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 2019 ANNUAL REPORT 2019 CONTENTS
Corporate Information 2
Financial Highlights 4
Group Structure 5
Results Highlights 6
Chairman’s Statement 7
Management’s Discussion and Analysis 21
Directors, Supervisors and Senior Management 41
Report of the Board of Directors 57
Report of the Supervisory Committee 83
Corporate Governance Report 86
Risk and Internal Control and Governance Report 105
Environmental, Social and Governance Report 113
Independent Auditor’s Report 137
Consolidated Statement of Financial Position 148
Statement of Financial Position of the Company 152
Consolidated Income Statement 155
Income Statement of the Company 158
Consolidated Statement of Cash Flows 160
Cash Flows Statement of the Company 163
Consolidated Statement of Changes in Equity 165
Statement of Changes in Equity of the Company 171
Notes to the Consolidated Financial Statements 175
Supplementary Information to Consolidated Financial Statements 487 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 Mr. Dou Bo 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. Wang Haibing Mr. Xia Hua Mr. Li Fangzhong Mr. Lo Wah Wai Mr. Ren Xiaochang Mr. Jin Jingyu Mr. Liu Wei Independent Non-executive Directors Non-executive Directors Mr. Huang Yong Mr. Zhang Yongchao 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 2019 2 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 3
趙凱珊律師行) FINANCIAL YEAR END 31 December WEBSITE OF THE COMPANY www.chinacqme.com PRINCIPAL BANKER China Merchants Bank Chongqing Shangqingsi Sub-branch Building 1st Floor, Zhong-an International Yuzhong No.162 Zhongshan Third Road, District, Chongqing City, the PRC 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. ( (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 (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) 023-63075687 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 0.05 2019 36,846 19,080 (39,031) 242,946 203,915 184,835 444,669 5,516,812 6,167,115 7,014,766 3,335,935 9,503,049 2,213,959 7,289,090 6,844,421 10,350,701
(Restated) (Note)
0.11 0.12 0.09 0.12 2015 2016 2017 2018 48,951 61,838 49,374 51,111 92,116 128,963 110,539 147,386 (57,311) (27,182) (102,454) (60,500) 523,896 529,854 468,472 555,672 466,585 502,672 366,019 495,172 417,634 440,834 316,645 444,061 448,395 580,596 400,263 420,762 9,010,422 9,255,032 9,292,602 5,284,318 5,627,580 6,137,920 5,745,841 5,747,618 6,869,058 6,135,937 7,083,411 6,736,277 9,139,491 9,429,046 10,544,832 10,530,066 2,270,433 3,293,109 3,461,421 3,793,789 7,898,013 9,431,029 9,207,262 9,541,407 1,343,211 2,272,819 2,029,276 2,311,745 6,554,802 7,158,210 7,177,987 7,229,662 6,106,407 6,577,614 6,777,724 6,808,890
According to the Accounting Standards for Business Enterprises issued by the Ministry of According to the Accounting Standards for Business Enterprises issued Finance of the PRC
Company owners of the Company dividends the Company
(RMB’000) Revenue and profit Revenue Profit before income tax Profit before income Profit for the year Income tax expense Attributable to owners of the Non-controlling interests – Basic (RMB) Earnings per share attributable to Dividends – proposed final Assets and liabilities Non-current assets Current liabilities Current assets Net current assets Total assets less current liabilities Non-current liabilities Net assets Equity attributable to owners of Non-controlling interests (Note) Financial Highlights Financial
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 4 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 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 Industrial Enabling Innovation 51% Chongqing Machinery and Electronics Additive Center Co., Ltd. Manufacturing Co., Ltd. (重慶機電增材製造有限公司) 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. 57 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. 30 third-tier subsidiaries, including 15 wholly-owned subsidiaries, 8 subsidiaries with controlling interest, 7 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 (Chongqing) Ltd. 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 Smart 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% Xinjiang Fubaotian Cotton-picking Service Co., Ltd. 100% Chongqing Machinery & Electronic Intelligent Manufacturing Co., Ltd. 26.67% Chongqing Chongtong Turbine Technology Co., Ltd.
66.26% Chongqing Unication 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%100% ChongqingShenzhen ChongfaWater Turbine Cummins Works Engine PVT.LTD Co., Ltd.
64.21% Chongqing Gas Compressor Factory Co.,Ltd. 35.79% Agricultural Industry Development Fund）
100% Chongqing Pump Industry Co., Ltd.
100% Chongqing Water Turbine Works Co., Ltd. （重慶水輪尼泊爾公司）
Clean Energy Equipment 100% Chongqing Pigeon Electric Porcelain Co., Ltd. 74% Chongqing Pigeon Electric Wires & Cables 50% Chongqing Pigeon Electric Materials Co., 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. 96.0267% Jilin Chong Tong Chengfei New Material Co., Ltd.
Group Structure Group 100% Chongqing 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 year year the for Group the of revenue The amounted 2019 December 31 ended million, RMB5,516.8 approximately to of approximatelyrepresenting an increase approximately or million RMB232.5 approximately with compared as 4.4% period RMB5,284.3 million for the same of 2018. shareholders the to attributable Profit 31 ended year the the Company for of approximately was 2019 December a representing million, RMB184.8 decrease of approximately RMB259.3 as 58.4% approximately or million compared with approximately RMB444.1 million for the same period of 2018. year Basic earnings per share for the amounted 2019 December 31 ended (2018: RMB0.05 approximately to approximately RMB0.12). “Board”) (the directors of board The of the Company proposed to declare a final dividend of RMB0.01 per share 31 ended year the for inclusive) (tax December 2019 (2018: RMB0.04 (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 2019 6 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 7
Looking back at 2019, international unilateralism and trade protectionism have intensified, Looking back at 2019, international unilateralism and trade protectionism achieved has economy US the Although increased. have uncertainties geopolitical and turmoil political the because trend decelerating a showed economy global the growth, of growth economic the stagnant, is zone Euro the in economics the continues, Brexit of have continued. As Japan has slowed down, and the adjustment in emerging economies and ups the down, especially slowed generally economies have major of the growth rates RESULTS REVIEW On behalf of the Board, I am pleased to announce the annual results of the Group for the On behalf of the Board, I am pleased to announce the annual results annual Group’s The “Year”). the or “Period” (the 2019 December 31 ended year Accountants Public Certified ShineWing auditor, Company’s the by audited been have of the Group annual results (Special General Partnership). It is my pleasure to present the shareholders. as well as its sustainable development strategy and outlook to Dear Shareholders, Chairman’s Statement Chairman’s (Continued) downs of China-US economic and trade negotiations, casting shadow over the sluggish sluggish the over shadow casting negotiations, trade and economic China-US of downs slowed has growth economic global the environment, trade and economic international down generally. China- and economy international the in slowdown of impact the China, around Looking have contradictions structural economic manifest, to started has conflicts trade US decreasing, were profits corporate weakening, was demand market prominent, become was pressure downward economic and increasing, were economy real of difficulties the prices, consumer up pushed have prices pork rising the as Meanwhile, large. relatively the Facing tested. been has slope climbing of stage the in is which economy China’s the Chinese government adhered to supply side structural complicated economic situation, promote to policies monetary sound and policies fiscal proactive implemented reform, in infrastructure and industrial credit, accelerated economic growth, increased investment technology 5G of application wide up sped reform, market-oriented of deepening economic broadened potential, development activated and innovated development, and expanded development opportunities of multilateral driving force of domestic demand, reform-promoting, growth-stabilizing, of promotion coordinating countries, between trade employment, stabilize to macro-control improving risk-preventing; and structure-adjusting investment and confidence. The GDP growth rate for finance, foreign trade, foreign capital, the total economic output was RMB99 trillion, and the the year was approximately 6.1%, dollar. GDP per capita exceeded USD10,000 fully and guideline the as strategy development “321” new the adopted Group The The Group continued to adhere to the expansion implemented the “1334” work measures. intelligent accelerated and innovation, technological continued markets, multiple of high-end cultivated and introduced and management risk-preventing transformation, circle as a whole. However, talents, laying the foundation for the Group to achieve a benign in investment and the affected by the domestic and foreign downward economy, slowdown than expected. lack of orders, the overall business growth of the Group was lower approximately was 2019 December 31 at as Group the of revenue operating Total increase of approximately RMB5,516.8 million (2018: RMB5,284.3 million), representing an approximately was profit Gross year. last over 4.4% approximately or million RMB232.5 representing a decrease of RMB1,038.7 million (2018: approximately RMB1,245.9 million), last year. Profit attributable approximately RMB207.2 million or approximately 16.6% over RMB184.8 million (2018: to the shareholders of the Company amounted to approximately RMB259.3 approximately of decrease a representing million), RMB444.1 approximately million or approximately 58.4% over last year. Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 8
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 9 (Continued) Chairman’s Statement Chairman’s In 2019, the Group fully grasped the opportunity from the recovery of the wind power power wind the of recovery the from opportunity the grasped fully Group the 2019, In driving billion, RMB1.27 reached business blades power wind of orders The market. hydropower large by Stimulated segment. the of income operating overall of growth the insulator used for high speed railway, high speed variable equipment, stick prop porcelain cold lead nuclear IV Generation blowers, centrifugal stage single drive direct frequency lubricated natural gas compressor and other oil-free high pressure transfer pump, reactor and wire equipment, hydropower as such business of income operating the products, growth. stable maintained compressors gas and pumps industrial fans, industrial cable, RMB4,049.4 approximately reached segment energy clean of income operating The last of period same the from 15.7% approximately of increase an representing million, wind power blades market, year. However, due to the intensified market competition in the in gross profit margin, rising raw material costs, increased labor costs and a large decline million, RMB248.7 approximately reached segment the of performance operating the period of last year. representing a decrease of approximately 7.8% from the same BUSINESS REVIEW AND OUTLOOK BUSINESS REVIEW AND and wires electrical equipment, generation (hydroelectric equipment energy Clean gas pumps, industrial blowers, industry blades, power wind materials, and cables compressors, etc.) Earnings per share for the Period were approximately RMB0.05 (2018: approximately approximately (2018: RMB0.05 approximately were Period the for share per Earnings December 2019 amounted to approximately RMB16,517.8 RMB0.12). Total assets as at 31 liabilities total while million), RMB16,277.7 approximately 2018: December (31 million approximately 2018: December (31 million RMB9,228.7 approximately to amounted per share was approximately RMB1.98 (31 December RMB9,048.0 million); and net asset 2018: RMB1.96). During the Period, the Group’s administrative expenses accounted for approximately 9.9% 9.9% approximately for expenses accounted administrative Group’s the Period, During the for approximately 5.6%. The administrative selling expenses accounted of the revenue while general. in 4.9% approximately for year last than higher was expenses selling and expenses December 31 at As Period. the during position financial stable a maintained Group The RMB2,094.6 amounted to approximately and bank deposits of the Group 2019, total cash same the to compared as 3.2% approximately of decrease slight a representing million, period of last year. (Continued) In 2019, the wire, cable and materials business actively created a “hydropower integration” integration” created a “hydropower actively and materials business the wire, cable In 2019, pump industrial the share; market its increased and platform”, sales “one-stop and HSDZ50-170 successfully made sales of expanded overseas market and business actively boric H3D6-12/24 pump, injection safety medium-pressure HSDZ160-65 pump, charging large- of types Four pump in Pakistan. test and H3D5-6/24 hydraulic acid injection pump power plants generation of PWR nuclear water pumps suitable for the third scale industrial water pump the chemical container by the Company, including independently developed Level 3), water cooling pump (RCC-M “Hualong One” reactor cavity (Class D equipment), and start-up Level 3, RCC-M Level 2) water supply pump (Nuclear Safety auxiliary electric examination of the state-level nuclear power expert group; water supply pump, passed the business blowers industry of system” MVR for used unit compressor steam “centrifugal as the city-level key new product. successfully passed the identification Engine Company Limited (“Chongqing Cummins”), a joint In addition, Chongqing Cummins engaged in the production of high-horsepower diesel venture of the Company, is principally actively responded to the impact of market downturn,engine. In 2019, Chongqing Cummins as such markets the in exploring its increased and strategy, marketing implemented active overseas and ships and machinery petroleum machinery, engineering equipment, power leading maintained still horsepower 500 than more with engines of sales The markets. performance remained overall stable. The constructionposition in the market, and its annual technology R&D center of Chongqing Cummins has been project of the high-power engine engine plant project commenced construction and is put into use, and the new high-power business the 2020. It is expected that in into operation put and expected to be completed year of 2020. The annual results of Chongqing Cummins will remain stable throughout the 3 to the consolidated financial statements. in 2019 are set out in Note VIII, Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 10
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 11 (Continued) Chairman’s Statement Chairman’s Looking forward to 2020, the Group will take advantage of the opportunities of the rapid the of the opportunities of take advantage will Group the 2020, to Looking forward high-quality of development the accelerate to manufacturing smart of development tools and smart electronics,development of smart gear machine tools, smart screw machine and applied research and will continue to promote the construction of smart technology is It centers. experience and displays manufacturing smart centers, printing 3D centers, expected that the segment will achieve recovery growth. Following the State launched “3-Years Action Plan to Accelerate the Development of of Development the Accelerate to Plan Action “3-Years launched State the Following actively Group the (2018-2020)”, Industry Intelligence Artificial of Generation New the and integration of intelligent manufacturing and industrial developed in-depth coordination key for level intelligence of development rapid the promoted actively informatization, industrial software, platform software, management technology, information equipment, technology the leads business electronic smart The solutions. system and Internet manufacturing intelligent of providers of batch first the as selected was and innovation of Industry and Information Technology. However, affected system solutions by the Ministry market demand of automotive industry, as well as the lack by the continuous decline in the market the ships, and machinery petroleum industry, machinery the in demand market of operating the and precipitously, declined has business tool machine smart for demand have decreased significantly. Accordingly, the high-end income and operating performance overall turnover of approximately RMB1,319.6 million, smart equipment segment recorded 17.5% from the same period of last year. The representing a decrease of approximately a representing million, RMB258.1 approximately achieved segment the of loss operating period of last year. decrease in profit of approximately RMB280.5 million from the same High-end smart equipment (smart gear machine tools, smart screw machine tools, tools, machine screw smart tools, machine gear (smart equipment smart High-end etc.) smart electronics, Looking forward to 2020, the Group will continue to firmly grasp the opportunity of the the of opportunity the grasp firmly to continue will Group the 2020, to forward Looking projects, hydropower EPC high-quality expand to strive market, power wind of recovery consolidate and equipment, power nuclear key of application market promote steadily estate, real in businesses materials and cables and wires electrical of share market segment will fields. It is expected that the rail transit, railway and other hydropower, urban achieve better growth. (Continued) ry hobbing” project of Chongqing Machine Tools (Group) Co., Ltd. (“Chongqing (“Chongqing Ltd. Co., (Group) Tools Machine Chongqing of project hobbing” ry Machine Tools”), a subsidiary of the Company, was awarded the first prize of Science Machine Tools”), a subsidiary of the Company, was awarded the Federation; and Technology Progress Award by China Machinery Industry The “key technology, process equipment and automatic production line of high-speed The “key technology, process equipment and automatic production d On 2 January 2019, the Notice on Releasing the 2018 (25th Batch) Newly Accredited On 2 January 2019, the Notice on Releasing the 2018 (25th Batch) (Fa Gai Gao Ji [2019] List and Full List of National Enterprise Technology Centers (“Chongqing Water No.36) confirmed that Chongqing Water Turbine Works Co., Ltd. the National Enterprise Turbine”), a subsidiary of the Company, was recognized as Technology Center;
During this Period, the Group was granted the following awards: • AWARDS In 2019, the “Industrial Internet Development Action Initiative (2018-2020)” and the “Guidance Initiative (2018-2020)” and the Internet Development Action In 2019, the “Industrial by successively issued were Promotion” and Construction Network Internet Industrial for of manufacturing ecosystem the intelligent of construction the up The Group sped the PRC. corporate with system innovation collaborative two-level built and center, the empowerment and entered partner confirmation with SAP, the Group completed the technology center; and foreign PLM and other domestic agreements with Shanghai into strategic cooperation of bulk materials directly reduced the procurement partners; the centralized procurement RMB10.0 million; the financial business maintained a cost of the Group by approximately income of the segment reached approximately RMB145.4 stable operation; the operating last of period same the from 20.7% approximately of decrease a representing million, million, RMB42.1 approximately reached segment the of results operating the and year, 2.2% from the same period of last year. representing an increase of approximately will continue to accelerate the implementation of digital Looking forward to 2020, the Group for hydropower equipment and the construction of digital upgrade demonstration projects the on research the promote will Group The platform. e-procurement as such projects data operation and the construction of intelligent warning application of intelligentized big generators turbine hydroelectric impact-type ultrahigh-head for system diagnosis and industrial fan products, enabling technologies for digital and life cycle project system of overall operating performance of the segment will remain transformation of enterprises. The stable throughout the year. Industrial services (industrial empowerment, financing, trading, etc.) (industrial empowerment, financing, Industrial services • Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 12 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 13 (Continued) Machinery & Electronic Intelligent Manufacturing Co., Ltd. (“Chongqing (“Chongqing Ltd. Co., Manufacturing Intelligent Electronic & Machinery
hongqing Unication Electronic Technology Co., Ltd (“Chongqing Unication”), a a Unication”), (“Chongqing Ltd Co., Technology Electronic Unication hongqing Intelligent”), a subsidiary of the Company, was included in the intelligent intelligent the in included was Company, the of subsidiary a Intelligent”), providers of the Ministry of Industry and Information manufacturing system solution Technology for 2019. subsidiary of the Company, was awarded the “ ‘Small Giant’ Enterprise of Specialty, subsidiary of the Company, was and Industry of Ministry the by 2018” for Innovation and Uniqueness Excellency, included in the Benchmark Enterprises in Intelligent Information Technology, and was digital Chongqing of batch first the and 2019 for Chongqing in Manufacturing 2019; workshops and smart factories for Pump”), both subsidiaries of the Company, were included in the first batch of of batch first the in included were Company, the of subsidiaries both Pump”), for 2019; workshops and smart factories Chongqing digital Chongqing C Chongqing Pump and Chongqing Water Turbine, both subsidiaries of the Company, both subsidiaries of the Company, and Chongqing Water Turbine, Chongqing Pump (industrial intelligence) demonstration Chongqing industrial internet were included in projects in 2019; C
Chairman’s Statement Chairman’s 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 diverse product mix intelligent, green and honest manufacturing and other fields, providing and services to enhance its ability to guard against market risk. Regional advantages of “One Belt and One Road”, “Yangtze River Economic Belt”, Belt”, Economic River “Yangtze Road”, One and Belt “One of advantages Regional Area Trade Free Chongqing and Circle” Economic Shuangcheng “Chengdu-Chongqing opportunities for the Group have been taken advantage of, bringing favorable development preferential policies such as to tap potential markets. Meanwhile, the Group benefits from industrial policy advantages western development and enjoys unique regional advantages, and tax advantages. As the largest integrative equipment manufacturing company in western China, the Group As the largest integrative equipment in the machinery industry of the PRC for years and has ranked among top 500 enterprises and advantages in the future development: will stick to the following foundation DEVELOPMENT FOUNDATION AND ADVANTAGES DEVELOPMENT FOUNDATION • • • (“Chongqing Ltd. Co., Industry Pump Chongqing and Tools Machine hongqing • (Continued) Development Strategies 2020 is the planning year of “Fourteenth Five-Year” Plan. Facing the multiple tests tests multiple the Facing Plan. Five-Year” “Fourteenth of year planning the is 2020 and transformation industry manufacturing domestic of period “acceleration of state-owned of reform the deepening of period transformation “pilot upgrading”, promoting comprehensively of stage “critical and corporations” investment capital to high quality as a whole”, the Group will adhere to from stepping into benign cycle strategy as the overall strategy, the supply side adopt the new “321” development the and focus, the as efficiency and reform the line, main the as reform structural guarantee, quality market, on focusing by is: which point, starting as work “1334” reduction of “accounts delivery guarantee and service guarantee, reduction of costs, technological of enhancement liabilities, of reduction inventory”, and receivable enhancement of risk innovative force, enhancement of reformation innovation force, and develop prevention and control capabilities, and enhancement of cohesiveness by brought risks and impacts the to respond actively will Group the consensus, will and pressure, downward economic and environment external complicated the development. comprehensively improve profitability and achieve high-quality
I. DEVELOPMENT STRATEGIES priorities of the Group in 2020 are as follows: Development strategies and work The Group possesses 4 state-level enterprises technical centers, 1 famous brand in the famous brand in centers, 1 technical 4 state-level enterprises possesses The Group 190 and Chongqing in centers technical 16 PRC, the in trademarks well-known 5 PRC, research and development. and continues to invest in patented technologies and structure governance corporate standardized and efficient highly has Group The mechanism governance and risk control and develops good corporate institutional system, run and managed. that is efficiently mechanism incentive system, management resource human comprehensive Group has The mechanism, and possesses excellent and leading technical and overseas talent cultivation and a management team with international horizon. elites, a high quality staff team Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 14 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 15 (Continued) fight in groups and coordinated with each other. We will establish a a establish will We other. each with coordinated and groups in fight
long-term cooperation with large group companies, construction units, design construction units, design with large group companies, long-term cooperation common customer together subsidiaries with bring and will institutes and others, resource sharing, and to seize information exchange and base, so as to realize of policy Road” One Belt, “One the on Relying together. opportunities market synergies of overseas high-quality EPC projects the country and leveraging the of exports increase to efforts our make will we equipment, hydropower of wires and cables in Southeast Asia and South industrial fans, industrial pumps, output. In terms of wind power business, we Asia markets. Second, increase more for strive and installation power wind of tide the grasp to continue will terms of the wire and cable business, we will offshore wind power orders; in hydropower of terms in projects; construction transit rail for bidding up step use of the synergy of the Nepal branch to equipment business, we will make the industrial pump business, we will actively secure EPC orders; in terms of electronics smart the of terms in projects; pump nuclear overseas up follow development of smart products. Besides, we business, we will strengthen the RFID tags and other products in order put efforts to develop motor controllers, of our smart electronics in the industry; in terms to enhance the competitiveness we will speed up product structure adjustment, of intelligent gear machine tools, of products such as dry-cut gear hobbingaccelerate research and development business, wemachines and gear grinding machines; in terms of steering system achieve mass will accelerate the development of new products for China VI and We will promote production. Third, make a transformation in industrial services. industrial the of aftermarket the of model maintenance and operation the and maintenance pump business; accelerate the undertaking of the operation parts market of business of hydropower equipment, the expansion of the spare intelligent of transformation the and system, steering and braking automotive from only gear machine tools and equipment, so as to realize the transformation manufacturing to “manufacturing + service”. Grab market opportunities First,
Work Priorities (1)
Chairman’s Statement Chairman’s II. (Continued) procurement to ensure that the subsidiaries of the Group reduce reduce Group the of subsidiaries the that ensure to procurement ensure delivery: optimize any bottleneck process in production, improve improve production, in process bottleneck any optimize delivery: ensure costs and achieve the goals of centralized procurement and cost reduction. reduction. cost and procurement centralized of goals the achieve and costs receivables, of control the strengthen funds”: “two the reduce Second, strictly and risks, receivable long-term prevent and to attention close pay collection and payment terms of the contract; manage the management of the control the backlog of pre-investment, track strengthen inventory and storage, communication close maintain manner, timely a in progress project customer that Ensure inventory. reduce and delivery timely achieve to customers with reduce debt: the proportion of “two funds” reaches a reasonable level. Third, channels financing period, borrowing the adjust scale, financing the control companies, and financing methods, make good use of the platform of financial debt the of level reasonable a maintain and risks, and costs financial reduce ratio of the Group. internal collaboration, adjust production organization and collaboration models. and collaboration models. adjust production organization internal collaboration, design, product of connection integrated an form to subsidiaries the Guide communication and others; process control, customer production organization, quality warranty. Second, ensure of product delivery with improve the efficiency high up set Company, the of culture quality the develop to continue quality: control quality strengthen activities, QC promote standards, high and quality quality. product ensure and control quality improve process, the throughout structure user the optimize system, marketing improve service: ensure Third, satisfaction customers’ to attention more pay system, service after-sales and focus on improving customers’ dissatisfaction, and after-sales advice tracking, reaches the expected goals. and ensure that customers’ satisfaction “Three reductions” and enhance efficiency “Three reductions” and enhance control as the main line, promote subsidiaries First, reduce costs: with budget to do a full coverage of bulk materials to control and reduce costs; continue centralized “Three guarantees” and improve quality and “Three guarantees” First,
(3) (2) Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 16 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 17
(Continued)
Continue innovation and enhance supporting Continue innovation the Group: re-examine the “Fourteenth Five-Year Plan” of First, prepare the existing industry and product structure, and accelerate the development the accelerate and structure, product and industry existing enhance the driving force intelligent industries. Second, of big data and investment the of proportion the increase innovation: technological for the up speed innovation; technological in development and research in accelerate the research and developmentapplications for new patents and service-oriented of development the promote products; key of hydropower and power, wind pumps, industrial as such manufacturing and services maintenance and operation remote out carry equipment; as such projects new planning development; digital industrial promote development units, hydropower high-head large-capacity four-nozzle new workshop digital manufacturing intelligent for platform cloud of progress the ensure Third, projects. new other and control operation and installation equipment the complete projects: construction major of engine high-powered of base new the of II phase for commissioning at the end of the year; start construction project of Chongqing Cummins second the in business transformer the for project relocation the of gas of base production the of relocation the complete year; the of half and industrialization the promote schedule; on business compressor business; cable and wire for cables special of manufacturing intelligent project. pump diaphragm large-scale a of construction the start and capacity application the promote application: digital strengthen Fourth, achieve to system an innovation create and center empowerment the of the two-level collaboration with the corporate technology center; complete workshop digital the for project demonstration manufacturing intelligent research of the hydropower equipment business; promote the application pump industrial of maintenance and operation remote the to related of construction the promote intelligence, data big on based business impact intelligent early warning and diagnosis system for ultra-high head the system generator set in hydropower equipment business, and promote cycle, so construction of wind power business products in the whole life automatic as to realize the digital transformation of the Group; carry out accounting of financial costs of business units of pilot subsidiaries.
“Four enhancements” and empowerment “Four enhancements” 1.
