Less: Finance discount Design fee Consulting fee Traveling expenses Amortization of intangible assets Business entertainment fee General office expenses Others Financial Expenses Research and Development Expenses Research and Development
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 51. 50.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
368 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 369 — — — — — Last period Last period Last period (Continued)
42,865,524.00 70,662,653.00 113,528,177.00
— (109,704.27) (109,704.27) 5,645,210.29 76,668,574.02 19,704,902.99 76,668,574.02 14,059,692.70 Current period Current period Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Impairment loss on loans and advances Total Item Total Items Total Items Impairment loss on inventory Bad debts loss Financial assets at fair value through profit or loss Bad debts loss Gain and loss arising from the changes in fair value Impairment loss on credit Loss on Impairment of Assets Loss on Impairment
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 54. 53. 52.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — 200,779.00 Last period 4,959,927.00 360,840,184.00 106,783,008.00 472,783,898.00 (Continued)
— (84,208.00) 536,755.49 48,530,857.59 369,941,950.32 418,925,355.40 Current period
(CONTINUED) 7 September 2018, the Company held the fourth board meeting that that meeting board fourth the held Company the 2018, September 7 14 November 2018, CQMEHG issued the approval (CQMEH [2018] No. No. [2018] (CQMEH approval the issued CQMEHG 2018, November 14 186) regarding Chongqing General Industry (Group) Co. Ltd. listed transferring 186) regarding Chongqing General shares. Ltd. Co. Equipment Refrigeration General Midea Chongqing of 10% General Industry (Group) Co. Ltd. that The approval agreed that Chongqing Ltd. Co. Equipment Refrigeration General Midea Chongqing of 10% holds Group Holding Exchange Equity and Assets Chongqing at list open shares million. At Co. Ltd., with trading value no less than valuation of RMB 6,128.65 Midea of 10% Ltd., Co. Group Holding Exchange Equity and Assets Chongqing General shares selling price is RMB 6,712.28 million. The Company recognized Midea of disposals from RMB42,283,946.40 of income investment equity General shares. On On agreed the Company to use 41.5% of Chongqing Youyan shares to increase agreed the Company to use 41.5% of Chongqing Youyan shares to Co. (Beijing) Material New Powder Youyan for shares exchange and capital On Ltd. (short for “Beijing Youyan”) to acquire 7.26% of Beijing Youyan shares. Company 17 October 2018, CQCMHG issued approval to the Company. The of disposals from RMB6,246,911.19 of income investment equity recognized Chongqing Youyan shares.
equity investments during holding period financial assets under equity method Investment income from disposals of long-term Investment income from disposals of long-term
Investment income from available-for-sale financial assets Investment income from available-for-sale Others Investment income from disposals of available-for-sale Investment income from disposals of available-for-sale Total Items Investment income from long-term equity investments Investment income from Investment Income
Note 1: Note Note 2: Note
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 55.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
370 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 371
— — — — Last period 1,245,930.00 8,470,297.00 1,375,884.00 profit and loss (Continued) 33,249,771.00 14,678,747.00 59,020,629.00 in extraordinary
Amount recorded
Last period 1,103,542.12 4,647,019.63 6,555,900.00 7,000,000.00 15,826,463.00 52,450,246.50 11,977,181.31 47,000,000.00 28,621,504.61 15,063,571.87 11,652,409.38 240,368,367.00 100,360,500.73 240,368,367.00 100,360,500.73 224,541,904.00 47,910,254.23 133,621,128.92 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 52,450,246.50 47,910,254.23 100,360,500.73 100,360,500.73 Current period (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED) plant and equipment assets Gains on disposals of intangible Gains on disposals of property, manufacturing of over-height impact type hydroturbine which are not classified as held for sale Others Stable subsidy
Innovative development project grants Renovation and transformation project grants Tax returns Relocation grants R&D grants Other grants Digital workshop of new model for core components Total Items Total Items Including: Gains on disposals of non-current assets Other Income Gains on Disposals of Assets Gains on Disposals
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 57. 56.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
3,812,547.03 profit and loss in extraordinary Amount recorded
(Continued)
— Last period 5,521,385.00 4,794,696.19 2,218,716.00 2,664,347.68 1,288,593.00 4,605,898.05 9,028,694.00 15,877,488.95
4,794,696.19 2,664,347.68 3,812,547.03 4,605,898.05 15,877,488.95 Current period
(CONTINUED) compensation Others Government grants Penalty incomes, default fine and Items Total Debt restructuring Non-operating income details: Non-operating
Non-operating Income (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 58.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
372 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 373 — Revenue Revenue Revenue Revenue
Related with asset/revenue — (Continued)
Bureau CQCJ [2018] No. 58 regarding special fund budget for the first intellectual property in 2018 Liangzhou District Industry and Information Bureau, Jinjiang district Finance Bureau Liangzhou District Industry and Information Bureau — Notice issued by Chongqing Finance Jiangjin District Finance Bureau, Jiangjin District Finance Bureau, Shapingba District Finance Bureau
Source —
— — — — From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Last period 2,218,716.00 2,218,716.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
— (CONTINUED) 50,000.00 42,450.00 355,600.00 2,216,297.68 2,664,347.68 Current period (continued) grants grants Others Intellectual Property Office Other grants Government reward Shapingba District Financial Total Items Government grants details: Government grants
Non-operating Income Non-operating Income (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 58.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
— — — 40,000.00 Last period 8,506,043.95 profit and loss in extraordinary (34,459,020.00) (34,459,020.00) 136,912,412.00 136,912,412.00 102,453,392.00 Amount recorded
(Continued)
— — 267,153.85 642,499.00 3,306,129.52 Last period 2,080,366.00 1,769,145.39 2,409,567.00 3,314,140.14 1,721,683.74 5,281,726.76 3,560,043.02 15,302,047.00 20,434,479.00 16,935,459.00 54,951,347.03 55,218,500.88 60,500,227.64 Current period
— 40,000.00 1,769,145.39 3,314,140.14 8,506,043.95 3,306,129.52 16,935,459.00 Current period
(CONTINUED)
Because the Company has no taxable income in HK, there is no income tax Because the Company has no taxable income in HK, there is no income from HK in the current period.
and relevant provision – United Kingdom – China – China – United Kingdom Deferred income tax
Current income tax calculated according to tax law Items Total
Income tax expense
Note: non-current assets
Items Total Donation expenditure for Commonweal Relocation loss Loss from rejection and damage of Others Debt restructuring Penalty and overdue fine Income Tax Expense Non-operating Expenses
(1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 60. 59.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
374 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 375 — — — — — Last period 1,375,884.00 28,860,689.00 27,484,805.00 (Continued)
— 16,590,617.52 36,289,709.51 35,000,000.00 80,744,216.08 531,538,013.11 121,963,101.53 240,950,368.47 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) or pay other cash related with operating, investment and and investment operating, with related cash other pay or Total Items Received government grants Tax returns Collection and payment funds Guarantee fee Interest income Loans Others Cash received relating to other operating activities Cash received relating to other
Receive financing activities a)
Cash Flow Statement Other Comprehensive Income Other Comprehensive (1) Please refer to VI. 43 Other Comprehensive Income for details. 43 Other Comprehensive Income Please refer to VI.
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62. 61.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — — — — Last period Last period 67,647,430.00 15,735,344.00 51,912,086.00 551,131,450.00 110,684,268.00 440,447,182.00
(Continued)
— 5,264,371.55 2,184,239.39 40,383,641.43 10,667,121.01 67,122,800.00 428,307,039.39 605,794,412.50 110,171,546.12 439,307,732.39 359,000,000.00 Current period Current period
(CONTINUED) (continued) or pay other cash related with operating, investment and and investment operating, with related cash other pay or Items Items Total Total Increased restricted cash and cash equivalent Period expenses by cash Returned deposit Collection and payment funds Others Interest income Withdrawing funds Government grants related with assets Funds for selling Midea General Cash paid relating to other operating activities Cash paid relating to other operating Cash received relating to investment activities Cash received relating to investment
financing activities (continued) financing activities b) Receive c)
Cash Flow Statement Cash Flow Statement (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
376 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 377 — — — — Last period Last period 5,360,000.00 (Continued) 144,405,831.00 139,045,831.00
— — 48,194,021.94 33,923,650.00 14,270,371.94 340,256,690.38 340,256,690.38 Current period Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) or pay other cash related with operating, investment and and investment operating, with related cash other pay or Total Items Items Total Non-controlling shareholders capital injection Supply funds to the related party Prepay land deposit Receive from financial lease Bills discounted Cash paid relating to investment activities Cash paid relating to investment Cash received relating to financing activities Cash received relating to financing
Receive financing activities (continued) financing activities d) e)
Cash Flow Statement Cash Flow Statement (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — — Last period 36,607,449.00 178,675,901.00 142,068,452.00
(Continued)
— 12,032.67 5,980,000.00 84,915,416.50 37,037,717.80 41,885,666.03 Current period
(CONTINUED) (continued) or pay other cash related with operating, investment and and investment operating, with related cash other pay or Items Total Purchase non-controlling stocks Pay for financial lease Guarantee commitment fee Increased restricted cash and cash equivalent Others Cash paid relating to financing activities Cash paid relating to financing
financing activities (continued) financing activities f) Receive
Cash Flow Statement Cash Flow Statement (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
378 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 379 — — — — — — — Last period 3,373,355.00 93,017,672.00 28,227,363.00 52,568,947.00 (Continued) (34,459,020.00) 113,528,177.00 930,406,388.00 366,018,894.00 205,386,505.00
(240,368,367.00) (797,848,026.00) (472,783,898.00) (315,661,553.00) (1,527,102,489.00)
— — 109,704.27 4,527,499.34 (2,479,826.43) 19,704,902.99 81,642,837.38 76,668,574.02 11,887,798.50 34,798,750.50 46,016,844.00 (91,854,456.78) (11,537,993.46) 685,648,864.72 495,171,833.01 180,919,078.41 169,034,583.90 Current period (418,925,355.40) (298,586,106.82) (562,745,117.25) (256,716,740.14)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) (gain listed as “–”) (gain listed as “–”) operating activities of depletion of oil and gas assets, depreciation productive biological assets intangible assets and other long-term assets ains or losses on changes in fair value (gain listed as “–”) as listed (gain value fair in changes on losses or ains Depreciation of property, plant and equipment, Depreciation of property, plant and equipment, Add: Impairment loss on credit Losses on retirement of property, plant and equipment Losses on retirement of property, plant and equipment
Reconciliation of net profit to cash flows from Reconciliation of net profit to cash flows Others Net cash flows from operating activities Increase in contractual liabilities (decrease listed as “–”) Add: Provisions for asset impairment Amortization of investment property G Net profit Financing expenses (gain listed as “–”) Investment losses (gain listed as “–”) Increase in deferred tax liabilities (decrease listed as “–”) Decrease in inventories (increase listed as “–”) Decrease in deferred tax assets (increase listed as “–”) Decrease in contractual assets (increase listed as “–”) Decrease in operating receivables (increase listed as “–”) Amortization of intangible assets Amortization of long-term deferred expenses Losses on disposal of property, plant and equipment, Losses on disposal of property, plant and equipment, Increase in operating payables (decrease listed as “–”)
1. Items Supplementary information to the consolidated cash flow statement information to the consolidated Supplementary
Cash Flow Statement Cash Flow Statement (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. — — — — — 815,653.00 Last period 29,055,717.00 (218,400,825.00) 1,174,539,298.00 1,173,723,645.00 1,174,539,298.00 1,392,940,123.00 1,174,539,298.00 Beginning balance
(Continued)
— — — — — — 879,802.59 395,804,097.06 Current period 1,174,539,298.00 1,570,343,395.06 Ending balance 1,570,343,395.06 1,569,463,592.47 1,570,343,395.06
(CONTINUED) (continued) information to the consolidated cash flow statement statement flow cash consolidated the to information company or subsidiaries of the Company Restricted cash and cash equivalent in parent
bill receivable endorsement Add: Ending balance of cash equivalents Less: Beginning balance of cash equivalents Net increase in cash and cash equivalents Less: Beginning balance of cash Significant non-cash investing and financing activities: Significant non-cash investing and financing Property, plant and equipment acquired under Changes in cash and cash equivalents: Ending balance of cash
Cash Bank deposits available for use on demand Including: Cash in hand Cash equivalents Including: Bond investment due within three months Ending balance of cash and cash equivalents Including: Items 2. 3. Items Cash and cash equivalents (continued) Supplementary
(3) Cash Flow Statement Cash Flow Statement (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 62.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
380 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 381 (Continued)
Statutory reserve And Deposit pledged as collateral, etc. Reason Note 1 Note 2
Deposits for bank acceptance bills,
amount From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 148,398,276.85 134,000,618.49 590,268,488.45 of net carrying Ending balance
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) subsidiary of the Company Machine Tools Group raises a loan of of loan a raises Group Tools Machine Company the of subsidiary 0,000,000.00 RMB and the bank acceptance bill amount of 30,000,000.00 30,000,000.00 of amount bill acceptance bank the and RMB 0,000,000.00 Jiangsu Chengfei, a subsidiary of the Group, mortgage sits its first phase plant Jiangsu Chengfei, a subsidiary of the Jiangsu to obtain the loan with amount of to Dongru sub-branch of Bank of 4 RMB (the loan term is from 8 Jun 2018 to 7 Jun 2019, and the contract interest RMB (the loan term is from 8 Jun 2018 rate is 5.0025%); RMB295,000,000.00 in Jiangsu Bank Dongru Branch (final maturity: 2015.3.10- RMB295,000,000.00 in Jiangsu Bank Group Tools Machine rate). interest benchmark the above 2% 2023.2.15, C Nanpingzutun Chayuan-Lujiao district Nan’an in located mortgages the plot section No. C15/1-03 to Agricultural Bank of China Yubei Branch. The
Buildings Land-use rights Cash and cash equivalent Items Restricted Assets of Ownership Restricted Assets Note 2: Note Note 1: Note
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 63.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
CNY balance 76,669.84 76,669.84 202,182.32 34,155,002.27 19,039,277.56 68,463,932.82 95,523,391.69 116,674,400.00 128,618,490.76 114,371,659.07 147,495,400.00
(Continued)
— — — — — — — — rate 6.8632 16,031,670.85 7.84738.6762 4,672,925.27 13,373,736.31 0.8762 6.8632 16,031,670.85 7.84738.6762 4,672,925.27 13,373,736.31 0.8762 8.6762 16,837,036.76 6.8632 116,674,400.00 8.67626.8632 58,623,560.21 9,638,190.29 7.8473 7.84736.86328.6762 13,837,448.57 38,737,321.55 42,948,621.57 8.6762 128,618,490.76 8.6762 114,371,659.07 8.6762 147,495,400.00 0.06189 2,202,240.80 Exchange Ending balance
— — — — — — — — Foreign 87,502.67 87,502.67 25,764.57 595,481.92 595,481.92 2,335,888.63 1,541,427.85 2,335,888.63 1,541,427.85 1,940,600.35 6,756,824.44 1,404,328.93 1,763,338.80 5,644,207.01 4,950,165.00 35,584,869.20 17,000,000.00 14,824,288.37 13,182,229.44 17,000,000.00 currency balance
(CONTINUED) Currency USD EUR GBP HKD USD EUR GBP GBP JPY USD GBP USD EUR EUR USD GBP GBP GBP GBP
Equivalents — Report items Cash and Cash Accounts receivable — Prepayments — Short-term loan — Advances — Accounts payable — Other Payables — Other receivables — Long-term loans Foreign currency monetary items Foreign currency
Foreign currency monetary items Foreign currency (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANCIAL 64.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
382 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 383
— Net profit at 17,660,867.76 disposal date (Continued)
— — Net asset at disposal date
100.00 100.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December ratio (%) Shareholding
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Dissolved Reason
Dissolved Developments Ltd Smelting Co., Ltd. PTG Advanced Company name Chongqing Huahao Business Combination under Common Control Business Combination in the scope of consolidation Companies that are not longer included Business Combination not under Common Control Business Combination
None. None.
CHANGES IN CONSOLIDATION SCOPE CHANGES IN 2. 3. 1.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VII.