(4) Chairman’s Statement Chairman’s (Continued) of setting up a state-owned capital investment company by by company investment capital state-owned a up setting of difficulty in production and operation, risks in product quality and and quality product in risks operation, and production in difficulty delivery of certain businesses, and major risks in safety, environmental, environmental, safety, in risks major and businesses, certain of delivery risks. We and occupational health. Second, prevent and control financial and assets of structure the optimize system, financial the improve will control and prevent funds”, “two of management the strengthen liabilities, tax and financial data risks, capital and debt risks, asset impairment risks, prevent Third, risks. compliance other and regulatory exchange foreign of management the promote vigorously will We risks. legal control and the enterprises according to law, enhance risk awareness, and improve in decision- risk control system; prevent and control non-compliance risk commercialmaking procedures, risks in major litigations and risks in major of a contracts. We will put efforts in the risk control and the construction in team of legal personnel so as to improve our professional capabilities risk prevention. the parent group, the Group will make good hierarchical authorization authorization hierarchical good make will Group the group, parent the promote actively companies; specialized secondary of reform the for subsidiaries. mature relatively the among ownership mixed of reform the a strategy for each and one policy”, implement Second, “one enterprise increment + promote subsidiaries, we will take “ensure enterprise. For key path, main the as assets” revitalize + management enhance + reform to the situation of different subsidiaries, formulate action plans according manner multi-pronged a in plan the of implementation the promote and Third, optimize human resources. to ensure that the goals are achieved. the reduce will we productivity, labor overall improving on Focusing the support and subsidiaries, our of efficiency the increase and staff to set up professional teams and optimize the advantageous subsidiaries the out sort further will We assets. existing revitalize Fourth, structure. the speed up and assets of all sub-subsidiaries, inefficient and ineffective process of revitalizing disposal. Improve the mechanism to prevent and control risks Improve the mechanism to prevent risks. We will strengthen operational First, prevent and control operational and control significant risks in the process controls, in order to prevent the future of subsidiaries that are currently current period or minor risks in in Speed up reform and increase vitality reform and increase Speed up opportunities. Taking the and grasp mixed reforms First, take advantage opportunity
2. 3. Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 18 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 19 (Continued)
st, make scientific decisions and carry on effective controls. Trial Trial controls. effective on carry and decisions scientific make st, Standardize governance and strengthen synergy and strengthen governance Standardize Fir implementation of the system for the appointment of external independent of the system for the appointment implementation of professional by subsidiaries; implementation directors and supervisors of directors financial of rotation of implementation selection; manager execution and control and prevention risk the strengthen subsidiaries; optimize the incentive and subsidiaries. Second, supervision of overseas constraints. incentive diversified implement and mechanism constraint guide cooperation, and coordination strengthen service, improve Third, current operating priorities and difficulties, and help subsidiaries to solve and form an overall synergy.
4. Chairman’s Statement Chairman’s Looking forward to 2020, the novel coronavirus pneumonia epidemic (the “Epidemic”) has Looking forward to 2020, the novel development, and the domestic manufacturing PMI a short-term effect on China’s economic The world economy is affected, obviously slowing hit a record low to 35.7% in February. by the spread of multi-national epidemic. Furthermore, down and exists many uncertainties geopolitical of escalation and markets, financial in turbulence trade, global in tensions world economy in 2020. Although positive events, such as tensions all cast a haze on the major economies, positive news about Sino-US economic the looser monetary policies of Brexit”, “No-deal Britain’s about concerns of weakening the and negotiations, trade and uncertainty, policy continued however, sentiment, market boosting in role a play may declining fiscal stimulus in the United States may lead to weak business confidence and of manufacturing industry in a slowdown in US economic growth, while the development global overall the therefore, uncertainty, global by hampered be to continue will Europe year for China to build a environment has not changed essentially. 2020 will be the final Five-Year” Plan. Supported well-off society in an all-round way and carry out the “Thirteenth to continue will China policies, monetary prudent and policies fiscal proactive the by development the accelerate optimization, and reforms structural supply-side to adhere promote and infrastructure, in investment increase industries, emerging strategic of household of growth steady the to due addition, In development. economic high-quality 2020 will be basically the same as in 2019, consumption, the GDP growth rate of China in the with along opportunities the of virtue By development. rapid and steady maintaining and transit rail urban protection, environmental energy, clean in investment of increase help with the and initiatives, One Road” “One Belt, and of China intelligent manufacturing core screen core network of Chongqing’s efforts to build an entire industry chain of the the accelerate will Group the Sichuan, and Chongqing of circle economic an build and SUMMARY Mr. Wang Yuxiang Executive Director and Chairman (Continued) manufacturing and market development of wind power, hydropower, nuclear power, power power, power hydropower, nuclear of wind power, development and market manufacturing promote smart equipment, and actively distribution and high-end generation, transmission, proactive taking is Group The development. of cycle virtuous a into entry overall the the impact of the Epidemic. respond, and striving to minimize measures to actively 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, work and to all staff members for their hard also like to give my gratitude particular, I would to create will work with all staff members over the past year. the Group great contributions 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 Chongqing, the PRC 27 March 2020 Chairman’s Statement Chairman’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 20 Management’s Discussion and Analysis
OUTLOOK AND PROSPECT
Looking forward to 2020, the novel coronavirus pneumonia epidemic (the “Epidemic”) has a short-term effect on China’s economic development, and the domestic manufacturing PMI hit a record low to 35.7% in February. The world economy is affected, obviously slowing down and exists many uncertainties by the spread of multi-national epidemic. Furthermore, tensions in global trade, turbulence in financial markets, and escalation of geopolitical tensions all cast a haze on the world economy in 2020. Although positive events, such as the looser monetary policies of major economies, positive news about Sino-US economic and trade negotiations, and the weakening of concerns about Britain’s “No-deal Brexit”,
may play a role in boosting market sentiment, however, continued policy uncertainty, 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING weak business confidence and declining fiscal stimulus in the United States may lead to a slowdown in US economic growth, while the development of manufacturing industry in Europe will continue to be hampered by global uncertainty, and the Epidemic will have a short but rather severe impact on the world economy, therefore it is expected that the overall global environment has no substantial change in recovery trend. There are still certain uncertainties about the economic recovery, and the global GDP growth is expected to slow down flatly.
2020 will be the final year for China to build a well-off society in an all-round way and carry out the “Thirteenth Five-Year” Plan. Supported by the proactive fiscal policies and prudent monetary policies, China will continue to adhere to supply-side structural reforms, accelerate the development of strategic emerging industries, increase investment in infrastructure, and promote high-quality economic development. In addition, due to the steady growth of household consumption, the GDP growth rate of China in 2020 will be expected to keep basically the same as in 2019, maintaining steady development.
The report of the 19th National Congress of the Communist Party of China proposes to actively promote the high-quality development of the manufacturing industry, taking “consolidation, enhancement, promotion and unblocking” as the main line of work, accelerate the transformation and upgrade of the industrial chain and the cultivation of new kinetic energy, and vigorously develop the transformation and upgrading of advanced traditional manufacturing industry, striving to reduce the cost of land, energy, logistics and institutional cost of the enterprise; to accelerate the cultivation of the domestic market and deepen the potential of domestic demand; to improve the business environment, reduce taxes and fees, provide policy support to serve the manufacturing and consumer industries, and increase direct financing for technology-based and technical-based enterprises; and to cultivate a new group of innovative leading enterprises with global competitiveness.
21 (Continued) In 2019, the Group actively optimized its large marketing system and focused on target In 2019, the Group actively optimized substantial achieved business parts auto and business power wind for Orders markets. orders year; last of period same the over respectively 30% and 40% by increased growth, remained electronics smart and compressors gas pumps, industrial fans, industrial for and China in downturn economic the of impact continued the to due However, stable. of the domestic industry, abroad, shrinking market demand and the structural adjustment did business tools machine gear smart and business equipment hydropower for orders the Group of orders new overall the the year, During expectations. annual their not meet decreased by 6% year-on-year. BUSINESS REVIEW Market Development In 2020, by virtue of the opportunities along with the increase of investment in clean energy, of investment with the increase opportunities along by virtue of the In 2020, and China of manufacturing intelligent and transit rail urban protection, environmental an entire of Chongqing’s efforts to build Road” initiatives, and with the help “One Belt, One Chongqing and build an economic circle of the core screen core network industry chain of enterprise” one for policy “one with and measures work “1334” the by guided Sichuan and the complex to the impact and risks of the Group will actively respond as the starting point, comprehensive our improve pressure; downward economic and environment external the of strategies and teamwork; accelerate strengthen implementation analysis capabilities, power power, hydropower, nuclear power, market development of wind manufacturing and innovation increase equipment; smart high-end and distribution transmission, generation, focus also will Group the addition, In competitiveness. core the enhance and investment teams, talent of building the strengthen profitability, and development high-quality on talents, implement active epidemic prevention measures introduce and cultivate high-end anti-risk capabilities, and actively promote the overall for protecting employees, strengthen It is expected that the business of the Group will entry into a virtuous cycle of development. 2020. maintain healthy development in Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 22
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 23 (Continued) Management’s Discussion and Analysis and Discussion Management’s In 2019, the Group strengthened the two-level work responsibilities of its headquarters and In 2019, the Group strengthened funds”: “two the reduce First, control. process to attention close paid and subsidiaries, and inventory control have fulfilled the expectations of the the overall accounts receivable year. last to compared significantly increased have inflows cash operating and Board, financing of the Group is controlled within the budget range, Second, reduce debt: the total expected the than lower points percentage 1.8 approximately is ratio asset-liability the Group the of margin profit gross average the costs: reduce Third, Board. the of target gross the them, Among year. last from points percentage 4.8 approximately by decreased and compressors gas blades, power wind tools, machine gear smart of margin profit power bargaining enhanced Group The significantly. decreased electronics intelligent of reduction cost achieving platform, procurement centralized through suppliers against approximately RMB10 million. Operational Efficiency In 2019, the Group continued to cultivate a quality culture and took the opportunity to to opportunity the took and culture quality a cultivate to continued Group the 2019, In Most process. control quality entire the strengthen to competition QC third the launch the of loss quality increased the to due but control, quality good up set have subsidiaries RMB100 the quality loss of integrated and industrial pump business, auto parts business rate delivery product The increased. slightly has Group the of revenue sales product period of last year. percentage points over the same an increase of 4 increased steadily, of industrial pump and hydropower generation equipment Among them, the delivery rates personnel and system service sound a Through 10%. than more by increased business have taken optimization measures from design, assessment mechanism, our subsidiaries the needs of customers in a timely manner. Customer process and other sources to grasp by 2 percentage points year-on-year. satisfaction was higher, increased Operational Quality (Continued) ); and 2 municipal enterprise technology centers centers technology enterprise municipal 2 and 中國機械工業聯合會); Reform and Restructuring industrial in subsidiary its of closure and liquidation the completed Group the 2019, In Tong of asset transfer overall of work phased the Gas, Yongtong namely pump business bankruptcy the and business, blower industrial for subsidiary the Affairs, Water Kang corporation in and joint venture (“WGP”); promoted the company an Italian liquidation of of wind power business; completion of the transfer of wind resources development projects the wire and cable business the land and properties built thereon of Songqiao by-pass for pump business; completed and land of Yongtong Factory, the subsidiary for the industrial tools business; and the disposal of part of inefficient assets for the smart gear machine enrolled was under deepened the human resources reform. The total number of employees of secondary management control within the target range during the year, and the number departments decreased by 4.4%. In 2019, the Group focused on the commercialization of innovation results. The R&D R&D The results. innovation of commercialization the on focused Group the 2019, In 20 (including patents authorized 227 5.6%; for accounted year the during investment and 25 new new products were developed, were newly added, 106 key invention patents) fully fulfilled; the Group’s annual goals were the municipal-level appraisal, products passed products and compressors and other new pumps, MVR centrifugal steam SZDP centrifuge such as a number of innovative projects have been put into operation; new technologies equipment hydropower for pumps centrifugal multi-level high-end and workshops digital was Center Empowerment Industrial Chongqing schedule; on launched were business high- of series 4 construction; project demonstration commenced and established, container water pump of the nuclear power station for end pumps such as the chemical Machinery China of appraisal product new major the passed business pump industrial ( Federation Industry policies innovation various from support received continuously We up. set been have throughout the year. Technological Innovation Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 24
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 25 (Continued) Management’s Discussion and Analysis and Discussion Management’s In 2019, the Group fully grasped the opportunity of the recovery of the wind power market. In 2019, the Group fully grasped business reached RMB1.27 billion, driving the growth of The orders of wind power blades segment. Stimulated by large hydropower equipment, stick overall operating income of the direct frequency variable speed high railway, speed high for used insulator porcelain prop transfer reactor cold lead nuclear IV Generation blowers, centrifugal stage single drive the products, other and compressor gas natural lubricated oil-free pressure high pump, wire and cable, industrial operating income of business such as hydropower equipment, operating The growth. stable maintained compressors gas and pumps industrial fans, million, representing income of clean energy segment reached approximately RMB4,049.4 year. However, due to the an increase of approximately 15.7% from the same period of last rising raw material costs, intensified market competition in the wind power blades market, operating performance a large decline in gross profit margin, the and costs increased labor of decrease a representing million, RMB248.7 approximately reached segment the of approximately 7.8% from the same period of last year. Clean energy equipment (hydroelectric generation equipment, electrical wires and and wires electrical equipment, generation (hydroelectric equipment energy Clean gas pumps, industrial blowers, industry blades, power wind materials, cables, compressors, etc.) RESULTS OVERVIEW Operation Analysis In 2019, the Group improved its risk control and internal control system. The Group revised internal control system. The Group improved its risk control and In 2019, the Group the Company the risk control evaluation of Measures”, completed the “Risk Management investigation, risk legal corporate out carried comprehensively subsidiaries, two its and and established a risk prevention “review (回頭看)” of internal control, self-inspection and for major enhanced the legal guidance mechanism. The Group and control collaboration legal risks. deal with operational risks and to help them properly projects of subsidiaries, audit supervision and risk analysis. The Group also strengthened the Risk Management (Continued) In 2019, the wire, cable and materials business actively created a “hydropower integration” integration” created a “hydropower actively and materials business the wire, cable In 2019, pump industrial the share; market its increased and platform”, sales “one-stop and HSDZ50-170 successfully made sales of expanded overseas market and business actively boric H3D6-12/24 pump, injection safety medium-pressure HSDZ160-65 pump, charging large- of types Four pump in Pakistan. test and H3D5-6/24 hydraulic acid injection pump power plants generation of PWR nuclear water pumps suitable for the third scale industrial water pump the chemical container by the Company, including independently developed Level 3), water cooling pump (RCC-M “Hualong One” reactor cavity (Class D equipment), 2) and start- Safety Level 3, RCC-M Level water supply pump (Nuclear auxiliary electric expert power nuclear state-level the of examination the passed pump, supply water up unit used for MVR system” successfully passed the group; “centrifugal steam compressor new product. identification as the city-level key Engine Company Limited (“Chongqing Cummins”), a joint In addition, Chongqing Cummins engaged in the production of high-horsepower diesel venture of the Company, is principally actively responded to the impact of market downturn,engine. In 2019, Chongqing Cummins as such markets the in exploring its increased and strategy, marketing implemented active overseas and ships and machinery petroleum machinery, engineering equipment, power leading maintained still horsepower 500 than more with engines of sales The markets. performance remained overall stable. The constructionposition in the market, and its annual technology R&D center of Chongqing Cummins has been project of the high-power engine engine plant project commenced construction and is put into use, and the new high-power business the 2020. It is expected that in into operation put and expected to be completed year of 2020. The annual results of Chongqing Cummins will remain stable throughout the 3 to the consolidated financial statements. in 2019 are set out in Note VIII, Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 26
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 27 (Continued) Management’s Discussion and Analysis and Discussion Management’s In 2019, the “Industrial Internet Development Action Initiative (2018-2020)” and the “GuidanceIn 2019, the “Industrial Internet Development by successively issued were Promotion” and Construction Network Internet Industrial for of ecosystem manufacturing the intelligent of construction the up sped The Group the PRC. with corporate system innovation collaborative two-level built and center, the empowerment with SAP, and entered technology center; the Group completed the partner confirmation other domestic and foreign into strategic cooperation agreements with Shanghai PLM and reduced the procurement partners; the centralized procurement of bulk materials directly business maintained a cost of the Group by approximately RMB10.0 million; the financial approximately RMB145.4 stable operation; the operating income of the segment reached last of period same the from 20.7% approximately of decrease a representing million, million, RMB42.1 approximately reached segment the of results operating the and year, period of last year. representing an increase of approximately 2.2% from the same Industrial services (industrial empowerment, financing, trading, etc.) Industrial services (industrial Following the State launched “3-Years Action Plan to Accelerate the Development of of Development the Accelerate to Plan Action “3-Years launched State the Following actively Group the (2018-2020)”, Industry Intelligence Artificial of Generation New the industrial of intelligent manufacturing and coordination and integration developed in-depth key for level intelligence of development rapid the promoted actively informatization, industrial software, platform software, management technology, information equipment, technology the leads business electronic smart The solutions. system and Internet manufacturing intelligent of providers of batch first the as selected was and innovation of Industry and Information Technology. However, affected system solutions by the Ministry the as well as industry, automotive of demand market the in decline continuous the by the ships, and machinery petroleum industry, machinery the in demand market of lack machine tool business has declined precipitously, and the market demand for smart CNC significantly. Accordingly, the high-end smart equipment operating income has decreased a representing million, RMB1,319.6 approximately of turnover overall recorded segment from the same period of last year. The operating loss of decrease of approximately 17.5% of profit in decrease a representing million, RMB258.1 approximately reached segment the from the same period of last year. approximately RMB280.5 million High-end smart equipment (smart gear machine tools, smart screw machine tools, tools, machine screw smart tools, machine gear (smart equipment smart High-end etc.) machinery, steering systems, smart agricultural (Continued) GROSS PROFIT by decreased million, RMB1,038.7 approximately was 2019 for profit gross The 16.6%, as compared with approximately million or approximately RMB207.2 approximately approximately was margin gross The 2018. of period same the for million RMB1,245.9 approximately with compared as points percentage 4.8 approximately by decreased 18.8%, the decrease in gross profit 23.6% for the same period last year, which was mainly due to cost of raw materials and which arose from the intensifying market competition, the rising in operating revenue from staff cost of the wind power blades business and the decrease the smart CNC machine tool business of the Group. For the year ended 31 December 2019, the Group’s operating revenue amounted to to amounted revenue operating Group’s the 2019, December 31 ended year the For or million RMB232.5 approximately of increase an million, RMB5,516.8 approximately same the for million RMB5,284.3 approximately with compared as 4.4% approximately equipment revenue of clean energy As compared with 2018, the operating period of 2018. of 73.4% approximately for (accounting million RMB4,049.4 approximately was segment smart operating revenue of high-end increase of approximately 15.7%; total revenue), an RMB1,319.6 million (accounting for approximately equipment segment was approximately of approximately 17.5%; operating revenue of industry 23.9% of total revenue), a decrease RMB145.4 million (accounting for approximately 2.7% service segment was approximately approximately 20.7%. In view of the above, it is mainly due of total revenue), a decrease of operating the Conversely, business. blades power wind of revenue sales in increase the to segment was affected by the downturn of domestic revenue of high-end smart equipment market insufficient faced business tool machine smart the and economy, foreign and demand. of novel coronavirus pneumonia epidemic at the beginning It is expected that the outbreak impact on the Group’s business and its operating of the year will have certain negative to aim an with target operation expected the uphold will Group The 2020. in revenue achieve stable growth. SALES Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 28
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 29 (Continued) Management’s Discussion and Analysis and Discussion Management’s The operating profit for 2019 was approximately RMB241.5 million, significantly significantly million, RMB241.5 approximately was 2019 for profit operating The 56.6%, as compared with decreased by approximately RMB315.2 million or approximately mainly due to the decrease approximately RMB556.7 million for the same period of 2018, machine tool CNC smart the and business blades power wind the of margin profit in gross business. OPERATING PROFIT The selling and administrative expenses for 2019 were approximately RMB852.3 million, million, RMB852.3 approximately were 2019 for expenses administrative and selling The million or approximately 4.9%, as compared with an increase of approximately RMB40.1 the of proportion The year. last of period same the for million RMB812.2 approximately in turnover was in line with that of approximately 15.4% selling and administrative expenses RMB9.9 approximately by increased expenses selling The year. last period same the of period last year, mainly due to the increase in the cost million as compared with the same increased by approximately of sales and after-sales service; the administrative expenses due to the increase of RMB30.2 million as compared with the same period last year, mainly from the application of new approximately RMB15.6 million in depreciation expenses arising lease accounting standards, and to the lesser of the change method due to computation employee in million RMB9.1 and million RMB3.1 approximately of increase the extent, 51 and Note in Note VI, are set out Details respectively. expenses and in insurance benefits VI, 52 to the consolidated financial statements. SELLING AND ADMINISTRATIVE EXPENSES SELLING AND ADMINISTRATIVE The gain on disposal of asset for 2019 was approximately RMB131.7 million, an increase of The gain on disposal of asset for or approximately 31.2%, as compared with approximately approximately RMB31.3 million on gain the to attributable mainly year, last of period same the for million RMB100.4 during the Period. Details are set out in Note VI, 60 to the disposal of land and properties consolidated financial statements. GAIN ON DISPOSAL OF ASSET GAIN ON DISPOSAL OF The other gains for 2019 were approximately RMB227.2 million, an increase of of increase an million, RMB227.2 approximately were 2019 for gains other The 70.1%, as compared with approximately million or approximately approximately RMB93.6 granted mainly attributable to the subsidies for the same period of 2018, RMB133.6 million VI, 55 to Details are set out in Note and the technology R&D subsidies. by the government financial statements. the consolidated OTHER GAINS (Continued) PROFIT ATTRIBUTABLE TO SHAREHOLDERS amounted 2019 December 31 ended year the for shareholders to attributable profit The RMB259.3 approximately of decrease a representing million, RMB184.8 approximately to the for million RMB444.1 approximately with compared as 58.4% approximately or million RMB0.05, decreased same period of 2018. Earnings per share amounted to approximately of the same period of by approximately 58.3% as compared with approximately RMB0.12 2018. INCOME TAX EXPENSES approximately were 2019 December 31 ended year the for expenses tax income The or approximately 35.5%, as RMB39.0 million, a decrease of approximately RMB21.5 million, of 2018, mainly because compared with approximately RMB60.5 million for the same period of the decrease in income tax payables during the Period. INVESTMENT INCOME INVESTMENT to approximately RMB295.4 million, a decrease of Investment income for 2019 amounted or approximately 29.5% as compared with approximately approximately RMB123.5 million of 2018, mainly due to the decrease of approximately RMB418.9 million for the same period as ventures joint and associates of income investment of share the in million RMB86.0 of last year. This was because of the decrease in sales compared with the same period of Chongqing Cummins Engine Company Limited, which of the high-horsepower products compared as million RMB36.2 approximately of income investment in decrease a in resulted to the lesser extent, the decrease of approximately RMB22.0with the same period last year; million respectively in performance of Chongqing ABB million and approximately RMB19.1 Hongyan Fangda Automotive Suspension Co., Ltd. Transformer Co., Ltd. and Chongqing demand. Conversely, the performance of Knorr-Bremse affected by the decline in market RMB9.0 approximately by increased Ltd. (Chongqing) Vehicles Commercial for Systems period last year, which was due to the adjustment of million as compared with the same on gain in decrease a to due was decrease the extent, lesser the to product structure, and RMB48.1 million as compared with the same period last equity disposal of approximately statements. year. Details are set out in Note VI, 56 to the consolidated financial The net interest expense for 2019 was approximately RMB158.2 million, increased by by increased million, RMB158.2 approximately was 2019 for expense interest net The 22.7%, as compared with approximately million or approximately approximately RMB29.3 scale mainly due to the increase in financing for the same period of 2018, RMB128.9 million for the Period. NET FINANCE COSTS NET FINANCE Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 30 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 31 8.6 20.6 47.4 14.3 20.6 22.4 2018 4.0% (12.5) 193.0 269.6 48.4%
40.4 12.1 23.5 2019 (55.7) 124.2 139.8 248.7 (293.7) (258.1) 103.0% Segment Results (106.9%)
(Continued) 72.3 57.5 2018 108.2 236.7 201.9 250.0 796.8 246.2 376.0 64.0% 30.2%
77.3 49.5 2019 Gross Profit 157.1 208.6 118.9 251.3 735.9 101.0 227.8 70.9% 21.9%
(RMB in millions, except for percentage) 2018 554.1 910.0 664.5 883.4 410.9 304.9 66.2% 30.3% 1,370.9 3,499.5 1,599.2
Revenue 2019 579.8 705.0 556.4 418.0 345.2 73.4% 23.9% 1,460.7 1,303.9 4,049.4 1,319.6 Period ended 31 December Period ended 31 December ended 31 December Period
equipment business business
Hydroelectric generation Clean energy equipment Electrical wires and cables General machinery Other products Total CNC machine tools High-end smart equipment % of total Steering systems Other products Total % of total Management’s Discussion and Analysis and Discussion Management’s
The table below sets forth the revenue, gross profit and segment results attributable to our to attributable results segment and profit gross revenue, the forth sets below table The periods indicated: major business segments for the BUSINESS PERFORMANCE As at 31 December 2019, the Company’s distributable reserve attributable to shareholders shareholders to attributable distributable reserve Company’s the 2019, 31 December As at . amounted to RMB2,675.9 million of the Company According to the Articles of Association of the Company, the Company’s reserves available Company, the Company’s reserves Articles of Association of the According to the determined earnings are the lower of that on the Company’s retained for distribution based for Business Enterprises (“CAS”). China Accounting Standards under HKFRSs and DISTRIBUTABLE RESERVES DISTRIBUTABLE 1.3 0.1 39.8 41.2 2018 7.4% 223.5 556.7 40.2%