Xinjiang Xinjiang Ltd. Co.,
(Continued)
10 Invest 51.00 — 500.00 picking cotton of Service district, Tacheng district, services Tacheng picking Cotton Baotian Fu 4.2
equipment
of automatic and intelligent intelligent and automatic of
manufacturing and selling selling and manufacturing Chongqing Chongqing Ltd. Co., Solutions Factory
Consultation, designation, designation, Consultation, district, Nan’an district, Smart Nan’an Sino-Germany Chongqing 4.1
00 Invest 40.00 — 10,000.00
machines Chongqing Chongqing Ltd. Co.,
Invest — 100.00 59,424.13 gear-cutting of Manufacturing district, Nan’an distirct, (Group) Nan’an Tools Machine Chongqing 4
control
electronic information product information electronic
under common common under
communication products and and products communication Chongqing Chongqing Ltd. Co., Technology
combinations combinations
Manufacturing of mobile mobile of Manufacturing district, Nan’an district, Nan’an Electronic Unication Chongqing 3.1
66.26 Business Business 66.26 — 5,431.24
Chongqing
control
Chongqing
district, Ltd. Co., district, Manufacturing Intelligent
under common common under
district, district,
combinations combinations products
Northern new new Electronic Northern & Machinery Chongqing 3
Northern new new Northern
Business Business — 100.00 10,161.04 industry of Manufacturing
etc.
nonferrous metals and alloy, alloy, and metals nonferrous Chongqing Chongqing
Manufacturing and selling of of selling and Manufacturing district, Qijiang Ltd. district, Co. Qijiang Smelting Huahao Chongqing 2
Invest — 100.00 6,133.54
(“CAFF”)
& Steering System Co., Ltd. Ltd. Co., System Steering &
and components and Chongqing Chongqing
Chongqing CAFF Automotive Braking Braking Automotive CAFF Chongqing 1
Manufacturing of vehicle parts parts vehicle of Manufacturing district, Yubei district, Yubei 3200 100.00 23,280.00 Invest —
Name of subsidiaries of Name No.
location
method Indirect Direct (RMB’0000) business of Nature registration
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure Group (1)
1. Interests in Subsidiaries in Interests
INTERESTS IN OTHER ENTITIES OTHER IN INTERESTS VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
384
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 385
(Continued)
control
under common common under
combination not not combination
United Kingdom United Kingdom Production of screw of Production Kingdom United Kingdom United Ltd. Components Precision 5.1 100.00 Business Business 100.00 — 1 GBP
control
under common common under
combination not not combination
United Kingdom United Kingdom Shell company Shell Kingdom United Kingdom United Limited (PTG) 5 Business Business — 100.00 million GBP20
control
under common common under
combination not not combination screw Chongqing Chongqing Ltd. Co., Manufacturing
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 100.00 Business Business 100.00 — selling 4,000.00 and manufacture Design, district, Nan’an district, Rotors Nan’an Precision Holroyd Chongqing 4.7
Chongqing Chongqing Ltd. Co., Manufacture
0.0Invest 100.00 — tools 110.00 machinery of Manufacturing district, Nan’an district, Nan’an Machinery Shengong Chongqing 4.6
Chongqing Chongqing Ltd. Co., Founding
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
0.0Invest 100.00 — goods 1,870.40 foundry of Manufacturing district, Jiangjin district, & Jiangjin Forging Yinhe Chongqing 4.5
Chongqing Chongqing Ltd. Co., Factory
0.0Invest 100.00 — tools 8,000.00 machinery of Manufacturing district, Nan’an district, Tools Nan’an Machine 2 No. Chongqing 4.4
gear-cutting machines gear-cutting Chongqing Chongqing
Chongqing Tool Factory Co., Ltd. Jiangjin district, district, Jiangjin Ltd. Co., Factory Tool Chongqing 4.3 Manufacturing of cutting tools for for tools cutting of Manufacturing district, Jiangjin 0.0Invest 100.00 — 6,000.00
Name of subsidiaries of Name No.
location
Nature of business of Nature registration method Indirect Direct (RMB’0000)
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure structure Group (1) (continued)
Interests in Subsidiaries Subsidiaries in Interests 1. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII.
control under common common under
(Continued)
combination not not combination
United Kingdom United Kingdom Manufacturing of machine tools machine of Manufacturing Kingdom United Kingdom United Limited. Precision HoIroyd 5.7 100.00 Business Business 100.00 — GBP100
equipment Ltd. Company
0.0Invest 100.00 — and HKD600000 materials export and Import Kong Hong Kong Hong Development Investment PTG 5.6
control
under common common under
combination not not combination
100.00 Business Business 100.00 — 25000 EUR tools machinery of Selling Germany Germany GmbH Deutschland PTG 5.5
control
under common common under
combination not not combination 2018
PTG Advanced Developments Ltd. United Kingdom United Kingdom Shell company, dissolved in April April in dissolved company, Shell Kingdom United Kingdom United Ltd. Developments Advanced PTG 5.4 100.00 Business Business 100.00 — GBP1
control
under common common under
combination not not combination
United Kingdom United Kingdom Leasing of properties of Leasing Kingdom United Kingdom United Ltd. Investments Milnrow 5.3 100.00 Business Business 100.00 — 198 GBP
control
under common common under
machine tools machine combination not not combination
PTG Heavy Industries Ltd. Industries Heavy PTG 5.2 United Kingdom United Kingdom Design and manufacture of of manufacture and Design Kingdom United Kingdom United 100.00 Business Business 100.00 — 2 GBP
Name of subsidiaries of Name No.
location
Nature of business of Nature registration method Indirect Direct (RMB’0000)
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure structure Group (1) (continued)
Interests in Subsidiaries Subsidiaries in Interests 1. (continued)
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
386
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 387
turbine machinery products machinery turbine Chongqing Ltd Co., Technology
00 Invest 40.00 of — 3,000.00 maintenance and Detection district Nan’an district, Nan’an Turbine Chongtong Chongqing 8.2
(Continued) Ltd.
Air Conditioning Equipment Co., Co., Equipment Conditioning Air
water cooling unit cooling water Chongqing
Chongqing Chongtong Wide Wisdom Wisdom Wide Chongtong Chongqing 8.1
20 Invest 42.00 — manufacturing 3,000.00 and Designation district Nan’an district, Nan’an
machinery Chongqing Chongqing Ltd. Co.,
Invest — 100.00 51,509.01 general of Manufacturing district, Nan’an district, (Group) Nan’an Industry General Chongqing 8
Chongqing Chongqing Ltd. Co.,
00 Invest 50.00 — 680.00 product tubular PPR\PPC district, Changshou district, Materials Changshou Electric Pigeon Chongqing 7.2
Chongqing Chongqing Ltd Co., Porcelain
0.0Invest 100.00 — 5,300.00 porcelain electrical Manufacture district, Changshou district, Changshou Electrical Pigeon Chongqing 7.1
cables Chongqing Chongqing
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Invest — 74.00 and 10,010.00 wires electric Manufacture district, Yubei district, Yubei Wire Pigeon 7
generators Chongqing Chongqing Ltd.
Invest — 100.00 14,709.71 power of Manufacturing district, Jiangjin Co., district, Works Jiangjin Turbine Water Chongqing 6 Company (US HPR) (US Company
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
The United States The United States Manufacturing of screws of Manufacturing States United The States Rotors United and The Screw Precision Holroyd 5.8.1.1 0.0Invest 100.00 — USD1
plant US) (PTG Limited
The United States The United States First class SPV built for American Invest American 100.00 for — built SPV USD1,000 class First States United The States United Group(US) The Technologies Precision 5.8.1
Limited (US Holding) (US Limited plant
Precision Technologies Group (US) (US) Group Technologies Precision 5.8 United Kingdom United Kingdom First class SPV built for American American for built SPV class First Kingdom United Kingdom United 0.0Invest 100.00 — GBP1
Name of subsidiaries of Name No.
location
Nature of business of Nature registration method Indirect Direct (RMB’0000)
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure structure Group (1) (continued)
Interests in Subsidiaries Subsidiaries in Interests 1. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII.
Chongqing Ltd. Co., Chongqing machine
10 Chongqing Gas Compressor Factory Factory Compressor Gas Chongqing Shapingba district, district, Shapingba Shapingba district, district, Shapingba Manufacturing of gas compression compression gas of Manufacturing Invest — 100.00 18,721.39
Chongqing Chongqing
9 Chongqing Pump Industry Co., Ltd. Shapingba district, district, Shapingba Ltd. Co., Industry Pump Chongqing Shapingba district, district, Shapingba Invest — 100.00 19,641.15 pumps of Manufacturing construction
(Continued) Tong Kang Water Affairs Co., Ltd Co., Affairs Water Kang Tong Chongqing Chongqing
engineering environmental
8.5 Chongqing General Industry (Group) (Group) Industry General Chongqing Tongnan district, district, Tongnan Tongnan district, district, Tongnan Sewerage treatment and and treatment Sewerage
0.0Invest 100.00 — 1,000.00
Electrical Equipment Co., Ltd. Co., Equipment Electrical Chongqing Chongqing apparatus for general machine general for apparatus
8.4 Chongqing Shunchang General General Shunchang Chongqing Nan’an district, district, Nan’an Nan’an district, district, Nan’an Manufacturing of general electric electric general of Manufacturing 0.0Invest 100.00 — 100.00
Control
under Common Common under
Combination not not Combination Equipment Co., Ltd. Co., Equipment equipment
8.3.5 Business Business Xilinhaote Chenfei Wind-Power Wind-Power Chenfei Xilinhaote Xilin, Neimeng Xilin, Neimeng Manufacturing of wind-power wind-power of Manufacturing Neimeng Xilin, Neimeng Xilin, 91.18 — 5,000.00
Equipment Jiangsu Co., Ltd. Co., Jiangsu Equipment Jiangsu Jiangsu equipment
8.3.4 Chongtong Chengfei Wind Power Power Wind Chengfei Chongtong Rudong district, district, Rudong Rudong district, district, Rudong Manufacturing of wind-power wind-power of Manufacturing 11 Invest 91.18 — 10,000.00
Material Co., Ltd. Co., Material equipment
8.3.3 Gansu Chongtong Chengfei New New Chengfei Chongtong Gansu Gansu province Gansu province Manufacturing of wind-power wind-power of Manufacturing province Gansu province Gansu 11 Invest 91.18 — 5,000.00
Material Co., Ltd Co., Material equipment
8.3.2 Chongqing Chongtong Chengfei New New Chengfei Chongtong Chongqing Manufacturing of wind-power wind-power of Manufacturing Chongqing Chongqing 11 Invest 91.18 — 5,000.00
Material Co., Ltd.-Wuwei branch Ltd.-Wuwei Co., Material equipment
8.3.1 Jilin Chongtong Chengfei New New Chengfei Chongtong Jilin Jilin province Jilin province Manufacturing of wind-power wind-power of Manufacturing province Jilin province Jilin 11 Invest 91.18 — —
Control
under Common Common under
Combination not not Combination Material Co., Ltd. Co., Material equipment Jilin
8.3 Business Business Jilin Chongtong Chengfei New New Chengfei Chongtong Jilin Jilin province Baicheng district, district, Baicheng province Jilin Manufacturing of wind-power wind-power of Manufacturing 91.18 — 15,265.62
Name of subsidiaries of Name No.
location
Nature of business of Nature registration method Indirect Direct (RMB’0000)
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure structure Group (1) (continued)
Interests in Subsidiaries Subsidiaries in Interests 1. (continued)
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
388 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 389
(Continued)
already transferred relevant assets to the Company and completely dissolved on 17 December 2018. December 17 on dissolved completely and Company the to assets relevant transferred already
Smelting to transfer its assets to the Company with the manner of paying a debt by assets. Huahao Smelting has has Smelting Huahao assets. by debt a paying of manner the with Company the to assets its transfer to Smelting
on the disposal of dissolved assets of Chongqing Huahao Smelting Co. Ltd.. The approval agrees Huahao Huahao agrees approval The Ltd.. Co. Smelting Huahao Chongqing of assets dissolved of disposal the on
Pursuant to August 31 2017, CQMEHG issued the approval (CQMEG [2017] No. 141) regarding the agreement agreement the regarding 141) No. [2017] (CQMEG approval the issued CQMEHG 2017, 31 August to Pursuant Note:
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
Company Limited (“CMEFC”) Limited Company
Chongqing
Electronics Holding Group Finance Finance Group Holding Electronics
Chongqing
district, district,
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts district, Chongqing Machinery and and Machinery Chongqing 13
Northern new new Northern
Chongqing
Northern new new Northern
Chongqing
Invest — 70.00 60,000.00 service financial Provide district, district, Ltd.
district, district,
Northern new new Co., Northern Materials Shengpu Chongqing 12
Northern new new Northern Academy Co., Ltd. Co., Academy
Sales of machinery materials machinery of Sales ,4.0100.00 2,140.50 Invest — Chongqing
Control Equipment Technology Research Research Technology Equipment
Chongqing
district, district,
under Common Common under
district, district,
Chongqing Machinery & Electronic Electronic & Machinery Chongqing 11
Combination Combination
Northern new new Northern
Northern new new Northern
Business Business Provision of engineering services engineering of Provision ,0.0100.00 3,000.00 —
Name of subsidiaries of Name No.
location
Nature of business of Nature registration method Indirect Direct (RMB’0000)
business Major
of Place
Acquisition (%) Acquisition Shareholding capital
Registered Registered
Group structure structure Group (1) (continued)
Interests in Subsidiaries Subsidiaries in Interests 1. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII.
Ending interest balance of 86,194,988.68 Total liabilities 229,672,056.89 Total liabilities 2,807,649,911.91 2,151,128,233.03 non-controlling
— — — (Continued) liabilities
liabilities Decrease of minority Non-current other equity Non-current shareholders
— Current Current liabilities liabilities Dividends to minority distributed shareholders
Ending balance Beginning balance to minority attributable Total assets Profit or loss Total assets shareholders (CONTINUED)
assets assets interest Beginning balance of Non-current Non-current non-controlling
(%) 30.00 213,776,286.00 15,895,770.89 26.00 68,072,697.00 41,832,969.82 22,010,397.03 1,700,281.11 (continued) assets assets Current Current of minority shareholders Shareholding 678,202,765.87 237,419,837.13 915,622,603.00 534,778,643.66 21,073,762.58653,366,000.36 555,852,406.24 239,168,133.33 892,534,133.69 571,462,649.62 26,556,077.37 598,018,726.99 3,561,731,413.37 11,492,021.37 3,573,223,434.74 2,807,649,911.91 2,853,994,763.13 9,721,089.76 2,863,715,852.89 2,151,128,233.03
Name of subsidiaries Name of subsidiary CMEFC Pigeon Wire Pigeon Wire CMEFC Name of subsidiaries Pigeon Wire CMEFC Significant partly-owned subsidiaries Significant partly-owned Key financial information of significant partly-owned subsidiaries Key financial information of significant
Interests in Subsidiaries Interests in Subsidiaries (2) (3)
INTERESTS IN OTHER ENTITIES INTERESTS 1.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
390 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 391 activities Cash flows from operating
Total (Continued) income
comprehensive
Last period Net profit
revenue Operating 112,356,931.00 50,590,996.00 50,590,996.00 (190,699,635.00) 1,459,492,246.00 80,037,654.00 80,037,654.00 86,915,245.00
Cash From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December activities operating flows from
(CONTINUED)
Total income (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts comprehensive
Current period Net profit (continued)
revenue Operating restriction of using assets and paying off debts of the the of debts off paying and assets using of restriction 116,794,872.98 52,985,902.97 52,985,902.97 280,151,764.97 1,379,182,051.07 156,449,705.68 156,449,705.68 31,482,524.00
Company has no structured entity included in the scope of of scope the in included entity structured no has Company Name of subsidiaries CMEFC Pigeon Wire Others Provide financial or other support to structured entity included in the Provide financial or other support scope of consolidated financial statements The Significant Key Company None. consolidated financial statements. (continued) On 31 December 2018, all the subsidiary companies do not issue share On 31 December 2018, all the subsidiary companies do not capital or debt securities.
Interests in Subsidiaries Interests in Subsidiaries (5) (6) (4) (3) subsidiaries partly-owned significant of information financial
INTERESTS IN OTHER ENTITIES INTERESTS 1.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII.
Vehicles (Chongqing) Ltd (Chongqing) Vehicles valves Chongqing Chongqing
Knorr-Bremse Systems for Commercial Commercial for Systems Knorr-Bremse Manufacturing and sale of commercial vehicle vehicle commercial of sale and Manufacturing District, Yubei District, Yubei Equity method Equity — 34.00
pump Chongqing Chongqing
(Continued)
Manufacturing and sale of clutch and clutch clutch and clutch of sale and Manufacturing District, Nanan District, Nanan Co.,Ltd (Chongqing) EXEDY Equity method Equity — 27.00
insulator
transformer, UHV AC transformer, sets of of sets transformer, AC UHV transformer, Chongqing District, Chongqing District,
Power transformer, reactor, HVDC converter converter HVDC reactor, transformer, Power Jiulongpo Huayan, Jiulongpo Huayan, S.r.l Power Gen Water
Equity method Equity — 49.00
machinery and its systems its and machinery Chongqing Chongqing
Manufacturing and sale of large separation separation large of sale and Manufacturing District, Jiangbei Yufu, District, Jiangbei Yufu, Machinery Jiangbei Chongqing Equity method Equity — 41.00
metal products metal
processing, metal powder and its products, products, its and powder metal processing,
metal, non-ferrous metal alloys and rolling rolling and alloys metal non-ferrous metal,
Qijiang, Chongqing Qijiang, Chongqing Manufacturing and selling: non-ferrous non-ferrous selling: and Manufacturing Chongqing Qijiang, Chongqing Qijiang, 2] [Note Youyan Chongqing
Equity method Equity — 41.50
insulator
transformer, UHV AC transformer, sets of of sets transformer, AC UHV transformer, Chongqing District, Chongqing District,
Power transformer, reactor, HVDC converter converter HVDC reactor, transformer, Power Jiulongpo Huayan, Jiulongpo Huayan, ABB Chongqing
Equity method Equity — 37.80
Joint ventures— Joint
and high-horse power engines in China in engines power high-horse and Chongqing Chongqing
Largest professional manufacturer of heavy-duty heavy-duty of manufacturer professional Largest District, Shapingba District, Shapingba Cummins CQ Equity method Equity — 50.00
— — — — — — Associates—
joint venture joint
of business of
or associates of Name
Nature of business of Nature registration method Indirectly Directly
place Principal
of Place
Accounting (%) Accounting shareholding
of Proportion
Significant joint ventures or associates or ventures joint Significant (1)
Interests in Joint Ventures or Associates or Ventures Joint in Interests 2.
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
392
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 393
issued approval to the Company and equity exchange is completed in the current year. current the in completed is exchange equity and Company the to approval issued
Ltd. (short for “Beijing Youyan”) to acquire 7.26% of Beijing Youyan shares. On 17 October 2018, CQCMHG CQCMHG 2018, October 17 On shares. Youyan Beijing of 7.26% acquire to Youyan”) “Beijing for (short Ltd.
of Chongqing Youyan to increase capital and exchange shares for Youyan Powder New Material (Beijing) Co. Co. (Beijing) Material New Powder Youyan for shares exchange and capital increase to Youyan Chongqing of
On 7 September 2018, the Company held the fourth board meeting that agreed the Company to use 41.5% 41.5% use to Company the agreed that meeting board fourth the held Company the 2018, September 7 On
(Continued) 2: Note
equity transfer is completed in the current year. current the in completed is transfer equity
10% of Chongqing Midea General Refrigeration Equipment Co. Ltd. shares open list at Chongqing Assets and and Assets Chongqing at list open shares Ltd. Co. Equipment Refrigeration General Midea Chongqing of 10%
Equipment Co. Ltd. shares. The approval agreed that Chongqing General Industry (Group) Co. Ltd. that holds holds that Ltd. Co. (Group) Industry General Chongqing that agreed approval The shares. Ltd. Co. Equipment
General Industry (Group) Co. Ltd. listed transferring 10% of Chongqing Midea General Refrigeration Refrigeration General Midea Chongqing of 10% transferring listed Ltd. Co. (Group) Industry General
On 14 November 2018, CQMEHG issued the approval (CQMEH [2018] No. 186) regarding Chongqing Chongqing regarding 186) No. [2018] (CQMEH approval the issued CQMEHG 2018, November 14 On 1: Note
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
Co., Ltd Co., Chongqing Chongqing
Chongqing Shenjian Automotive Drive Part Part Drive Automotive Shenjian Chongqing Automobile transmission Automobile District, Nanan District, Nanan Equity method Equity 35.00 —
Chongqing Chongqing
Sales of gas of Sales District, District, Yubei Yubei Ltd Co. engineering gas Chongqing Equity method Equity 20.00 —
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
Chongqing Chongqing
Manufacturing of centrifugal refrigerator centrifugal of Manufacturing District, Nanan District, Nanan 1] [Note Tongyong Midea Equity method Equity 10.00 —
and other auto parts auto other and
Chongqing Chongqing leaf spring, auto air suspension, guide arm arm guide suspension, air auto spring, leaf
Hongyan Yubei District, District, Yubei Yubei District, District, Yubei Development, manufacturing and sales of car car of sales and manufacturing Development,
Equity method Equity — 44.00
joint venture joint
of business of
or associates of Name
Nature of business of Nature registration method Indirectly Directly
place Principal
of Place
Accounting (%) Accounting shareholding
of Proportion
Significant joint ventures or associates associates or ventures joint Significant (1) (continued)
Interests in Joint Ventures or Associates Associates or Ventures Joint in Interests 2. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII.
— — period Beginning balance/Last 6,953,862.68 50,781,568.37 95,735,756.71 512,901,875.00 270,604,937.37 253,495,662.00 253,495,662.00 518,048,828.00 518,048,828.00 348,023,204.00 348,023,204.00 696,046,408.47 1,664,415,654.00 2,177,317,529.00 1,430,489,552.15 1,481,271,120.52 2,808,684,784.22
(Continued)
— — CQ Cummins Ending balance/ (3,295,125.65) 98,737,620.94 708,145,201.70 462,610,362.85 177,446,963.62 302,582,956.35 643,793,524.17 106,272,641.02 643,793,524.17 360,896,119.24 360,896,119.24 721,792,238.50 Current period 1,648,014,239.87 2,356,159,441.57 1,535,629,582.13 1,634,367,203.07 2,987,530,210.38
(continued) (CONTINUED) Items Current assets Total assets Non-current assets Including: cash and cash equivalents Current liabilities Non-current liabilities Total liabilities Received dividends from joint ventures Recognized dividends from joint ventures Total comprehensive income Income tax expense Net profit Fair value of investment in joint ventures with public offer Fair value of investment in joint ventures with Operating revenue Carrying amount of equity investment in joint ventures Carrying amount of equity investment in joint Net assets calculated based on shareholding ratio Net assets calculated based on shareholding Non-controlling interest Total equity attributable to shareholders of the Company Total equity attributable to shareholders of the Financial expenses Key financial information of significant joint ventures of significant joint Key financial information
Interests in Joint Ventures or Associates Interests in Joint (2)
INTERESTS IN OTHER ENTITIES INTERESTS 2.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
394 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 395
— balance Beginning 5,983,151.67 6,218,494.34 2,878,647.00 2,878,647.00 5,792,536.00 46,828,862.00 46,828,862.00 17,613,431.00 15,448,273.37 693,384,443.81 113,146,767.00 113,146,767.00 257,151,743.00 230,354,763.00 236,147,299.00 510,912,473.00 132,969,848.00 377,942,625.00
(Continued) — — —
Hongyan Fangda Ending balance 775,213.95 6,148,038.62 4,999,713.72 25,626,268.64 25,626,268.64 19,301,425.49 32,020,557.04 886,441,307.41 123,406,148.77 123,406,148.77 280,468,519.94 236,963,977.99 241,963,691.71 541,733,637.14 132,676,099.77 409,057,537.37
— — — balance Beginning 185,423.97 1,600,832.00 1,504,736.12 8,575,237.82 8,575,237.82 1,600,832.00 39,150,730.00 39,150,730.00 94,339,109.00 10,963,657.00 10,963,657.00 20,783,630.00 19,974,960.36 84,519,136.00 345,781,835.81 105,302,766.00
— — — — — — — — — — — — — — — — — Ending Chongqing Youyan balance 975,250.00 975,250.00 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(continued)
(CONTINUED) — — — balance Beginning 9,993,310.96 4,390,835.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 87,778,353.00 16,320,388.73 66,673,624.00 210,558,170.67 210,558,170.67 298,625,219.00 298,625,219.00 790,013,807.00 818,989,227.00 823,380,062.00 239,860,333.00 1,432,162,889.04 1,613,393,869.00 1,373,533,536.00
ABB — — Ending balance (3,022,324.33) 79,590,988.45 13,149,657.27 72,170,372.38 72,170,372.38 77,650,013.00 32,763,003.35 77,821,301.18 726,597,886.02 248,255,606.76 248,255,606.76 656,760,864.20 667,342,218.79 700,105,222.14 225,401,318.72 1,356,866,086.34 1,131,464,767.62
equivalents Cash and cash joint ventures associates with public offer joint ventures investment in associates on shareholding ratio shareholders of the Company Financial expenses Operating revenue Fair value of investment in
Income tax expense Recognized dividends from Total comprehensive income Net profit
Received dividends from
Carrying amount of equity
Net assets calculated based
Total equity attributable to Non-current liabilities Non-controlling interest Current liabilities Total liabilities Total assets Non-current assets Including: Items Current assets Key financial information of significant associates Key financial information
Interests in Joint Ventures or Associates Interests in Joint (3)
INTERESTS IN OTHER ENTITIES INTERESTS 2.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII. — — — — — — balance Beginning (233,398.37) 1,192,270.73 (5,077,994.29) (5,077,994.29) 97,091,665.00 50,808,049.00 50,808,049.00 14,707,654.18 145,165,854.00 208,569,950.00 208,569,950.00 353,735,804.00 224,406,559.00 129,329,245.00
— — — — — — Chongqing Shenjian Ending balance (Continued)
Automotive Drive Part Co., Ltd 1,794,582.28 5,848,064.08 5,848,064.08 3,090,000.00 8,850,692.52 89,742,246.20 89,742,246.20 155,104,136.95 256,454,912.15 234,709,103.77 231,619,103.77 491,164,015.92 314,438,509.98 176,725,505.94
(continued) — — — — — balance Beginning 447,749.24 (937,009.06) (937,009.06) 5,177,194.93 58,166,434.00 58,166,434.00 12,497,000.00 14,231,525.50 158,271,820.10 141,869,351.22 228,567,088.78 216,070,088.78 370,436,440.00 183,919,459.00 186,516,981.00
— — — — — Ending balance 134,443.95 6,165,527.19 2,068,532.78 2,068,532.78 9,199,952.67 59,014,532.44 59,014,532.44 10,883,000.00 185,118,028.14 143,937,883.99 196,110,758.84 185,227,758.84 340,048,642.83 171,260,225.59 168,788,417.24
(continued)
(CONTINUED) — — balance Beginning 448,032.00 6,020,465.00 6,020,465.00 4,635,729.93 4,129,343.62 5,001,111.78 26,215,563.87 26,215,563.87 78,241,557.00 78,241,557.00 17,250,288.00 510,177,293.33 289,783,544.00 229,488,616.00 212,238,328.00 519,720,192.00 164,885,581.00 354,834,611.00
— — Ending balance 560,676.28 EXEDY (Chongqing) Co., Ltd Chongqing Jiangbei Machinery 3,864,570.09 2,076,426.00 6,860,944.14 7,739,549.17 9,059,424.00 3,575,496.89 20,282,249.09 20,282,249.09 78,029,543.84 78,029,543.84 495,433,219.88 288,998,310.53 177,744,981.60 168,685,557.60 467,303,968.41 138,062,381.42 329,241,586.99
equivalents Cash and cash joint ventures joint ventures associates with public offer investment in associates – Others on shareholding ratio shareholders of the Company
Received dividends from
Income tax expense Recognized dividends from Total comprehensive income Net profit Financial expenses Operating revenue Fair value of investment in
Carrying amount of equity
Net assets calculated based
Total equity attributable to Non-controlling interest Non-current liabilities Total liabilities Current liabilities Total assets Non-current assets Including: Current assets Items Key financial information of significant associates of significant associates Key financial information
Interests in Joint Ventures or Associates Interests in Joint (3)
INTERESTS IN OTHER ENTITIES INTERESTS 2.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
396 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 397
— — — Beginning 6,509,383.00 6,509,383.00 60,515,585.00 (Continued)
balance/Last year
— — — 7,865,510.89 7,865,510.89 Current year 49,810,588.03 Ending balance/
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts – Net profit – Other comprehensive income – Total comprehensive income Items
Associates Total investment par value
Total amounts by shareholding ratio: Contingent liabilities with joint ventures or associates investment None. Excess deficit occurred in joint ventures or associates Excess deficit occurred in joint None. Unconfirmed commitment with joint ventures investment None. Significant restrictions on the capacity of joint ventures or associates Significant restrictions on the the Company to transfer financial funds to None. Financial information of insignificant joint ventures or associates of insignificant joint ventures Financial information
Interests in Joint Ventures or Associates Interests in Joint (7) (8) (6) (5) (4)
INTERESTS IN OTHER ENTITIES INTERESTS 2.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII. (Continued)
(CONTINUED) But foreign exchange risk arises when future commercial transaction transaction commercial future when arises risk exchange foreign But or recognized assets or liabilities are denominated in a currency that is or recognized assets or liabilities are denominated in a currency monitors Group the of department Financial currency. functional entity’s to reduce the scale of foreign currency transactions, assets and liabilities to the the negative impact of risks on the Group business performance or forward exchange contracts Group may sign the There for level. lowest didn’t currency swap contracts. In the year of 2018 and 2017, the Group sign any contracts mentioned above. Foreign exchange risk China. Main business is settled in The Group mainly operates in mainland RMB.
Market risk Significant cooperative operation Significant cooperative financial statements not included in the scope of consolidated Structured entity 1) None. None.
INTERESTS IN OTHER ENTITIES INTERESTS RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS RISKS ASSOCIATED WITH (1) The Group’s business operations face various risks, including market risk (foreign (foreign risk market including risks, various face operations business Group’s The risk), credit risk and liquidity risk. The Group’s basic exchange risk and interest rate of financial market to reduce the negative impact strategy aims at the unpredictability the Group. of risks to the financial results of 4. 3.
IX. VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
398 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 399 — — Total 19,039,277.56 147,495,400.00 128,618,490.76 114,371,659.07 116,674,400.00
(Continued) — — — — — — —
EUR 202,182.32 68,463,932.82 4,672,925.27 34,155,002.27 3,404,403.18 188,678,683.17 13,837,448.57 95,523,391.69 14,039,630.89 556,775,615.27
— — — — — — — — — — — JPY
— — — GBP Ending balance From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 42,948,621.57 58,623,560.21 89,863,030.05 16,837,036.76 2,202,240.80 147,495,400.00 128,618,490.76 114,371,659.07 377,686,072.54
— — — — — — — — — — — HKD (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(continued) – — — — — — USD 9,638,190.29 38,737,321.55 16,031,670.85 76,669.84 13,373,736.31 95,411,249.94 116,674,400.00 165,049,911.84 111,442,920.79 76,669.84 234,445,462.19 2,202,240.80 8,077,328.45 356,244,622.07
(continued) liabilities assets Long-term loans Other payables Accounts payable Other receivables Short-term loans Receipts in Advance Cash and Cash Equivalents Accounts receivable Prepayments Item Total Total Foreign currency financial Foreign currency financial
Foreign exchange risk Foreign exchange The Group’s foreign currency financial assets and liabilities at beginning currency financial assets The Group’s foreign in RMB are as follows: and ending of period presented
Market risk 1)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (1)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX.
— — Total 26,982,669.00 149,246,400.00
— — — — EUR (Continued)
— — GBP 6,695,003.00 44,616.00 7,140,302.00 36,769,406.00 733,455.00 126,585,483.00 26,982,669.00 10,702,117.00 9,717,749.00 137,639,955.00 223,700,592.00 10,451,204.00 440,454,507.00 149,246,400.00
Beginning balance
— — — — — — — — HKD
— — — — USD (continued) 400,683.00 3,103,510.00 81,718.00 38,186,968.00 3,158,990.00 44,531,186.00 89,082,622.00 97,335,017.00 16,163,077.00 81,512,653.00 6,002,757.00 201,013,504.00 93,830,824.00 16,081,359.00 36,630,682.00 2,799,151.00 149,342,016.00 206,302,711.00 117,220,089.00
(continued) liabilities assets one year Accounts payable Receipts in Advance Long-term Loans due within Prepayments Item Total Foreign currency financial Short-term loans Total Foreign currency financial Cash and Cash Equivalents Accounts receivable Foreign exchange risk Foreign exchange As for various US dollar financial assets and liabilities, if RMB devalues or devalues RMB if liabilities, and assets financial dollar US various for As factors rises against US dollar by 1% On December 31,2018, while other by increase or decrease will profit net Group’s the same, the remain RMB321,975.63, which is RMB860,845.00 on December 31, 2017.
Market risk 1)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (1)
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
400 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 401
balance Beginning (Continued) 776,275,000.00
1,540,765,562.00 2,317,040,562.00
Ending balance 915,000,000.00 910,705,132.24 1,825,705,132.24
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) fixed rates expose the Group to fair value interest rate risk. The The risk. rate interest value fair to Group the expose rates fixed Nature of borrowings Total Borrowings at floating rates Borrowings at fixed rates Interest rate risk bearing bank deposits rate risk arises from interest The Group’s interest and borrowings at floating rates expose and borrowings. Bank deposits rate risk. Bank deposits and borrowings the Group to cash flow interest at Group determines the related proportions of its fixed and floating rate rate floating and fixed its of proportions related the determines Group 2017 and During prevailing market conditions. the on depending contracts and borrowings at floating rates were 2018, The Group’s bank deposits HKD, and UKP. The Group currently denominated in RMB, USD, EUROS, interest rate risk. does not hedge its exposure to as are rates fixed at and rates floating at borrowings bank Group’s The follows:
Market risk 2)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (1)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX. (Continued)
(continued) (continued) Financial department of the Group continuously monitors the interest rate. of the Group continuously Financial department increase the cost of new interest-bearing An increasing interest rate will of unpaid interest-bearing debt at debt, as well as the interest expense impact on the financial results of the floating rates, which makes negative latest the to according adjustments make will management The Group. rate swaps to reduce the interest risk. market conditions, such as interest rate interest any make didn’t Group the 2017, and 2018 of year the In swap. at borrowings bank of balance ending the 2018, December 31 On floating rates is RMB915,000,000.00 (which is RMB1,540,765,562.00 on or rates at floating rates increase the borrowing December 31, 2017). If factors remain the same, the Group’s decrease by 50 points, while other by RMB4,575,000.00, which is about net profit will decrease or increase 2017. RMB6,079,250.00 on 31 December Interest rate risk Interest rate risk
Market risk 2)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (1)
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
402 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 403 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Liquidity risk Credit risk The subsidiaries are responsible for their own cash flow forecast, according according forecast, flow cash own their for responsible are subsidiaries The the short- to which the finance department of the Group continuously monitors adequate cash term and long-term capital needs. So that the Group maintains this time same the At time. any at securities available and portfolio reserve loan the of provisions the with compliance monitors continuously department of funds to agreement, obtaining commitment from the main financial institutions meet the short-term and long-term funding requirements. The Group manages credit risk according to credit risk portfolio. Credit risk risk Credit portfolio. risk credit to according risk credit manages Group The other receivable, accounts Equivalents, cash and cash from comes mainly notes receivable, etc. receivables and in state-owned banks and listed banks The Group’s liquid capital is deposited the Group believes that there is no significant of large and medium-scale. So losses due to default by the other units. risk since there will not be significant The risk. credit control to policies relevant formulates Group the Otherwise, of each customer by taking into account its Group assesses the credit quality past parties, third from guarantees obtaining of possibility position, financial as current marketing situation and set the experience and other factors, such credit customer’s the monitors periodically Group The period. credit appropriate collections, written takes Group the credit, poor with customers For record. risk credit overall the ensure to as so period credit the cancels or shortens under control.
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (3) (2)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX. — — Total 5,124,292.21 33,598,400.00 13,156,812.78 221,693,396.99 894,160,000.00 524,445,833.72 558,527,763.23 930,290,350.44 1,111,051,036.81 1,189,834,941.93 2,636,400,832.87 1,522,525,538.63 1,128,945,186.86 1,225,850,904.13 2,164,670,306.18 7,683,019,793.77
— — — — — — — — — — — — — — — — — — (Continued)
— — — — — — — — — — — — — — 2-5 years Over 5 years Ending balance
— — — — — — — — — — — — — 1-2 years 26,514,400.00 7,084,000.00
— — — 5,124,292.21 Within 1 year 75,991,637.84 45,474,486.42 100,227,272.73 34,240,000.00 34,240,000.00 825,680,000.00 79,615,859.24 113,832,117.11 501,840,550.00 301,388,400.00 996,676,926.35 13,156,812.78 524,445,833.72 558,527,763.23 930,290,350.44 1,111,051,036.81 1,148,120,948.78 41,713,993.15 2,636,400,832.87 1,522,525,538.63 1,128,945,186.86 1,225,850,904.13 2,164,670,306.18 5,551,249,903.10 193,546,603.53 1,427,747,822.73 301,388,400.00 7,473,932,729.36 7,607,707,400.62 68,228,393.15 7,084,000.00
(continued) deposits from other banks Long-term payables Bonds payable Long-term loans Receipt of deposits and Long-term receivables Loans and advances Interest payable Other receivables Other payables Accounts receivable Accounts payable Trading financial assets Notes receivable Notes payable Cash and Cash Equivalents Short-term loans Financial assets — Total Total Financial liabilities — Item Liquidity risk
The major financial assets and liabilities held by the Group are analyzed in in analyzed are Group the by held liabilities and assets financial major The obligations without discounting of the remaining contractual terms of the maturity as follows:
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (3)
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
404 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 405 — — Total 92,092,000.00 11,250,751.00 484,802,264.00 152,773,313.00 809,054,101.00 285,429,572.00 868,480,000.00 879,613,461.00 1,092,963,661.37 1,050,640,822.00 2,403,684,040.00 1,479,630,312.00 1,950,028,138.00 1,658,694,663.00 1,701,856,415.00 7,930,478,811.37 (Continued)
— — — — — — — — — — — — — — — — — —
— — — — — — — — — — — — — — — 2-5 years Over 5 years From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Beginning balance
— — — — — — — — — — — — — 1-2 years (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 58,493,600.00 33,598,400.00
— — — Within 1 year 11,250,751.00 71,877,257.00 68,193,699.00 145,358,616.00 34,240,000.00 834,240,000.00 484,802,264.00 152,773,313.00 809,054,101.00 193,204,336.00 42,305,853.00 422,626,616.00 126,555,130.00 784,691,935.00 879,613,461.00 1,053,124,729.75 39,838,931.62 1,050,640,822.00 2,403,684,040.00 1,479,630,312.00 1,950,028,138.00 1,658,694,663.00 1,701,856,415.00 6,135,926,723.00 944,739,552.00 567,985,232.00 126,555,130.00 7,775,206,637.00 7,798,547,879.75 98,332,531.62 33,598,400.00
(continued) deposits from other banks Long-term receivables Receipt of deposits and Loans and advances Other receivables Interest payable Accounts receivable Other payables Notes receivable Accounts payable Other current assets Notes payable Long-term payables Cash and Cash Equivalents Short-term loans Bonds payable Long-term loans Financial assets — Item Total
Total Financial liabilities — Liquidity risk
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) (3)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX. — — Total 123,356.84 5,000,935.37
(Continued)
— — — — Level 3 46,693,061.00 51,817,353.21 46,693,061.00 46,693,061.00
— — — — — — Level 2
— — — Level 1 123,356.84 5,124,292.21 5,000,935.37
investment Total assets Item Financial assets Trading financial assets Including: Equity investment Money fund investment Other equity instrument Assets measured continuously at fair value Assets measured continuously at
On 31 December 2018, assets measured continuously at fair value are are value fair at continuously measured assets 2018, December 31 On as follows: presented according to three levels
FAIR VALUE MEASUREMENT FAIR VALUE (1) The fair value measurement is determined by the lowest level to which the input value, value, input the which to level lowest the by determined is measurement value fair The as a whole belongs to. to the fair value measurement which is significant or active markets for identical assets Quoted prices (unadjusted) in Level 1 inputs: date. entity can access at the measurement liabilities that the are that 1 Level within included prices quoted than other Inputs inputs: 2 Level either directly or indirectly. observable for the asset or liability, for the asset or liability. Level 3 inputs: Unobservable inputs
X. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
406 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 407
— — — — — — — — — Total instrument investment Other equity 46,693,061.00 (Continued)
— — — — Level 3 935.37 assets Trading financial 233,996.48 (109,704.27) (109,704.27) (110,639.64) 152,773,313.00 152,773,313.00 152,773,313.00 152,773,313.00 5,000,000.00 5,233,996.48 46,693,061.00 5,124,292.21 46,693,061.00
— — — —
Level 2 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued)
— — — — (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Level 1
for sale— for sale – Chongqing Iron and steel stock – Purchasing money fund investment – Beijing Youyan Equity – Chongqing Iron and steel stock – Purchasing money fund investment Current period Total assets
Item Equity instrument available Total Profit or Loss for the current period
Beginning balance Increase Financial assets Financial assets available Gain or loss from fair value changes
Ending balance
Assets measured continuously at fair value of current period changes as follows: Assets measured continuously at Assets measured continuously at fair value Assets measured
On 31 December 2017, assets measured continuously at fair value are are value fair at continuously measured assets 2017, December 31 On to three levels as follows: presented according
FAIR VALUE MEASUREMENT FAIR VALUE (2) (1) Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
X.