(6.3) (3.8) 52.2 42.1 2019 208.8 241.5 17.4% 86.5% Segment Results
(Continued) 3.5 7.7 2.3 59.5 70.7 2018 5.7% 0.2% 1,245.8
3.9 2.4 2.4 66.3 72.6 2019 Gross Profit 7.0% 0.2% 1,038.7
–% 8.9 2.2 (RMB in millions, except for percentage) (RMB in millions, except 69.0 2018 3.5% 105.5 183.4 5,284.3
Revenue 4.6 2.4 –% 63.3 77.5 2019 2.7% 145.4 5,516.8 Period ended 31 December Period ended 31 December Period ended 31 December
Industrial service business Trade business Financial services Other service Total % of total Headquarters Total % of total Total BUSINESS CLEAN ENERGY EQUIPMENT 2019 December 31 ended year the for business equipment energy clean the of revenue The million, representing an increase of approximately amounted to approximately RMB4,049.4 RMB3,499.5 approximately with compared as 15.7% approximately or million RMB549.9 mainly due to the steady rising in sales revenue of windmillion for the same period of 2018, 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 million RMB60.9 of approximately a decrease million, representing approximately RMB735.9 same the for million RMB796.8 approximately with compared as 7.6% approximately or rising raw material costs period of 2018, mainly due to the intensified market competition, resulting in the decrease in and increased labor costs in the wind power blades market gross profit. energy clean the of performance overall the 2019, December 31 ended year the For a representing million, RMB248.7 approximately was segment operating equipment the with compared as 7.8% approximately or million RMB20.9 approximately of decrease period of 2018, which was performance of approximately RMB269.6 million for the same business. mainly due to the decrease in gross profit in wind power blades Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 32
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 33 (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 approximatelyor million RMB1.9 approximately of increase an representing million, RMB72.6 same period of 2018. 2.7% as compared with approximately RMB70.7 million for the INDUSTRIAL SERVICE BUSINESS INDUSTRIAL SERVICE segment recorded a revenue For the year ended 31 December 2019, the industrial service RMB38.0 approximately of decrease a representing million, RMB145.4 approximately of RMB183.4 million for the million or approximately 20.7%, as compared with approximately business. same period of 2018, mainly due to the decrease in foreign trade The overall performance loss of the high-end smart equipment operating segment for for segment operating equipment smart high-end the of loss performance overall The while million, RMB258.1 approximately to amounted 2019 December 31 ended year the million. RMB22.4 approximately was 2018 in period same the for profit performance the RMB280.5 million, which was mainly due to the The decrease in profit was approximately in losses of the intelligent CNC machine tool business. decrease in sales and increase 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 decrease a representing million, RMB227.8 approximately to amounted for million RMB376.0 approximately to compared 39.4% approximately or million RMB148.2 due to the decrease in operating income of the intelligent the same period in 2018, mainly margin profit gross its and million, RMB327.0 approximately of business machine tool CNC period last year to 18.2%. decreased from 27.9% in the same For the year ended 31 December 2019, the revenue of the high-end smart equipment equipment smart high-end the of revenue the 2019, December 31 ended year the For of decrease a representing million, RMB1,319.6 approximately was segment operating approximately to compared 17.5% approximately or million RMB279.6 approximately downward The decrease was due to the for the same period in 2018. RMB1,599.2 million resulting in a insufficient market demand, and foreign economies and impact of domestic machine tool business. revenue of the intelligent CNC decline in sales HIGH-END SMART EQUIPMENT BUSINESS HIGH-END SMART
(Continued) RMB-179.0 million (for the year ended 31 December 2018: a net cash outflow of of outflow cash net a 2018: December 31 ended year the (for million RMB-179.0 sound financially is Group the that believe Directors million). RMB-582.7 approximately predictable any and fund capital needs operating its meet to resources sufficient and has capital expenditure. TRADE AND OTHER RECEIVABLES receivables and other receivables assets of the Group As at 31 December 2019, the trade approximately of increase an representing million, RMB3,891.7 approximately totaled million as at 31 December RMB326.9 million, as compared with approximately RMB3,564.8 to due receivables in increase and receivables, land in increase to due mainly 2018, and increase in asset business growth of electrical wires and cables and industrial pumps, consolidated the to 7 VI, Note and 4 VI, Note to refer Please disposal. for receivables financial statements for detailed ageing analysis of the trade receivables. As at 31 December 2019, the cash and bank deposits (including restricted cash) of the deposits (including restricted 2019, the cash and bank As at 31 December million (31 December 2018: approximately to approximately RMB2,094.6 Group amounted or million RMB70.1 approximately of decrease a representing million), RMB2,164.7 approximately 3.2%. of activities operating from inflow cash net a had Group the Period, the During (for the year ended 31 December 2018: net cash inflow of approximately RMB120.2 million approximately of from investing activities inflow cash net a million), RMB81.6 approximately approximately of inflow cash net a 2018: December 31 ended the year (for RMB26.5 million approximately of activities financing from outflow cash net a and million), RMB902.6 CASH FLOW The overall performance of the industrial service operating segment for the year ended 31 the year ended segment for service operating of the industrial performance The overall RMB0.9 an increase of approximately was approximately RMB42.1 million, December 2019 the for million RMB41.2 approximately with compared as 2.2% approximately or million 2018. same period of Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 34
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 35 (Continued) Management’s Discussion and Analysis and Discussion Management’s As at 31 December 2019, the net current assets of the Group were approximately approximately were Group the of assets current net the 2019, December 31 at As as million RMB457.9 approximately of decrease a representing million, RMB3,335.9 2018. compared with approximately RMB3,793.8 million as at 31 December As at 31 December 2019, total liabilities of the Group amounted to approximately approximately to amounted Group the of liabilities total 2019, December 31 at As as million RMB180.7 approximately of increase an representing million, RMB9,228.7 million as at 31 December 2018. Total current compared with approximately RMB9,048.0 million, representing an increase of approximatelyliabilities were approximately RMB7,014.8 million as at 31 December RMB278.5 million as compared with approximately RMB6,736.3 the total non-current 2018, accounting for approximately 76.0% of total liabilities. However, a decrease of approximately liabilities were approximately RMB2,214.0 million, representing million as at 31 December RMB97.7 million as compared with approximately RMB2,311.7 2018, and accounting for approximately 24.0% of total liabilities. As at 31 December 2019, the total assets of the Group amounted to approximately approximately to amounted Group the of assets total the 2019, December 31 at As as million RMB240.1 approximately of increase an representing million, RMB16,517.8 million as at 31 December 2018. Total current compared with approximately RMB16,277.7 of decrease a representing million, RMB10,350.7 approximately to amounted assets as compared with approximately RMB10,530.1 million as at approximately RMB179.4 million for approximately 62.7% of total assets. However, total non- 31 December 2018, accounting RMB6,167.1 million, representing an increase of current assets amounted to approximately as compared with approximately RMB5,747.6 million as at approximately RMB419.5 million for approximately 37.3% of total assets. 31 December 2018, accounting ASSETS AND LIABILITIES As at 31 December 2019, trade payables and other payables of the Group totaled totaled Group the of payables other and payables trade 2019, December 31 at As approximately with compared as same the basically million, RMB2,143.1 approximately Note VI, 35 Please refer to Note VI, 30 and as at 31 December 2018. RMB2,121.7 million and other ageing analysis of the trade financial statements for detailed to the consolidated payables. TRADE AND OTHER PAYABLES TRADE AND (Continued) CONTINGENT LIABILITIES liabilities. As at 31 December 2019, the Group had no significant contingent As at 31 December 2019, approximately RMB557.1 million of the Group was deposited with As at 31 December 2019, approximately RMB557.1 million of the approximately RMB594.3 the banks with pledge or restriction for use (31 December 2018: 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 RMB1,060.3 million as at assets of the Group, which had a net book value of approximately million). 31 December 2019 (31 December 2018: approximately RMB282.4 SECURED ASSETS As at 31 December 2019, the Group had an aggregate bank and other borrowings of of borrowings other and bank aggregate an had Group the 2019, December 31 at As RMB384.8 approximately of increase an representing million, RMB3,005.5 approximately as at bond payable) (include million RMB2,620.7 approximately with compared as million 31 December 2018. RMB1,362.9 approximately were year one within Group the by repayable Borrowings with compared as million RMB384.5 approximately of increase an representing million, the by repayable Borrowings 2018. December 31 at as million RMB978.4 approximately RMB1,642.6 million, representing a slight increase Group after one year were approximately as compared with approximately RMB1,642.3 million (includeof approximately RMB0.3 million 2018. bond payable) as at 31 December As at 31 December 2019, by dividing the borrowing by the total capital, the gearing ratio of by the total capital, the gearing 2019, by dividing the borrowing As at 31 December 2018: 29.5%). the Group was 41.2% (31 December INDEBTEDNESS As at 31 December 2019, the current ratio (the ratio of current assets to current liabilities) ratio of current assets to current 2019, the current ratio (the As at 31 December 1.48:1 (31 December 2018: 1.56:1). of the Group was GEARING RATIO CURRENT RATIO Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 36 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 37 (Continued)
Wai, Mr. Ren Xiaochang, Mr. Jin Jingyu and Mr. Liu Wei as independent non- independent as Wei Liu Mr. and Jingyu Jin Mr. Xiaochang, Ren Mr. Wai,
the Company. Mr. Xia Hua and Mr. Li Fangzhong were democratically elected elected democratically were Fangzhong Li Mr. and Hua Xia Mr. Company. the as employee representative supervisors. The term of the aforesaid supervisors supervisors aforesaid the of term The supervisors. representative employee as meeting until expiry of the term of the fifth session commenced from the date of the fix the remuneration of of the supervisory committee. The Board was authorized to passed at the each supervisor pursuant to the remuneration standard for supervisors with each of them 2018 annual general meeting and to enter into a service agreement all do to and fit think shall Board the as conditions and terms such to subject and on such acts and things to give effect to such matters. executive Directors of the Company. The term of the aforesaid Directors commenced executive Directors of the Company. expiry of the term of the fifth session of the Board. from the date of the meeting until the to of each Director pursuant remuneration the The Board was authorized to fix passed at the 2018 annual general meeting and remuneration standard for Directors and terms to such and subject on them of with each service agreement into a enter to to give effect and things acts fit and to do all such conditions as the Board shall think to such matters. Re-election of the members of the fifth session of the supervisory committee of the Re-election of the members of Ms. Wu Yi and Mr. Wang Haibing as the supervisors Company: Mr. Sun Wenguang, of Re-election of the members of the fifth session of the Board: Mr. Wang Yuxiang, Ms. of the Board: Mr. Wang Yuxiang, members of the fifth session Re-election of the as executive Directors, Mr. Huang Yong, Mr. Zhang Chen Ping and Mr. Yang Quan Wang Pengcheng as non-executive Directors, Mr. Lo Yongchao, Mr. Dou Bo and Mr. Wah
Management’s Discussion and Analysis and Discussion Management’s Save as disclosed above, the Company had no other significant discloseable events during Save as disclosed above, the Company had no other significant the Period. (II) (I) On 26 June 2019, the Company held the annual general meeting to consider and approve general meeting to consider the Company held the annual On 26 June 2019, the following matters: Events in the Period SIGNIFICANT EVENTS SIGNIFICANT
(Continued) Since the outbreak of the new coronavirus (the “Epidemic”) nationwide from January Since the outbreak of the new to and strictly implemented various regulations 2020, the Group has actively responded On associated company of the Company, entered into the Overall Relocation Project Project Relocation Overall the into entered Company, the of company associated and Temple Yuqing of Land the for Agreement ABB–Acquisition Chongqing of Co., Ltd. Chongqing ABB Transformer in Jiulongpo District of Aboveground Buildings Industry High-Tech Jiulongyuan Chongqing with Agreement”) Acquisition “Land (the 42,366 approximately of area an with land a of disposal to Limited, Company Group of RMB850,000,000.00. For details, please refer to square meters at the consideration publicated on 2020 January 6 dated the Company of Board the the announcement of and the Company’s website. the website of the Stock Exchange donated and China, of control and prevention epidemic virus for requirements and of outbreak the after immediately Federation Charity Chongqing to million RMB1.5 and Epidemic the of control and prevention the ensure to order In Epidemic. the work resumed have subsidiaries its and Group the operation, and production the 2020, and supported the country to win the battle and production as of 26 February social security, supply of terms in Epidemic the against control and prevention of and occupational health. responsibility, internal management
(2) and production the on impact a temporary Epidemic will have that the expects The Group progress and duration the will depend on impact the of operation of the Group. The extent and prevention local of implementation the and control, and prevention epidemic the of on the Group. control policies, but it will not have a significant negative effect discloseable subsequent Save as disclosed above, the Company had no other significant events. (1) an ABB”), (“Chongqing Ltd. Co., Transformer ABB Chongqing 2020, January 6 SUBSEQUENT EVENTS SUBSEQUENT Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 38
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 39 (Continued) Management’s Discussion and Analysis and Discussion Management’s RISK OF FOREIGN EXCHANGE various currency exposures, The Group is exposed to foreign exchange risk arising from 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. functional 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. 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 as 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 transactions only represents Group at the time of financing and the value of each of these an immaterial part of its total assets and undertakings. TREASURY POLICIES As at 31 December 2019, the Group had capital commitments of approximately RMB64.8 Group had capital commitments of approximately RMB64.8 As at 31 December 2019, the and assets fixed of respect in million) RMB53.2 approximately 2018: December (31 million intangible assets. CAPITAL COMMITMENTS In 2019, the total capital expenditure of the Group was approximately RMB231.5 million, was approximately RMB231.5 capital expenditure of the Group In 2019, the total of relocation, plant expansion, improvement used for environmental which was principally million). (2018: approximately RMB611.8 and equipment upgrade production technology CAPITAL EXPENDITURE (Continued) EMPLOYEES had a total of 8,699 employees (31 December 2018: As at 31 December 2019, the Group continue the upgrade of its technical talent base, foster 9,124 employees). The Group will professional extensive with possessed personnel management and technical recruit and and remunerations the with links that system distribution the optimise experiences, so safety on training improve employees, and management our of reviews performance employee-employer harmonious and good maintain and safety employees’ ensure to as relations. As at 31 December 2019, the bank deposits of the Group included HK dollars valued at dollars valued included HK Group of the the bank deposits December 2019, As at 31 million, GBP at approximately RMB20.8 million, US dollars valued approximately RMB1.5 million valued at approximately RMB0.8 RMB64.8 million and CHF valued at approximately valued RMB0.1 million, US dollars HK dollars valued at approximately (31 December 2018: and million, RMB13.4 approximately at valued GBP million, RMB16.0 approximately at was not Save as the aforesaid, the Group approximately RMB4.7 million). EUR valued at significant risk of foreign exchange. exposed to any Management’s Discussion and Analysis and Discussion Management’s
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 40 Directors, Supervisors and Senior Management
The following table sets out information regarding our Directors:
Name Age Position
Wang Yuxiang 58 Executive Director, Chairman Chen Ping 57 Executive Director, General Manager Yang Quan 55 Executive Director, Vice General Manager Huang Yong 57 Non-executive Director Zhang Yongchao 42 Non-executive Director Dou Bo 51 Non-executive Director
Wang Pengcheng 52 Non-executive Director 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING Lo Wah Wai 56 Independent Non-executive Director Ren Xiaochang 63 Independent Non-executive Director Jin Jingyu 54 Independent Non-executive Director Liu Wei 55 Independent Non-executive Director
EXECUTIVE DIRECTORS
Mr. Wang Yuxiang (王玉祥), aged 58, 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
41 (Continued) from December 1979 1979 December from ) 重慶高新創投紅馬資本管理有 中國第二重型機械廠 ). He is also a member of the the of member a also is He 重慶市工業經濟聯合會). ). He graduated from Sichuan Cadre Correspondence Correspondence Cadre Sichuan from graduated He ). aged 57, is the general manager of the Company. Ms. Chen Chen Ms. Company. the of manager general the is 57, aged 陳萍), 中國機械工業聯合會 engages in merger and reorganization of enterprises, equity investment, capital operations engages in merger and reorganization of enterprises, equity investment, She was elected and other works, gaining extended experience in corporate management. Communist the of Congress People’s Municipality Chongqing 5th the in deputy a as and director of Knorr- Party of China in May 2017. She also served as a vice chairman now. to up 2016 October from Ltd. (Chongqing) Vehicles Commercial for Systems Bremse Machinery and Electronics She also served as vice chairman and director of Chongqing She served as a chairman Holding (Group) Finance Co., Ltd. from August 2016 up to now. of chairman the now, to up 2016 June from Ltd. Co., Engine Cummins Chongqing of ( Limited Management Capital Horse Red Hi-tech Chongqing to November 1984. Mr. Wang is a senior economist, a senior political scientist, and the to November 1984. Mr. Wang Second Council of Chongqing Enterprises Confederation (重 Executive Vice President of the (重慶市企業家協會) and Chongqing 慶市企業聯合會), Chongqing Entrepreneurs Association ( Economics Industrial of Federation policy in September 1988, the School (四川幹部函授學院) with an associate degree in Party management of the Party School of Sichuan Provincial correspondence course of economic (MBA) Administration Business of Master of program the 1995, December in Committee 1999, the legal course of Party School of the CPC of Chongqing University in December degree from August 2002 to December 2004 and the Central Committee with a bachelor’s graduated from the Class of program of EMBA in Xiamen University in December 2011. He term) in December 2013. Chongqing Enterprise Leaders of Tsinghua University (one-year ( Ping Chen Ms. Marketing Department of China Southern Power Grid from March to October 2006), the the 2006), October to March from Grid Power Southern China of Department Marketing Group Co. of China National Erzhong Disciplinary Inspection Committee secretary of the secretary of served as the Party Committee to April 2004 (and concurrently from July 2000 2000 to April 2004 and took Industry Park (德陽重工園區) from November Deyang Heavy Chongqing of Committee Work Enterprise of secretary deputy the as post temporary a Committee of of the Communist Party Committee and the deputy secretary Municipal Party League, Youth Communist the of secretary the successively), City Chongqing of SASAC Inspection Disciplinary the of inspector level section and inspector level vice-section deputy director, office workshop, machinery heavy of secretary branch Party Committee, secretary and plant manager of the Heavy Machinery plant manager, general Party branch Co. from November 1984 to Branch Factory (重機分廠) of China National Erzhong Group 3 metal workshop and an officer of the Communist Youth July 2000, and a worker of No. ( Factory Erzhong National China of League Leading Group Office for the Development of Creative Industries in Chongqing (重慶市創意 Leading Group Office for the Development Council of China Machinery Industry 產業發展領導小組辦公室), and a director of the Fourth ( Federation Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 42 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 43 (Continued) 重慶機電控股集團信博投資管理
) from from 重慶紅巖方大汽車懸架有限公司)
) from December 2011 2011 December from 重慶氣體壓縮機廠有限責任公司)
) from August 2000 to March 2001, the deputy deputy the 2001, March to 2000 August from 重慶龍華印務有限公司) Directors, Supervisors and Senior Management Senior and Supervisors Directors, ) from January 2016 to July 2016, the executive director (legal representative) of director (legal representative) 2016 to July 2016, the executive 有限公司) from January Ltd. (重慶機 Assets Management Co., and Electronic Holding Group Chongqing Machinery as the assistant to October 2014. She served ) from July 2009 電控股集團資產管理有限公司 manager of (Group) Co., Ltd. and the of Chongqing Light Textile Holding to the president manager a 2004, February to 2002 December from Ltd. Co., Excellence Super Chongqing in Chongqing Light Textile Holding (Group) Co., Ltd. from of assets operation department of department operation assets of manager deputy the 2002, December to 2001 March (Group) Co., Ltd. and president of Chongqing Longhua Chongqing Light Textile Holding ( Ltd. Co., Printing and Development June 2013 up to now and a director of Precision Technology Investment Co., Ltd. (精密技術投資發展有限公司) from April 2012 up to now, a director of Chongqing ( Ltd. Co., Factory Compressor Gas of Chongqing Shengpu to February 2018, and an executive director and general manager Materials Co., Ltd. (重慶盛普物資有限公司) from December 2011 up to now. Mr. Yang has the of manager the as served once management, enterprise in experience of years 20 over of the Company from business management department and assistant to general manager department and head of August 2007 to May 2012, the head of the economic operation steering team of Chongqing the business management department of the securities work aged 55, is an executive Director and Vice General Manager of Mr. Yang Quan (楊泉), aged 55, is an executive Director serves as chairman and director of Precision Technologies the Company. He concurrently of the Company since Group (PTG) Limited since September 2019, a vice general manager of director a 2012, December since Company of the executive Director an and May 2012, February 2018. He has been Chongqing Shengong Machinery Manufacture Co., Ltd. since (重慶有研重冶新材料有限 a director of Chongqing Youyan Smelting New Material Co., Ltd. a director of Chongqing 公司) from July 2014 to October 2018. He concurrently serves as ( Ltd. Co., Suspension Automotive Fangda Hongyan section officer, section officer and assistant researcher of the enterprise management management enterprise the of researcher assistant and officer section officer, section Ms. 2000. August to October 1983 from Industry Bureau Light Chongqing of department a Bachelor of Science after graduating with a major in Chen is a senior economist with in degree postgraduate a obtained and 1983 August in University Yuzhou from biology Master College of Business Administration (重慶工 business administration from Chongqing in EMBA (Executive Master of Business 商管理碩士學院) in July 2001 and a master degree in University Chongqing of economics and business of school the from Administration) December 2013. ) from May 2015 until now. She was the vice president and a member of the Party president and a member of the until now. She was the vice 限公司) from May 2015 February Holding (Group) Co., Ltd. from Machinery and Electronic Committee of Chongqing Electronic and Machinery Chongqing of chairman the been has She 2016. May to 2004 ( Ltd. Co., Management Investment Xinbo Group Holding ) from from 公司) (Continued) 集團) 重慶通用航空產業集團 重慶機電控股( ) since since 重慶國創投資管理有限公司) ) from July 1987 to March March to 1987 July from ) 重慶第二機床廠 aged 42, has been a non-executive Director of the the of Director non-executive a been has 42, aged 張永超), ), chairman and general manager of Chongqing Chongqing of manager general and chairman ), 重慶國地資產經營管理有限公司 ) since March 2014 to now. Mr. Huang has over 20 years of experience in the有限公司) since March 2014 to now. Mr. 集團) Company since June 2019. He has been the vice general manager of Chongqing Re- Chongqing of manager general vice the been has He 2019. June since Company and supervisor employee as served has He 2019. January since Ltd. Co., guarantee Management Group Co., director of asset business department of Chongqing Yufu Assets Management Asset Guodi Chongqing of branch Party of secretary and chairman Ltd., Ltd( Co., ( Ltd. Co., Management and Investment Guochuang Chongqing of Department Compliance Risk of director the as served He 2019. January 2004. Mr. Yang is an engineer, graduated from the College of Mechanical Engineering of the College of Mechanical Engineering is an engineer, graduated from 2004. Mr. Yang for EMBA foundry in July 1987, and studied with a bachelor’s degree in Sichuan University 2013. from November 2011 to June in Xiamen University March 2004 to August 2007, the party branch secretary of the foundry workshop, deputy secretary of the foundry workshop, August 2007, the party branch March 2004 to the hot plate and deputy director of reform office, secretary director of the “five-initiative” economist factory director, and chief of the equipment division, managing workshop, chief ( Factory Tools Machine 2 No. Chongqing of automobile industry. Since January 2013 to June 2016, he has concurrently served as the automobile industry. Since January Corporation (美國恩斯特龍直升機公司). He was the general chairman of Enstrom Helicopter ( Ltd. Co., Group Industry Aviation General Chongqing of manager NON-EXECUTIVE DIRECTORS in July 1984. Since July 2007, Mr. Huang Yong (黃勇), aged 57, joined the Parent Group of the Company. Mr. Huang has been a director and he has been a non-executive Director Company since 2004 to now. Since January 2011 to the general manager of the Parent served as the chairman of Chongqing General Aviation now, Mr. Huang has concurrently ). He has also served as a director Industry Group Co., Ltd. (重慶通用航空產業集團有限公司 Recycling (Group) Co., Ltd. (重慶市金通報廢汽車回收處理 of Chongqing Jin Tong Scrap Car ( ) from January 2011 to May 2013 and the vice chairman and general manager of 有限公司) from January 2011 to May 2013 Ltd from 2003 to 2004. From 2000 to 2004, Mr. Huang was Chongqing Hongyan Motor Co., the chairman of Chongqing Heavy Vehicle Group Co., the general manager and thereafter Plant, and from Ltd. From 1984 to 2000, he worked in Sichuan Automobile Manufacturing Automobile Manufacturing 1996 to 2000, he served as the deputy plant manager in Sichuan students of Chongqing Plant. Mr. Huang is a senior engineer and a tutor of postgraduate with a bachelor’s degree in University of Technology, He graduated from Hunan University degree in engineering from automobile manufacturing in 1984 and obtained his master’s Chongqing University in 2000. ( Yongchao Zhang Mr. Machinery and Electronics Holding (Group) Co., Ltd. ( Ltd. Co., (Group) Holding Electronics and Machinery Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 44 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 45 (Continued) 重慶第二建設有限公 重慶建工集團股份有限公司) from ) from February February from 重慶建工集團股份有限公司)
) from March 2003 to March 2007, 2007, March to 2003 March from 重慶第二建設有限公司) ) from March 2007 to March 2008, was appointed as the chief accountant of Chongqing ) from March 2007 to March 2008, was appointed as the chief Directors, Supervisors and Senior Management Senior and Supervisors Directors, aged 51, has more than 20 years of financial management experience. Mr. Dou Bo (竇波), aged 51, has more than 20 years of the board and securities general manager of ChongqingMr. Dou has served as secretary Co., Ltd. (重慶建工集團股份有限公司) (stock code: 600939. Construction Engineering Group Chongqing of manager general securities the been has He now. to 2016 July from SH) ( Ltd. Co., Group Engineering Construction Yufu Assets Management Group Co., Ltd. from August 2017 to July 2018 and an employee and an employee 2017 to July 2018 from August Group Co., Ltd. Management Yufu Assets the of Secretary Party as served He 2017. December since Group Yufu of supervisor He 2017. August to 2016 September from Chongqing District, Banan of Bureau Justice and Office the of director deputy Office, Affairs Legislative the of head the as served Chongqing Government of Banan District, Party Committee of the People’s member of the Development as the staff member of the to September 2016. He served from January 2013 Department Research Development the of director assistant the Department, Research Department Affairs (Legal Supervisors of Board the of Office the of director deputy and 2013. January to 2003 September from supervisor employee and Department) Audit and Policy and Regulation Division of the Chongqing Municipal He served as an officer at the Housing from July 2001 to September 2003. He studied at Bureau of Land Resources and Administration of the School of Economics and Business the Graduate School of Business from September 2005 to June 2008 and obtained a Administration of Chongqing University From September 2001 to July 2004, he studied master’s degree in business administration. School of Southwest University of Political Science and at the Civil and Commercial Law in law. He studied international trade at Department of Law and obtained a master’s degree of Political Science and Law from September 1997 Economics at the Southwest University degree in economics. He also majored in law and to July 2004 and obtained a bachelor’s law. obtained a bachelor’s degree in 2011 to July 2017, and has been the general manager of financial assets department of 2011 to July 2017, and has been the general manager of financial ( Ltd. Co., Group Engineering Construction Chongqing March 2008 to February 2011 during which he received his Master’s degree in Business March 2008 to February 2011 during which he received his 2009. He was the Administration in Chongqing University from March 2005 to December ( Ltd. Co., Construction Second Chongqing of officer financial chief 司 ( Ltd. Co., Construction Second Construction Co., Ltd. (重 was appointed as deputy chief accountant of Chongqing Second director 慶第二建設有限公司) from July 2002 to March 2003 and was appointed as deputy Company (重慶第二 of finance department of Chongqing Second Construction Engineering financial officer 建築工程公司) from July 1996 to July 2002. In April 2000, he was the chief ) during of Chongqing Tianyou Property Development Co., Ltd. (重慶天友物業發展有限公司 December in University Chongqing of profession accounting from graduated he which cashier, as appointed was he July 1996, to 1988 October From self-learning. through 2001 (Continued) aged 56, joined our Company in January 2008 and has been an Mr. Lo Wah Wai (盧華威), aged 56, joined our Company in January 2008 and has been Company’s chairman of the independent non-executive Director of the Company and the had more than eight years Audit and Risk Management Committee since January 2008. He an international accounting of experience in auditing and business consulting services in independent an was Lo Mr. States. United the in spent were which of years two firm, 399. code: (stock Limited Technology Pharmaceutical East Far of director non-executive 2004 to wind up Far East HK) in September 2004. A petition was filed on 15 September a syndicated bank loan and Pharmaceutical Technology Limited in respect of the default of involved in the arrangement since then, liquidators have been appointed. Mr. Lo was not had default said the after made was appointment his and loan bank syndicated the of of BMI group. Mr. Lo is occurred. Mr. Lo is currently the chairman of the board of directors INDEPENDENT NON-EXECUTIVE DIRECTORS accountant and financial officer of finance section in the fourth branch of Chongqing Chongqing of branch fourth the in section finance of officer financial and accountant with the ). He graduated Company (重慶第二建築工程公司四分公司 Construction Engineering 重慶廣播電視 and Television University ( finance in Chongqing Radio major in infrastructure to July 1988. 大學) in September 1986 University. an MBA degree at Chongqing (王鵬程), aged 52, has Mr. Wang Pengcheng Huarong of the Chongqing office of China as the deputy general manager He has served Chongqing of director a and now to up 2012 August from Ltd. Co., Management Asset ) (stock code: 600939. Group Co., Ltd. (重慶建工集團股份有限公司 Construction Engineering and held the following positions at the Chongqing office of SH) from May 2010 up to now, November from manager general assistant Ltd.: Co., Management Asset Huarong China Risk the and Department Business Innovation the of manager senior 2012; July to 2010 the of manager senior 2010; November to 2010 January from Department Compliance from February 2008 to January 2010; senior manager Operational Management Department July 2007 to February 2008; senior deputy manager (in of the General Department from deputy senior 2007; July to 2006 September from Department General the of charge) leader team office and 2006; August to 2000 July from Department General the of manager 2000 to June 2000. He held the following positions at of the preparation panel from January and Commercial Bank of China: deputy chief of organizationChongqing branch of Industrial 2000; December to 1997 September from charge) (in Department Organization of division cadres technical deployment, cadres general, the of chief deputy and member staff sections of the Personnel Division from September management, and cadres management cashier, clerk, accountant, and personnel director of 1992 to August 1997; and guardian, ) from June 1990 to August 1992. Hongqiezixi sub-branch (紅茄子溪分理處 Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 46