— — — 536,755.49 536,755.49 2,773,313.00 2,773,313.00 (2,773,313.00) 150,000,000.00 150,000,000.00 152,773,313.00 152,773,313.00 (150,000,000.00) (152,773,313.00) (150,000,000.00) available for sale of financial assets (Continued) Equity Investments
(CONTINUED) new financial accounting standards Item Balance of January 1,2017 Purchase Sale Total gain or loss of current period Gain or loss recognized in profit or loss income Gain or loss recognized in other comprehensive Beginning balance financial accounting standards Other comprehensive income caused by new financial accounting standards Beginning retained earnings caused by new for sale caused by Equity Investments of financial assets available Balance of trading financial assets caused by new financial accounting standards Balance of trading financial assets caused by Sale Total gain or loss of current period Gain or loss recognized in profit or loss Ending balance Assets measured continuously at fair value of current period changes as follows: period changes as follows: continuously at fair value of current Assets measured (continued)
FAIR VALUE MEASUREMENT FAIR VALUE (2)
X. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
408 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 409 34.00% (Continued)
562,411,906.00 252,295,246.00 207,600,793.00 800,000,000.00 3,492,197,900.00 6,777,723,705.00 1,669,889,955.00 10,269,921,605.00 Beginning balance
29.46% 911,696,617.94 843,184,922.99 142,714,020.69 145,701,759.15 800,000,000.00 Ending balance 2,843,297,320.77 6,808,899,644.22 9,652,196,964.99
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts non-current liabilities due within one year Total capital Debt ratio Total liabilities Shareholders’ equity Item Short-term loans Long-term loans Long-term accounts payable Bonds payable Loans of banks and non-bank financial institutions included in CAPITAL MANAGEMENT The capital management strategies aim to guarantee the continuing operations, so so operations, continuing the guarantee to aim strategies management capital The a maintain as while as stakeholders, and shareholders the reward can Group the that to reduce capital cost. perfect capital structure the rearrange could Group the structure, capital the adjusting or maintaining For or sell shareholders, issue new shares shareholders, return capital to dividend paid to assets to reduce the debt. capital requirements from the outside. It takes The Group is not subject to mandatory total is ratio debt The capital. the control and inspect to ratio debt of advantage long-term loans, short-term of total a is borrowing Total capital. total to borrowing bonds payable and loans of banks and non-bank loans, long-term accounts payable, included in non-current liabilities due within one year. financial institutions which are borrowing and shareholders’ equity. Total capital is the sum of total ratio is as follows: The ending and beginning debt
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XI.
52.22 Voting 52.22 Ending rights (%) balance Beginning proportion 184,288.50
52.22 (Continued) —
52.22 Shareholding proportion (%) Ending Decrease
proportion Shareholding proportion (%) capital
184,288.50 Registered (RMB’0000) —
balance Increase Beginning 199,919.48
owned assets authorized by Chongqing SASAC Management of state-
Business nature balance Ending balance Shareholding amount Beginning 184,288.50 199,919.48
of Huangshan Avenue, New North Zone, Chonqing No. 60 Middle Section Place of Registration
CQMEHG CQMEHG Controlling shareholder Controlling shareholder and ultimate controlling party Controlling shareholder CQMEHG Controlling Shareholder and Ultimate-controlling Party and Ultimate-controlling Controlling Shareholder Registered capital of the controlling shareholder (Unit: RMB’0000) Registered capital of the controlling Shareholdings attributable to controlling shareholders
Controlling Shareholder and Ultimate-controlling Party and Ultimate-controlling Controlling Shareholder (1) (2) (3)
RELATED PARTIES 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION AND RELATED-PARTY RELATED PARTIES (I)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
410 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 411
(Continued)
Relationship with the Group Joint venture Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate of a subsidiary Associate of a subsidiary
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) refer to “VIII.8.1. (1) Group structure” for information about about information for structure” Group (1) “VIII.8.1. to refer ease refer to “VIII.8.2. (1) Significant joint ventures or associates” for for associates” or ventures joint Significant (1) “VIII.8.2. to refer ease Joint venture or associates Chongqing Cummins Engine Co., Ltd. Chongqing ABB Power Transformer Co. Ltd. Chongqing Jiangbei Machinery Co. Ltd. Knorr-Bremse Systems for Commercial Vehicles (Chongqing) Ltd. Chongqing Hongyan Fangda Automotive Suspension Co. Ltd. EXEDY Chongqing Co. Ltd. Chongqing Youyan Smelting New Material Co., Ltd. Water Gen Power S.r.l Shenzhen Chongfa Cummins Engine Co., Ltd EXEDY (Guangzhou) Driving System Co., Ltd. EXEDY (Beijing) Auto Parts Co., Ltd. Jinan Fangda Chongtan Automotive Suspension Co., Ltd. Chengdu Red Rock Fangda Automotive Suspension Co., Ltd. Chongqing Gas Engineering Co., Ltd. Chongqing Shenjian Automotive Drive Part Co., Ltd. Joint Ventures and Associates Pl Subsidiaries Please information about joint ventures and associates. The other joint ventures or information about joint ventures in current or previous period with associates that entered into transactions the Group are addressed below. subsidiaries.
RELATED PARTIES RELATED PARTIES 2. 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
(Continued)
of parent company of parent company Under the same control A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company Relationship with the Group Parent company Associate of a subsidiary A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company A subsidiary of parent company Under the same control A subsidiary of parent company
(continued) Electronic Microcredit Co. Ltd. Chongqing Jianan Instrument Co. Ltd. Chongqing Crane Works Co. Ltd. Ltd. Chongqing Standard Fasteners Industrial Co. Electromechanical secondary school of Chongqing Chongqing Jinmei Property Management Co., Ltd. Chongqing Electrical Science Research Institute Chongqing Heavy Vehicle Special Truck Co. Ltd. Chongqing Liangjiang New Area Machinery &
CQMEHQ Other related parties Shandong Xinhai Finance & Guarantee Co., Ltd. CQMEHG Asset Management Co. Ltd. Chongqing Heavy-Duty Truck Group Co., Ltd. Chongqing General Machinery Industry Co. Ltd. CQMEHG Casting Co. Ltd. Co. Ltd.Chongqing Special Type Electrical Machine Factory Chongqing Bosen Electrical Group Co. Ltd. Associate of parent company Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
412 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 413
(Continued)
of parent company of parent company Associate of parent company A subsidiary of parent company Associate of parent company Associate of parent company Associate of a subsidiary Associate of a subsidiary A subsidiary of parent company Associate of parent company A subsidiary of parent company Associate of parent company Associate of parent company Associate of parent company Under the same control Relationship with the Group Under the same control
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (continued) Briggs & Stratton (Chongqing) Engine Co., Ltd. Chongqing Changjiang Bearing Co. Ltd. Co., Ltd. Chongqing Zhongche Changke Railway Vehicles Chongqing Electric Machine Federation Ltd. Chongqing Jinmei Communication Co., Ltd. Kunlun Financial Leasing Co., Ltd. Chongqing Kangjia Electronics Co., Ltd. Chongqing Kangjia Auto Electronic Co., Ltd. Chongqing Heavy Automobile Group Transportation Co., Ltd. Associate of parent company Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. SAIC-IVECO Hongyan Commercial Vehicle Co. SAIC Fiat Powertrain HongYan Co., Ltd. Chongqing Anji Red Rock Logistics Co.,Ltd. Chongqing Xinan Computer Co. Ltd. Other related parties Technology Co. Ltd.CQMEHG Mechanical & Electrical Engineering company A subsidiary of parent Chongqing Metallurgical Copper Ltd. Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
(Continued)
of parent company of parent company of parent company of parent company of parent company Under the same control Relationship with the Group Associate of a subsidiary Associate of a subsidiary Associate of a subsidiary Associate of parent company Associate of a subsidiary Associate of a subsidiary A subsidiary of parent company Under the same control Under the same control Under the same control
(continued) (continued) Development Co. Ltd. Automobile Spring Co. Ltd. (Group) Co.Ltd Chongqing Shuangqiao Hongyan Automobile Real Estate Chongqing Shuangqiao Hongyan Automobile Property Co. Ltd.Chongqing Hongyan Automobile Engineering Under the same control Chongqing Heavy Automobile Group Hongyan Chongqing Heavy Automobile Group Kafu Parts Co., Ltd.
Other related parties Ltd. Chongqing Dencare Oral Care Products Co., Ltd. Chongqing Union Property Right Exchange Co., Ltd. Chongqing Qineng Electricity & Aluminum Co., Chongqing Ankai Bus Co., Ltd. Chongqing Foreign Trade And Economic Cooperation Qijiang Minsheng Rural Bank Co., Ltd. Qijiang Gear Transmission Co. Ltd. Qijiang Gear Factory Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
414 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 415
(Continued)
of parent company of parent company of parent company of parent company of parent company of parent company of parent company of parent company of parent company of parent company Under the same control Under the same control Under the same control Under the same control Under the same control Under the same control Under the same control Under the same control Relationship with the Group Under the same control Associate of parent company Under the same control
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (continued) Appliance Development Company Chongqing Keyi Special Type Electromechanical Electric Chongqing Keyi Special Type Electromechanical Chongqing Feiying Hoisting Equipment Co. Ltd. Co., Ltd. Chongqing Automotive standard parts factory Chongqing Sanling Industry Co., Ltd. Chongqing Huazhan Metal Material Restructuring Co. Ltd. Chongqing Electronics Technology Research Institute Chongqing Mechanical Engineering Design Institute Chongqing Hongzhuan Auto Sales Co., Ltd. Chongqing Shikai Fuel Gas Power Co., Ltd. Chongqing Jidian Property Management Co. Ltd. Chongqing Jidian Property Management Co. Other related parties Chongqing Bosen Electrical Group Switchgear Co. Ltd. Chongqing Bosen Electrical Group Switchgear Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
(Continued)
of parent company of parent company of parent company of parent company of parent company of parent company of parent company Under the same control Associate of parent company Associate of parent company Under the same control Under the same control A subsidiary of parent company Associate of a subsidiary Associate of parent company Associate of parent company Relationship with the Group Under the same control
(continued) (continued) Chongqing Coral Property Management Co., Ltd. Chongqing Coral Property Management Co., CRRC Chongqing Sifang Technology Co., Ltd. Co. Ltd.Chongqing Qichi Automobile Parts and Components Shenzhen Chongfa Cummins Engine Co., Ltd Under the same control Qijiang Qichi Huade Machinery Co., Ltd. Chongqing Zhongqi Construction Design Office Chongqing Heavy Automobile Group Hongqi Property Co. Ltd. control Under the same CQMEHG Electrical Industry Investment Co. Ltd. Chongqing Tianyuan Material Recycling Ltd Ltd. Chongqing General Aviation Industry Group Co. Chongqing General Aircraft Industry Co. Ltd. Company LimitedCAFUC Chongqing General Aviation Training Under the same control Chongqing Juntong Automobile Co. Ltd. Other related parties Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
416 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 417
(Continued)
of parent company of parent company of parent company of parent company of parent company Associate of a subsidiary A subsidiary of parent company A subsidiary of parent company Under the same control Associate of a subsidiary Associate of parent company Associate of parent company Under the same control Relationship with the Group Associate of a subsidiary Under the same control Under the same control
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (continued) Development Co. Ltd. SAIC-IVECO Hongyan Cheqiao Co. Ltd. Chongqing Military Industry Group Co. Ltd. Ltd. Chongqing Heavy Vehicle Special Truck Co. CompanyChongqing Machinery Industrial Supply and Marketing Under the same control Real Estate Chongqing Shuangqiao Hongyan Automobile Ltd. Chongqing Qichi Heavy Automobile Fittings Co., Chongqing Xitong Electric Co. Ltd. Chongqing Zili MachineWorks Chongqing Rail transportation industry Investment Ltd Qijiang Qichi Forge Co. Ltd.
China Heavy Automobile Finance Co., Ltd. Apparatus Co. Ltd.Chongqing Bosen Electrical Group High Voltage A subsidiary of parent company Chongqing Yuzhu Taixing Film Plating Co., Ltd. Other related parties Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
(Continued)
of parent company of parent company of parent company of parent company Under the same control Under the same control Associate of parent company Associate of a subsidiary Associate of a subsidiary Associate of a subsidiary Under the same control Relationship with the Group Under the same control
(continued) (continued) Metal Material Restructuring Branch Chongqing High Strength Fasteners Factory Chongqing Fuye Trading Company Chongqing Qingjia Electronics Co., Ltd. Shandong Xinhai Investment Co., Ltd Chongqing Jinxing Co., Ltd. Chongqing Qichi High-tech casting Co., Ltd. Qijiang Qichi Xinxin Welfare Co. Ltd. Chongqing Standard Fasteners Industry Co. Ltd. Huazhan Chongqing Standard Fasteners Industry Co. Ltd. Other related parties Other Related Parties Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
418 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 419 — — — — — 615,956.00 792,797.00 Last period 2,081,216.00 1,209,737.00 4,060,498.00 (Continued)
412,000.00 169,700.00 328,403.43 2,875,400.77 6,753,144.31 1,247,006.30 4,288,012.69 6,882,127.32 7,285,901.65 10,034,244.19 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Pricing methods and decision-making procedures Agreed Price (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Transactions Purchases
New Material Co., Ltd. Industry Co. Ltd.* Group Switchgear Co. Ltd.* Group Co. Ltd.* Transformer Co. Ltd.* Co. Ltd.* Industrial Co. Ltd.* Federation Ltd. Co. Ltd.* Chongqing Youyan Smelting Chongqing General Machinery Chongqing Bosen Electrical Chongqing Bosen Electrical Chongqing Crane Works Co. Ltd.* Chongqing Chongtong Power Chongqing Standard Fasteners Related parties Chongqing Electric Machine Chongqing Juntong Automobile Chongqing Xinan Computer Other Related Parties
RELATED PARTY TRANSACTIONS RELATED PARTY 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. 149,552.00 250,649.00 Last period 7,388,342.00 9,957,823.00 61,712,938.00 35,206,368.00
(Continued) — — — — —
40,275,940.66 Current period
Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Pricing methods and decision-making procedures (continued)
Purchases Purchases Purchases Purchases Purchases Transactions
(continued)
The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter14A of the Listing Rules. Logistics Co., Ltd.* Group Kafu Parts Co., Ltd.* Co., Ltd.* casting Co., Ltd.* Group Transportation Co., Ltd.* Chongqing Heavy Automobile Qijiang Qichi Huade Machinery Total Related parties Chongqing Heavy Automobile Chongqing Anji Red Rock Chongqing Qichi High-tech
Other Related Parties Other Related Parties *
RELATED PARTY TRANSACTIONS RELATED PARTY 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts XII.
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
420 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 421
— — — — — — 61,000.00 Last period 1,886,792.45 3,301,940.45 1,354,148.00
(Continued)
— — 34,662.88 173,700.00 1,886,792.45 4,238,777.12 1,609,655.00 1,445,328.11 37,135,620.24 46,524,535.80 Current period
Agreed Price Pricing methods
and decision- making procedures From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Be Guaranteed Agreed Price Purchases Transactions Receiving Services Agreed Price Receiving Services Agreed Price Receiving Services Agreed Price Receiving Services Agreed Price Receiving Services Agreed Price Receiving Services Price Agreed
The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter14A of the Listing Rules. Management Co. Ltd.* Engineering Property Co. Ltd.* Transportation Co., Ltd.* Hongqi Property Co. Ltd.* Co., Ltd. CQMEHQ* Chongqing Heavy Automobile Group Chongqing Hongyan Automobile Chongqing Crane Works Co. Ltd.* Total
Related parties Chongqing West Public Transport Chongqing Jidian Property CQMEHG Asset Management Co. Ltd.* Receiving Services Agreed Price Qijiang Gear Factory* Chongqing Heavy Automobile Group
Receiving services *
RELATED PARTY TRANSACTIONS RELATED PARTY 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — — — Last period 5,461,895.00 9,605,978.00 34,341,012.00 15,755,327.00 40,519,627.00
(Continued)
12,058,685.83 55,779,149.20 96,236,567.29 59,915,083.78 36,646,074.78 14,292,833.95 10,926,076.55 13,964,595.91 10,670,317.36 Current period
Pricing methods and decision- making procedures
(continued) Transactions Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price
industry Investment Ltd* Commercial Vehicle Co. Ltd.* Co. Ltd.* New Material Co., Ltd. Co. Ltd.* Co. Ltd.* Industrial Co. Ltd.* Federation Ltd. Chongqing Crane Works Qijiang Gear Transmission Chongqing Youyan Smelting Chongqing Rail transportation Chongqing Standard Fasteners Chongqing Xinan Computer CQMEHG Casting Co. Ltd.* Sales of Goods Agreed Price Chongqing Electric Machine
Related parties
SAIC-IVECO Hongyan Sale of goods
RELATED PARTY TRANSACTIONS RELATED PARTY 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
422 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 423 999,356.00 724,155.00 177,114.00 161,768.00 481,737.00 Last period 2,229,990.00 3,891,156.00 13,838,249.00 (Continued)
86,466.32 693,081.14 171,891.30 8,148,708.28 4,859,491.87 2,554,574.17 1,355,531.46 10,596,322.59 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Pricing methods and decision- making procedures
(continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Transactions Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price
(continued)
Machinery Co. Ltd. Industry Co. Ltd.* Transformer Co. Ltd.* Automobile Co. Ltd.* for Commercial Vehicles (Chongqing) Ltd. Group Co. Ltd.* Cheqiao Co. Ltd.* & Electrical Engineering Technology Co. Ltd.* Chongqing Juntong CQMEHG Mechanical Chongqing Jiangbei Chongqing General Machinery Chongqing Chongtong Power Knorr-Bremse Systems Chongqing Bosen Electrical
Related parties SAIC-IVECO Hongyan Sale of goods
RELATED PARTY TRANSACTIONS RELATED PARTY 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — Last period 1,854,582.00 1,569,373.00 131,611,319.00
(Continued) — —
6,576.85 45,653.55 339,007,682.18 Current period
Pricing methods and decision- making procedures
(continued) Transactions Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price Sales of Goods Agreed Price
(continued) Automotive The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter14A of the Listing Rules. Bearing Co. Ltd.* Equipment Co. Ltd. Area Machinery & Electronic Microcredit Co. Ltd.* Drive Part Co., Ltd. Chongqing Liangjiang New Chongqing Shenjian Related parties
Midea General Refrigeration Total Chongqing Changjiang
Sale of goods
*
RELATED PARTY TRANSACTIONS RELATED PARTY 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts XII.