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 47 (Continued) Directors, Supervisors and Senior Management Senior and Supervisors Directors, aged 54, joined the Company in June 2012 and has served as Mr. Jin Jingyu (靳景玉), aged 54, joined the Company in June 2012 and has served been has He 2012. June since Company the of Director non-executive independent an of School the of students postgraduate of tutor and finance of professor a as serving has He 2009. March since University Business and Technology Chongqing of Finance Group Co., Ltd. (重 served as an independent director of Chongqing Tourism Investment of 慶旅遊投資集團有限公司) since November 2019, an independent non-executive director 2019. December to 2014 March from Co., Ltd.* (stock code:1963.HK) Chongqing of Bank (known as Chongqing Mr. Jin joined the Chongqing Technology and Business University the deputy director of the Business School before 2003) since May 1997 and served as associate an and 2001 March to 2000 March from Department Investment and Finance studied He 2005. November to 2000 November from finance of professor and professor 1992 July to 1988 September from University Henan of Department Mathematics the in of Technology and Science of University the in studied student; undergraduate an as aged 63, joined the Company in July 2007 and has been an the Company in July 2007 and (任曉常), aged 63, joined Mr. Ren Xiaochang remuneration and the chairman of our Director of the Company independent non-executive has over 30 years of experience in the automobile industry. committee since then. Mr. Ren China as (renamed Automobile of Institute Research Chongqing with been has Ren Mr. Institute Co., Ltd.(stock code:601965.SH)) since January Automotive Engineering Research served as the deputy director of Car Design Department, 1982 to December 2016 and had general manager (superintendent), deputy secretary vice chief, chief, the vice chairman, operational of charge in is He Company. the of chairman and Committee, Party the to human resources and assets management, etc. Mr. Ren management, strategic planning, Ltd. Co., Automobile Changan Chongqing of director independent an currently also is Zongshen Power Machinery Co., Ltd. (stock code: (stock code: 000625.SZ) and Chongqing relating to the board of directors. Mr. Ren graduated from 001696.SZ) in charge of matters Management the and 1981 in engineering in degree bachelor’s a with University Hunan with a master’s degree in business administrationSchool of Wuhan University of Technology Machinery of expert an grade, researcher’s of engineer senior a is Ren Mr. 2004. in allowance special with expert an and PRC the of Specialist Technology Scientific Industrial from the State Council. also an independent non-executive director of Tenfu (Cayman) Holdings Company Limited Company Limited Holdings of Tenfu (Cayman) director independent non-executive also an of Certified of the Hong Kong Institute He is a practising member (stock code: 6868.HK). Accountants. Institute of Certified Public and a member of the American Public Accountants a bachelor’s degree in University of Hong Kong with Chinese from The Mr. Lo graduated U.S., with a Institute of Technology, the in 1986 and New Jersey business administration in science in 1992. master’s degree 重慶 (Continued) 中國投資專業建設 中國技術經濟學會金融科技專業委員會理事 ),教育部高等學校金融學類專業教學指導委員會 a ); from July 2002 to June 2003, a director and and director a 2003, June to 2002 July from ); 大鵬證券有限責任公司 ), a member of the Enterprises Operations Branch of the Operations Research Society of ), a member of the Enterprises ) and general manager of the 1st Business Department of Dapeng Securities of the 1st Business Department 融資服務公司) and general manager )); from June 2005 to February 2010, the chairman of Chongqing of chairman the 2010, February to 2005 June from 萬里蓄電池股份有限公司)); (重慶天地藥業有限公司). Mr. Jin served as an independent Tiandi Pharmaceutical Co., Ltd. Assets Exchange Co. Ltd. from June 2015 to July 2017. Mr. director of Chongqing Financial Financial Majors in Universities of on Education Committee Guiding of Jin is now a member ( Education of Ministry of Colleges and of Committee Special Technology and Financial the of Board the of member a 委員會), ( Association Economy and Technology China 會 Research Center of the Economy of the Upper Reaches China, adjunct researcher of the center of humanities and social science of the Ministry of Yangtze River (a major research Evaluation Committee of Professional Titles, the Teaching of Education), a member of the of Economics of Chongqing Technology and Business Steering Committee and the School University. China majoring in management science from September 1992 to July 1995 and received received and 1995 July to 1992 September from science management in majoring China majoring in Southwest Jiaotong University in engineering; studied in the a master’s degree received a 2003 to January 2007 and and engineering from March management science follows: from several concurrent posts as in management. Mr. Jin held doctorate degree Company Service the Financing of director business a 2002, September to 1997 September ( ( Limited Company secretary to the board of directors of Southwest Synthetic Pharmaceutical Co., Ltd. (西南 Synthetic Pharmaceutical Co., board of directors of Southwest secretary to the to March 2010, a director from January 2006 ) (stock code: 000788.SZ); 合成製藥股份公司 directors of Chongqing Wanli New Energy Co., Ltd. (stock and secretary to the board of ( Ltd. Co., Batteries Storage Wanli Chongqing as known formerly 600847.SH, code ( Committee Construction Professional Investment China the of member Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 48 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 49 (Continued) (stock code: 603976. 603976. code: (stock 重慶涪陵電力實業股份有限公 ), and a member of Investment Investment of member a and 有限公司), 集團) 重慶正川醫藥包裝材料股份有限公司
aged 55, has served as an independent non-executive director of the non-executive director of an independent as aged 55, has served 重慶園林綠化建設投資(
) (stock code: 600452.SH), and Chongqing Sanxia Paints Company Limited (重慶三峽油 ) (stock code: 600452.SH), and Directors, Supervisors and Senior Management Senior and Supervisors Directors, Company since September 2014. He is currently the head, professor and PhD candidate and PhD head, professor the is currently He 2014. September Company since and Economics of School the of Department Management Business the of supervisor the vice head of Business Administration of Chongqing University, Business Administration has He University. Chongqing of Centre Research Development Economics and Medicine Chuan Zheng Chongqing of director independent an as served concurrently ( Ltd. Co., Materials Packaging ), Mr. Liu Wei (劉偉 SH), Chongqing Fuling Electric Power Industrial Co., Ltd. ( Ltd. Co., Industrial Power Electric Fuling Chongqing SH), 司 external director of Chongqing Iron & Steel 漆股份有限公司) (stock code: 000565.SZ), an (Group) Investment Construction Landscaping Chongqing and Limited Company (Group) ( Limited Company Decision-making Committee of Shanghai Zhongwei Venture Capital Fund (上海中衛創業風 Decision-making Committee of University since July 1990. He once served as 險投資基金). Mr. Liu served at Chongqing and assistant to the head of department for Department the lecturer, associate professor vice and Engineering, Mechanical of College of professor Engineering, Mechanical of Research Institute. Mr. Liu graduated from Chongqing chief of the Industrial Engineering from graduated 1984, July in Machinery Mining in degree bachelor’s a with University degree in Mechanics in July 1987, and graduated Chongqing University with a master’s Theory and Design Mechanical in degree doctorate a with University Chongqing from Manchester of University the at research post-doctoral conducted also He 1990. July in and Technology from September 1996 to October 1997. He completed Science Institute of of listed company by the Securities Association of the training for independent directors China in December 2002. (Continued) Employee Supervisor Employee Supervisor Independent Supervisor Independent Supervisor Chairman of the Supervisory Committee Chairman of the
54 56 41 46 53 Age Position )) from July 2010 to June June to 2010 July from 重慶市企業兼併破產工作辦公室)) aged 53, has been serving as the chairman of the Supervisory aged 53, has been serving as the
Li Fangzhong Xia Hua Wang Haibing Wu Yi Sun Wenguang Name Mr. Sun Wenguang (孫文廣), Supervisory the of chairman the and 2018, October since Company the of Committee Ltd. Co., Finance (Group) Holding Electronics and Machinery Chongqing of Committee Chongqing of supervisor the as serving concurrently been has and 2018, April since the as served concurrently He 2018. August since Ltd. Co., (Group) Industry General 2018, August to 2016 July from Ltd. Co., (Group) Tools Machine Chongqing of director controller of Chongqing Power Transformer Co., Ltd. concurrently served as the financial Precision of director the as served concurrently and 2017, November to 2016 July from and Ltd. Company Development Investment PTG Limited, (PTG) Group Technologies He 2018. August to 2017 February from Ltd. Co., Transformer Power ABB Chongqing and Property Rights Administration Division of Chongqing served as the chief of the Reform Enterprise (Chongqing Commission Administration and Supervision Assets State-owned ( Office Bankruptcy and Merger Administration Rights Property and Reform the of chief deputy the as served He 2016. Commission Administration and Supervision Assets State-owned Chongqing of Division (No. 2 corporate supervision department (企業監管二處)) from August 2005 to July 2010, Management Fund Equity Luzuofu Chongqing of director and chairman as worked and Co., Ltd. (重慶盧作孚股權基金管理有限公司) from March 2010 to June 2016. He served as Division of Chongqing State- an assistant researcher of the Property Rights Administration supervision corporate 2 (No. Commission Administration and Supervision Assets owned the of member staff senior a as and 2005 August to 2004 March from department) Assets Supervision and Property Rights Administration Division of Chongqing State-owned from November 2003 Administration Commission (No. 2 corporate supervision department) of department corporate 2 No. of the member staff senior a as served He 2004. March to 2003. He worked as an Chongqing Municipal Finance Bureau from January 1998 to March department of Chongqing office clerk, clerk and senior staff member of the No. 1 corporate assistant an is Sun Mr. 1998. January to 1987 August from Bureau Finance Municipal
The following table sets out information regarding our Supervisory Committee: sets out information regarding The following table SUPERVISORS Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 50 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 51 重慶百 股份有限 (Continued) 集團) 重慶燃氣( 重慶中柱律師事務所) and aged 41, has been an independent supervisor of the Company aged 41, has been an independent
), Chongqing Zhongzhu Law Firm ( Firm Law Zhongzhu Chongqing 重慶東方聯合律師事務所), since November 2018, the consultant to the Internal Control Standard Committee Committee Standard Control Internal the to consultant the 2018, November since Directors, Supervisors and Senior Management Senior and Supervisors Directors, Mr. Wang Haibing (王海兵), ) from August August from ) (北京凱文律師事務所重慶分所 Firm Law Kaiwen Beijing of Branch Chongqing at the School of Economic Law of Southwest University 1997 to April 2008. Ms. Wu studied a with graduated and 1997 July to 1993 September from Law and Science Political of School of Southwest University of Political Science bachelor’s degree and at the Graduate to July 2006 and graduated with a master’s degree in law. and Law from September 2003 HSBC School of Business from September 2008 to July She studied at Peking University degree in finance. 2009 and graduated with a master’s committee audit the of chairman director, independent the been has He 2019. June since of committee appraisal and remuneration the of member and ), a member of Chongqing Lawyers Association and the Specially-invited Specially-invited the and Association Lawyers Chongqing of member a 事得律師事務所), Conference Consultative Political People’s Chinese of Committee fourth the of Member Law Dongfanglianhe Chongqing of lawyer the as served once Wu Ms. Chongqing. of ( Firm aged 46, has been an independent supervisor of the Company since been an independent supervisor ), aged 46, has Ms. Wu Yi (吳怡 ( Firm Law Bestone Chongqing of director the currently is She 2014. September accountant. He graduated from Sichuan Provincial Fiscal School majoring in corporate and in corporate School majoring Provincial Fiscal from Sichuan He graduated accountant. graduated school education degree and 1987 with a technical secondary finance in July of School Correspondence the from management economic in degree bachelor’s a with MBA Institute December 1999, and from the the CPC Central Committee in Party School of degree in 2009. ) with a master’s (重慶工商管理碩士學院 of Chongqing University 公司 Zhongnan of tutor doctoral cooperative the 2019, April since Finance of Ministry the of of the audit department of University of Economics and Law since June 2017, the professor deputy chief of the financial Chongqing University of Technology since December 2015, the Humanistic the of president the and center development and research accounting and Social and Humanities of Base Research Key the of Institute Research Control Internal the business training at the Sciences of Chongqing since March 2013. He has attended ) from July to October Humanities and Technology University of Poland (波蘭人文科技大學 Zhejiang at Technology of University Chongqing of training tutor backbone the 2016, organized Chongqing of training talents leader accounting the 2015, July in University has He 2016. March to 2013 March from Institute Accounting National Shanghai by Bureau, the Municipal obtained the leader talent certificate jointly issued by the Finance Social and Resources Human Municipal the Department, Organization Committee Party Institute. He participated Security Bureau of Chongqing and Shanghai National Accounting to July from University State California at training business management accounting in professor of the audit August 2011. He has been the deputy professor and distinguished 2015. November to 2011 April from Technology of University Chongqing of department (Continued) 公司). He has been serving as the 集團) aged 56, has been an employee supervisor of the Company since since Company the of supervisor employee an been has 56, aged 夏華), ) in August 1981, majoring in machine manufacturing. In September In majoring in machine manufacturing. 1981, August in 重慶第二機械製造學校) September 2015. He currently serves as the chairman and party secretary of Chongqing and party secretary of He currently serves as the chairman September 2015. Co., Ltd. (重慶鴿牌電線電纜有限公司), a subsidiary of the Pigeon Electric Wires & Cables power the in experience of years 30 over with economist senior a is Xia Mr. Company. August 2000, he successively served positions such as the industry. From August 1981 to director, deputy head of the branch factory, office workshop technician, deputy workshop division and deputy plant manager of Chongqing director, head of production scheduling successively he 2011, January to 2000 August From (重慶電機廠). Factory Machine Electric department party secretary of Chongqing Machinery and served as the office director and Ltd. (重慶機電控股( Electronics Holding (Group) Co., He was a doctorate student at Southwestern University of Finance and Economics from from Economics and Finance of University Southwestern at student doctorate a was He (financial management of degree doctorate a obtained and 2011 June to 2007 September Chongqing of tutor and assistant teaching the as acted successively He management). editor of to December 2010, the intern (重慶工學院) from April 2004 College of Technology 2004. He Monthly from February to April of Finance and Accounting the periodical office in April 2004 with a master’s degree. Wuhan University of Technology graduated from ( Hua Xia Mr. chairman and party secretary of Chongqing Pigeon Electric Wires & Cables Co., Ltd. since chairman and party secretary of from Chongqing Second Machinery Manufacturing School January 2011. Mr. Xia graduated ( Institute of Chongqing University (重慶工商管理碩士學院) 2006, he graduated from the MBA with an MBA degree. supervisor of the Company Mr. Li Fangzhong (李方忠), aged 54, has been an employee of secretary and representative) (legal chairman as serves currently He 2019. June since From May 2017 to February the Party Committee of Chongqing Pump Industry Co., Ltd. and manager general representative), (legal Board the of chairman as served he 2019, Industry Co., Ltd. From May deputy secretary of the Party Committee of Chongqing Pump and general manager 2015 to May 2017, he served as the chairman (legal representative) the as served he 2015, May to 2012 From January Ltd. Co., Industry Chongqing Pump of January to 2007 November From Ltd. Co., Industry Pump Chongqing of manager general Ltd. From Pump Industry Co., Chongqing of manager served as deputy general he 2012, manager of Chongqing December 2002 to November 2007, he served as assistant general deputy as served he 2002, December to 1997 August From Ltd. Co., Industry Pump May From Ltd. Co., Industry Pump Chongqing of Division Set Complete the of director Set Division of Chongqing 1995 to August 1997, he served as designer of the Complete served as the designer of Pump Industry Co., Ltd. From October 1993 to May 1995, he From July 1989 to October the design department of Chongqing Pump Industry Co., Ltd. Pump Industry Co., Ltd. 1993, he served as the technician in 3rd workshop of Chongqing at Department II of From September 1985 to July 1989, he studied hydraulic machinery Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 52 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 53 (Continued) Qualified Accountant Vice General Manager, Chief Financial Officer Vice General Manager, Chief Financial Secretary to the Board Vice General Manager Vice General Manager Vice General Manager General Manager
53 50 45 51 51 55 57 Age Position
aged 57, is an executive Director and General Manager of the the of Manager General and Director executive an is 57, aged aged 55, is an executive Director and Vice General Manager of aged 55, is an executive Director and Vice General Manager aged 51, is a vice general manager of the Company. Mr. Zhang aged 51, is a vice general manager of the Company. Mr. Zhang 陳萍),
Kam Chun Ying, Francis Liu Zhongtang Deng Rui Zhang Shu Qin Shaobo Yang Quan Chen Ping Name Directors, Supervisors and Senior Management Senior and Supervisors Directors, is a senior engineer. He has served as a director of Chongqing Gas Compressor Factory is a senior engineer. He has served as a director of Chongqing director of 2019. He has served as a since March (重慶氣體壓縮機廠有限責任公司) Co., Ltd. General Chongqing Ltd., Co., Works Turbine Water Chongqing including companies several Jiangbei Chongqing Ltd., Co., Engine Cummins Chongqing Ltd., Co., (Group) Industrial Technology Equipment Electronic & Machinery Chongqing and Ltd. Co., Machinery positions various held had Zhang Mr. 2016; July since Ltd. Co., Academy Research Chongqing of department development and planning the of manager the including of the foreign business Machinery & Electronics Holding (Group) Co., Ltd., the manager department of the Company department and the manager of the planning and development of the Department of Foreign from March 2014 to June 2016; he served as the deputy chief Mr. Yang Quan (楊泉), Mr. Zhang Shu (張舒), Company. For details regarding Ms. Chen’s experience, please refer to “Executive “Executive to refer please experience, Chen’s Ms. regarding details For Company. Directors” set out above. “Executive to refer please experience, Yang’s Mr. regarding details For Company. the Directors” set out above. Ms. Chen Ping ( Ping Chen Ms.
The following table sets out information regarding our Senior Management officers: sets out information regarding The following table SENIOR MANAGEMENT Mechanical Engineering of Gansu University of Technology and obtained a bachelor’s bachelor’s a obtained and Technology of University Gansu of Engineering Mechanical Senior at studied he 2007, December to 2007 January From engineering. in degree September of Tsinghua University. From President Training Course Economic Management Chongqing Administration Department of 2015, he studied at Business 2012 to December ). of Business Administration (重慶工商管理碩士學院 Master College 市政府 (Continued) ) in charge of daily work of of work daily of charge in ) 指揮部辦公室綜合協調部 MDI 重慶市 the MDI Office from April 2012 to March 2014; he served as a senior staff member of the he served as a senior staff member from April 2012 to March 2014; the MDI Office ( government municipal the of office industry food (the department industry food department, an assistant member of the foreign business 食品工業辦公室)), a senior staff business and the deputy chief of the foreign foreign business department researcher of the and Information Commission from July 1999 to April department in Chongqing Economic Liling Food Factory (重慶立林食品廠) from December 1992 2006. He worked in Chongqing as a technical staff in the drink and food factory and head to September 1996, and worked Jinyunshan Garden Spot (重慶縉雲山園藝場) from July of Bailibao workshop of Chongqing graduated from the Southwest Agricultural University 1988 to December 1992. Mr. Zhang and inspection in July 1988, and from College of Economics with a diploma in food analysis management of degree master’s a with University Agricultural Southwest of Trade and management in July 1999. majoring in agricultural economics of the Company. Mr. Qin is Mr. Qin Shaobo (秦少波), aged 51, is a vice general manager a vice general manager of the Company since June 2018; a senior engineer, has served as of the Chengkou County Committee of Chongqing from he served as the deputy secretary director and office as the standing committee member May 2015 to June 2018; he served as served he 2015; April to 2014 February from Committee County Fengdu Chongqing of of Chongqing Fengdu County Committee and the director the standing committee member from February 2012 to February 2014; he served as the of United Front Work Department from March 2011 to standing committee member of Chongqing Fengdu County Committee Chongqing Fengdu CountyFebruary 2012; he served as the standing committee member of the as served he 2011; March to 2009 August from post) temporary a (as Committee Economic Commission from chief of the Education and Training Division of the Chongqing and Development High-tech chief of as the deputy he served 2009; 2005 to August October to 2003 February from Commission Economic Chongqing the of Division Industrialization of Shenzhen NorthOctober 2005; he served as the director of Technical Quality Department from April 2002 to February Jianshe Motorcycle Co., Ltd. of China South Industries Group Construction Motorcycle 2003; he worked as the vice general manager in Shenzhen North 2001 November from Group Industries South China of Company Manufacturing (Chongqing) University Chongqing in Administration Business of College the in studied 2002; he April to administration; business in degree master’s a obtained and 2002 March to 1999 March from Technology Center of he served as the executive deputy director of the National Enterprise Group from October 1999 to Chongqing Jianshe Industry Group of China South Industries Department No. 2 of November 2001; he served as the deputy director of the Development Economics and Business, the deputy chief of Planning and Investment Department and and Department Investment and Planning of chief deputy the Business, and Economics (化工醫藥 of Chemical Medicine (in charge) of the Industrial Department the deputy chief 2006 Commission from May Economic and Information Technology 工業處) in Chongqing Chongqing of Department Coordination the of head the as worked and 2014, March to ( Office Headquarters MDI Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 54 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 55 (Continued) ) in December 2008, 2008, December in )
重慶市委黨校函授學院
aged 50, is a vice general manager and the chief financial aged 45, is the secretary to the Board of the Company. Mr. Deng Mr. Company. the of Board the to secretary the is 45, aged Directors, Supervisors and Senior Management Senior and Supervisors Directors, has served as the director of Chongqing Pigeon Electric Wires & Cables Co. Ltd., the the Ltd., Co. Cables & Wires Electric Pigeon Chongqing of director the as served has System Co., Ltd. and the director of Chongqing Pump director of Exedy Chongqing Driving Mr. Deng has been working in corporate leaders and Industry Co., Ltd. since July 2016. management. in corporate experience extensive with career long a for management office and minister of the Organization Department of the Party He served as the vice minister Electrics and Machinery Chongqing of Department) Management Leader (the Committee 2012 to June 2016, and the secretary and vice directorHolding (Group) Co., Ltd. from June May to 2009 June from Ltd. Co., (Group) Holding Electric and Machinery Chongqing of and head of office of the Company from July 2007 to 2012. He served as the secretary secretary and head of the comprehensive management August 2009, and worked as the group (證券領導小組綜合管理部) of Chongqing Machinery department of securities leading Ltd. from February 2006 to July 2007, and secretary of & Electronics Holding (Group) Co., the director of promotion division, and workshop supervisor the Communist Youth League, Co., Ltd. (重慶軸承工業公司) from May 1998 to February of Chongqing Bearing Industrial scientist and graduated from Chongqing Machinery & 2006. Mr. Deng is a senior political Electric College (重慶機電工程技術學校) in bearing processing with a technical secondary School Correspondence the from graduated and 1998, May in degree education school ( School Party Municipal Chongqing the of Mr. Deng Rui (鄧瑞), Rui Deng Mr. the state-level enterprise technology center in Chongqing Jianshe Industry Group of China Group of Jianshe Industry in Chongqing technology center enterprise the state-level scholar visiting a was he 1999; October to 1997 July from Corporation Industries North September Institute of Technology from of Industrial Design of Beijing at the Department (Group) Chongqing Construction Industrial he worked as an engineer of 1996 to July 1997; 1996; he from March 1992 to September North Industries Corporation Co., Ltd of China Chongqing group in No. 22 workshop of technician at the technology worked as a trainee to 1990 July from Corporation Industries North China of Factory Machinery Construction March 1992. Ms. Liu Zhongtang (劉忠堂), majoring in economics and management with a bachelor’s degree, and graduated from from graduated and degree, bachelor’s a with management and economics in majoring with a bachelor’s degree in Xiamen University, majoring in international economy and trade Program in the School January 2013. He graduated from the EMBA Professional Graduate of Management of Xiamen University in December 2014. served as a Vice General officer of the Company. Ms. Liu is a senior accountant and has served She 2018. August since Company the of officer financial chief the and Manager the to secretary deputy and manager general representative), (legal chairman the as to 2017 May from Ltd. Co., (Group) Industrial General Chongqing of Committee Party and general manager of August 2018, and served as the chairman (legal representative) 2015 to May 2017. She has Chongqing General Industrial (Group) Co., Ltd. from August (Continued) aged 53, has been appointed as the qualified qualified the as appointed been has 53, aged 甘俊英), accountant of our Company since February 2008. He served as the chief risk officer of of officer risk chief the as served He 2008. February since Company our of accountant Limited of UK from July 2013 to June 2019. Mr. Kam Precision Technologies Group (PTG) Xinming China Holdings Limited (a company listed on the was the company secretary of Stock Code: 02699.HK) in July 2016 and served as the Main Board of the Stock Exchange, 2017. Prior to joining the Company, Mr. Kam was the chief investment officer in January Limited, and was responsible for finance operations financial controller of TFH Management group. the within companies listed and private the both in compliance corporate and Tohmatsu, Touche Deloitte for worked Kam Mr. 1989, April and 1986 August Between assistant. He has over 30 previously known as Deloitte Haskins Sells, as a senior account has been a member of the years of experience in corporate and finance management. He the of fellow a and 1996 June since Accountants Public Certified of Institute Kong Hong Kam graduated from Mr. Chartered Association of Certified Accountants since June 2001. degree in a master’s November 2004 with in Kingdom United the in Heriot-Watt University business administration. been trained at the Party School of the Municipal Party Committee from 1 March 2017 to 31 1 March 2017 Committee from Municipal Party School of the at the Party been trained (Group) of Chongqing General Industrial served as the general manager March 2017. She of Chongqing and the chief financial officer 2013 to August 2015, Co., Ltd. from September She studied 2006 to September 2013. (Group) Co., Ltd. from February General Industrial 2007 ) from September of Chongqing University (重慶工商管理碩士學院 in the MBA Institute of controller financial the as served She degree. master’s a gained and 2010 June to ) from June (重慶氣體壓縮機廠有限責任公司 Compressor Factory Co., Ltd. Chongqing Gas finance and University of China majoring in 2006. She studied at the Open 2002 to February accountant She served as the deputy chief July 2002 to September 2005. accounting from of Chongqing Gas Compressor Factory from January and director of Finance Department as the deputy director of Finance Department (in charge) of 2001 to June 2002; she served from October 1997 to January 2001; she served as an Chongqing Gas Compressor Factory April from Factory Compressor Gas Chongqing of Department Finance of officer accounting First Construction Sichuan Coal of accountant an she worked as 1997; 1993 to October studied at Chongqing Coal ) July 1990 to April 1993. She Company (四川煤炭第一建安公司 from September 1988 to July 1990. Industry School majoring in accounting ( Francis Ying, Chun Kam Mr. Directors, Supervisors and Senior Management Senior and Supervisors Directors,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 56 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 2019.
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 VI, 50 to the consolidated financial statements.
RESULTS REVIEW 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING
The results of the Group for the year ended 31 December 2019 are set out in the Consolidated Income Statement in this annual report on pages 155 to 157. 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 20 and “Management Discussion and Analysis” set out on pages 21 to 40. An indication of likely future developments is set out in “Chairman’s Statement” on pages 14 to 19. 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 the operations of the Group. Environmental policies and performance of the Group are set out in “Environmental, Social and Governance Report” on pages 113 to 136.
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”.
57 (Continued) Economic Risk Adversely Affects the Group’s Profitability The Which It Operates, Which Could Adversely Affect Its Businesses Which Could Adversely Affect Which It Operates, The Group is dependent on the regional economic conditions in which the Group is The Group is dependent on the regional economic conditions interest rates hike in operated. The uncertainty of global economy, the possibility of adversely would China Mainland in growth economic of down slowing and US the affect the Group’s profitability. The Group faces significant competition with homogeneous products from both both from products homogeneous with competition significant faces Group The players in each of the markets in which stateowned enterprises and privately-owned faced by the Group’s transmission systems it operates. Due to intensified competition of products related of development and research the that fact the and business behind, the Group did not experience simultaneous new energy automobile lagged in each of the main markets in which the Group growth. As the number of competitors intense competition. In some cases, such fierce operates is large, the Group faces downward pricing pressure on certain products in competition has already caused market position depends on its ability to anticipate the Group’s portfolio. The Group’s factors, including its competitors’ introduction of and respond to various competitive services, pricing strategies adopted by competitors new or improved products and The Group cannot assure that its current or and changes in customers’ preferences. products comparable or superior to those it offers, potential competitors will not offer adapt more quickly than it does to evolving industry at the same or lower prices, or Increased competition may result in price trends or changing market requirements. market Group’s the in decrease and margins profit gross decreased reductions, share.
(2) PRINCIPAL RISKS AND UNCERTAINTIES PRINCIPAL (1) in Markets the of Each in Recession and Competition Significant Faces Group Relationship with customers is the foundation of business. The Group fully understands this fully understands The Group of business. is the foundation with customers Relationship and with customers to fulfil their immediate maintains close relationship principle and thus long-term needs. Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 58 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 59 (Continued)
Uncertainties in Financial Market Risk of Interest Rate Risk of Foreign Exchange Risk of Foreign The Group’s activities expose it to a variety of financial risks: market risk (including The Group’s activities expose it to a variety of financial risks: credit risk), rate interest flow cash and risk rate interest value fair risk, currency focuses on risk and liquidity risk. The Group’s overall risk management programme adverse potential minimise to seeks and markets financial of unpredictability the the to IX Note in out set are Details performance. financial Group’s the on effects consolidated financial statements. The loans of the Group mainly derive from bank loans and corporate bonds. Therefore from bank loans The loans of the Group mainly derive loans as announced by the People’s Bank of China, the benchmark interest rate for will Rate Offered Interbank Singapore the and Rate Offered Interbank London the of the Group, and the change in interest rate in the directly affect the cost of debts of debts to a certain extent. The management will future will have impact on the cost credit policies in order to give early response to the actively monitor the change of enrich the financing channels, and minimize risk, strengthen the capital management, the financial costs. The Group is exposed to foreign exchange risk arising from various currency currency various from arising risk exchange foreign to exposed is Group The risk exchange Foreign GBP. and dollars US to respect with primarily exposures, are liabilities or assets recognised or transactions commercial future when arises is not the Group’s functional currency. Management denominated in a currency that all requiring hedges, exchange foreign of system management a up set has the foreign exchange risk against their functional subsidiaries of the Group to manage tools recognized by the Group. currency and adopt foreign exchange The Group reviews and optimizes its asset portfolio to ensure that it is sufficiently sufficiently is it that ensure to portfolio asset its optimizes and reviews Group The by managed is conditions economic adverse of risk The efficient. and effective cost and constant assessment monitoring of the business performance, ensuring proper and investment prevailing the of appropriateness the and conditions economic of business strategy.
Report of the Board of Directors Board of of the Report (5) (4) (3) (Continued) Uncertainties in Environmental Policies Uncertainties in The Group’s production and operation is one of the key monitoring industries in the of the key monitoring industries and operation is one The Group’s production subject to a number of environmental protection policy. It is national environmental energy disposal, waste quality, water air, concerning regulations and laws relevant subject to inspection by the health and safety, and is consumption, public environmental current Company’s The authorities. protection environmental national environmental national the if However, standards. national reached have indicators further are protection standards and the environmental adjusted is policy protection the on imposed be will requirements protection environmental higher improved, and input, protection environmental Company’s the increase will which Company, to regard In performance. operating Company’s the affect adversely may thus is it stage, learning initial an in is Group the as management, risk environmental the and changes, environmental and policy of uncertainties the predict to difficult adverse effects on its environmental performance. Group seeks to minimise potential by implemented indicators and measures policies, current the of analysis An and Social “Environmental, in out set is policies environmental on Company the Governance Report”.
The Company considers stable and sustainable returns to shareholders of the Company The Company considers stable (“Shareholders”) to be our goal. of Articles the and regulations rules, laws, applicable with compliance to Subject the Board will take into Association, in deciding whether to propose any dividend payout, losses and distributable account, among other things, the financial results, the earnings, ratio and possible effects on reserves, the operations and liquidity requirements, the debt of the Company. the credit lines, and the current and future development plans reserves its right in its sole The Board will review the dividend policy from time to time and the dividend policy. There and absolute discretion to update, amend, modify and/or cancel given any for amount particular any in paid be will dividends that assurance no be can period. FINAL DIVIDEND (6) Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 60
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 61 (Continued) Report of the Board of Directors Board of of the Report Pursuant to the Enterprise Income Tax Law of the People’s Republic of China (“EIT Law”) Pursuant to the Enterprise Income and the Circular on Issues Concerning the Withholdingand the implementation rules thereof Resident Enterprises on Dividends Payable to H Share of Enterprise Income Tax by PRC is Company the No.897), [2008] Han (GuoShui Shareholders Corporate Non-resident non-resident to payable dividends on tax income enterprise the pay and withhold to liable of holders of H shares corporate holders of H shares whose names appear on the register Date at a rate of 10% prior of the Company (“H Share Register of Members”) on the Record to the payment of such final dividends. WITHHOLDING OF ENTERPRISE INCOME TAX FOR NON- NON- FOR TAX INCOME ENTERPRISE OF WITHHOLDING SHAREHOLDERS RESIDENT CORPORATE In order to ascertain the entitlements of the shareholders to receive the proposed final final proposed the receive to shareholders the of entitlements the ascertain to order In 25 Thursday, from closed be will Company the of members of register the dividend, of transfer no which during inclusive), days (both 2020 June 30 Tuesday, to 2020 June documents accompanied by share certificates of the shares will be registered. All transfer be lodged with our H Share Registrar, Computershare shareholders of the Company must Centre, Hopewell Floor, 17th 1712-1716, Shops at Limited Services Investor Kong Hong Hong Kong for registration no later than 4:30 p.m. on 183 Queen’s Road East, Wanchai, Wednesday, 24 June 2020. The Board has recommended the payment of a final dividend of RMB0.01 per share (tax per share dividend of RMB0.01 of a final the payment has recommended The Board 2018: 31 December (for the year ended 2019 December 31 year ended the for inclusive) of share capital total on the calculated based is which inclusive)), (tax share RMB0.04 per 2019, totaling RMB36,846,401.54 for the year ended 31 December 3,684,640,154 shares to approval 31 December 2018). Subject for the year ended (totaling RMB147,385,606.16 on 18 June Meeting to be convened at the forthcoming Annual General by shareholders whose shareholders to 2020 July 29 on paid be will dividend final proposed the 2020, “Record (the 2020 June 30 on Company the of Members of Register the on appear names Date”). (Continued) In order to ascertain the entitlements of the shareholders to attend and vote in the Annual In order to ascertain the entitlements of the shareholders to attend be closed from Tuesday, General Meeting, the register of members of the Company will during which no transfer of 19 May 2020 to Thursday, 18 June 2020 (both days inclusive), share certificates must shares will be registered. All transfers accompanied by the relevant Investor Kong Hong Computershare Registrars, Share H Company’s the with lodged be East, 183 Queen’s Road Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 2020. Wanchai, Hong Kong not later than 4:30 p.m. on Monday, 18 May CLOSURE OF REGISTER OF MEMBERS Any H shares registered in the name of non-individual shareholders will be treated as as treated be will shareholders non-individual of name the in registered shares H Any to payable dividends the hence and shareholders corporate non-resident by held being corporate income tax. Non-resident to the withholding of enterprise them will be subject accordance authorities for tax refunds in apply to the relevant taxation shareholders may person natural to payable dividends final The any). (if treaty tax applicable the with Date is Register of Members on the Record names appear on H Share shareholders whose payable to the Company. For final dividends withholding of income tax by not subject to the Register of names appear on H Share shareholders of H shares whose resident corporate tax on such not withhold enterprise income Record Date, the Company will Members on the opinion is provided by a resident corporate shareholder dividends, provided that a legal confirmed by the Company. within the prescribed period and in the EIT Law) whose name appears on the H Share If any resident enterprise (as defined incorporated in the PRC or under the laws of a foreign Register of Members which is duly a PRC-based de facto management body does not wish country (or a territory) but with tax to be withheld by the Company, it should lodge all to have the 10% enterprise income opinion issued by a PRC certified lawyer (with affixation transfers with and submit a legal thereto) that establishes its resident enterprise status to of common seal of the law firm Computershare Hong Kong Investor Services Limited the Company’s H Share Registrars, Wanchai, East, Road Queen’s 183 Centre, Hopewell Floor, 17th 1712-1716, Shops at H person investor whose natural Any on 24 June 2020. than 4:30 p.m. no later Hong Kong of any such non-individual shareholders and who does shares are registered in the name income tax to be withheld by the Company may consider not wish to have any enterprise relevant H shares into his or her own name and lodging all transferring the legal title of the by the H share certificates with the Company’s Hrelevant transfer instruments accompanied June 2020. Shareholders are Share Registrars for registration no later than 4:30 p.m. on 24 in respect of the ownership recommended to consult their tax advisors regarding tax issues tax effects. and disposal of H shares in the PRC and Hong Kong and other Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 62
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 63 (Continued) Report of the Board of Directors Board of of the Report Summary of the Group’s results, assets, liabilities and minority interests for the latest five latest the interests for minority and liabilities assets, results, Group’s the of Summary the in included not is which report, annual this in 4 page on out set is years financial audited financial statements. FINANCIAL HIGHLIGHTS As at 31 December 2019, cash, bank balances and time deposits (including restricted restricted (including deposits time and balances bank cash, 2019, December 31 at As (31 position financial stable a indicating million, RMB2,094.6 approximately were cash) RMB2,164.7 million). December 2018: approximately As at 31 December 2019, equity attributable to the shareholders of the Company amounted the shareholders of the Company 2019, equity attributable to As at 31 December RMB6,808.9 approximately 2018: December (31 million RMB6,844.4 approximately to 0.5%. RMB35.5 million or approximately an increase of approximately million), representing operating. As was mainly cash flows from the Group’s working capital During this Period, by divided borrowings as (calculated ratio gearing Group’s the 2019, December 31 at equity and borrowings as shown in the consolidated total capital, total capital comprises 41.2% (31 December 2018: approximately 29.5%). The balance sheets) was approximately current assets as a percentage of current liabilities) was Group’s current ratio (being the 2018: approximately 1.56:1). approximately 1.48:1 (31 December Liquidity and Financial Resources Liquidity and Financial FINANCIAL REVIEW FINANCIAL (%) 100 70.14 29.86 shares total issued Approximate percentage in
Shares Number of 3,684,640,154 2,584,452,684 1,100,187,470
(Continued) Total Share capital structure Domestic shares H shares
SHARE CAPITAL During the Period, the Group invested approximately RMB231.5 million in acquisition of of acquisition in million RMB231.5 approximately invested Group the Period, the During expansion and equipment, etc. for business such as real property, plant non-current assets, of the RMB611.8 million). Details 31 December 2018: approximately (for the year ended during the and equipment of the Group property, properties, plant changes in investment consolidated financial statements. in Note VI, 18 and VI, 21 to the year are set out INVESTMENT PROPERTIES, REAL PROPERTY, PLANT AND AND PLANT PROPERTY, REAL PROPERTIES, INVESTMENT EQUIPMENT Report of the Board of Directors Board of of the Report There was no change in the share capital of the Company as at 31 December 2019, details There was no change in the share statements. of which are set out in Note VI, 45 to the consolidated financial
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 64 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 65 2.5% 2.6% 3.8% 5.8% 1.7% 16.4%
電聯合動力技術 (Continued) 新疆金風科技股份有限 （上汽依維柯紅巖商用 （重慶海康威視科技有限公司）
車有限公司） 有限公司) 公司) Total amount of the top five customers Chongqing Hikvision Technology Co., Ltd. SAIC-IVECO Hongyan Commercial Vehicle Co., Ltd. Guodian United Power Technology Company Limited (國 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. ( Xinjiang Goldwind Science & Technology Report of the Board of Directors Board of of the Report None of the top five customers is a connected person of the Group.
Set out below are revenues derived from product sales and service provision to major major to provision service and sales product from derived revenues are below out Set Group’s revenue during the reporting period: customers as a percentage of the MAJOR CUSTOMERS AND SUPPLIERS MAJOR CUSTOMERS AND CHARITY DONATIONS donation amounted to approximately RMB100,000 (forDuring the Period, the Group’s charity approximately RMB40,000). the year ended 31 December 2018: RESERVES are set out in during the year under review in reserves of the Group Details of the changes financial statements. Note VI, 46 to VI, 49 to the consolidated Details of the changes in bonds of the Group during the year under review are set out in during the year under review are in bonds of the Group Details of the changes consolidated financial statements. Note VI, 39 to the BONDS 3.9% 2.7% 2.6% 2.4% 28.3% 16.6%
有限公司) 上海) (Continued) Total amount of the top five suppliers 中銅國際貿易集團有限公司 ) Trade Group Co., Ltd.( China Copper International ) Wire and Cable Co., Ltd. (金川集團電線電纜有限公司 Jinchuan Group ) Industry Co, Ltd (雲南銅業股份有限公司 Yunnan Copper ( Materials Co., Ltd (道生天合材料科技 Techstorm Advanced ) Taishan Fibreglass Inc. (泰山玻璃纖維有限公司 None of the top five suppliers are connected persons of the Group. None of the top five suppliers are respective associates, or our substantial shareholders who, None of our Directors or their capital, has any beneficial share our of more or 5% own of the Board, knowledge the to and suppliers. interest in any of our top five customers For the year ended 31 December 2019, the non-competition agreement entered into into entered agreement non-competition the 2019, December 31 ended year the For Parent the Ltd., Co., (Group) Holding Electronics and Machinery Chongqing between effective. Please refer to the Prospectus for details. Company, and the Company remained COMPETITION AND CONFLICTS OF INTEREST COMPETITION AND CONFLICTS
Set out below are expenses derived from procured products and services from major major from services and products procured from derived expenses are below out Set during the reporting period: of the Group’s sale cost suppliers as a percentage Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 66 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 67
(Continued)
Date of appointment On 18 June 2013 On 28 June 2016 On 8 December 2015 On 27 July 2007 On 27 November 2017 On 28 June 2018 On 26 June 2019 On 10 January 2008 On 27 July 2007 On 18 June 2012 On 29 September 2014 On 30 October 2018 On 29 September 2014 On 18 September 2015 On 26 June 2019 On 26 June 2019 Report of the Board of Directors Board of of the Report Huang Yong Lo Wah Wai Sun Wenguang Wang Yuxiang Chen Ping Yang Quan Non-executive Directors Dou Bo Wang Pengcheng Zhang Yongchao Independent non-executive Directors Ren Xiaochang Jin Jingyu Liu Wei Supervisors Wu Yi Xia Hua Wang Haibing Li Fangzhong Executive Directors During the year and as at the date hereof, the Directors and Supervisors are as follows: and Supervisors are as and as at the date hereof, the Directors During the year DIRECTORS AND SUPERVISORS DIRECTORS (Continued) DIRECTOR’S REMUNERATION Remuneration the by proposed are Company the of Directors the of remuneration The Other Meeting. General Annual the by approved and Board the by considered Committee, and position the on based Committee Remuneration the by determined are remunerations Please refer to Note XI, responsibilities of each Director and the operating results of the Group. 463 of this annual report. 4 to the consolidated financial statements set out on pages 458 to BIOGRAPHIES OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF BIOGRAPHIES MANAGEMENT of the Company are Biographical details of Directors, Supervisors and senior management set out on pages 41 to 56 of this annual report. The office term of non-executive Directors and independent non-executive Directors of the The office term of non-executive Director (including Directors Company is three years. Upon expiry of the office term, each at Annual General Meetings. appointed with specific terms) may offer himself for re-election OFFICE TERM OF NON-EXECUTIVE DIRECTORS AND AND DIRECTORS NON-EXECUTIVE OF TERM OFFICE DIRECTORS INDEPENDENT NON-EXECUTIVE Pursuant to such service contracts and the Articles of Association, the Chairman of the the of Chairman the Association, of Articles the and contracts service such to Pursuant of the Company will hold office for a term of three years Board and executive Directors be can contracts such expiry, Upon date. appointment respective their from starting of the Articles of Association and the Listing Rules, renewed under the relevant provisions The Meetings. General Annual at re-election for themselves offer may Directors and giving not less than three months’ notice in writing by eithercontracts may be terminated by to terms thereof. party on the other, or according of the Directors has entered into a service contract with Save as mentioned above, none statutory than (other compensation without terminated be not could which Company the compensation) within one year. Independent non-executive Directors have submitted to the Company the annual written written annual the Company the to submitted have Directors non-executive Independent The Rules. Listing the of 3.13 Rule by required as independence own their of confirmation non-executive Directors are independent. opinion that all four independent Company is of the SERVICE CONTRACTS DIRECTOR’S INDEPENDENCE OF INDEPENDENT NON-EXECUTIVE DIRECTORS OF INDEPENDENT INDEPENDENCE Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 68
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 69 (Continued) Report of the Board of Directors Board of of the Report During the Year, none of Directors of the Company or their spouse or juvenile children was juvenile children or spouse their or Company the of Directors of none Year, the During of none the shares or bonds of the Group; acquiring make profit by granted the right to or fellow subsidiaries was a the Company, its holding company, or any of its subsidiaries such rights in any other party to any arrangement which enables the Directors to acquire corporations. DIRECTORS’ RIGHTS TO ACQUIRE SHARES AND BONDS DIRECTORS’ RIGHTS TO ACQUIRE SHARES AND As of 31 December 2019, none of the Directors, chief executive or Supervisors of the the of Supervisors or executive chief Directors, the of none 2019, December 31 of As debt or shares underlying shares, the in positions short or interests any had Company of meaning the (within corporations associated its of any or Company the of securities Kong) of Hong (Chapter 571 of the Laws Ordinance Part XV of the Securities and Futures Exchange Stock the and Company the to notified be to required were which “SFO”)) (the Part XV of the SFO (including interests or short positions pursuant to Divisions 7 and 8 of are taken or deemed to have under such provisions which the Directors or chief executive pursuant to section 352 of the SFO, to be entered in of the SFO), or which were required, notified to the Company and the register referred to therein, or which were required to be Transactions by Directors of the Stock Exchange pursuant to the Model Code for Securities Listing of Securities on theListed Issuers set out in Appendix 10 of the Rules Governing the Stock Exchange. INTERESTS OF THE DIRECTORS AND CHIEF EXECUTIVE IN THE INTERESTS OF THE DIRECTORS SHARES SHARES AND UNDERLYING During the year ended 31 December 2019, none of the Group and its subsidiaries subsidiaries its and Group the of none 2019, December 31 ended year the During listed securities of the Company. purchased, sold or redeemed any PURCHASE, SALE OR REDEMPTION OF SECURITIES OF THE THE OF SECURITIES OF REDEMPTION OR SALE PURCHASE, COMPANY During the Year, none of Directors or Supervisors had a material interest, either directly had a material interest, either none of Directors or Supervisors During the Year, the which to Group the of business the to significance of contract any in indirectly, or was a party. or fellow subsidiaries company, or any of its subsidiaries Company, its holding INTERESTS OF DIRECTORS AND SUPERVISORS IN CONTRACTS CONTRACTS IN SUPERVISORS AND DIRECTORS OF INTERESTS TRANSACTIONS AND CONNECTED (%) 2.52 6.30 6.30 2.52 5.32 5.32 52.22 64.82 shares total issued Percentage of
– – – – – – (%) 8.42 (L) 8.42 (L) shares Percentage of total issued H
– – (%) 8.98 (L) 8.98 (L) 7.58 (L) 7.58 (L) shares 74.46 (L) 92.42 (L) domestic total issued Percentage of
(Continued)
(1) (1) (1) (2) (1) (3) (3) (1) Notes
owner owner owner owner owner owner corporation interest corporation interest
Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Controlled Controlled shares shares shares shares shares shares Stock category Status
H shares H shares
shares 92,670,000 92,670,000 Number of 232,132,514 Domestic 232,132,514 Domestic 195,962,467 Domestic 195,962,467 Domestic 1,924,225,189 Domestic 2,388,490,217 Domestic
Long Position
Management Group Co., Ltd. and Electronic Holding (Group) Co., Ltd. Engineering Group Co., Ltd. Management Co., Ltd. the PRC Assets Supervision and Administration Commission Name of shareholders
Chongqing Yufu Assets Chongqing Machinery Chongqing Construction China Huarong Asset Ministry of Finance of Chongqing State-owned Chongqing Long position in domestic shares and H shares of RMB1.00 each of the Company Long position in domestic shares For the year ended 31 December 2019, so far as the Directors of the Company are aware, For the year ended 31 December a director, chief executive or supervisor of the Company) the following persons (not being Company as recorded in the register required to be kept had interests in the shares of the under section 336 of the SFO: INTERESTS OF SUBSTANTIAL SHAREHOLDERS AND OTHER OTHER AND SHAREHOLDERS SUBSTANTIAL OF INTERESTS UNDERLYING SHARES PARTIES IN SHARES AND During the Year, the Group was not involved in material litigation or arbitration. the Group was not involved in During the Year, EVENTS SIGNIFICANT 37 of this annual report. Please refer to page SIGNIFICANT LITIGATION SIGNIFICANT (L) Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 70 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 71 (L) (L) (L) (L) (L) (S) (P) (P) (P) (%) 0 issued shares of total 2.98 2.98 2.37 2.37 2.06 0.00 2.96 2.37 Percentage
(L) (L) (L) (L) (L) (S) (P) (P) (P) 0 shares of total 9.97 9.98 7.93 6.91 0.08 9.90 7.93 issued H Percentage
(4) 7.93 Notes (%) 重慶市國有資產監督管理委員會)
(Continued) ), Chongqing Chongqing 重慶市國有資產監督管理委員會), under the control of major shareholders Investment manager Investment manager Custodian Corporate interest Investment manager
(L) (L) (L) (L) (S) (P) (P) (P) 0 shares Status Number of 882,000 87,276,000 87,276,000 75,973,334 87,276,000 109,831,600 109,659,300 (L) 108,949,600 Assets Supervision and Administration Commission ( Commission Administration and Supervision Assets
Chongqing Machinery and Electronics Holding (Group) Co., Ltd. and Chongqing Yufu Yufu Chongqing and Ltd. Co., (Group) Holding Electronics and Machinery Chongqing State-Owned Assets Supervision and Administration Commission is deemed to be interested State-Owned Assets Supervision and Administration Commission is as 232,132,514 domestic in 1,924,225,189 domestic shares and 92,670,000 H shares as well shares of the Company held by the two companies. Assets Management (Group) Co., Ltd. were wholly owned by Chongqing State-Owned Assets Assets Management (Group) Co., Ltd. were wholly owned by Chongqing ( Commission Administration and Supervision Chongqing Construction Engineering Group Co., Ltd. is held as to 76.53% by Chongqing State- Chongqing Construction Engineering Group Co., Ltd. is held as to 76.53% Owned As means long position means short position means lending pool through its wholly owned Chongqing Construction Investment Holding Co., Ltd. (重慶建工投資 through its wholly owned Chongqing Construction Investment Holding 控股有限責任公司). Therefore, Chongqing State-Owned Assets Supervision and Administration of the Company held Commission is deemed to be interested in 232,132,514 domestic shares by Chongqing Construction Engineering Group Co., Ltd.