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
424 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 425 90,462.00 46,225.00 14,744.00 Last period 2,228,079.00 1,211,093.00 3,590,603.00 (Continued)
— — — — 6,298,894.56 1,091,662.11 7,390,556.67 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Agreed Price Pricing methods and decision- making procedures
(continued)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Service Fee Service Service Service Service Rending of Rending of Administration Rending of Rending of Rending of
Transactions
The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter14A of the Listing Rules. Bearing Co. Ltd.* for Commercial Vehicles (Chongqing) Ltd. Group Co. Ltd.* Fasteners Industrial Co. Ltd.* & Electrical Engineering Technology Co. Ltd.* Engine Co., Ltd. Knorr-Bremse Systems Chongqing Bosen Electrical Chongqing Cummins Chongqing Standard Chongqing Changjiang Total
Related parties CQMEHG Mechanical
Charging administrative fee/rending of service Charging administrative *
RELATED PARTY TRANSACTIONS RELATED PARTY 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
— — — — — — 9,151.00 2,415.00 141,983.00 846,908.00 Last period
(Continued)
377.36 5,444.69 7,067.67 5,278.30 18,909.98 39,109.00 86,037.74 14,948.11 14,837.33 133,301.89 Current period
Pricing methods and decision- making procedures
(continued) Transactions Discount of Bill Agreed Price Service Fee Agreed Price Discount of Bill Price Agreed Discount of Bill Price Agreed Discount of Bill Agreed Price Discount of Bill Price Agreed Discount of Bill Price Agreed Discount of Bill Agreed Price
Co. Ltd.* Co. Ltd.* Transformer Co. Ltd.* Electrical Engineering Technology Co. Ltd.* Industry Co. Ltd.* Co. Ltd.* Truck Co. Ltd.* Chongqing Chongtong Power Chongqing Crane Works Co. Ltd.* Discount of Bill Agreed Price Chongqing Heavy Vehicle Special Qijiang Gear Transmission Co. Ltd.* Discount of Bill Price Agreed CQMEHG Mechanical & Chongqing General Machinery Chongqing Changjiang Bearing
Related parties CQMEHG Casting Co. Ltd.* Chongqing Juntong Automobile CQMEHG Asset Management Fee and commission income Fee and commission
RELATED PARTY TRANSACTIONS RELATED PARTY 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
426 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 427
108.00 20,706.00 23,889.00 28,917.00 23,000.00 13,181.00 13,097.00 50,943.00 17,749.00 34,057.00 219,528.00 Last period
(Continued)
— — — — — — — 94.34 94.34 94.34 188.68 Current period
Pricing methods and decision- making procedures
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Service Fee Agreed Price Service Fee Agreed Price Transactions Service FeeDiscount of Bill Agreed Price Agreed Price Service Fee Agreed Price Discount of Bill Agreed Price Service FeeService Fee Agreed Price Agreed Price
Industry Co. Ltd.* Co. Ltd. Transformer Co. Ltd.* Group Co. Ltd.* Truck Co. Ltd.* Co. Ltd. Chongqing Bosen Electrical Chongqing Xitong Electric Co. Ltd.* Discount of Bill Agreed Price CQMEHG Casting Co. Ltd.* Chongqing Xinan Computer Co. Ltd.* Chongqing Chongtong Power Chongqing Jiangbei Machinery Chongqing Jiangbei Machinery Chongqing Crane Works Co. Ltd.* Service Fee Agreed Price Chongqing General Machinery Chongqing Xitong Electric Co. Ltd.* Service Fee Agreed Price
Related parties Chongqing Heavy Vehicle Special Fee and commission income Fee and commission
RELATED PARTY TRANSACTIONS RELATED PARTY 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
94.00 2,821.00 11,561.00 Last period 1,460,108.00
— — (Continued)
1,792.45 327,576.22 Current period
Pricing methods and decision- making procedures
(continued) (continued) Transactions Service FeeService Fee Agreed Price Agreed Price
The related party transactions above are in accordance with the continuing The related party transactions above related party transactions defined in Chapter14A of the Listing Rules. Co. Ltd.* Electrical Engineering Technology Co. Ltd.* CQMEHG Mechanical & Others Total Related parties Chongqing Changjiang Bearing
Fee and commission income Fee and commission *
RELATED PARTY TRANSACTIONS RELATED PARTY 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
428 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 429 840,926.00 641,159.00 545,207.00 Last period 2,547,772.00 2,980,533.00 2,632,361.00 6,264,868.00 6,279,469.00 4,630,561.00 1,800,308.00 1,055,012.00 12,651,890.00 (Continued)
245,998.42 390,651.81 418,121.07 690,937.61 910,410.75 1,702,488.41 1,095,433.97 2,764,176.49 6,290,826.13 6,332,886.39 7,350,405.66 14,874,642.07 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Pricing methods and decision- making procedures
(continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Transactions Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Price Agreed
Co. Ltd.* Computer Co. Ltd.* Automobile Co. Ltd.* Industrial Co. Ltd.* Transformer Co. Ltd.* Machinery Co. Ltd. Co. Ltd.* Special Truck Co. Ltd.* Bearing Co. Ltd.* Co. Ltd.* Chongqing Jiangbei Chongqing Standard Fasteners Chongqing Chongtong Power Chongqing Crane Works Related parties Chongqing Changjiang Chongqing Heavy Vehicle CQMEHG Casting Co. Ltd.* Loan Interest Agreed Price Chongqing Xitong Electric Chongqing Juntong Chongqing Xinan Qijiang Gear Transmission CQMEHQ* Interest income from loans and advances Interest income
RELATED PARTY TRANSACTIONS RELATED PARTY 6.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — 108,585.00 157,950.00 Last period 3,525,791.00 1,390,300.00 1,253,019.00 49,305,711.00
(Continued) — — —
628,019.18 116,273.58 116,273.58 3,991,546.77 47,919,091.89 Current period
(continued) Pricing methods and decision- making procedures
(continued) Transactions Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price Loan Interest Agreed Price
The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter14A of the Listing Rules. Industry Co. Ltd.* Industry Co. Ltd.* Machinery Co., Ltd.* Industry Group Co. Ltd.* Engine Co., Ltd. Electrical Engineering Technology Co. Ltd.* Co. Ltd.* Total Related parties Chongqing General Aviation Chongqing Cummins Chongqing General Aircraft Chongqing General Machinery CQMEHG Mechanical & Qijiang Qichi Huade Chongqing General Aviation
Interest income from loans and advances Interest income *
RELATED PARTY TRANSACTIONS RELATED PARTY 6.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
430 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 431 — 47,276.00 74,216.00 94,044.00 463,638.00 110,527.00 238,479.00 Last period 2,601,140.00 2,858,012.00 3,159,916.00 (Continued)
81,340.72 167,309.62 938,202.96 216,223.59 156,727.55 154,895.79 1,339,756.27 2,726,718.41 1,907,198.15 1,026,604.01 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Pricing methods and decision- making procedures
(continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Deposit Interest Agreed Price Transactions Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price
Co. Ltd.* Co. Ltd.* Electrical Engineering Technology Co. Ltd.* Special Truck Co. Ltd.* Instrument Co. Ltd.* Co. Ltd.* Machinery Industry Co. Ltd.* Bearing Co. Ltd.* Group Hongyan Automobile Spring Co. Ltd.* Chongqing Xinan Computer CQMEHG Mechanical & CQMEHQ* Related parties CQMEHG Asset Management Chongqing Heavy Vehicle Chongqing Jianan Qijiang Gear Transmission Chongqing General Chongqing Changjiang Chongqing Heavy Automobile Deposit interest payments Deposit interest
RELATED PARTY TRANSACTIONS RELATED PARTY 7.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — — 45,707.00 36,569.00 44,905.00 10,357.00 39,251.00 16,935.00 175,573.00 239,598.00 Last period
(Continued)
35,083.08 75,981.31 31,104.35 79,594.29 24,652.38 22,767.80 16,371.22 16,314.14 13,404.47 12,981.72 11,897.45 Current period
Pricing methods and decision- making procedures
(continued) (continued) Transactions Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price
Industry Group Co. Ltd.* Transformer Co. Ltd.* Fasteners Industrial Co. Ltd.* Group Co. Ltd.* Group Co. Ltd.* Automobile Co. Ltd.* Co., Ltd. Machinery Co. Ltd. Area Machinery & Electronic Microcredit Co. Ltd.* Automotive Drive Part Chongqing Chongtong Power Related parties Chongqing Standard Chongqing Military Industry Chongqing Bosen Electrical Chongqing Juntong Chongqing Jiangbei Chongqing Liangjiang New Chongqing General Aviation CQMEHG Casting Co. Ltd.* Deposit Interest Agreed Price Qijiang Gear Factory* Chongqing Shenjian Deposit interest payments Deposit interest
RELATED PARTY TRANSACTIONS RELATED PARTY 7.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
432 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 433 — — 9,667.00 11,498.00 14,176.00 57,967.00 13,367.00 17,492.00 Last period 10,380,310.00 (Continued)
9,317.66 8,208.34 6,049.15 2,835.16 1,589.03 9,931.73 23,949.10 9,117,009.45 Current period
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December Pricing methods and decision- making procedures
(continued) (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Transactions Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price Deposit Interest Agreed Price
The related party transactions above are in accordance with the continuing The related party transactions above are in accordance with the continuing related party transactions defined in Chapter 14A of the Listing Rules. Co. Ltd.* Co. Ltd.* Co., Ltd.* Automobile Engineering Property Co. Ltd.* Group Switchgear Co. Ltd.* Group Kafu Parts Co., Ltd.* & Electrical Industry Development Co., Ltd. Chongqing Xitong Electric Chongqing Transformer Chongqing Bosen Electrical Total Related parties Chongqing Heavy Automobile Chongqing Hongyan Chongqing Puhui Mechanical Others Chongqing Crane Works
Deposit interest payments Deposit interest *
RELATED PARTY TRANSACTIONS RELATED PARTY 7.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. 217,500.00 Last period Last period Last period 1,205,030.00 5,999,425.00 4,576,895.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00
(Continued)
— — — — — — — — Current period Current period Current period
(continued) Related parties Total Related parties Total Chongqing Jiangbei Machinery Co. Ltd. Chongqing Jiangbei Machinery Co. Ltd. Accepting Providing
Technology Co. Ltd. CQMEHG Mechanical & Electrical Engineering CQMEHG Asset Management Co. Ltd. Related parties Total CQMEHQ Reimbursed expenses Accommodation of funds Accommodation (1)
(2)
RELATED PARTY TRANSACTIONS RELATED PARTY 9. 8.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
434
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 435
defined in Chapter 14A of the Listing Rules. Listing the of 14A Chapter in defined
The related party transactions above are in accordance with the continuing related party transactions transactions party related continuing the with accordance in are above transactions party related The *
Total 17,861,733.41
Co. Ltd.* Co.
(Continued)
Technology Co., Ltd.* Co., Technology Group Electrical
Chongqing Bosen Bosen Chongqing Chongqing Mengxun Electronic Electronic Mengxun Chongqing 773,896.50 Price 2019.3.3 Agreed 2015.3.4 Buildings
Co. Ltd.* Co.
Manufacturing Co., Ltd.* Co., Manufacturing Group Electrical
Chongqing Machinery & Electronic Intelligent Intelligent Electronic & Machinery Chongqing 88,085.71 Price 2023.11.14 Agreed 2018.11.14 Buildings Chongqing Bosen Bosen Chongqing
Manufacturing Co., Ltd.* Co., Manufacturing
601,488.68 Price 2019.5.31 Agreed 2016.6.1 Buildings Chongqing Machinery & Electronic Intelligent Intelligent Electronic & Machinery Chongqing CQMEHQ*
Machinery Complete Plant Co., Ltd.* Co., Plant Complete Machinery
838,464.64 Price 2021.7.31 Agreed 2018.8.1 Buildings Chongqing Machine Tools Group Shengpu Shengpu Group Tools Machine Chongqing CQMEHQ*
Technology Research Academy Co., Ltd.* Co., Academy Research Technology
1,681,199.95 Price 2019.5.31 Agreed 2016.6.1 Buildings Chongqing Machinery & Electronic Equipment Equipment Electronic & Machinery Chongqing From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December CQMEHQ*
Group Finance Co., Ltd.* Co., Finance Group
Chongqing Machinery & Electronics Holding Holding Electronics & Machinery Chongqing CQMEHQ* 2,362,698.81 Price 2018.11.30 Agreed 2016.12.1 Buildings
Co. Ltd.* Co.
Steering Systems Co., Ltd.* Co., Systems Steering Management
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
Chongqing CAFF Automotive Braking & & Braking Automotive CAFF Chongqing 5,362,516.60 Price 2018.12.31 Agreed 2018.1.1 Buildings CQMEHG Asset Asset CQMEHG
Chongqing Machinery & Electric Co., Ltd.* Co., Electric & Machinery Chongqing CQMEHQ* 6,153,382.52 Price 2018.12.31 Agreed 2017.1.1 Buildings
Lessee Leaser Asset class Asset lease of leasing fee leasing of lease current period current
date of of date Pricing method method Pricing of date during during
Starting Starting Ending Ending recognized recognized
Leasing fee fee Leasing
(1)
Associated renting Associated
Associated rental conditions rental Associated 10.
RELATED PARTY TRANSACTIONS TRANSACTIONS PARTY RELATED (II) (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION RELATED-PARTY AND PARTIES RELATED XII. (CONTINUED) period during current 918,596.76 918,596.76 recognized Leasing fee
(Continued)
Pricing method of leasing fee Agreed Price
lease date of Ending
lease date of Starting
(continued) (continued) Buildings 2018.1.1 2019.7.31 Asset class
Youyan Smelting New Material Co., Ltd. Chongqing
Machinery & Electric Co., Ltd. Chongqing Total Leaser Lessee The Group as guarantor None. Associated leasing
Guarantees (2) Associated rental conditions Associated rental (1)
RELATED PARTY TRANSACTIONS RELATED PARTY 11. 10.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
436 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 437
— No No No fulfilled Whether has been guarantee
— (Continued)
Due date
— Starting date
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December amount Guaranteed (continued) 57,600,000.00 2016-3-14 2031-3-14 122,000,000.00 2018-3-14 2026-3-14 800,000,000.00 2016-9-29 2021-9-29 979,600,000.00
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Machinery & Electric Co., Ltd. Machinery & Electric Co., Ltd. Machinery & Electric Co., Ltd. Guaranteed party
CQMEHQ Chongqing CQMEHQ Chongqing CQMEHQ Chongqing Total Guarantor The Group as guaranteed party The Group as guaranteed
Guarantees (continued) (2)
RELATED PARTY TRANSACTIONS RELATED PARTY 11.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
— — — 33,768.00 55,350.00 78,801.00 24,928.00 241,800.00 330,130.00 481,795.00 758,531.00 546,700.00 402,300.00 639,347.00 712,076.00 1,327,603.00 4,044,663.00 7,580,668.00 2,695,846.00 5,035,532.00 2,428,937.00 1,472,196.00 19,282,334.00 17,879,772.00 66,053,077.00 Beginning balance
(Continued)
— — — — — — — — — — — 4,495.00 853,587.94 772,829.26 1,470,774.74 1,618,498.00 4,130,411.33 3,983,055.92 4,594,244.72 4,470,600.67 17,941,949.07 13,326,229.18 25,802,835.01 55,211,902.83 134,181,413.67 Ending balance
Apparatus Co. Ltd. Technology Co. Ltd. Chongqing Bosen Electrical Group High Voltage Chongqing Changjiang Bearing Co. Ltd. Chongqing Qichi Heavy Automobile Fittings Co., Ltd. Chongqing Ankai Bus Co., Ltd. Chongqing Midea General Refrigeration Equipment Co. Ltd. Chongqing Jiangbei Machinery Co. Ltd. Chongqing Huazhan Metal Material Restructuring Co. Ltd. Chongqing Huazhan Metal Material Restructuring Chongqing Shenjian Automotive Drive Part Co., Ltd. SAIC-IVECO Hongyan Commercial Vehicle Co. Ltd. Chongqing Electric Machine Federation Ltd. Chongqing Special Type Electrical Machine Factory Co. Ltd. Chongqing Juntong Automobile Co. Ltd. Water Gen Power S.r.l Chongqing Bosen Electrical Group Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering Chongqing General Machinery Industry Co. Ltd. Total
Qijiang Gear Factory Related parties Chongqing Rail transportation industry Investment Ltd Chongqing Rail transportation industry Investment Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Standard Fasteners Industrial Co. Chongqing Crane Works Co. Ltd. Chongqing Xinan Computer Co. Ltd. SAIC-IVECO Hongyan Cheqiao Co. Ltd. Qijiang Gear Transmission Co. Ltd. Receivable
BALANCES WITH RELATED PARTIES BALANCES WITH 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
438 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 439 — — — — 2,000.00 47,771.00 11,410.00 10,000.00 649,155.00 376,056.00 150,000.00 1,341,455.00 2,429,198.00 2,337,450.00 3,015,430.00 71,213,148.00 68,394,895.00 (Continued) 423,394,968.00 273,417,000.00
Beginning balance
— — — 60,000.00 15,000.00 359,572.99 155,000.00 4,433,105.63 2,039,799.38 1,341,455.00 1,000,000.00 8,800,000.00 3,923,650.00 3,628,770.00 3,557,160.96 2,368,822.27 61,213,147.59 45,855,318.01 138,750,801.83 Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (Chongqing) Ltd. Total
Chongqing Jiangbei Machinery Co. Ltd. Related parties Others Chongqing Qichi Automobile Parts and Components Co. Ltd. Chongqing Qichi Automobile Parts and Components Chongqing Rui Shida Power Technology Co. Ltd. Chongqing Rui Shida Power Technology Co. Chongqing Qichi Ruiante Transmission Co. Ltd. CQMEHQ Chongqing Bosen Electrical Group Co. Ltd. Chongqing Shenjian Automotive Drive Part Co., Ltd. Chongqing Shenjian Automotive Drive Part Co., Chongqing Midea General Refrigeration Equipment Co. Ltd. Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Jidian Property Management Co. Ltd. Chongqing Cummins Engine Co., Ltd. Water Gen Power S.r.l CQMEHG Asset Management Co. Ltd. Qijiang Gear Transmission Co. Ltd. Chongqing Hydro Power Control Equipment Branch Office Chongqing Hydro Power Control Equipment Branch Knorr-Bremse Systems for Commercial Vehicles Knorr-Bremse Systems for Commercial Vehicles Chongqing Changjiang Bearing Co. Ltd. Other receivables
BALANCES WITH RELATED PARTIES BALANCES WITH 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — — — — — 2,590.00 85,333.00 18,717.00 39,900.00 200,000.00 931,524.00 131,076.00 663,000.00 1,872,140.00 1,309,644.00 3,509,644.00 2,000,000.00 Beginning balance Beginning balance
(Continued)
— — — — — — — 20,000.00 833,122.24 391,245.44 341,380.00 900,000.00 100,496.80 530,000.00 246,665.00 200,000.00 3,377,209.20 1,480,544.20 Ending balance Ending balance
(continued)
(Chongqing) Ltd. Knorr-Bremse Systems for Commercial Vehicles Knorr-Bremse Systems for Commercial Vehicles Chongqing Changjiang Bearing Co. Ltd. Chongqing Jiangbei Machinery Co. Ltd. Total CQMEHG Casting Co. Ltd. Total Related parties Chongqing Electric Machine Federation Ltd. Chongqing Crane Works Co. Ltd. Related parties Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Special Type Electrical Machine Factory Co. Ltd. Chongqing Special Type Electrical Machine Factory Chongqing Xinan Computer Co. Ltd. Chongqing Electric Machine Federation Ltd. Chongqing Heavy Automobile Group Kafu Parts Co., Ltd. Chongqing Heavy Automobile Group Kafu Parts Chongqing General Machinery Industry Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. Qijiang Gear Transmission Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Notes receivable Prepayments
4. BALANCES WITH RELATED PARTIES BALANCES WITH 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
440 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 441 6,749.00 10,816.00 31,417.00 41,482.00 45,252.00 75,906.00 77,092.00 99,083.00 355,832.00 103,917.00 154,232.00 374,583.00 393,457.00 482,939.00 1,760,373.00 4,916,566.00 18,447,769.00 20,344,694.00 (Continued) 253,495,662.00 260,528,433.00
Beginning balance Beginning balance
— — — — — — — — — — — — — — 543,956.61 4,816,103.40 19,325,365.24 19,869,321.85 378,631,655.04 383,447,758.44 Ending balance Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Chongqing Youyan Smelting New Material Co., Ltd. Chongqing Youyan Smelting New Material Co., Chongqing Hongyan Fangda Automotive Suspension Co. Ltd. Chongqing Hongyan Fangda Automotive Suspension EXEDY Chongqing Co. Ltd. Total Related parties Qijiang Gear Transmission Co. Ltd. Chongqing Cummins Engine Co., Ltd. Total Related parties Chongqing Juntong Automobile Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Xitong Electric Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Xinan Computer Co. Ltd. Chongqing Crane Works Co. Ltd. Chongqing General Aviation Industry Group Co. Ltd. CQMEHG Casting Co. Ltd. Chongqing Heavy Vehicle Special Truck Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Chongqing Cummins Engine Co., Ltd. Chongqing Jiangbei Machinery Co. Ltd. Interest receivable Dividend receivable
6. BALANCES WITH RELATED PARTIES BALANCES WITH 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — 5,585,560.00 8,951,000.00 49,000,000.00 80,000,000.00 42,000,000.00 91,000,000.00 63,800,000.00 35,000,000.00 30,000,000.00 30,489,025.00 60,000,000.00 86,000,000.00 26,000,000.00 120,000,000.00 361,660,412.00 166,714,135.00 1,074,200,132.00 Beginning balance Beginning balance
(Continued)
— — — — — — — 90,000,000.00 33,200,000.00 33,200,000.00 63,050,000.00 49,500,000.00 16,000,000.00 267,600,000.00 150,000,000.00 307,000,000.00 158,000,000.00 Ending balance Ending balance 1,101,150,000.00
(continued) Total Chongqing General Aviation Industry Group Co. Ltd. CQMEHQ Chongqing Heavy Vehicle Special Truck Co. Ltd. Chongqing Heavy Vehicle Special Truck Co. Chongqing Cummins Engine Co., Ltd. Chongqing Changjiang Bearing Co. Ltd. Qijiang Gear Transmission Co. Ltd. Total Related parties Related parties Qijiang Gear Transmission Co. Ltd. Chongqing Crane Works Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Juntong Automobile Co. Ltd. Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing Jiangbei Machinery Co. Ltd. Chongqing Xitong Electric Co. Ltd. Chongqing Xinan Computer Co. Ltd. CQMEHG Casting Co. Ltd. Loans and advances Long-term receivables
8. BALANCES WITH RELATED PARTIES BALANCES WITH 7.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
442 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 443 — 812.00 40,457.00 68,381.00 25,500.00 17,035.00 618,074.00 267,513.00 635,668.00 480,630.00 2,837,137.00 9,883,188.00 1,284,022.00 3,607,959.00 (Continued)
Beginning balance
— — — — — 17,034.89 23,840.00 2,252,875.91 1,985,766.83 1,839,000.00 1,595,785.00 1,174,098.78 21,682,553.66 12,794,152.25 Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Standard Fasteners Industrial Co. Chongqing Bosen Electrical Group Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. Total Chongqing Heavy Automobile Group Transportation Co.,Ltd. Chongqing Heavy Automobile Group Transportation Related parties Chongqing Midea General Refrigeration Equipment Co. Ltd. Chongqing Midea General Refrigeration Equipment Chongqing Anji Red Rock Logistics Co., Ltd. Chongqing Special Type Electrical Machine Factory Co. Ltd. Chongqing Special Type Electrical Machine Factory Chongqing Electrical Science Research Institute Chongqing Crane Works Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Qijiang Qichi Forge Co. Ltd. Chongqing Xinan Computer Co. Ltd. Chongqing Electric Machine Federation Ltd. Accounts payable
BALANCES WITH RELATED PARTIES BALANCES WITH 9.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — — 44,105.00 574,988.00 192,600.00 206,280.00 760,499.00 2,062,027.00 1,517,012.00 5,584,500.00 43,300,416.00 32,358,405.00 Beginning balance
(Continued)
— — 45,315.00 34,600.00 474,988.00 331,569.95 658,274.40 654,552.74 175,174.90 479,353.50 34,309,829.34 19,722,235.62 11,733,765.23 Ending balance
(continued)
Technology Co. Ltd. Property Co. Ltd. Chongqing Bosen Electrical Group Switchgear Co. Ltd. Chongqing Bosen Electrical Group Switchgear Chongqing Bosen Electrical Group Co. Ltd. CQMEHG Mechanical & Electrical Engineering Total
CQMEHG Asset Management Co. Ltd. Related parties Chongqing Shenjian Automotive Drive Part Co., Ltd. Chongqing Shenjian Automotive Drive Part Co., Chongqing Changjiang Bearing Co. Ltd. Chongqing Heavy Automobile Group Transportation Co., Ltd. Chongqing Heavy Automobile Group Transportation Chongqing Crane Works Co. Ltd. Chongqing Hongyan Automobile Engineering Chongqing Hongyan Automobile Engineering CQMEHQ Chongqing Heavy Automobile Group Hongqi Property Co. Ltd. Chongqing Heavy Automobile Group Hongqi CQMEHG Casting Co. Ltd. Other payables
BALANCES WITH RELATED PARTIES BALANCES WITH 10.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
444 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 445 — — — — 341.00 3,452.00 5,055.00 2,086.00 98,689.00 11,115.00 12,405.00 31,798.00 490,000.00 450,000.00 650,000.00 1,900,000.00 1,562,310.00 1,250,000.00 1,727,251.00 4,740,000.00 (Continued)
Beginning balance Beginning balance
— — 172.47 7,691.52 80,209.16 50,003.37 34,060.17 14,297.73 16,589.16 40,301.51 14,630.44 24,071.66 823,602.63 616,000.00 279,763.28 500,000.00 200,000.00 1,385,393.10 1,477,818.37 2,793,818.37 Ending balance Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Technology Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. CQMEHG Mechanical & Electrical Engineering Chongqing Electric Machine Federation Ltd. Total Related parties Chongqing General Aviation Industry Group Co. Ltd. Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Standard Fasteners Industrial Co. Total Related parties Chongqing Crane Works Co. Ltd. CQMEHG Asset Management Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing Bosen Electrical Group Co. Ltd. CQMEHQ Chongqing Xinan Computer Co. Ltd. Chongqing Heavy Automobile Group Hongqi Property Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing General Aviation Industry Group Co. Ltd. CQMEHG Casting Co. Ltd. Others Chongqing Jianan Instrument Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Interests payable Notes payable
12. BALANCES WITH RELATED PARTIES BALANCES WITH 11.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — 29,519.00 930,391.00 677,854.00 6,028,672.00 2,889,563.00 1,512,901.00 2,004,742.00 4,237,229.00 17,687,759.00 42,651,443.00 28,182,226.00 193,347,768.00 170,103,295.00 147,602,838.00 193,054,089.00 Beginning balance
(Continued)
9,450,104.39 9,283,558.14 4,885,355.93 4,569,394.58 4,554,047.34 4,417,074.89 90,671,059.98 33,368,717.17 46,946,297.25 75,160,987.76 32,119,785.76 15,135,752.57 15,178,758.30 10,720,286.84 183,758,900.33 346,862,432.28 391,824,799.76 Ending balance
(continued)
Electronic Microcredit Co. Ltd. Automobile Spring Co. Ltd. Technology Co. Ltd. CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering Chongqing Jianan Instrument Co. Ltd. CQMEHG Asset Management Co. Ltd. Chongqing Xinan Computer Co. Ltd. Qijiang Gear Factory Chongqing Xitong Electric Co. Ltd. CQMEHG Asset Management Co. Ltd. Chongqing Heavy Automobile Group Hongyan Chongqing Heavy Automobile Group Hongyan CQMEHQ Related parties Chongqing Jiangbei Machinery Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Chongqing Heavy Vehicle Special Truck Co. Ltd. Chongqing Heavy Vehicle Special Truck Co. Chongqing Standard Fasteners Industrial Co. Ltd. Chongqing Juntong Automobile Co. Ltd. Qijiang Gear Transmission Co. Ltd. Chongqing Automotive standard parts factory Co., Ltd. Chongqing Automotive standard parts factory Chongqing Liangjiang New Area Machinery & Chongqing Liangjiang New Area Machinery & Deposits taking
BALANCES WITH RELATED PARTIES BALANCES WITH 13.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
446 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 447 — — — 9,124.00 76,740.00 825,443.00 658,944.00 491,208.00 3,978,998.00 1,194,811.00 2,260,995.00 1,181,656.00 9,682,378.00 3,279,652.00 2,398,315.00 6,123,600.00 16,558,145.00 (Continued)
Beginning balance
83,059.99 15,032.71 79,548.05 17,388.02 194,557.48 278,473.20 199,435.42 345,447.79 421,237.89 423,437.44 148,377.22 4,049,480.87 3,548,418.67 3,241,650.68 3,034,161.05 1,678,436.26 1,179,352.73 Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) Huazhan Metal Material Restructuring Branch Estate Development Co. Ltd. Chongqing Standard Fasteners Industry Co. Ltd. Chongqing Standard Fasteners Industry Co. Ltd. CQMEHG Casting Co. Ltd. Chongqing Automotive standard parts factory Co., Ltd. Chongqing Automotive standard parts factory Chongqing General Aircraft Industry Co. Ltd. Chongqing Crane Works Co. Ltd. Chongqing Qichi Automobile Parts and Components Co. Ltd. Chongqing Qichi Automobile Parts and Components Chongqing General Machinery Industry Co. Ltd. Related parties Chongqing General Aviation Industry Group Co. Ltd. Chongqing General Aviation Industry Group Co. Chongqing Heavy Automobile Group Hongqi Property Co. Ltd. Chongqing Heavy Automobile Group Hongqi Chongqing Jidian Property Management Co. Ltd. Chongqing Jidian Property Management Co. Chongqing Chongtong Power Transformer Co. Ltd. Chongqing Chongtong Power Transformer Co. Chongqing Bosen Electrical Group Co. Ltd. Chongqing Heavy Automobile Group Kafu Parts Co., Ltd. Chongqing Heavy Automobile Group Kafu Parts Chongqing General Aviation Industry Group Co. Ltd. Chongqing Shuangqiao Hongyan Automobile Real Chongqing High Strength Fasteners Factory Qijiang Qichi Xinxin Welfare Co. Ltd. Deposits taking Deposits taking
BALANCES WITH RELATED PARTIES BALANCES WITH 13.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. — — — 209.00 360.00 67,393.00 10,699.00 584,354.00 630,356.00 321,138.00 1,319,237.00 1,479,195.00 2,064,739.00 10,919,475.00 877,057,453.00 Beginning balance Beginning balance
(Continued)
— — — — — — — 1.39 959.65 361.06 441.25 6,210.19 19,999.99 19,999.99 Ending balance Ending balance 1,297,852,782.28
(continued)
(continued) Property Co. Ltd. Others Chongqing Fuye Trade Company Chongqing Zili MachineWorks Chongqing Feiying Hoisting Equipment Co. Ltd. Chongqing Military Industry Group Co. Ltd. Total Related parties Chongqing Bosen Electrical Group Co. Ltd. Total Chongqing Shenjian Automotive Drive Part Co., Ltd. Chongqing Shenjian Automotive Drive Part Co., Related parties CQMEHG Electrical Industry Investment Co. Ltd. Chongqing Bosen Electrical Group Switchgear Co. Ltd. Chongqing Bosen Electrical Group Switchgear Chongqing Special Type Electrical Machine Factory Co. Ltd. Chongqing Special Type Electrical Machine Factory Qijiang Qichi Forge Co. Ltd. Chongqing Electrical Science Research Institute Chongqing Hongyan Automobile Engineering Chongqing Hongyan Automobile Engineering Receipts in advance Deposits taking Deposits taking
14. BALANCES WITH RELATED PARTIES BALANCES WITH 13.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
448 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 449 — — — — (Continued)
Beginning balance Beginning balance
5,577,756.42 5,577,756.42 44,449,820.04 44,449,820.04 Ending balance Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Kunlun Financial Leasing Co., Ltd. Total Kunlun Financial Leasing Co., Ltd. Total Related parties Related parties Non-current liabilities due within one year Non-current liabilities due within Long-term payables
16. COMMITMENTS BALANCES WITH RELATED PARTIES BALANCES WITH As at balance sheet date, there is no commitment associated with related related with associated commitment no is there date, sheet balance at As parties that is contracted but not presented in balance sheet. 15.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV) (III)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. 2018.07 of Supervisory Committee in 2018.11 2018.12 — — — — Dismissed in Become Chairman — — — — Dismissed in — — — — — — —
Total Notes (Continued)
60,000.00 60,000.00 80,400.00 80,400.00 80,400.00 60,000.00 60,000.00 60,000.00 60,000.00 470,083.72 587,844.38 734,639.05 129,722.00 737,115.00 724,708.05 814,772.05
— — — — — — — — — — — — — — — —
— — — — — — — — — — Bonus Distribution 470,151.00
— — — — — — — — — — — Social 81,411.72 112,660.00 89,085.48 751,060.00 440,335.62 1,796,481.10 55,154.38 376,961.00 90,812.05 399,923.00 90,812.05 394,604.00 90,812.05 456,996.00 insurance, housing fund and pensions
60,000.00 60,000.00 80,400.00 80,400.00 80,400.00 60,000.00 60,000.00 60,000.00 60,000.00 276,012.00 516,000.00 155,729.00 243,904.00 129,722.00 266,964.00 239,292.00 266,964.00 allowances 2,695,787.00 498,087.73 2,962,355.00 440,335.62 6,596,565.35 Salaries and OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF Committee Committee president Duty
Supervisor Supervisor Supervisor Supervisor Chairman of Supervisory Independent Director Independent Director Non-executive Director Sun Wenguang, as a supervisor, is nominated to be chairman of of chairman be to nominated is supervisor, a as Wenguang, Sun Mr. the Supervisory Committee in August 2018, and normally serves as the the Supervisory Committee in August 2018, and normally serves as chairman in November 2018.
Mr. Zhang Mingzhi Mr. Xia Hua Mr. Huang Hui Ms. Wu Yi Mr. Xiang Hu Mr. Sun Wenguang Chairman of Supervisory Mr. Liu Wei Mr. Jin Jingyu Mr. Ren Xiaochang Independent Director Mr. Lu Huawei Independent Director Mr. Deng Yong Non-executive Director Mr. Wang Pengcheng Non-executive Director Mr. Dou Bo Mr. Huang Yong Non-executive Director Mr. Wang Yuxiang Chairman of Directors Mr. Yang Quan Executive Director/Vice Ms. Chen Ping Executive Director/CEO
Name Total Remuneration of directors and supervisors of current period: directors and supervisors of Remuneration of Note 1: Note
REMUNERATION MANAGEMENT 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
450 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 451 — Total 5,000.00 60,000.00 60,000.00 55,000.00 60,000.00 80,000.00 80,000.00 80,000.00 60,000.00 60,000.00 136,000.00
— — — — — — — — — — — — (Continued)
Bonus 77,000.00 77,000.00 507,000.00 728,000.00
— — — — — — — — — — — — — — Social insurance, housing fund and pensions
— — 5,000.00 60,000.00 60,000.00 55,000.00 60,000.00 80,000.00 80,000.00 80,000.00 60,000.00 60,000.00 256,000.00 60,000.00 214,000.00 530,000.00 258,000.00 60,000.00 924,000.00 1,242,000.00 255,000.00 63,000.00 468,000.00 786,000.00 136,000.00 255,000.00 63,000.00 334,000.00 652,000.00 230,000.00 63,000.00 457,000.00 750,000.00 221,000.00 allowances 2,211,000.00 309,000.00 2,981,000.00 5,501,000.00 Salaries and From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Committee president Supervisor Supervisor Supervisor Chairman of Supervisory Executive Director/CEO Supervisor
Independent Director Duty Independent Director Independent Director Executive Director/CEO Executive Director/Vice Non-executive Director Non-executive Director Chairman of Directors
Independent Director Non-executive Director Non-executive Director
of directors and supervisors of current period: period: current of supervisors and directors of OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF (continued) Mr. Zhang Mingzhi Mr. Xia Hua Ms. Wu Yi Mr. Xiang Hu (resign in July 2018) Mr. Yu Gang (resign in March 2016) Mr. Huang Hui Mr. Wei Fusheng (resign in November 2017) Non-executive Director Ms. He Xiaoyan (resign in December 2017) Non-executive Director Mr. Liu Wei Name Mr. Jin Jingyu Mr. Lu Huawei Total Ms. Chen Ping Mr. Yang Quan Mr. Wang Pengcheng Mr. Dou Bo (entry in November 2017) Mr. Wang Yuxiang Mr. Ren Xiaochang Mr. Deng Yong Mr. Huang Yong
Remuneration (continued) of last period: Remuneration of directors and supervisors
MANAGEMENT MANAGEMENT REMUNERATION 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII.