(formerly known as “The Bank of New York”) Corporation
JPMorgan Chase & Co. Name of shareholders The Bank of New York Mellon Templeton Asset Management Ltd. The Bank of New York Mellon GE Asset Management Incorporated 1) Report of the Board of Directors Board of of the Report (2) (L) H shares of the Company with par value of RMB1.00 each Company with par value of RMB1.00 H shares of the ( Notes: (S) (P) (Continued) ) and indirectly holds 4.22% of of 4.22% holds indirectly and ) 中國華融資產管理股份有限公司 Bank of New York Mellon Corporation holds 100% interests in The Bank of New York York New of Bank The in interests 100% holds Corporation Mellon York New of Bank Mellon (formerly known as “The Bank of New York”), which holds 87,276,000 of H shares of which holds 87,276,000 of H shares as “The Bank of New York”), Mellon (formerly known the in shares of block same the to relates shares H 87,276,000 in interest The Company. the of 87,276,000 of H shares of the Company. Company and includes a lending pool Asset Management Co., Ltd. ( Ltd. Co., Management Asset of subsidiary wholly-owned a Company, (Group) Insurance Life China through shares the deemed to be interested in 195,962,467 Ministry of Finance of the PRC is it. Therefore, the Asset Management Co., Ltd. the Company held by China Huarong domestic shares of The The
Master Sales Agreement Agreement”) was renewed On 7 April 2016, a master sales agreement (the “Master Sales Electronics Holding (Group) by and between the Company and Chongqing Machinery and Sales Master the to Pursuant Company”). “Parent the as to refer (hereinafter Ltd. Co., such as control valves and Agreement, the Company has agreed to sell certain products electric of series BV the and assemblies clutch and gears systems, steering for parts cables (the “Products”) to the Parent Company and its associates. For the year ended 31 December 2019, the summary of the connected party transactions For the year ended 31 December the of majority a where statements, financial consolidated the to notes the in out set is connected transactions as defined in Chapter 14A of transactions constituted continuing the Hong Kong Listing Rules. Kong Listing Rules, thePursuant to the disclosure requirements of Chapter 14A of the Hong defined in the Listing Rules) following transactions between certain connected persons (as ongoing basis, for which the and the Company have been entered into/or carried out on an with the Listing Rules: Company has made the relevant disclosure as below in accordance During the Period, the Company has no connected transactions. During the Period, the Company TRANSACTIONS CONTINUING CONNECTED CONNECTED TRANSACTIONS Save as disclosed above, the Directors of the Company are not aware of any persons persons any of aware not are Company the of Directors the above, disclosed as Save in the shares or underlying shares of the Company holding any interests or short positions in the register pursuant to section 336 of the SFO as at which were required to be recorded 31 December 2019. (4) (3) Huarong China of shares the of 63.36% holds directly PRC the of Finance of Ministry Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 72 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 73 (Continued) is not less than 10% (i.e. price = cost x (1 + percentage mark-up)), whereas mark-up)), percentage + (1 x cost = price (i.e. 10% than less not is
the 10% mark-up is determined based on the average gross 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 none of the above is applicable, the cost plus a percentage mark-up (tax-inclusive) If none of the above is applicable, the cost plus a percentage which If there is no market price determined by an independent third party, the transaction If there is no market price determined independent third party; price between the Group with the The quoted prices in the market through the industry website or enquiry (including the The quoted prices in the market with at least two independent third parties in the website of Alibaba (www.1688.com)) or similar products provided by suppliers (except market (i.e. the price of the same in the same area under daily operations and on the Company and its subsidiaries) third parties); normal commercial terms to independent
Report of the Board of Directors Board of of the Report (i) The Master Sales Agreement was entered into in the ordinary course of business of the The Master Sales Agreement was The basis of pricing is as follows: Group on normal commercial terms. On 20 April 2018, the Company entered into a supplementary sales agreement with the On 20 April 2018, the Company caps of sales for 2019 from RMB190 million to RMB360 Parent Company to increase annual the of meeting general annual the at approved were adjustments above The million. Company on 28 June 2018. Additionally, in case where there are material fluctuations in the prices of any or all of the of any or all of in the prices fluctuations there are material in case where Additionally, in good of the Master Sales Agreement shall re-negotiate the terms products, the parties agreement. or a new master sales entering into a supplemental agreement faith by way of the of date the from years three of period a for valid is Agreement Sales Master The years by for a successive term of three can be renewed by the Company agreement and the expiry of the initial term. Accordingly, least three months prior to the giving notice at general 2019 approved at the annual for the year ended 31 December annual caps of sales million. June 2016 was set at RMB190 meeting dated 28 (iii) (ii) (Continued) prices in the market through the industry website or enquiry with at least with at website or enquiry industry through the in the market prices If none of the above is not applicable, cost plus a percentage mark-up (tax-inclusive), If none of the above is not applicable, cost plus a percentage mark-up)). which will not exceed 10% (i.e. price = cost x (1 + percentage If there is no market price determined by an independent third party, the transaction If there is no market price determined by an independent third price between the Group with the independent third party; The quoted two independent third parties (i.e. the price of the same or similar products provided two independent third parties (i.e. the price of the same or similar same area under daily by suppliers (except the Company and its subsidiaries) in the parties); operations and on normal commercial terms to independent third
Master Supplies Agreement Master Supplies was Agreement”) Supplies “Master (the agreement supplies master a 2016, April 7 On to the Master Parent Company. Pursuant between the Company and the renewed by and supply to agreed have associates its and Company Parent the Agreement, Supplies series YB2 parts, component gears, as such materials raw and parts with Company the electrolytic copper (the “Supplies”). engines, electricity, water, gas and are material fluctuations in the prices of any or all of the Additionally, in case where there in Agreement Supplies Master the of terms the re-negotiate shall parties the products, into a supplemental agreement or a new master supplies good faith by way of entering Agreement is valid for a period of three years from the agreement. The Master Supplies of term successive a for Company the by renewed be can and agreement the of date term. initial the of expiry the to prior months three least at notice giving by years three supplies for the year ended 31 December 2019 approved Accordingly, the annual caps of March 2016 was set at RMB80 million. at the Board meeting dated 29 was entered into in the ordinary course of business of the The Master Supplies Agreement The basis of pricing is as follows: Group on normal commercial terms. (i) For the year ended 31 December 2019, the monetary value of sales under the Master Sales the Master of sales under the monetary value 2019, ended 31 December For the year and its associates was approximately Company to the Parent Company Agreement by the million). 2018: approximately RMB296.5 (for the year ended 31 December RMB230.0 million (iii) (ii) Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 74 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 75 (Continued)
Parent Group Financial Services Framework Agreement Parent Group Financial Services The Company’s subsidiary Chongqing Electrical Holdings Group Finance Company Company Finance Group Holdings Electrical Chongqing subsidiary Company’s The into the Financial Limited (the “Finance Company”) and the Parent Company entered Financial Services Service Framework Agreement on 7 April 2016 (the “Parent Group General Meeting Framework Agreement”), under which, (i) as approved at the Annual loan services for the held on 28 June 2016, the approved proposed annual cap for approved at the Board year ended 31 December 2019 was RMB3,000 million; (ii) as proposed annual cap for guarantee approved 2016, the meeting held on 29 March (including million RMB100 was 2019 December 31 ended year the for services 29 on held meeting Board the at approved as (iii) fees); handling corresponding services for the March 2016, the approved proposed annual cap for other financial year ended 31 December 2019 was RMB38.5 million.
Report of the Board of Directors Board of of the Report (I) FINANCIAL SERVICES FRAMEWORK AGREEMENT FINANCIAL SERVICES For the year ended 31 December 2019, the rent paid by the Company to the Parent Parent the to Company the by paid rent the 2019, December 31 ended year the For approximately was Agreement Leasing Master the under associates its and Company 31 December 2018: approximately RMB17.9 million). RMB27.9 million (for the year ended The Parent Group leases land and buildings to the Group as the Group’s offices, productionThe Parent Group leases land and quarters. Accordingly, the annual cap of the lease for the facilities, workshops and staff was 2016 March 29 meeting dated Board the at approved 2019 December 31 ended year set at RMB45 million. On 7 April 2016, a master leasing agreement (the “Master Leasing Agreement”) was was Agreement”) Leasing “Master (the agreement leasing master a 2016, April 7 On and land of lease the for Company Parent the and Company the between into entered and its associates to the Company for use as offices, buildings by the Parent Company and staff quarters. production facilities, workshops Master Leasing Agreement Master Leasing For the year ended 31 December 2019, the monetary value of supplies under the Master the under supplies of value monetary the 2019, December 31 ended year the For was Company the to associates its and Company Parent the by Agreement Supplies approximately 2018: December 31 ended year the (for million RMB48.1 approximately RMB74.7 million). (Continued) Other financial services (including bill discounting services, consultancy services, services, consultancy services, discounting bill (including services financial Other agency services and underwriting services, etc.) for the provision of The fees charged by the Finance Company on the Parent Group by any independent other financial services will be not higher than the fees charged third party on the Parent Group for the same types of services. Guarantee services Risk of Assessment the for Measures Interim the in regulations the to Pursuant the CBRC, by set Group Enterprise of Company Finance of Indicators Supervision cannot Company Finance the in capital total to exposure risk guarantee of ratio is RMB600,000,000. exceed 100%. The registered capital of the Finance Company the guarantee services Thus the maximum limit amount in respect of annual caps of of the Finance Company is RMB600,000,000. Loan services the Finance Company will be Parent Group from for loans to the The interest rates similar of the same type and under interest rates for loans to those not lower than the commercial banks in the PRC. Group from other independent terms to the Parent in commercial banks banks from the national least two at choose The Company will banks in Chongqing that have business relations the PRC and the local commercial as to the loan services of the same type and with the Company and make inquiries Group (the companies under the Parent Group carry under similar terms to the Parent by the banks as a result of the implementation of the same credit ratings assessed the Parent Group), and submit the results to the a unified credit policy throughout Company will then make the final assessments and Finance Company. The Finance for the services to the Parent Group by reference to determine the final interest rates comprehensive returns, capital cost of the Finance the Parent Group’s business risks, the that ensure to as so factors, others and indictors regulatory and Company the Finance Company to the Parent Group are in line interests for loans provided by for loan services. with the above pricing standards The Parent Group Financial Services Framework Agreement was entered into in the into in the was entered Agreement Services Framework Group Financial The Parent normal commercial terms. on Company of the Finance of business ordinary course is as follows: The basis of pricing Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 76 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 77 (Continued)
Group Financial Services Framework Agreement Group Financial Services Framework The Finance Company entered into a financial services framework agreement (the (the agreement framework services financial a into entered Company Finance The April 7 on Company the with Agreement”) Framework Services Financial “Group at the Annual General Meeting held on 28 June 2016, under which, (i) as approved the of respect in transactions the for cap annual proposed approved the 2016, 31 December 2019 was RMB3,500 million; (ii) deposit services for the year ended held on 29 March 2016, the approved proposed as approved at the Board meeting year the for services financial other of respect in transactions the for cap annual RMB39 million. ended 31 December 2019 was Agreement was entered into in the ordinary The Group Financial Services Framework Company on normal commercial terms. The basis course of business of the Finance of pricing is as follows: For the year ended 31 December 2019, pursuant to the Financial Services Framework Framework Financial Services pursuant to the 2019, ended 31 December For the year respect of the loan services provided daily maximum limit amount in Agreement, the million, approximately RMB1,206.55 to the Parent Group was by the Finance Company RMB0 approximately was services guarantee of respect in amount transaction the approximately was services financial other of amount transaction the and million limit maximum daily the 2018: December 31 ended year the (for million RMB0.18 the million, RMB1,288.24 approximately was services loan of respect in amount million was approximately RMB0 in respect of guarantee services transaction amount RMB0.3 approximately was services financial other of amount transaction the and million).
Report of the Board of Directors Board of of the Report (II) (Continued) The fees charged by the Finance Company on the Group for the provision of other The fees charged by the Finance than the fees charged by any independent third financial services will be not higher types of services. party on the Group for the same 2019, pursuant to the Financial Services Framework For the year ended 31 December limit amount in respect of deposit services provided Agreement, the daily maximum Group was approximately RMB1,719.09 million and by the Finance Company to the ended year the (for million RMB0.66 approximately was the other financial services of deposit services 31 December 2018: the daily maximum limit amount in respect was approximately was approximately RMB1,796.2 million and other financial services RMB0.9 million). Other financial services (including bill discounting services, consultancy services, services, consultancy services, discounting bill (including services financial Other services, etc.) agency services and underwriting The interest rates for deposits offered by the Finance Company to the Group will be Company to the Group for deposits offered by the Finance The interest rates terms same type and under similar interest rates for deposits of the not lower than banks in the PRC. by other independent commercial offered to the Group banks commercial national the from banks two least at choose will Company The in Chongqing that have business as the local commercial banks in the PRC as well same the of deposits for rates interest the obtain and Company the with relations and compare those with the interest rates offered by type and under similar terms, for deposits of the same type and under similar the Finance Company to the Group interests received by the Group for its deposits are in terms, so as to ensure that the for deposit services. line with the above pricing standards Deposit services Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 78 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 79 (Continued) has come to their attention that causes them to believe that the the that believe to them causes that attention their to come has
transactions involving the provision of goods or services by the Group, Group, the by services or goods of provision the involving transactions
disclosed continuing connected transactions have not been approved by the the by approved been not have transactions connected continuing disclosed Company’s board of directors. nothing has come to their attention that causes them to believe that the the that believe to them causes that attention their to come has nothing with the pricing transactions were not, in all material respects, in accordance policies of the Group. for nothing on normal commercial terms or on terms no less favourable than terms available favourable than terms available terms or on terms no less on normal commercial independent third parties; and to or from (as the case may be) agreements governing them and on terms that in accordance with the relevant interests of the shareholders as a whole. are fair and reasonable and in the fair and reasonable in respect of the afore-mentioned proposed annual caps; in respect of the afore-mentioned fair and reasonable business of the Group; ordinary and usual course of entered into in the auditor of the Company was engaged to report on the Group’s continuing continuing Group’s the on report to engaged was Company the of auditor
(b) connected transactions in accordance with Hong Kong Standard on Assurance Assurance on Standard Kong Hong with accordance in transactions connected Engagements Other Than Audits or Reviews Engagements 3000 (Revised) ‘Assurance and with reference to Practice Note 740 ‘Auditor’s of Historical Financial Information’ Rules’ Listing Kong Hong the under Transactions Connected Continuing on Letter has The auditor Accountants. Public Certified of Institute Hong Kong by the issued the of respect in conclusions and findings containing letter unqualified an issued in report annual the in Group the by disclosed transactions connected continuing the Listing Rules. They conclude that: accordance with Rule 14A.56 of (a) The independent non-executive Directors, namely Mr. Lo Wah Wai, Mr. Ren Ren Mr. Wai, Wah Lo Mr. namely Directors, non-executive independent The abovementioned the reviewed have Wei, Liu Mr. and Jingyu Jin Mr. Xiaochang, that such transactions are: transactions and confirmed continuing connected (1) (4) The (2) (3) Report of the Board of Directors Board of of the Report (Continued) has come to their attention that causes them to believe that the the that believe to them causes that attention their to come has respect to the aggregate amount of each of the continuing connected connected continuing the of each of amount aggregate the to respect transactions were not entered into, in all material respects, in accordance with respects, in accordance with not entered into, in all material transactions were governing such transactions. the relevant agreements transactions, nothing has come to their attention that causes them to believe believe to them causes that attention their to come has nothing transactions, have exceeded the annual continuing connected transactions that the disclosed Company. cap as set by the nothing with
(d) (c) A copy of the auditor’s letter has been provided by the Company to The Stock Exchange of A copy of the auditor’s letter has Hong Kong Limited. of the related party transactions or continuing connected Save as disclosed above, none note XI to the financial statements constitutes connected party transactions as set out in transactions that should be disclosed under the Hong transactions or continuing connected transactions and continuing connected transactions, the Kong Listing Rules. For connected disclosure requirements under Chapter 14A of the Hong Company has complied with the Kong Listing Rules. complied with the has Company the transactions, For the purpose of continuing connected Hong Kong Listing Rules from time to time, and the value disclosure requirements of the transactions for the year ended 31 December 2019 have and the transaction terms of the with the pricing policies and guidelines set out in the Hong been determined in accordance Letter HKEx-GL73-14. Kong Stock Exchange’s Guidance There are no provisions for pre-emptive rights under the Company’s Articles of Association There are no provisions for pre-emptive rights under the Company’s on a pro rata basis to or the PRC laws which require the Company to offer new shares existing shareholders. PRE-EMPTIVE RIGHTS Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 80
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 81 (Continued) Report of the Board of Directors Board of of the Report For the year ended 31 December 2019, the Company had 1,100,187,470 H shares of of shares H 1,100,187,470 had Company the 2019, December 31 ended year the For Co., Ltd. held 92,670,000 H which Chongqing Machinery and Electronics Holding (Group) public shareholding was shares in its total share capital of 3,684,640,154 shares. Therefore, 27.34%, indicating a sufficient public float throughout the year. PUBLIC FLOAT After the balance sheet date, please refer to the subsequent events on page 38 of this of 38 page on events subsequent the to refer please date, sheet balance the After annual report. POST BALANCE SHEET DATE EVENTS The Company’s policies relating to remunerations of non-executive Directors are to ensure The Company’s policies relating for their efforts made and time spent on the Company, that they can be fully compensated and Directors executive (including employees of remunerations to relating policies and that remunerations are offered in line with their duties senior management) are to ensure competitiveness the ensure to designed are policies Remuneration practice. market and employees. Directors of remuneration levels, and to effectively attract, retain and motivate the in participate to allowed not are executives the and associates their of any or determination of their own remuneration. Remunerations of the Directors of the Company were determined by the Remuneration Remuneration the by determined were Company the of Directors the of Remunerations the operating results of the Company and comparable Committee, taking into consideration the Report of the Board of Directors set out on page 68 in market statistics. Please refer to this annual report. As at 31 December 2019, the Group had a total of 8,699 employees (31 December 2018: As at 31 December 2019, the Group their and trends market on based determined were salaries Their employees). 9,124 were which etc., schemes, pension insurance, included benefits Welfare performance. with national regulations. strictly executed in accordance EMPLOYEE AND REMUNERATION POLICY AND REMUNERATION EMPLOYEE The Board of the Company has established Audit and Risk Management Committee, Committee, Management Risk and Audit established has Company the of Board The (“Board Committee Strategic and Committee Nomination Committee, Remuneration Corporate of section the in out set are Committees Board the of Details Committees”). report. on pages 91 to 96 of this annual Governance Report BOARD COMMITTEES
Mr. Wang Yuxiang By Order of the Board (Continued) Executive Director and Chairman Chongqing Machinery & Electric Co., Ltd. The annual results announcement has been published on the Company’s website website Company’s the on published been has announcement results annual The the Stock Exchange’s website. The annual report will also (http://www.chinacqme.com) and Stock Exchange’s websites on or around 15 April be available on the Company’s and the thereafter according to 2020 and will be dispatched to the shareholders of the Company the means they choose to receive communications. PUBLICATION OF ANNUAL RESULTS ON THE WEBSITES OF THE PUBLICATION OF ANNUAL THE COMPANY STOCK EXCHANGE AND On 28 June 2018, PricewaterhouseCoopers ZhongTian LLP and PricewaterhouseCoopers LLP and PricewaterhouseCoopers PricewaterhouseCoopers ZhongTian On 28 June 2018, auditors of the Company (the “Independent Auditor”), have resigned as the independent general meeting of the Company, ShineWing Certified and as approved by the 2018 annual as the new Independent Auditor on 28 June 2018 Public Accountants LLP was appointed of the forthcoming annual general meeting. and will hold office until the conclusion has Company the Meeting, General Annual 2019 the at Company the by approved As Accountants LLP as the auditor for the year ended 31 appointed ShineWing Certified Public Public Accountants LLP has performed audit on the December 2019. ShineWing Certified statements prepared in accordance with the PRC Financial Group’s consolidated financial Reporting Standards. The Company’s reserves available for distribution to its owners as at 31 December 2019 to its owners as at 31 December reserves available for distribution The Company’s million. were RMB2,675.9 AUDITORS DISTRIBUTABLE RESERVES DISTRIBUTABLE Chongqing, the PRC 27 March 2020 Report of the Board of Directors Board of of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 82 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 seriously implemented the “1334”
work arrangement focusing on the annual business objectives in accordance with the 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING Rules of Procedures of the Supervisory Committee of the Company. The committee focused on promoting scientific decision-making, standardized operation and management improvement to supervise and perform duties according to the laws, and made efforts to improve the quality and efficiency of supervision by means of inter-department linkage, combination of supervision and examination, and combination of investigation and inspection. 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, two of the supervisors were 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, “good start” supervision, specialized inspections on preparation and implementation of annual budget, trade receivables and its contract management. In respect of daily supervision, it reviewed the interim results and annual financial accounts, financial budget and profit distribution plans of the Company as well as participated in the review of the auditor’s report and provided constructive advice through convening three special meetings of Supervisory Committee, attending one general meeting, sitting in seven 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.
83 (Continued) Supervisory Committee has inspected the connected transactions of the the of transactions connected the inspected has Committee Supervisory he Supervisory Committee has supervised duty fulfillment of the Directors and and Directors the of fulfillment duty supervised has Committee Supervisory he management of the Company and is of a view that the Directors, the general general the Directors, the that view a of is and Company the of management members have exercised rights granted by manager and other senior management discharged their duties in strict compliance with the shareholders and the Board and faith. The Committee is not aware of any abuse of principle of diligence and good of the Company’s shareholders and the legitimateauthority which impairs the interests rights of the Company’s employees as of the date of this report. Company and is of a view that the significant connected transactions arising from from arising transactions connected significant the that view a of is and Company the reporting period are fair, impartial and compliant the Company’s operation during of other shareholders and the Company. without damaging the interests T The The Supervisory Committee has examined details of the implementation of financial of the implementation of financial Committee has examined details The Supervisory reports of the Company. It confirms that the management system and the financial report and interim report are true and reliable and the financial budget report, annual the auditors engaged by the Company are objective auditing opinions presented by and fair. The Supervisory Committee has supervised the operating activities of the Company operating activities of the Company Committee has supervised the The Supervisory internal established a more thorough that the Company has already and with a view has management structure, and a corresponding internal control control system and this system and structure. implemented and improved actively and consciously
Based on supervision and inspection, the Supervisory Committee is of the opinion that that opinion the of is Committee Supervisory the inspection, and supervision on Based management members the members of the Board, the general manager and other senior interests best the in truthfully acted faith, good of principle the with complied strictly of Articles Company’s the to according duties their performed and Company the of improving is control internal the and rationally operated is Company The Association. conducted were connected parties its and Company Transactions between the gradually. on a fair and reasonable in the interests of shareholders of the Company as a whole and other senior management basis. To date, none of the Directors, the general manager and of Company and the rights members was found abusing authority to impair the interests contradiction with the laws, of the Company’s shareholders and employees, or acting in regulations and the Articles of Association of the Company. • • With respect to the work of the Company in 2019, the Supervisory Committee has the the has Committee Supervisory the 2019, in Company the of work the to respect With following views: • • • Report of the Supervisory Committee Supervisory of the Report
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 84 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 85
(Continued) Mr. Sun Wenguang By Order of the Supervisory Committee By Order of the Chairman of the Supervisory Committee Report of the Supervisory Committee Supervisory of the Report Chongqing, the PRC 27 March 2020 The Supervisory Committee has duly reviewed and approved the report of the Board, Board, the of report the approved and reviewed duly has Committee Supervisory The 2019 the at Board the by proposed be to proposals other and report financial audited Meeting. Annual General The Supervisory Committee is satisfied with the business activities conducted and the the and conducted activities business the with satisfied is Committee Supervisory The of the in the development prospect the Company in 2019, and is confident efforts made by Company. 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.
CHONGQING MACHINERY & ELECTRIC CO., & ELECTRIC LTD MACHINERY CHONGQING None of the Directors is aware of any information that would reasonably indicate that the Company is not, or was not at any time during the year ended 31 December 2019 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 2019.
THE BOARD
Annual Report 2019 Report Annual 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.
86
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 87 (Continued) Corporate Governance Report Governance Corporate The Board of the Company consists of 11 Directors, including 3 executive Directors, 4 non- The Board of the Company consists of 11 Directors, including executive Directors and 4 independent non-executive Directors. The Company has arranged appropriate director and senior officer liability insurance for The Company has arranged appropriate director and senior Directors and senior officers. All Directors of the Company have full and timely access to all relevant information, information, relevant all to access timely and full have Company the of Directors All Board the from reports regular management, the from data monthly updated including the affecting issues accounting or regulatory legal, significant on briefs and committees will be paid for by the Group. Directors may take independent professional advice, which Company. The minutes of Board meetings shall be prepared by the secretary to the Board of the the of Board the to secretary the by prepared be shall meetings Board of minutes The Directors present at the meeting for archiving. Minutes for Company and shall be signed by to Directors for their inspection. each meeting are also available Notice of Board meetings shall be delivered to each Director at least 14 days prior to the Notice of Board meetings shall The Company has made proper arrangements to ensure date of regular Board meetings. Upon Board meeting. a of agenda into the included be to Directors by matters proposed a in Directors all to delivered be will minutes finalised the meeting, a of conclusion the record. timely manner for their review and According to Provision A2.1 of the Corporate Governance Code, the chairman and general and general Code, the chairman Governance A2.1 of the Corporate to Provision According and roles distinct with Board the of members different by assumed be should Manager overall Group’s the for responsible is Company the of chairman The responsibilities. that so Board the to leadership provides and audit, and investment planning, strategic a in matters significant all approve and discuss and effectively operate can Board the planning. In budgeting and business including project investment, annual timely manner, responsible of the Company, the Board is the working rules of the Board accordance with for planning strategic on deciding meetings, general of resolutions the executing for and schemes and investment plans development, annual operation medium- and long-term plans, distribution profit plans, budget financial annual preparing and Company; the of plans and significant events of the Company. The generalfinancing, acquisition and merger daily operations and business management. manager is responsible for the Group’s (Continued) This policy was formulated by the nomination committee of the Board of Directors (the (the Directors of Board the of committee nomination the by formulated was policy This reference of terms the of 7.1(B) paragraph with accordance in Committee”) “Nomination principles and criteria selection key the out set to aiming Committee, Nomination the of when making any relevant recommendation as follows: adopted by Nomination Committee DIRECTOR NOMINATION POLICY DIRECTOR NOMINATION BOARD DIVERSITY POLICY BOARD DIVERSITY of benefits the embraces which recognizes and Diversity Policy Board a The Company has has a balance of skills, to ensure that the Board It endeavors members. a diversity of Board Company’s to the requirements of the diversity of perspectives appropriate experience and will continue to be made on a merit basis with due regardbusiness. All Board appointments the Board members. Selection of candidates will be based for the benefits of diversity of and cultural age, gender, to limited not but including perspectives, diversity of range a on experience, skills and knowledge. educational background, professional The Board of the Company has received from each independent non-executive Director a Director non-executive independent each from received has Company the of Board The their independence as of satisfied and has been independence of their written confirmation with the Listing Rules. date of this report in accordance at the approval Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 88 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 89 (Continued) diversity in all aspects with reference to the Board Diversity Policy of of Policy Diversity Board the to reference with aspects all in diversity
case of a candidate for an independent non-executive director of the Company, Company, the of director non-executive independent an for candidate a of case
to assess: (i) the independence of such candidate with reference to, among other other among to, reference with candidate such of independence the (i) assess: to as set out in Rule 3.13 of the Listing Rules; and (ii) things, the independence criteria relating to independent non-executive directors as set the guidance and requirements 14 to the Listing Rules and in the “Guidance out in Code Provision A.5.5 of Appendix of Hong Kong Limited; for Boards and Directors” published by The Stock Exchange and the Company (adopted and amended from time to time by the Board), including but the Company (adopted and amended and professional background, race, not limited to gender, age, cultural/educational skills, knowledge and length of service; professional experience, independence, Any other relevant factors as may be determined by the Nomination Committee or the Any other relevant factors as may be determined by the Nomination Board from time to time as appropriate. in Considering Reputation for integrity; reputation in the business and industry; Accomplishment, experience and time, interest and attention to the businesses of Commitment in respect of sufficient the Company and its subsidiaries;
d) Corporate Governance Report Governance Corporate (f) (a) The Nomination Committee shall consider the following factors, which are not exhaustive following factors, which are not Committee shall consider the The Nomination of suitability the assessing in appropriate, considers it if discretion has Board the and of any of directors or re-appointment regarding the appointment the proposed candidate existing Board member(s):– Selection Criteria (e) (b) (c) ( (Continued) a nomination from a Board member (as the case may be), convene a meeting meeting a convene be), may case the (as member Board a from nomination a or filling a casual vacancy to the Board or as an addition to the Board, the the Board, the to addition an as or Board the to vacancy casual a filling or Nomination Committee will conduct the relevant selection process (coupled (coupled process selection relevant the conduct will Committee Nomination make and candidate nominated the against criteria) selection relevant the with a make then will Board the and consideration, for Board the to recommendations candidate shall be eligible to be appointed as adecision as to whether the nominated director of the Company. of the Nomination Committee or circulate a resolution in writing to the members of in writing to the members Committee or circulate a resolution of the Nomination of terms the with accordance in same the consider to Committee Nomination the reference. For re-appointing a director of the Company: For re-appointing a director of the F The chairman of the Nomination Committee will, upon his/her own motion or receipt upon his/her own motion or the Nomination Committee will, The chairman of of
the director proposed to be re-appointed or re-elected due to retirement by rotation rotation by retirement to due re-elected or re-appointed be to proposed director the under the Company’s Articles of Association is an independent non-executive director of under the Company’s Articles of Association is an independent the Nomination Committee the Company who has served the Board for more than 9 years, the of context the in independent remained has director the whether assess also shall of Hong Kong Limited, Rules Governing the Listing of Securities on The Stock Exchange the at re-elected be should and Rules”) “Listing (the time to time from amended as for Board the to recommendations make and Company the of meeting general next the director has remained consideration. The Board will then make a decision as to whether proposed the recommend so, if and Rules, Listing the of context the in independent to the Company’s shareholders for consideration at reappointment/re-election of the director Provision A.4.3 of Appendix the next general meeting of the Company. According to Code re-appointment proposed the to relating circular Company’s the Rules, Listing the to 14 that the director is still of such director shall include the reasons why the Board believes independent and should be re-elected. (c) (b) The nomination procedures to select and recommend candidates for the Directors of of Directors the for candidates recommend and select to procedures nomination The be summarised as follows: Company could (a) Nomination Procedures The Nomination Committee will conduct the relevant selection process and selection criteria The Nomination Committee will be re-appointed and make recommendations to the Board against the director proposed to will then make a decision as to whether the director shall for consideration, and the Board a director of the Company; and be eligible to be re-appointed as If Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 90 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 91 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 meetings number of Number of attended/total meetings held
(Continued) Independent Non-executive Director Independent Non-executive Director Non-executive Director (appointed on 26 June 2019) Non-executive Director Executive Director Position
Liu Wei Jin Jingyu Ren Xiaochang Independent Non-executive Director Lo Wah Wai Independent Non-executive Director Zhang Yongchao Wang Pengcheng Non-executive Director Dou Bo Huang Yong Non-executive Director Yang Quan Executive Director Chen Ping Name of Director
Wang Yuxiang Executive Director, Chairman Corporate Governance Report Governance Corporate
Attendance of Directors in the general meeting of the Company is as follows: Attendance of Directors in the general From 1 January 2019 to 31 December 2019, the Company held one general meeting. From 1 January 2019 to 31 December ATTENDANCE OF DIRECTORS TO GENERAL MEETING OF DIRECTORS TO ATTENDANCE The Nomination Committee will ask the recommended candidates to provide the necessary candidates to provide the Committee will ask the recommended The Nomination request the the Nomination Committee may in the form specified and personal information documents, if considered necessary. additional information and candidate to provide Information from Candidate Information from 7/7 7/7 7/7 7/7 7/7 7/7 5/7 7/7 7/7 7/7 7/7 meetings number of Number of attended/total meetings held
(Continued) Position
Non-executive Director Independent Non-executive Director Name of Director
Chen PingYang Quan Executive Directors Huang Yong Directors Executive Dou Bo Non-executive Director Wang Yuxiang Executive Director, Chairman Wang Pengcheng Director Non-executive Zhang Yongchao Non-executive Director (appointed on 26 June 2019) Lo Wah WaiRen XiaochangJin Jingyu Director Independent Non-executive Director Independent Non-executive Liu Wei Non-executive Director Independent
From 1 January 2019 to 31 December 2019, the Company held seven board meetings. 2019 to 31 December 2019, the From 1 January of the Company is as follows: to the Board meetings Attendance of Directors ATTENDANCE OF DIRECTORS TO BOARD MEETING OF DIRECTORS TO ATTENDANCE Corporate Governance Report Governance Corporate Biographical details of Directors are set out on pages 41 to 49 of this annual report. Biographical details of Directors are set out on pages 41 to 49
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 92
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 93 (Continued) Corporate Governance Report Governance Corporate During the year, the Remuneration Committee was responsible for reviewing the the reviewing for responsible was Committee Remuneration the year, the During their remuneration performance of the senior management of the Company and determining packages which were approved by the Board. In accordance with the Corporate Governance Code, the Remuneration Committee under In accordance with the Corporate the role of the consultant of the Board and its articles the Board of the Company assumes of reference which are available on the websites of the of association has written terms The Remuneration Committee of the Company currently Stock Exchange and the Company. Lo Mr. Xiaochang, Ren Mr. (namely Directors non-executive independent 3 of consists Yong), Huang Mr. (namely Director non-executive 1 and Jingyu) Jin Mr. and Wai Wah non-executive Director. The primary duties of the with the chairman being an independent formulate the Company’s policies for remuneration of the Remuneration Committee are to management, and evaluate the performance of executive Directors, Supervisors and senior service contracts. Executive Directors shall not participate Directors and the terms of their with accordance In remuneration. own their to related resolutions of preparation the in and Directors of packages remuneration Company, the of Association of Articles the at the general meeting. Supervisors are subject to the approval REMUNERATION COMMITTEE All the current Independent Non-executive Directors of the Company are appointed at at appointed are Company the of Directors Non-executive Independent current the All each term, the of expiry Upon years. three of term office an with meeting general the General Annual at re-election for himself offer may Director non-executive independent in June Board of the Company will expire of the fifth session of the Meetings. The term 2022. OFFICE TERM OF INDEPENDENT NON-EXECUTIVE DIRECTORS OF INDEPENDENT NON-EXECUTIVE OFFICE TERM 2/2 2/2 2/2 2/2 meetings number of Number of attended/total meetings held
(Continued) Position
Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director Non-executive Director Name of Director
Ren Xiaochang (Chairman) Lo Wah Wai Jin Jingyu Huang Yong In accordance with the Corporate Governance Code, the Nomination Committee under the In accordance with the Corporate the role of the consultant of the Board and its articles of Board of the Company assumes the Stock on the websites of reference which are available association has written terms of Nomination Committee of the Company currently consists Exchange and the Company. The Mr. (namely Directors non-executive independent 3 (Chairman), Director executive 1 of Mr. Jin Jingyu and Mr. Liu Wei), and was chaired by Wang Yuxiang, Mr. Ren Xiaochang, Committee is mainly responsible for the identification and the Chairman. The Nomination for appointment or re-appointment as Directors and evaluation of appropriate candidates of the Company’s overall senior management, as well as the development and maintenance corporate governance policies and practices. the for procedure transparent and fair formal, a follows Committee Nomination The necessary consider first will committee The Board. the to Directors new of appointment Board, identify appropriate changes in respect of the structure, size and composition of the industry and knowledge professional their considering by candidates qualified and time and skills personal and integrity ethics, professional and personal experience, with the Articles commitments, and make recommendations to the Board. In accordance at election to subject is Director appointed newly each Company, the of Association of Directors shall be the general meeting. The independence of independent non-executive examined. NOMINATION COMMITTEE The Remuneration Committee convened two meetings during the year and the attendance and the attendance during the year two meetings convened Committee The Remuneration record is as follows: Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 94 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 95 2/2 2/2 2/2 2/2 meetings number of Number of attended/total meetings held
(Continued) Position
Executive Director, Chairman Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director
Name of Director
Wang Yuxiang (Chairman) Ren Xiaochang Jin Jingyu Liu Wei Corporate Governance Report Governance Corporate The Board of the Company has established the Audit and Risk Management Committee in The Board of the Company has of the Corporate Governance Code and its latest revision.accordance with the requirements on the websites of the The committee has written terms of reference which are available the of Committee Management Risk and Audit The Company. the and Exchange Stock and 1 non-executive Company currently consists of 3 independent non-executive Directors and Mr. Deng Yong). Mr. Lo Director (namely, Mr. Lo Wah Wai, Mr. Jin Jingyu, Mr. Liu Wei Committee. The major Wah Wai serves as the chairman of the Audit and Risk Management to review and monitor the responsibilities of the Audit and Risk Management Committee are and provide advice and Company’s financial reporting process and internal controls system suggestions to the Directors of the Company. AUDIT AND RISK MANAGEMENT COMMITTEE AUDIT AND RISK MANAGEMENT
As of 31 December 2019, the Nomination Committee of the Company convened two two convened Company the of Committee Nomination the 2019, December 31 of As is as follows: the year and the attendance record meetings during In assessing the Board composition, the Nomination Committee would take into account account into take would Committee Nomination the composition, Board the assessing In to gender, Policy, including but not limited set out in the Board Diversity various aspects knowledge. experience, skills and educational background, professional age, cultural and policy in of the Board diversity Committee would review the implementation The Nomination Company. set for the benefits of the achieving the objectives 4/4 4/4 4/4 4/4 meetings number of Number of attended/total meetings held
(Continued) Position
Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director Non-executive Director Name of Director
Lo Wah Wai (Chairman) Jin Jingyu Liu Wei Dou Bo STRATEGIC COMMITTEE Company the needs of strategic development, the Board of In response to the Company’s reference of terms written has committee The Committee. Strategic the established has the Company. The Strategicwhich are available on the websites of the Stock Exchange and Wang Mr. (namely Directors executive 3 of consists currently Company the of Committee Huang Mr. (namely Director non-executive 1 Quan), Yang Mr. and Ping Chen Ms. Yuxiang, Jin Mr. Xiaochang, Ren Mr. (namely Directors non-executive independent 3 and Yong) The Committee. Strategy of chairman the is Yuxiang Wang Mr. Wei). Mr. Liu and Jingyu propose and research out carry to are Committee Strategic the of responsibilities major and material investment suggestions on the Company’s long-term development strategies decisions for the Board’s reference in decision-making. year. The Strategic Committee did not convene any meeting during the
The Audit and Risk Management Committee convened four meetings during the year and during the year four meetings convened Committee and Risk Management The Audit record is as follows: the attendance Corporate Governance Report Governance Corporate During the year, the Audit and Risk Management Committee approved the 2018 2018 the approved Committee Management Risk and Audit the year, the During Financial Interim Consolidated Condensed 2019 the and Report Financial Consolidated by ShineWing Certified Public Accountants (Special GeneralReport of the Company audited financial the in out set as policies accounting the discussed and considered Partnership), auditors, external with control internal and position financial Company’s the and reports of the Company. qualified accountants and the management
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 96 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 97 3/3 3/3 2/3 1/3 2/3 2/3 1/3 meetings number of Number of attended/total meetings held
(Continued)
Independent Supervisor Employee Supervisor
Name of Supervisor Position
Sun WenguangWu Yi Chairman of the Supervisory Committee Wang HaibingHuang Hui on 26 June 2019) Independent Supervisor (appointed Li FangzhongXia Hua (resigned on 26 June 2019) Independent Supervisor Supervisor (appointed on 26 June 2019) Employee Zhang Mingzhi Employee Supervisor (resigned on 26 June 2019) Corporate Governance Report Governance Corporate The Supervisory Committee held three meetings during the year, the attendance to which is The Supervisory Committee held as follows: The Supervisory Committee of the Company comprises five supervisors, namely Mr. Sun five supervisors, namely Committee of the Company comprises The Supervisory During the Xia Hua and Mr. Li Fangzhong. Wu Yi, Mr. Wang Haibing, Mr. Wenguang, Ms. To safeguard chairman of the supervisors. Wenguang is appointed as the Period, Mr. Sun responsible is Committee Supervisory Company’s the shareholders, the of interests the of the Board activities and duty fulfillment of the Company’s financial for the supervision Committee Supervisory the 2019, In management. senior and members its Directors, of Company’s financial situation and business, and through has reviewed the legality of the Supervisory Committee and attending the Board meetings, convening the meetings of the etc., archives, establishing as well as meetings important other and meetings general senior management personnel. The Supervisory Committee conducted the due diligence on their duties according to the principle of prudence. carefully and thoroughly performs SUPERVISORY COMMITTEE SUPERVISORY (Continued) ACCOUNTABILITY AND AUDIT ACCOUNTABILITY AND for overseeing the management’s preparation of The Board of the Company is responsible and making appropriate announcement in accordance accounts for each financial period their for necessary information all shareholders to disclose to Rules Listing the with position and other matters. They are not aware of any evaluation of the Company’s financial events or conditions that may cast significant doubt upon material uncertainties relating to as a going concern. the Company’s ability to continue General (Special Accountants Public Certified ShineWing appointed has Company The for the services provided Partnership) as the independent auditor of the Company. The fees to amounted 2019 December 31 ended year the for Group the to auditor above the by approximately RMB3.0 million (2018: approximately RMB3.0 million). The Audit and Risk Management Committee and the Board of Directors have reviewed the the Board of Directors have Management Committee and The Audit and Risk the for Company the of systems management risk and control internal control, financial experience, staff qualifications and ensured the adequacy of resources, year. The Board financial and audit internal accounting, Group’s the of budget and programmes training internal the considered Committee Management Risk and Audit The function. reporting as they allowed the Board to monitor the Group’s control systems effective and adequate provide reasonable assurance that assets are safeguarded overall financial position and to executed were transactions misstatement; financial material or use unauthorized against authorization; and the accounting records were reliable in accordance with management’s or for publication and reflecting business the used within for preparing financial information are systems the that satisfied was Board The liabilities. and assets for accountability of effective internal control. effective and adequate for the purpose REVIEW OF THE AUDIT AND RISK MANAGEMENT COMMITTEE COMMITTEE MANAGEMENT RISK AND AUDIT THE OF REVIEW OF DIRECTORS AND THE BOARD Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 98
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 99 (Continued) Corporate Governance Report Governance Corporate The Company treats all shareholders equally with an aim to ensure that their rights can be The Company treats all shareholders interests can be safeguarded and that the shareholders’ fully exercised and their legitimate and held in strict compliance with the relevant laws general meetings can be convened all that ensure to is structure governance corporate Company’s The regulations. and shareholders, can enjoy equal benefits and undertake shareholders, especially the minority corresponding responsibilities. RIGHTS OF SHAREHOLDERS The General Meeting holds the highest authority of the Company. The Company highly highly Company The Company. the of authority highest the holds Meeting General The to therefore encourages all shareholders of the General Meetings, and values the functions channel direct and effective communication Meetings which serve as a attend the General of the The Articles of Association and the investors of the Company. between the Board to rights the including shareholders, the of rights the for provides expressly Company Meetings. notices of, and to vote at General attend, to receive GENERAL MEETINGS (Continued) For the purpose of the preceding requirement relating to the number of of number the to relating requirement preceding the of purpose the For Supervisory Committee to convene an extraordinary general meeting or a class a or meeting general extraordinary an convene to Committee Supervisory voting shares held, such number shall be calculated on the basis of the number of voting shares held, such number date of submission of such written request. relevant voting shares held on the If the Board fails to issue a notice of such meeting within 30 days from the date of the If the Board fails to issue a notice shareholders submitting such request may require receipt of the written request, the the Two or more shareholders jointly holding 10% or more of the voting shares relating to more of the voting shares relating jointly holding 10% or Two or more shareholders to meeting may request the Board general meeting or class a proposed extraordinary and submitting one or more written requests with convene such meeting by signing in which the matters for consideration at the meeting the same format and contents shall proceed to convene the extraordinary general shall be set out clearly. The Board soon as possible after receiving the aforesaid written meeting or the class meeting as request. meeting pursuant to the requirement in the above subparagraph (1). If the Supervisory in the above subparagraph (1). meeting pursuant to the requirement or meeting general extraordinary an over preside and convene to fails Committee law within 5 days from the date of the receipt of the a class meeting according to submitting such request and holding over 10% of written request, the shareholders shareholders or individually days consecutive 90 than more shares Company’s the months from the date together may convene such a meeting by themselves within 4 for convening such of receipt of the request by the Board, following the procedure meeting by the Board as much as possible.
(2) Pursuant to the Articles of Association, the Board may convene an extraordinary general extraordinary an convene may Board the Association, of Articles the to Pursuant or class extraordinary general meetings fit. Shareholders requisitioning meeting as it thinks by the following procedures: meetings shall abide (1) CALLING AN EXTRAORDINARY GENERAL MEETING EXTRAORDINARY GENERAL CALLING AN Corporate Governance Report Governance Corporate Any reasonable expenses incurred by the shareholders in convening and holding such such holding and convening in shareholders the by incurred expenses reasonable Any the to response in meeting such convene to Board the of failure the to due meeting shall be deducted from aforesaid request shall be borne by the Company. Such expenses the amounts owed by the Company to the Directors in default.
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
100 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 101 (Continued) the total nominal value and number of shares repurchased by shares of number and value nominal total the occupation and all other part-time occupation and positions; occupation and all other part-time number. identification documents and their present and former forename and surnames and any aliases; present and former forename and principal address (domicile); nationality;
the Company since the end of the last financial year, the highest and the lowest the Company since the end of the last financial year, the highest respect of each prices paid and the aggregate amount paid by the Company in class of its shares repurchased; reports showing status of the share capital of the Company; all parts of the register of shareholders; supervisors, general managers and other personal particulars of the Directors, the Company, including: senior management members of a) e) b) c) d)
(3) (4) (2) the right to inspect and copy, subject to payment of reasonable charge: and copy, subject to payment the right to inspect (1) copy of the Articles of Association upon payment of the costs thereof; of Association upon payment copy of the Articles
Corporate Governance Report Governance Corporate 1. Shareholders shall have the right to receive information as provided in the Articles of of Articles the in provided as information receive to right the have shall Shareholders Association, including: Procedures to Put Forward Enquiries Procedures to Put 2. (Continued) minutes of the general meetings as well as resolutions passed at the meetings passed at the as resolutions meetings as well of the general minutes the Supervisory Committee; of the Board and of the Company; receipts of debentures financial statements.
a shareholder requests to refer to the above-mentioned relevant information or or information relevant above-mentioned the to refer to requests shareholder a Submitted in writing or served to the Board. With definite topics to discuss and specific matters to resolve; Free of conflicts with the provisions of laws and administrative regulations, and fall Free of conflicts with the provisions of laws and administrative of the general into the business scope of the Company and the terms of reference meeting; (5) (6) (7)
demands information, the written documents stating the class and number of the held held the of number and class the stating documents written the information, demands submitted to the Company. Upon the verification of the shares of the Company shall be Company will provide to the shareholder as requested. A identity of the shareholder, the the enquiries directly through [email protected]. shareholder may submit and serve Where Procedures to Put Forward Motions at General Meeting Procedures to Put Forward Motions 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 shall satisfy the following requirements: Motions raised at a general meeting (1) A shareholder may submit and serve the motions through [email protected]. (3) (2) Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
102
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 103 (Continued) Corporate Governance Report Governance Corporate The Company has established a specific department responsible for handling investor investor handling for responsible department specific a established has Company The The investors. with communication open and on-going an maintaining and relations, trading. insider and disclosure information of procedures the controls strictly Company institutions financial and investment 28 with meetings 16 of total a held Company The of results interim and Kong Hong in shows road including ways various in investors or on-site meetings and telephone interviews. TheShenzhen Roadshow, investor presentations, strengthened the Group’s relationship with investors effective communication with investors understanding and enhanced confidence in operations and allowed them to have a better In 2019, the Company strengthened the communications and developments of the Group. of media including China Industry News, Hong Kong Wen and promotions with a number To strengthen the relationship between the Company and Wei Po, Chongqing Daily, etc. of corporate operations, the Company promoted investors, and improve the transparency outlook by means of website, publicity pamphlet, its development strategy and promising draw continuous attention from the public and investors on image building videos, etc., to the growth of the Company. In respect of any discloseable and significant event, the Company makes accurate and and accurate makes Company the event, significant and discloseable any of respect In relevant the by specified as websites the on manner timely a in disclosure complete requirements pursuant to the disclosure for information disclosure supervisory authorities of the participation and the rights to information Rules. This is to ensure under the Listing shareholders. INFORMATION DISCLOSURE AND INVESTOR RELATIONS DISCLOSURE AND INFORMATION Attendance
(Continued) training of The Hong Kong Institute of Chartered training of The Hong Kong Institute Secretaries training for directors, supervisors and senior training for directors, supervisors in Chongqing management of listed companies municipality
F unction training for new directors Function training for new directors Function training for new directors, the second Function training for new directors, Function training for new directors Name of Director content Training
Liu Wei Lo Wah WaiRen XiaochangJin Jingyu Function training for new directors Function training for new directors Wang PengchengZhang Yongchao Function training for new directors Function training for new directors, the 51st Yang QuanHuang YongDou Bo Function training for new directors directors Function training for new Wang YuxiangChen Ping Function training for new directors In accordance with the code provisions, the Company arranged trainings on relevant laws arranged trainings on the code provisions, the Company In accordance with of senior supervisors and members including the Listing Rules for Directors, and regulations written the received has Company the year, the During Company. the of management of all Directors. training records is recorded as follows: Training of Directors TRAINING OF DIRECTOR TRAINING OF
Corporate Governance Report Governance Corporate
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
104 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
risk prevention capacity, thus ensuring that the Group operates in a safe and stable 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING 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 2019, 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
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.