Total Total 814,772.05 728,000.00 652,000.00 737,115.00 750,000.00 734,639.05 786,000.00 728,025.14 4,158,000.00 1,242,000.00
— — — —
(Continued) Bonus
507,000.00 334,000.00 457,000.00 468,000.00 924,000.00 2,690,000.00
Bonus Distribution 470,151.00
—
pensions 63,000.00 63,000.00 63,000.00 60,000.00 249,000.00
— Social Social insurance, housing fund and insurance, housing fund and pensions
221,000.00 255,000.00 230,000.00 255,000.00 258,000.00 1,219,000.00 gains in kind allowance and 266,964.00 90,812.05 456,996.00 516,000.00266,964.00 89,085.48 751,060.00 440,335.62 1,796,481.10 243,904.00 90,812.05 399,923.00 246,435.00 87,372.14 394,218.00 Salary, housing allowances allowance, other 1,540,267.00 358,081.72 2,472,348.00 440,335.62 4,811,032.34 Salaries and OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF president Committee Committee Duty Duty Executive Director/CEO Supervisor Executive Director/CEO
Chairman of Supervisory
Supervisor (continued)
Name Name Mr. Wang Yuxiang Chairman of Directors Total Ms. Chen Ping Total Mr. Wang Yuxiang Chairman of Directors Mr. Xia Hua Ms. Chen Ping Mr. Yang Quan Executive Director/Vice Mr. Sun Wenguang Chairman of Supervisory Mr. Xiang Hu Ms. Liu Zhongtang Vice president/CFO Mr. Xia Hua Five most well-rewarded employees of current period: employees of current Five most well-rewarded
Five most well-rewarded employees of last period: Five most well-rewarded employees
REMUNERATION MANAGEMENT MANAGEMENT 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
452 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 453
0 1 25 Total Number of Last Period
(Continued)
Bonus
75,600.00 242,835.20 1 0 20
Number of Social 87,372.14 394,218.00 728,025.14 90,812.05 395,216.00 725,320.05 90,812.0547,589.20 392,160.00 722,264.05 Current Period insurance, housing fund and pensions
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 844,665.00 316,585.44 1,257,194.00 2,418,444.44 246,435.00 239,292.00 239,292.00 119,646.00 allowances Salaries and (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Duty
Company secretary Vice president OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF (continued) current period, none of the directors gives up or agrees to give up give to agrees or up gives directors the of none period, current management compensation (including paid and payable amount of of amount payable and paid (including compensation management Name Total Item RMB1,500,001 to 2,000,000 Within1,000,000 RMB RMB1,000,001 to1,500,000 Deng Rui Liu Zhongtang (entry in July 2018) Vice president/CFO Zhang Shu Qin Shaobo (entry in June 2018) Vice president Remuneration of directors, supervisors and senior management Remuneration of directors, supervisors Key During Salary range compensation to directors, supervisors and senior management) any salary. During past recorded periods, the Group never paid to any any salary. During past recorded well-rewarded employees to draw them director, supervisor or five most for the employment termination. into the Group or make compensation
MANAGEMENT MANAGEMENT REMUNERATION 4. 3. 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XII. Total
(Continued)
Bonus 68,000.00 68,000.00 137,000.00 137,000.00 273,000.00 273,000.00 137,000.00 137,000.00
— — — — Costs Social security Pension Housing Funds and contributions,
— — — — 690,000.00 189,000.00 1,262,000.00 2,141,000.00 230,000.00 63,000.00 216,000.00 509,000.00 230,000.00 63,000.00 216,000.00 509,000.00 230,000.00 63,000.00 215,000.00 508,000.00 Wages and allowances
manager manager Board OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF — — — Deputy general — Deputy general Secretary of the Job Position
(continued) (Resigned in June 2016) (Resigned in December 2016) (Resigned in June 2016) (Resigned in March 2016) Mr Zhao Zicheng Total Mr Duan Caijun Mr Chen Yu Mr Sun Wenguang Mr Liu Yonggang Mr Sun Shu Mr Deng Rui Name Remuneration of directors, supervisors and senior management directors, supervisors and senior Remuneration of for the previous year Key management remuneration
REMUNERATION MANAGEMENT MANAGEMENT 5.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V)
XII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
454 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 455 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts RECEIVABLE OF DIRECTORS AND DIRECTORS’ DIRECTORS’ AND DIRECTORS OF RECEIVABLE Borrowings of directors and directors’ related parties guaranteed by Borrowings of directors and corporation None. Borrowings receivable of directors and directors’ related parties of directors and directors’ Borrowings receivable None.
RELATED PARTIES OTHERS BORROWINGS 2. None. 1.
CONTIGENCIES RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) None. (VII) (VI)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XIII. XII. 89,007,236.00 34,886,736.00 11,812,008.00 15,517,864.00 26,790,628.00 14,768,600.00 143,310,546.00 128,541,946.00 Beginning balance Beginning balance (Continued)
— 88,966,411.92 53,153,949.02 22,611,700.00 12,464,131.20 19,796,210.88 34,094,369.84 53,153,949.02 Ending balance Ending balance
Total Items Total Items Over 3 years 2-3 years 1-2 years Within 1 year House, building and equipment Intangible assets Operating Lease Commitments Capital Commitments
non- Group the of under payments lease minimum aggregate future The as follows: cancelable operating leases are Capital expenditure contracted during the reporting period but not yet incurred period but not yet incurred contracted during the reporting Capital expenditure as follows: by the Group are
2. 1. COMMITMENTS
XIV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
456 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 457 — 38,951,232.00 81,341,982.00 75,566,628.00 (Continued) 324,380,805.00 167,472,195.00
Beginning balance
— 24,373,500.63 86,017,812.54 72,084,642.50 264,214,116.52 106,111,661.48 Ending balance
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Over 5 years Total Items Including: Unacknowledged financial charges Within 1 year 1-2 years 2-5 years LEASES The future aggregate lease payments of property, plant and equipment, and and equipment, and plant property, of payments lease aggregate future The leases are as follows: under of the Group finance construction in progress
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XV. Balance 147,385,606.16 (Continued)
to the Board Resolution on March 20, 2019, the Group’s board board Group’s the 2019, 20, March on Resolution Board the to proposed to distribute dividends to all shareholders at RMB0.04 per share (with proposed to distribute dividends to to need is which RMB147,385,606.16, is dividends proposed total the tax), shareholder meeting on June 28, 2019, approval by the shareholders at annual as a liability in the financial statements. therefore, it has not been recognized According
Dividends or profits to be distributed Items Sales Return Significant Non-adjusting Events Significant Non-adjusting Profit Distribution None. events significant other no has Group the disclosures, above the for Except occurring after the reporting period. Note: None.
4. 3. 2. 1. EVENTS AFTER THE REPORTING PERIOD EVENTS AFTER
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
458 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 459 (Continued)
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts New guidelines to be implemented Debt restructuring Pension plan Correction and effect of prior period errors Correction and On 7 December 2018, the Ministry of Finance issued the “Accounting Standards On 7 December 2018, the Ministry – Lease” (Finance [2018] No. 35) and requires for Business Enterprises No. 21 for the companies listed at both China and to take place on 1 January 2019 International adopt which overseas only listed companies the and overseas EnterprisesBusiness for Standards Accounting or Standards Reporting Financial the implement to intends Group The statements. financial the prepare to The Group expects that the implementation of standard from 1 January 2019. statements. the standard will not have a significant impact on the financial The Group does not have pension plans. The Group does not have pension None. None.
4. 2. 3. 1. OTHER SIGNIFICANT EVENTS OTHER SIGNIFICANT
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVII. (Continued)
(CONTINUED) Segment information Reportable segments of the Group are business units classified by different different by classified units business are Group the of segments Reportable different Since districts. different in operated and services or businesses marketing and technology corresponding require districts and businesses manages its production and of the Group independently strategy, each segment evaluates operating results of each segment so operating activities. The Group resources and evaluate performances. as to make decisions to allocate as follows: The Group has 10 reportable segments and sales of engines; Engine: in charge of production and sales of gear boxes; Gear box: in charge of production of sales and production of charge in equipment: generation Hydroelectric hydroelectric generation equipment; and sales of wire and cable; Electrical wire and cable: production and sales of general machinery; General machinery: production and Europe; Machinery tools: production and sales of machinery tools in China transformers; High-voltage transformers: production and sales of High-voltage etc. Financial services: providing financial services, such as loans, Other segments: producing and selling other products; both parties. Inter-segment transfer prices are determined after negotiation by the on based allocated are expenses and incomes liabilities, assets, The operations of the segment.
5. OTHER SIGNIFICANT EVENTS OTHER SIGNIFICANT
XVII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
460 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 461
(Continued)
018306 6,0,2.91,7,7.83,5,9.2(088449)2,8,0.6150520 2,1,6.4 1,5,2.2 495,171,833.01 (13,750,320.52) (24,018,466.94) 1,590,532.02 27,280,400.76 (30,818,404.97) 30,450,998.92 12,377,272.78 166,405,628.69 10,198,320.68 — 315,455,871.59 profit Net
38782)2,2,7.6960936 ,1,3.36,471,277.51 9,412,034.73 9,680,923.68 28,620,676.96 (388,718.29) — — expense tax Income ,0,3.5(,9,0.0 60,500,227.64 (1,097,700.00) 7,801,733.05 — —
,0,0.91506356 208164 983036 2,4,2.6 720407 ,9,3.2(626738)(488005)555,672,060.65 (14,848,020.52) (16,216,733.89) 1,590,532.02 27,280,400.76 (24,347,127.46) 39,863,033.65 22,058,196.46 195,026,305.65 9,809,602.39 — 315,455,871.59 profit Total
369,941,950.32 — 22,888,802.51 — 27,280,400.76 3,698,081.58 — 618,793.88 — — — 315,455,871.59 ventures joint and
associates from income Investment
0,6.68,0,3.1(416115)160,792,293.33 (24,116,101.57) 86,404,536.31 100,165.26 — 47,859,051.75 37,578,842.47 — 7,504,365.12 5,461,433.99 — — costs Interest
38,473,948.90 — 3,698,093.01 2,221,055.16 — 19,143,553.24 12,496,330.62 — 209,318.09 705,598.78 — — income Interest
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
,5,6.01302711 057197 989639 1,8,7.0 720407 ,7,1.2(192705)(488005)556,730,030.70 (14,848,020.52) (21,942,700.57) 1,276,711.82 27,280,400.76 (12,483,274.30) 39,839,633.97 20,577,189.72 193,022,751.13 8,551,467.10 — 315,455,871.59 (loss)/profit Operating
23.58 — 28.01 3.33 — 27.88 86.31 22.19 17.27 19.53 — — (%) rates profit Gross
4,5,4.711420564 0,4,0.5946180 637,120,036.03 9,436,128.07 708,141,405.35 1,134,240,556.45 445,857,448.57 — — cost transaction External 0,7,1.010178113 8,2.4 4,038,473,326.74 (88,120.04) 1,001,788,161.31 101,977,711.00 —
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
4303)(,4,0.0 848383)(931222)(2,038,514.33) (19,361,252.26) (8,418,378.37) (8,243,404.60) (4,310.34) — — cost transaction Inter-segment 9,8,4.8 394044)(8100)(139,351,488.04) (88,120.04) (3,914,064.42) (97,283,443.68) —
4,6,5.111243910 1,5,8.22,9,8.3639,158,550.36 28,797,380.33 716,559,783.72 1,142,483,961.05 445,861,758.91 — — costs Operating 4,177,824,814.78 — 1,005,702,225.73 199,261,154.68 —
Revenue from external customers external from Revenue 5,5,5.013098664 1,4,9.16,4,1.7883,364,976.94 68,948,716.67 910,044,193.61 1,370,938,646.47 554,056,855.20 — — 0,9,1.51,391,472,326.96 105,491,817.05 — 5,284,317,532.90 —
Inter-segment revenue Inter-segment 4303)(,4,0.0 506046)(786163)(2,038,514.33) (47,846,156.31) (5,066,034.68) (8,243,404.60) (4,310.34) — — 1065773)(3,914,064.42) (100,635,787.38) — (167,748,272.06) —
Total segment revenue segment Total 5,6,6.413912010 1,1,2.91674829 885,403,491.27 116,794,872.98 915,110,228.29 1,379,182,051.07 554,061,165.54 — — 0,2,0.31,395,386,391.38 206,127,604.43 — 5,452,065,804.96 —
Item Total Offset segments sales transformers tools services machinery cable equipment boxes Gear Engines
Other Other Materials High-voltage Machinery Financial General and wire generation
Electrical Electrical Hydroelectric
Financial information of reportable segments reportable of information Financial 6.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER (CONTINUED) XVII.
(Continued)
1,3,2.6 142453)3,1,8.813171 26,177,914.95 123,117.14 36,917,482.48 (1,402,435.37) (15,130,129.26) — — assets) tax income deferred 4,117,843.44 — (42,563,521.44) (4,585.06) —
long term equity investments and and investments equity term long
(other than financial instruments, instruments, financial than (other
Additions to non-current assets assets non-current to Additions
23,595,497.30 — 8,310,364.07 (4,754,201.28) — 3,349,226.15 2,885,648.51 — 848,238.38 12,956,221.47 — — receivables other
impairment of accounts and and accounts of impairment
Provision for/(reversal of) of) for/(reversal Provision
76,668,574.02 — 34,985,004.28 — — 5,497,630.95 8,495,755.26 — 5,729,765.79 21,960,417.74 — — inventory on Provision
,5,4.1294759 102766 0,2.315,745,864.85 309,127.43 11,082,786.61 2,924,745.92 1,954,642.01 — assets — intangible of Amortisation 34,798,750.50 — 2,781,583.68 — —
322170 ,9,7.44,4,6.312002 91,925,234.79 152,010.20 41,140,566.53 1,494,473.44 23,262,187.05 — — property investment 185,446,577.75 — 27,467,900.48 4,205.26 —
plant and equipment and and equipment and plant
Property, of Depreciation
Total Offset segments sales transformers tools services machinery cable equipment items Other Gear boxes Gear Engines
Other Other Materials High-voltage Machinery Financial General and wire generation
Electrical Electrical Hydroelectric
Financial information of reportable segments segments reportable of information Financial 6. (continued)
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER (CONTINUED) XVII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
462 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 463
(Continued)
5,2,1.0(0,4,7.0 082830 158090 919050 667000 9,9,1.0 79,340,974.00 (98,497,618.00) 36,647,050.00 39,189,065.00 81,548,079.00 50,822,843.00 (207,341,979.00) 259,024,414.00 profit Net 1030 255230 0,2,8.7366,018,893.67 102,729,789.67 22,505,233.00 51,043.00
-58030 6,4,6.0 896460)24610 937960)(15,249,107.00) (9,337,926.00) 254,611.00 (8,966,486.00) (60,543,468.00) 558,053.00 —- expense tax Income (102,453,392.00) — (9,169,069.00) — —
5,2,1.0(0,0,3.0 1,6,1.09,1,6.03,3,5.04,8,7.0(328510)79,340,974.00 (83,248,511.00) 45,984,976.00 38,934,454.00 90,514,565.00 111,366,311.00 (207,900,032.00) 259,024,414.00 profit Total 1030 164320 0,2,8.7468,472,285.67 102,729,789.67 31,674,302.00 51,043.00
,9,7.0(393960)(,7,9.0 79,590,989.00 (1,777,298.00) (13,943,946.00) 1,697,971.00 — — 955,798.00 259,024,414.00 ventures joint 360,840,184.00 — 35,292,256.00 —
and associates from income Investment
553020 109730 055580 32,071,491.00 10,525,528.00 11,039,793.00 15,563,052.00 — costs Interest ,0.032570 127670 9,0,5.0 117,577,546.00 (95,701,455.00) 81,297,677.00 352,547.00 1,200.00 62,427,713.00 —
2,6.085980 7,6.02,960,437.00 979,466.00 825,908.00 124,367.00 — income Interest ,5,6.016580 4,4.07,4,3.0(412440)17,728,904.00 (64,182,454.00) 73,941,938.00 144,147.00 176,528.00 2,758,567.00 —
12.22 — 28.80 0.29 — 22.57 85.72 15.42 14.45 14.79 (3.04) — (%) rates profit Gross
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
4,3,5.13048500 ,4,2,2.015205280 070394 670,542,406.97 10,740,379.47 1,502,095,278.00 1,240,828,025.70 380,498,510.00 242,731,154.11 — cost transaction External 8,156,604,885.00 — 801,727,883.12 3,307,441,247.63 —
(1,135,124,421.00) — (69,474,938.88) (1,046,183,568.37) — (4,402,479.03) (13,072,084.53) — (5,727,891.30) — 3,736,541.11 — cost transaction Inter-segment
3,9,1.03048500 ,4,5,1.015205280 382440 674,944,886.00 23,812,464.00 1,502,095,278.00 1,246,555,917.00 380,498,510.00 238,994,613.00 — costs Operating 9,291,729,306.00 — 871,202,822.00 4,353,624,816.00 —
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
3,6,5.24654819 ,5,7,7.617590362 524017 865,996,221.05 75,224,021.72 1,775,910,346.20 1,450,373,071.36 446,544,811.98 235,565,856.82 — customers external from Revenue 9,292,602,679.67 — 1,125,947,173.10 3,317,041,177.45 —
(1,178,890,421.10) — (69,474,938.43) (1,046,016,618.87) — (12,624,425.21) (45,046,547.28) — (5,727,891.30) — — — revenue Inter-segment
Total segment revenue revenue segment Total 3,6,5.24654819 ,5,0,6.617590362 2,7,6.0878,620,646.26 120,270,569.00 1,775,910,346.20 1,456,100,962.66 446,544,811.98 235,565,856.82 — ,6,5,9.21,195,422,111.53 4,363,057,796.32 — 10,471,493,100.77 —
Item Total Offset segments sales transformers tools services machinery cable equipment boxes Gear Engines
Other Other Materials High-voltage Machinery Financial General and wire generation
Electrical Electrical Hydroelectric
Financial information of reportable segments of the previous year as follows: as year previous the of segments reportable of information Financial
Financial information of reportable segments segments reportable of information Financial 6. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER (CONTINUED) XVII.
(Continued)
865430 4,8,6.0365650 2,7,5.023450 89,081,163.00 223,405.00 220,472,357.00 3,695,615.00 244,089,969.00 28,605,473.00 — assets) tax income 664,267,274.00 — 78,093,964.00 5,328.00 —
equity investments and deferred deferred and investments equity
than financial instruments, long term term long instruments, financial than
Additions to non-current assets (other (other assets non-current to Additions
,6,7.33,6,4.01,3,9.862740 437336 (4,238,595.13) 14,387,373.69 632,794.00 15,838,697.08 36,062,944.00 2,365,675.63 — receivables other and accounts 70,227,816.55 — 8,680,880.57 (3,501,953.29) —
Provision for/(reversal of) impairment of of impairment of) for/(reversal Provision
42,865,524.32 — 6,311,599.60 — — 836,106.30 — — 705,270.89 — 35,012,547.53 — inventory on Provision
,5,8.8200167 4,0.6732317 8,0.413,082,434.35 286,701.34 7,382,381.75 741,104.26 2,060,156.77 2,355,089.88 — assets intangible of Amortisation 28,227,363.19 — 2,319,494.83 — —
equipment and investment property investment and equipment 370771 609817 687081 194599 9,6.68,0,9.241,441.76 84,606,898.72 395,964.76 41,974,509.99 16,887,048.15 16,079,801.70 33,700,707.10 — ,2.143,298,223.58 2,627.31 236,987,223.06 —
Depreciation of Property, plant and and plant Property, of Depreciation
Other items Other Gear boxes Gear Engines Materials sales Other segments Other sales Materials tools transformers Machinery services machinery cable and equipment Total Offset
High-voltage High-voltage Financial General wire Electrical generation
Hydroelectric Hydroelectric
Financial information of reportable segments segments reportable of information Financial 6. (continued)
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER (CONTINUED) XVII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
464
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 465
None.
Other significant transactions and events that have impact on investor decisions investor on impact have that events and transactions significant Other 7.
(Continued)
joint ventures joint 1,046,677,545.00 — 334,061,672.00 — 298,625,221.00 50,808,891.00 — 15,158,557.00 — — — 348,023,204.00
or associates of Investment
Total liabilities Total ,6,3,0.05808770 ,1,0,9.021118230 2,308,099,634.00 2,151,128,233.00 2,315,408,698.00 598,018,727.00 1,568,132,602.00 — — 6,7,4.033116470 36105620)9,112,686,649.00 (3,681,095,622.00) 3,391,116,437.00 461,877,940.00 —
Total assets Total ,7,6,8.08254140 ,1,1,6.028375830 ,3,0,4.03542310 8,4,8.099590330 75911210)16,290,673,192.00 (7,539,141,261.00) 9,905,960,343.00 482,749,186.00 315,442,331.00 3,433,307,147.00 2,863,715,853.00 3,311,217,066.00 892,534,134.00 2,276,865,189.00 — 348,023,204.00
Total Offset segments sales transformers tools services machinery cable equipment boxes Gear Engines balance Beginning
Other Other Materials High-voltage Machinery Financial General and wire generation
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
Electrical Electrical Hydroelectric
joint ventures joint 1,009,154,785.28 — 310,260,813.08 — 248,255,606.76 89,742,246.20 — — — — — 360,896,119.24
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
or associates of Investment
Total liabilities Total ,9,0,2.25582462 ,6,4,6.628769919 2,228,816,512.97 2,807,649,911.91 2,764,649,561.06 555,852,406.24 1,593,004,224.32 — — 5,3,2.827376711 37086304)9,048,021,855.31 (3,760,856,370.40) 2,703,766,781.13 155,138,828.08 —
Total assets Total ,2,1,5.89562630 ,5,4,8.135323447 ,7,0,0.32825667 7,8,5.793008049 73188462)16,277,683,798.67 (7,371,838,466.24) 9,310,078,004.98 178,986,451.07 248,255,606.76 3,276,304,803.93 3,573,223,434.74 3,658,843,585.11 915,622,603.00 2,127,311,656.08 — 360,896,119.24
Total Offset segments sales transformers tools services machinery cable equipment Balance Ending Gear boxes Gear Engines
Other Other Materials High-voltage Machinery Financial General and wire generation
Electrical Electrical Hydroelectric
Information on the assets and liabilities of reported segments as follows: as segments reported of liabilities and assets the on Information
Financial information of reportable segments segments reportable of information Financial 6. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER (CONTINUED) XVII. 40,221,072.00 40,221,072.00 40,221,072.00 29,841,169.00 260,528,433.00 1,994,281,937.00 1,723,373,601.00 Beginning balance Beginning balance (Continued)
52,085,559.19 52,085,559.19 52,085,559.19 33,465,586.34 383,447,758.44 Ending balance Ending balance 1,434,981,852.73 1,032,914,121.44
Item Related-party interest receivable Total Classification of interest receivable
Significant overdue interest None.
Interest receivables 1) 2)
Interest receivables Total Item Dividend receivables Other receivables Less: Provision for bad debts (1) Other Receivables
1. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
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(Continued) joint venture receivable of joint venture receivable of joint venture receivable of joint venture receivable of
— — — Whether impaired and criterion No, Dividends No, Dividends No, Dividends No, Dividends
Payment Payment Payment Payment period, Pending Declared, Pending — Pending Payment Declare in current — Reasons for not yet recovered
Declared, Pending Declared, Pending
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 355,832.00 2,037,917.98 2,037,917.98 2,878,647.02 1,760,373.00 253,495,663.00 260,528,433.00 258,490,515.02 Beginning balance
— — — (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 4,816,103.40 4,816,103.40 378,631,655.04 383,447,758.44 378,631,655.04 Ending balance
(CONTINUED)
(continued) Hongyan Fangda Cummins Chongqing
Chongqing Including: Chongqing Hongyan Fangda Exedy Chongqing Youyan Over 1 year Including: Total Within 1 year Item Dividend receivables
Other Receivables Other Receivables (2)
1. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVIII. — 323,083.00 29,841,169.00 29,841,169.00 1,723,373,601.00 1,693,532,432.00 1,723,050,518.00 1,723,373,601.00 1,693,532,432.00 Beginning balance Beginning balance
(Continued)
— 402,672.99 33,465,586.34 33,465,586.34 999,448,535.10 999,448,535.10 Ending balance 1,032,914,121.44 Ending balance 1,032,914,121.44 1,032,511,448.45
(CONTINUED) (continued) Aging Total Less: Provision for impairment Net amount 1-2 years 6 moths – 1 year Within 6 moths Aging analysis
Item Other receivables Less: provision for bad debts Balance at book value Other receivables 1)
Other Receivables Other Receivables (3)
1. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
468 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 469
382,573.00 32,650,319.00 29,841,169.00 (Continued)
1,690,340,709.00 1,723,373,601.00 1,693,532,432.00 Beginning balance
— 32,609,591.29 33,465,586.34 999,448,535.10 Ending balance 1,000,304,530.15 1,032,914,121.44 From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) (continued) Others Other receivables related party Petty cash Total Less: Provision for impairment Nature Balance at book value Classification of other receivables by nature Classification of other receivables Other receivables written off this year Other receivables None.
Other receivables Other receivables 2) 3)
Other Receivables Other Receivables (3)
1. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVIII.
— — — — — — Ending provision bad debt balance of
4.55 10.01 20.18 24.27 27.35 86.37 ending of other (Continued) balance(%) Percentage receivables
1-2 years 1-2 years
Within 1 year, Within 1 year Within 1 year,
Within 1 year Within 1 year — Aging
46,997,547.88 103,396,040.80 208,459,107.14 250,729,318.32 282,500,000.00 892,082,014.14 Ending balance
related party related party related party related party related party
Borrowings of Borrowings of
Borrowings of
Borrowings of
Nature — Borrowings of
(continued) (CONTINUED) (continued) Wires & Cables Co., Ltd Co., Ltd. Works Co., Ltd. (Group) Co., Ltd (Group) Co., Ltd.
Chongqing Pigeon Electric Chongqing Shengpu Materials
Chongqing Water Turbine
Chongqing General Industry Total Name of debtors Chongqing Machine Tools Top five debtors of other receivables Top five debtors
4) Other receivables Other receivables
Other Receivables Other Receivables (3)
1. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
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— — — — — — —
Net Balance of book value impairment 88,741,458.00 962,518,551.00
(Continued) — — — — — — — — —
Provision Impairment for impairment Beginning balance
Gross book value 88,741,458.00 962,518,551.00 360,948,318.00 126,893,602.52 795,139,695.15 197,411,466.90 120,313,860.15 250,367,260.00 Ending balance 3,753,161,503.00 88,741,458.00 3,664,420,045.00 4,715,680,054.00 88,741,458.00 4,626,938,596.00 1,060,637,386.00
— — — — — — — —
Net Decrease book value From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December 905,441,679.40
— — — — — —
Increase Impairment (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Ending balance
Gross balance Beginning book value 88,741,458.00 905,441,679.40 360,948,318.00 126,893,602.52 794,139,695.15197,411,466.90 1,000,000.00 120,313,860.15 230,367,260.00 20,000,000.00 1,059,637,386.00 1,000,000.00 3,741,666,542.05 88,741,458.00 3,652,925,084.05 4,647,108,221.45 88,741,458.00 4,558,366,763.45
(CONTINUED)
(Notes 1) and joint ventures (Group) Co., Ltd. Works Co., Ltd. Wires & Cables Co., Ltd (Group) Co., Ltd Co., Ltd. Factory Co., Ltd. Braking & Steering System Co., Ltd Co., Ltd.
Investment in associates
Chongqing Water Turbine Chongqing Pigeon Electric Chongqing General Industry Chongqing Pump Industry Chongqing Gas Compressor Chongqing Machine Tools Investment in subsidiaries Total Investee Chongqing CAFF Automotive Chongqing Huahao Smelting Item Investments in subsidiaries Classification of long-term equity investments Classification
(2) Long-term equity investments Long-term equity (1)
2. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVIII. — — — — — Balance of impairment 88,741,458.00
— — — — — — Provision (Continued)
for impairment
25,080,288.00 20,992,435.00 101,375,113.00 145,697,206.75 448,068,452.58 Ending balance 3,741,666,542.05
— — — — Decrease 34,494,961.00
— — — — Increase (continued)
(continued) balance Beginning 24,080,288.00 1,000,000.00 20,992,435.00 135,870,074.00 145,697,206.75 448,068,452.58 3,753,161,503.05 23,000,000.00 34,494,961.00 that the Group agreed to clear Chongqing Huahao Smelting Smelting Huahao Chongqing clear to agreed Group the that
(CONTINUED)
econd-level subsidiary company, PTG which invested by the Group Group the by invested which PTG company, subsidiary econd-level Chongqing Machinery & Electric Co., Ltd. issued an approval of asset Chongqing Machinery & Electric Co., Ltd. issued an approval of asset disposal S Co., Ltd, and agreed to transfer the asset of Huahao Smelting to the the to Smelting Huahao of asset the transfer to agreed and Ltd, Co., has Group by pay debt in assets, underlying assets of Huahao Smelting and been transferred to the Group, Huahao Smelting has been closed cancelled on 17 December 2018. cancelled its subsidiary company named PTG Advanced Developments cancelled its subsidiary company named PTG Advanced Developments and research technology in engaged mainly which (ADL) Limited development before cancelled on 10 April 2018. (Notes 2)
& Electronic Intelligent Manufacturing Co., Ltd. Technology Research Academy Co., Ltd. Electronics Holding Group Finance Co., Ltd. (PTG) Limited Electronic Equipment Materials Co., Ltd.
Chongqing Machinery
Chongqing Machinery & Precision Technologies Group Chongqing Machinery and Total Chongqing Shengpu Investee Investments in subsidiaries Investments in Notes 2: Notes 1: Notes
Long-term equity investments Long-term equity (2)
2. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
472
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 473
— 4,429,156.08 — 385,072,789.44 — — 365,625,073.92 33,200,000.00 — 962,518,551.00
905,441,679.40 Total
— 4,429,156.08 — 82,489,833.09 — — 50,169,201.85 33,200,000.00 — 614,495,347.00 544,545,559.68 Total Sub
— — — — — — (2,414,655.00) — — 2,414,655.00 Italy WPG (Continued) —
— — — — — — 848,099.08 — — 41,010,268.00 Machinery
41,858,367.08
Chongqing Jiangbei Jiangbei Chongqing
— 6,189,528.39 — 975,250.00 — — 1,914,836.39 33,200,000.00 — 38,449,942.00 Youyan Chongqing —
— — — — — — 6,868,212.03 — — 42,606,938.00 Ltd. (Chongqing) 49,475,150.03
for Commercial Vehicles Vehicles Commercial for
Knorr-Bremse Systems Systems Knorr-Bremse
— (1,760,372.31) — 3,864,570.09 — — 5,412,929.93 — — 78,241,557.00 Exedy 81,550,289.15
— — — — — — 10,259,378.66 — — 113,146,768.00 Fangda Hongyan 123,406,146.66
— — — 77,650,013.00 — — 27,280,400.76 — — 298,625,219.00 ABB Chongqing 248,255,606.76
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December
2. Associates 2.
— — — 302,582,956.35 — — 315,455,872.07 — — 348,023,204.00 360,896,119.72 Total Sub
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts — — — 302,582,956.35 — — 315,455,872.07 — — 348,023,204.00 Cummins CQ 360,896,119.72
1. Joint venture Joint 1.
investment investment balance Investee impairment equity method equity changes income Others impairment period current Ending balance Ending
Reduced Reduced Additional Beginning Beginning of Balance recognized under under recognized equity Other comprehensive for in Provision declared
loss and profit other of dividends Cash
Investment Investment Adjustment Adjustment
Increase or decrease in current period current in decrease or Increase
Investments in subsidiaries in Investments (3)
Long-term equity investments investments equity Long-term 2. (continued) (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS OF THE COMPANY COMPANY THE OF STATEMENTS FINANCIAL THE OF ITEMS MAJOR TO NOTES XVIII. — — — — Cost Last period 1,466,871.00 35,399,730.00 287,131,237.00 294,727,306.00 224,886,822.00 (269,349,492.00)
(Continued)
— — — — Last period Revenue 536,756.43 (100,462.00) 6,947,699.25 62,644,976.16 435,654,044.70 365,625,074.86 Current period
— —
Cost
Current period Revenue 2,247,005.78 2,247,005.78 (CONTINUED)
No significant restriction of investment income of the Group.
in equity method in a subsidiary in a joint venture nvestment income from disposal of available-for-sale financial assets financial available-for-sale of disposal from income nvestment Investment income from disposal of long-term equity investment Investment income from disposal of long-term Total Investment income from long-term equity investments Investment income from long-term equity investments Items Others Investment income of long-term equity investments in cost method Investment income of long-term equity investments I Total Items Other operations Investment income from disposal of long-term equity investment Investment income from disposal of long-term Investment income from merger of subsidiaries Investment income Operating revenue & operating cost Operating revenue Notes: Directors on 20 The financial statements have been approved by the Board of March 2019.
4. 3. NOTES TO MAJOR ITEMS OF THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
474 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018 475
— Explanation — — — — — — — — — — — —
the period 536,755.49 287,747.63 (109,704.27) Amount for 4,647,019.63 1,155,440.25 (3,722,317.73) 39,149,513.21 49,165,905.47 (18,211,400.87) 262,579,246.17 223,141,985.33 100,375,940.91 128,741,607.29
From 31 December 2017 to 31 December 2018 2017 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts included in the profit or loss for the period nvestment income from disposal of available-for-sale financial assets financial available-for-sale of disposal from income nvestment Impact on income tax Total Sub-total
Gains and losses from disposal of non-current assets Gains and losses from disposal of non-current Item Impact on non-controlling interest (after tax) Profit and loss from fair value changes of trading financial assets Profit and loss from fair value changes of trading Tax rebate occasionally Employee resettlement compensation Government grants included in the profit or loss for the period Government grants included in the profit or loss Other non-operating income and expenses apart from the above Other non-operating income and expenses apart Investment income from disposal of long-term equity investment Investment income from disposal of long-term I Funds utilization fees collected from non-financial enterprises Funds utilization fees collected from non-financial
In accordance with the requirements of the “Explanatory Announcement on on Announcement “Explanatory the of requirements the with accordance In – No.1 Public the to Securities Offering Companies for Disclosure Information the China Securities Regulatory or Loss (2008)” issued by Extraordinary Profit in 2018 are as follows: profit or loss of the Group Commission, extraordinary
DETAILS OF EXTRAORDINARY PROFIT OR LOSS FOR THE OR LOSS FOR THE EXTRAORDINARY PROFIT DETAILS OF PERIOD (1)
1. Supplementary Information to Consolidated Financial Statements Financial to Consolidated Information Supplementary
0.12 0.06 per share (Continued)
Diluted earnings
0.12 0.06 Earnings per share per share Basic earnings
6.34 3.16 assets (%) return on net Weighted average
Company (excluding: extraordinary profit and loss) the Company
Profit for the reporting period Net profit attributable to the shareholders of Net profit attributable to the shareholders of the RETURN ON NET ASSETS AND EARNINGS PER SHARE NET ASSETS AND EARNINGS RETURN ON
In accordance with the requirements of the “Preparation Rules for Information Information for Rules “Preparation the of requirements the with accordance In and to the Public No.9 – Calculations Companies Offering Securities Disclosures by 2010)” in (Revised Share Per Earnings and Assets Net on Return for Disclosures return average weighted the Commission, Regulatory Securities China the by issued Group earnings per share of the earnings per share and diluted on net assets, basic in 2018 are as follows:
2. Chongqing Machinery & Electric Co., Ltd. 20 March 2019 Supplementary Information to Consolidated Financial Statements Consolidated to Information Supplementary December 2018 2017 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2018
476 CHONGQING MACHINERY & ELECTRIC CO., LTD.
(a joint stock limited company incorporated in the People’s Republic of China with limited liability) Stock Code: 02722 ANNUAL REPORT 2018
2018 ANNUAL REPORT