105 (Continued) evaluates and manages the risks that may potentially impact the the impact potentially may that risks the manages and evaluates major findings on risk management and internal control matters, and and matters, control internal and management risk on findings major confirmation to the Board and Risk Management Committee on the the on Committee Management Risk and Board the to confirmation the effectiveness of the Group’s risk management and internal control control internal and management risk Group’s the of effectiveness the reliability of financial reporting, effectiveness and efficiency of operations, operations, of efficiency and effectiveness reporting, financial of reliability ives prompt responses to, and follow up the findings on risk management and and management risk on findings the up follow and to, responses prompt ives internal control matters raised by the internal audit team or the external risk risk external the or team audit internal the by raised matters control internal management and internal control review adviser; and major processes of the operations and such new risks arising from the business business the from arising risks new such and operations the of processes major development from time to time; compliance with applicable laws and regulations, and adequacy of resources, staff compliance with applicable laws training programmes and adequacy of budget of the qualifications and experience, risk control and legal affairs department and Company’s internal audit department, finance department; and control; effectiveness of the risk management and internal control systems. Provides Monitors risks and takes measures to mitigate risks in day-to-day operations; Monitors risks and takes measures to mitigate risks in day-to-day G Identifies, Designs, implements and maintains appropriate and effective risk management and Designs, implements and maintains appropriate and effective internal control systems; Considers Evaluates the effectiveness of the internal control system of the Company, including Evaluates the effectiveness of the the Reviews A control systems on an ongoing risk management and internal Oversees the Group’s basis; systems at least annually, and such review should cover all material controls includingall cover should review such and annually, at least systems control; financial, operational and compliance reports and makes recommendations to the Board. reports and makes recommendations
• • • Management • • • • • • internal and management risk of responsibilities its perform to Board the ssists Audit and Risk Management Committee Audit and Risk • • • • Risk and Internal Control and Governance Report and Governance Control and Internal Risk
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
106 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 107 (Continued) the risks of significant decision-making projects, continuously refines refines continuously projects, decision-making significant of risks the the efficiency of economic operation, continuously inspects business business inspects continuously operation, economic of efficiency the the Group’s internal control system against the five elements of control control of elements five the against system control internal Group’s the
eports to the Audit and Risk Management Committee the findings of the review review the of findings the Committee Management Risk and Audit the to eports
the policies and standards for the control environment based on the internal control the policies and standards for risk management framework established in the Internal framework and comprehensive by the Committee of Sponsoring Organizations Control Integrated Framework issued and prevention effective the ensure to “COSO”) (the Commission Treadway the of control of risks; and and makes recommendations to the Board and management to improve the material and makes recommendations to weaknesses identified; systems deficiencies or control activities and management behaviours, identifies business risks and defects in internal business risks and defects in behaviours, identifies activities and management audit; the focus and frequency of regular audit plans to determine control, formulates environment, risk assessment, control activities, information and communication, and environment, risk assessment, annual these results of findings, analysis and monitoring. The approach, identification, the Audit and Risk Management Committee and the reviews have been reported to Board. Assesses Investigates R Reviews the adequacy and effectiveness of the Group’s risk management and internal Group’s risk management and and effectiveness of the Reviews the adequacy control systems; Evaluates
Risk and Internal Control and Governance Report and Governance Control and Internal Risk As a part of routines and the risk management and internal control systems, executive executive systems, control internal and management risk the and routines of part a As reporting work the quarter a once least at hear shall management senior and Directors the Group in time, and the of each department, to understand the operating condition of the Directors executive the to report also shall subsidiaries the of management senior on a regular basis. material progress of its business, financial and operation performance PROCESS USED TO IDENTIFY, EVALUATE AND MANAGE MANAGE AND EVALUATE IDENTIFY, TO USED PROCESS SIGNIFICANT RISKS • • • • • • • Internal Audit Team and Risk Management Team Internal Audit Team • (Continued) the risks identified by using the assessment criteria developed by the the by developed criteria assessment the using by identified risks the management; and Reports the results of risk monitoring to the management and the Board regularly. Reports the results of risk monitoring to the management and the Revises the risk management strategies and internal control processes in case of any Revises the risk management strategies and internal control processes significant change of situation; and Performs ongoing and periodic monitoring of the risk and ensures that appropriate Performs ongoing and periodic monitoring of the risk and ensures internal control processes are in place; Prioritises the risks by comparing the results of the risk assessment; Prioritises the risks by comparing warning indicators; and Refines and broadens the early strategies and internal control processes to prevent, Determines the risk management avoid or mitigate the risks. Considers the impact of risks on the business and the likelihood of their occurrence. Considers the impact of risks on Assesses Identifies risks that may potentially affect the Group’s business and operations. may potentially affect the Group’s Identifies risks that
• Risk Monitoring and Reporting • • Risk Response Risk Assessment • Risk Identification • The processes used to identify, evaluate and manage significant risks by the Group are by the Group significant risks and manage identify, evaluate used to The processes follows: summarised as • • • • Risk and Internal Control and Governance Report and Governance Control and Internal Risk
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 109 (Continued) Risk and Internal Control and Governance Report and Governance Control and Internal Risk For the supervision on overseas subsidiaries, the Company assigned employees to to employees assigned Company the subsidiaries, overseas on supervision the For supervision, and monitoring assessment, of system and process control internal execute deficiencies and business risks. For the potential risks and monitored operational activities of finance, operation, legal, quality and human identified and assessed from perspective practices shall be reported to the Board. resources, the risk management Risks on major decision-making projects of the Group were assessed through adopting adopting through assessed were Group the of projects decision-making major on Risks legal and control risk department, business the as such hierarchies various via assessment effective the management, so as to ensure advisors and affairs department, external legal The risk and legal audit works were reinforced for three key prevention and control of risks. economic contracts and major decisions. During the aspects such as rules and policies, were reviewed. year, a total of 138 copies of contracts Risk Management The risk management and internal audit departments of the Company review the business of the Company review and internal audit departments The risk management the identify to basis, regular a on Group the of behaviours management and activities suggestions. improvement opinions and internal control defects, and offer business risks, internal series of specific risk management, the Company conducted a During the Period, works, among other things, including: control and audit RISK MANAGEMENT, INTERNAL CONTROL AND AUDIT AUDIT AND CONTROL INTERNAL MANAGEMENT, RISK FUNCTIONS (Continued) During the Period, in strict compliance with the requirements of the Listing Rules of the requirements of the Listing in strict compliance with the During the Period, including PRC the of commissions and five ministries and the Kong Stock Exchange Hong its of management and control risk the strengthened Group the Finance, of Ministry the upon centred which laid foundation the on Based subsidiaries. overseas and domestic has been control of the Group for the year the focus of internal operation and rectification, A improvement. continuous and enhancement in-depth featuring phase new a to shifted been has improvement continuous and evaluation professional self-inspection, of norm control system. In addition, a professional evaluation team established within the internal of management risk and control internal of effectiveness the to evaluation organized internal an time, same the At subsidiaries. some and Company the of headquarter the Group. the of subsidiaries ten on conducted were analysis risk and inspection control Company the subsidiaries, of control internal the on assessment the out carrying While financial risk, operation risk, strategic the on analysis and assessment conducted also human resources risk of those companies. The Group has risk, market risk, legal risk and and control linkage mechanism of four departments i.e. “risk established the risk prevention audit department, finance department and office of control and legal affairs department, risks examine, prevent and respond to various to the Board” and business departments, internal control of the Group has formed the governance from multiple perspectives. The system, sound process, risk control linkage and scientific characteristics of “full-coverage cycle mechanism of “construction, evaluation, inspection, mechanism” to achieve a virtuous the internal control system. In general, the internal control rectification and improvement” of and the risks have been monitored in time. system of the Group is effective risk control works, their The Company requires the board of the subsidiaries to enhance board the and office manager general the to submitted be must reports self-inspection internal of quality the accordingly, filing, for Company the to report and approval, for to previous years. control self-inspection of entities has improved significantly compared and bidding on research do to personnel professional organized has Company The documents of large-scale tendering regulations as well as theirs cases, review the tender major and innovations technological and procurement equipment projects, infrastructure work of tender. projects of the subsidiaries, establishing the authority for the review Internal Control Risk and Internal Control and Governance Report and Governance Control and Internal Risk
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 111 (Continued) Risk and Internal Control and Governance Report and Governance Control and Internal Risk The Board considers that risk management and internal control procedures of the Group the of procedures control internal and management risk that considers Board The demands on business environment of the Company, and are sufficient to satisfy the current and internal control there is no finding that causes the Board to believe risk management systems of the Group are insufficient. During the Period, focusing on the business objectives of the Company and the “1334” workDuring the Period, focusing on the evaluation, post-investment conduct to adhered department audit internal the measures, economic responsibility review and construction special audit and rectification inspection, supervision of means by and guidance the as objectives and risks with audit project of risks major prevent to responsibilities supervisory perform effectively to services, and audit 5 revised and established newly has Group the Period, the During Company. the 141 supervision and examination projects with the management related systems, completed billion, 246 proposed points were adopted and the amount audit amount totaled RMB15.1 deducted by RMB39.67 million. The audit work plan of construction projects upon auditing which fully exerted the effect of the audit in the approved by the Board was completed, of the Group. third line of defense of risk prevention The internal audit department of the Company has reviewed, in an independent, objective, has reviewed, in an independent, department of the Company The internal audit direct the under systems control internal Company’s the manner, effective and scientific internal audit Management Committee. The Board and the Audit and Risk leadership of the information financial Company’s the of monitoring and inspection out carries department hoc basis, on a regular or an ad and internal control procedures disclosures, operations and disclosures, operational efficiencies transparency in information with a view to ensuring control system. the effectiveness of the corporate Internal Audit (Continued) persons authorised to act as spokespersons and respond to external external to respond and spokespersons as act to authorised persons Designated persons and departments to determine further escalation and disclosure Designated persons and departments as required; and Designated Designated reporting channels from different operations informing any potential inside Designated reporting channels information to designated departments; enquiries.
An information disclosure policy and contingent reporting policy of the Company are in in are Company the of policy reporting contingent and policy disclosure information An Group being captured and confidentiality potential inside information of the place to ensure in made are disclosure timely and consistent until maintained being information such of of regulates the handling and dissemination the Listing Rules. The policy accordance with which includes: inside information, • INFORMATION DISCLOSURE POLICY INFORMATION • • Risk and Internal Control and Governance Report and Governance Control and Internal Risk
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
112 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.
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 2019 CO., & ELECTRIC LTD Report MACHINERY Annual CHONGQING 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”.
ENGAGEMENT OF STAKEHOLDERS
The Company understands that effective and continuous listening to stakeholders’ opinions and responding to and addressing their concerns are indispensable for its business development and the fulfillment of its corporate social responsibility. As such, we endeavour to get a deep understanding of the concerns of different stakeholders, and build a relationship of mutual trust and mutual benefit with them to promote sustainable development.
According to the requirements of the Listing Rules, we regularly disclose the Company’s operating performance and project progress on the Company’s website (www.chinacqme. com) and the information disclosure website designated by the Stock Exchange (HKEXnews: www.hkexnews.hk). All disclosures are prepared and published in accordance with the requirements of the Listing Rules. In addition, when receiving inquiries from investors, the Company will promptly get in touch with them and invite them to visit the Company or attend teleconferences where the Company will answer their questions to help them understand its operating information. Meanwhile, the Company holds roadshows in various forms such as results presentations to introduce the latest information of the Company from time to time and invites investor representatives, potential investors and analysts to attend the roadshows.
113 11 16 10 (Continued) 8 4 13 14 24 18 20 1 6 15 7 Importance to the Group 2 5 Materiality Analysis of Issues Materiality Analysis of 21 17 12
3
22 Importance to the Stakeholders the to Importance The Stock Exchange has set forth four principles for reporting in the ESG Guide: materiality, for reporting in the ESG Guide: has set forth four principles The Stock Exchange the preparing for basis the form should which consistency, and balance quantitative, Group can stakeholder engagement, the the HKEX emphasizes, through ESG Report. As issues. social and environmental material identify and views wide-ranging understand of concerns the understand to questionnaires used we period, reporting the During stakeholders’ learned more about various At the same time, we also various stakeholders. our social responsibility performance last year, thus helpingevaluations and expectations of the report in response to stakeholders’ comments. us to formulate a framework for presented is matrix materiality Group’s the questionnaires, the of results the on Based of the matrix represents the issues that our stakeholdersbelow. The top right-handed corner top 3 concerned issues is hazardous and non-hazardous are most concerned about. The of suppliers and the training and development. waste treatment, the selection procedures MATERIALITY ASSESSMENT MATERIALITY Environmental, Social and Governance Report Governance Social and Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
114 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 115 (Continued) information protection intellectual property rights Product innovation and technology development Community voluntary activities Charity donations Clients’ sensitive information and privacy Protection of trademarks, trade names and other Protection of trademarks, trade Customer satisfaction and complaint handling Customer satisfaction and complaint Product safety and quality Emergency contingency plan Anti-fraud and corruption Selection procedures of suppliers
23 24 25 22 21 20 19 18 17 16
Operation Practice and Others assessment Carbon trading Suppliers’ environmental and social performance Use of natural resources Energy and water saving Hazardous and non-hazardous waste treatment Hazardous and non-hazardous Exhaust emissions Air pollutant and greenhouse gas emissions Air pollutant and greenhouse gas Sewage discharge
15 14 13 12 11 10 9 8
Environment
Employee benefits Wage package and employment relationship Wage package and employment Prevention of child and forced labour Training and development Occupational safety and health Employee turnover rate
Diversity and equal opportunities 7 6 5 4 3 2
Employees 1 Environmental, Social and Governance Report Governance Social and Environmental, The Company has been strictly in compliance with all applicable environmental laws and The Company has been strictly in compliance with all applicable of codes or regulations with non-compliance of cases no were there and regulations, conduct identified during the reporting period. Against the background of deteriorating environmental issues and the transformation and Against the background of deteriorating industries, the Group understands that as a part of upgrading of traditional manufacturing initiative to assume more environmental responsibilities. the industry, we should take the principle of “saving energy and reducing emissions” The Group adheres to the production The enterprise. environmentally-friendly and resource-saving a building to committed is and its in efficiency utilization resource enhances innovations, technological advances Group conservation and emission reduction in its production development and promotes energy an approach featuring low consumption, low emission and and development, to explore on Group’s pass rate for major high output. During the year ended 31 December 2019, the reached 100%. pollutant emission indicators and hazardous waste disposal rate ENVIRONMENT
(Continued) 《中華人民共和國環境保護 ). Besides, the Group raised ). Besides, the Group 《十三五節能減排綜合工作方案》 ) and the Comprehensive Work Program for Energy Saving and Emission Reduction in Saving and Emission Reduction Work Program for Energy ) and the Comprehensive The Group resolutely eliminated outdated production capacity, implemented upgrading upgrading implemented capacity, production outdated eliminated resolutely Group The and laws national with compliance strict in equipment production major on renovation and the PRC ( Environmental Protection Law of as the regulations such 法》 Plan Period ( the 13th Five-Year has products major of unit per consumption energy and utilization, energy of level the maintaining an advanced standard in the industry. exceeded the national standard, in manufacturing machinery equipment and parts, without The Group is principally engaged other and wastewater gas, greenhouse gas, waste of emission direct of quantity large mainly comprises solid metal scraps from the machining hazardous wastes. The emission understands that transportation is one of the main sources process. In addition, the Group transportation, by caused emissions gas greenhouse reduce To emissions. carbon of such use to employees encourage and systems teleconferencing and video provide we related and travel business by caused emissions gas greenhouse reduce to systems transportation. time real on-line the under and place in is Group the of system treatment sewage The takes also Group The standard. the to up emissions all with government, by monitoring materials to reduce the environmental impact. During initiatives for full recycling of waste tonnes 8,160 approximately generated Group the 2019, December 31 ended year the which were disposed through public auction with total of metal scraps during operation, wastes produced by disposal proceeds of approximately RMB22.6 million. The hazardous materials, in a total of the Group mainly composed of waste oil and waste oil wrapping recycling company about 213.358 tonnes, which were collected by qualified professional for the innocuous treatment. Emissions Environmental, Social and Governance Report Governance Social and Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
116 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 117 e) 2 gas equivalent 2 of greenhouse CO
(Continued) gas (Unit: t) (Unit: tCO 16,084.67 16,084.67 Quality of 104,094.39 104,094.39 120,179.06 120,179.06 greenhouse e for each RMB10,000 operating RMB10,000 each for e 2
e) 2 and dust will be reduced. For the year ended 31 December 2019, the the 2019, December 31 ended year the For reduced. be will dust and 2
, SO 2
emissions from the burning of fossil fuels emissions from power under emissions produced by the electric e, and the annual emission intensity was 0.1419 tCO 0.1419 was intensity emission annual the and e, 2 2 2 net purchase CO Total greenhouse gas emissions of the enterprise (tCO Total greenhouse gas emissions Summary of Greenhouse Gas Emissions Category Summary of Greenhouse CO Environmental, Social and Governance Report Governance Social and Environmental, Group’s comprehensive energy consumption per RMB10,000 value addition decreased by Group’s comprehensive energy consumption per RMB10,000 the in management energy contract of Implementation year-on-year. 15% approximately year of 2020 will be continued in the selected companies with conditions. Responding to the government’s call on environment protection and energy saving, saving, energy and protection environment on call government’s the to Responding energy high with equipment scrapping and elimination the accelerated has Group the with compliance full in constructed are plants new our Meanwhile, consumption. equipment and the environmental standards, including the design with new energy-efficient on the contracting energy wide use of green offices based on paperless technology. Based & Cables Co., Ltd. (重慶 management with the subsidiary Chongqing Pigeon Electric Wires energy- 鴿牌電線電纜有限公司) on a trial basis, the Group has carried out comprehensive utilize effectively to staff the encourage to subsidiaries, other against research saving Through the optimization, energy and to realize energy saving and consumption reducing. including consumption energy large with points critical its of recycling and modification standard of terms in emission of rate the lighting, and pressure residual heat, waste CO coal, Resource Utilization Greenhouse Gas Emissions Greenhouse Gas revenue. The Group adopted measures such as technological transformation of production of transformation technological as such measures adopted Group The revenue. conservation energy of implementation and consumption energy of reduction equipment, greenhouse gas emissions. and emission reduction to reduce During the reporting period, the greenhouse gas emissions of the Group were 120,179.06 During the reporting period, the tCO 6.07 4.248 0.129 thousand per RMB ten Consumption
(Continued) Total 203.42 0.0002 1,407.56 0.0017 7,549.358 0.0089 5,137,200 109,400.31 3,597,894.8 consumption
Ton Ton Ton Measuring unit
Thousand KWH Cubic meters Ton Diesel Water Packaging materials Resource categories
Electric power Natural gas Gasoline Environment and Natural Resources reaches of the Yangtze River with superior geographical The Group is located in the upper the to importance great attached Group The resources. water abundant and position production water-saving adopted and resources, water of conservation and utilization and controlled the living Group effectively managed and technology and equipment. The services. and products operations, Company’s the from generated wastewater industrial treatment and recycling system, it is ensured that the Through the construction of sewage were slogans conservation Water standards. discharge the meets wastewater industrial consciousness. The concealed pipes were checked on a set to enhance the water-saving and the internal water supply systems were also inspected. regular basis to avoid leakage, facilities were repaired or In addition, the damaged tanks, faucets and other water supply replaced in a timely manner. outside the main city with Subsidiaries of the Group are all located in the industrial parks vegetation. reasonable layout of production sites, and high coverage of green Resource consumption amount of the Group: consumption Resource Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 119 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, The Group also actively develops environmentally-friendly and energy-efficient products products energy-efficient and environmentally-friendly develops actively also Group The attaches protection. Firstly, the Group its responsibility in environmental businesses to fulfill pollution noise of influence the controls and monitors and control noise to importance noise national the to according environment surrounding the and health employees’ on the reduce and lines production the of layout the optimize We standards. management occupational isolation, green shelter and measures such as physical noise hazards through wind power rotor blades of approximately the Group manufactured protection. Secondly, KWH, thousand 3,685,500 of generation power annual representing 2019, in 1,755MW introduced that in 2018. The Group has 154% compared with increasing by approximately of nuclear power, including the chemical container water a series of products in the field “Hualong One” reactor cavity water cooling pump, to pump of the nuclear power station, of nuclear power and development of clean energy. actively participate in the construction total with sewage, municipal of treatment the in achieved been has usage Recycling 120,000 cubic meters in January and February 2019. sewage treatment of approximately has been transferred in March 2019, and the Group ceasedThe sewage treatment business thereafter. to conduct sewage treatment itself ) and the (Continued) ), guiding the Group’s reform 《薪酬管理實施辦法》 《經營業績考核辦法》 in respect of motivation, efficiency and quality. The Group revises and perfects the policy ofin respect of motivation, efficiency Group, the of level headquarter the at appraisal performance and compensation employee’s appraisal and compensation allocation system. improving the Group’s performance internal harmonious a in employees of growth on emphasis great places Group The comprehensive employee’s of improvement adjustment, structural through atmosphere human on tap effectively to as so environment, work good of creation and quality, to them encourage and creativity and enthusiasm employees’ motivate fully resources, giving priority to efficiency with the approach of perform fruitfully. The Group adheres to individual performance and due consideration to fairness, focusing on both teamwork and are offered a competitive linking individual compensation to corporate profits. Employees performance, individual on based adjustments annual to subject package, remuneration an equal and standardized contribution and market conditions. Clinging to employment on the and relationship, labour sound and harmonious a of establishment the basis, the Group publicises enhancement of the sense of belonging to organization of employees, information, transparent ensure to promoted and appointed be to candidates of details labour national with compliance strict in arranged hours work With results. and process other and leave paid providing rest, to right employees’ to respect full pays Group the laws, holidays. leaves for marriage, maternity and bereavement in addition to statutory Employees the perfects and revises mechanism, constraint and incentive the regulates Group The Compensation Practices ( Management Measures on Sound The Group embraces the concept of “paying respect to the dedicated, utilizing the the utilizing dedicated, the to respect “paying of concept the embraces Group The seeking talents, for innovative” the incentivising and aspiring the fostering competent, talents cultivating and employees for environment working sound and safe a provide to system and By improving the remuneration technology and management. experienced in to establish a comprehensive incentive system based designing career paths, we expect and harmonious a forward carry to motivations growth and emotional mental, physical, on employees, its of rights the safeguards fully Group The relationship. employment stable provides a safe and harmonious working environment for respects employees’ differences, cohesively pursues the realization of employees’ solidarity each and every employee, and human resources policies, employee benefits, vocational and sense of belonging through we pursue the core values of the Group. training and related activities. Together SOCIETY AND LABOUR PRACTICES EMPLOYMENT Examination Method on Operation Results ( Examination Method on Operation Environmental, Social and Governance Report Governance Social and Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
120 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 121 (Continued) Male Female
Employees by Gender 75% 6493
2206 25% Environmental, Social and Governance Report Governance Social and Environmental, As of 31 December 2019, the Group had 8,699 dedicated employees with a more more a with employees dedicated 8,699 had Group the 2019, December 31 of As by composition of the Group’s employees of ages and specialties. The reasonable mixture is set out as follows. different criteria The Group has been strictly in compliance with all relevant local employment laws where laws where local employment with all relevant in compliance has been strictly The Group any cases period, the Group did not have located. During the reporting the operation is complaints nor did it receive any employment laws and regulations, of violation of relevant related to recruitment. (Continued) Aged≤35 Aged between 36 and 45 Aged between 46 and 55 Aged≥56 Green energy equipment Green High-end smart equipment Modern industrial services Headquarters and others Employees by Age 45.07% 3921 62.00% 5393 Employees by Business Segment by Business Employees 56 0.64% 73 437 5.02% 0.84% 2124 24.42% 3177 2217 25.49% 36.52% Environmental, Social and Governance Report Governance Social and Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
122 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 123 (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 784 9.01% 381 4.38%
1582 18.19% 19.70% 1714 1462 16.81% 243 2.79% 17 211 2.43%
0.20% 329 3.78% 5532 63.59% 5143 59.12% Environmental, Social and Governance Report Governance Social and Environmental, (Continued) With an aim of creating a learning-oriented organization, the Group centered on competencyWith an aim of creating a learning-oriented organization, the Group for employees’ career development to improve professional quality, to establish a platform thus providing a wealth of development, and to build a sound training management system, sharing. learning opportunities and a positive atmosphere for knowledge Development and Training Occupational health and safety are a high priority within the Group. The Group strictly strictly Group The Group. the within priority high a are safety and health Occupational on Protection of China and the Law Labour Law of the People’s Republic complies with the approach the to Sticking regulations. and laws applicable other and Rights Labor of strictly we treatment”, comprehensive and prevention-dominated foremost, “safety of (AQ/T9006- of Enterprises Safety on Standardised Production the Basic Rules implement prevention accident including works key some bringing By laws. relevant and 2010) and health occupational of infrastructure the construction, standardised control, and system of safety goal, we have established a sound pollution control into the evaluation to initiatives takes Company The system. management health and safety occupational authentications. standard ISO18001 and ISO14001 in participate to subsidiaries its drive safety to eliminate are conducted safety production on inspections occasional Meanwhile, conducted was review and supervision Periodic safety. production ensure and hazards The Tools. Machine including Chongqing subsidiaries six of standardization safety the for service system and standardized the operation formulas of safety technology management by “establishing organizations, specifying responsibilities, the subsidiaries were perfected formulas and making strict assessment”. perfecting systems, standardizing glasses, safety masks, dust with furnished are segment business each at Employees other special labour supplies by the Group to effectively helmets, protective clothing and injury insurance and regular health checks also improve individual protection. Work-related their concerns. For the year ended 31 December 2019, the cover each employee to relieve or serious injury, and the work-related minor injury rate Group had no work-related death rate of identified was 0.017%, generally below the control target of 2%. The rectification was disease occupational of patient additional zero and 99.43%, was hazards safety serialization system, it not recorded in the year. Since the Group adopted the rotation and injuries, but also only met the employees’ need of active treatment during the work-related enabled the normal production and operation of the enterprise. Health and Safety Environmental, Social and Governance Report Governance Social and Environmental,
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
124 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 125 (Continued) Training content
Through “experiential training approaches”, a series of well- Through “experiential training approaches”, enhancing the designed extension courses were completed, in non-working conditions, mutual communication of employees responsibility, cohesion and promoting employees’ sense of and execution. middle- each company selected 3 Machinery & Electric, backbones with professional expertise level or technical the training camp; and QC Management to participate in Training Camp, each company Promotion Expert willing to promote QC selected 2 management members training. management to participate in the Systematically studied the design concept, plans and Systematically studied the design system, and how skills of the compensation management incentive and to establish and improve the compensation the actual situation of the restraint mechanism in line with company. Quality management training
internal driving force for a high-performance team of Comprehensive Compensation Management System” Subject Quality management trainingQuality management Camp of Chongqing QC Promotion Expert Training Held Team power pump-building the Special training on “Design
Environmental, Social and Governance Report Governance Social and Environmental,
Some examples of the Group’s internal training activities are as follows: training activities internal of the Group’s Some examples (Continued) Senior management Middle management Junior personnel 77 69 48 Trained employees by level of senior, middle and junior level Trained employees by level of Team power pump-building the internal driving force for a high-performance team Team power pump-building the During the Period, the Group held a total of 930 training sessions primarily covering covering primarily sessions training 930 of total a held Group the Period, the During and safety employee culture, corporate manufacturing, lean expertise, skills, business at person per hours training 50 about and participation of times 16,400 with health, average. Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 127 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, As of 31 December 2019, the Group continued to offer job opportunities to the public and As of 31 December 2019, the Group continued to offer job opportunities and resources human to play better give To persons. 260 than more of total a recruited resources management fulfill its social responsibility, the Group has established a human economy, market economy, knowledge to catering mechanism operational and system the developed Group The strategy. development Group’s the and responsibility social were set up to further career paths for its employees. Differentiated remuneration policies skilled talents with provenmotivate employees, and a team of management, technology and to our intelligence supports competency has been established to provide strong talent and strategic goal. Effectiveness of Human Resources Equal Opportunities and Diversity and Inclusion Equal Opportunities and Diversity opportunities, the Company has been committed As an employer with equal employment and discrimination against employees all for environment working good a providing to policies have always adhered to the principle of harassment. The Company’s employment does not discriminate against employees based on race, equal opportunities. The Company age, marital status, family status, or disability, and ensures color, belief, ethnicity, gender, expertise, their on based selected and measured be will candidates or employees that experiences, abilities and qualifications. The Group strictly observes the Labour Law of the PRC, the Labour Contract Law of the the PRC, the Labour Contract observes the Labour Law of The Group strictly to protect child labour or forced labour, regulations and policies against PRC and the laws, legitimate and impartial an creates and laws the under interests and rights employees’ place in are measures protection Labour rights. human to respect due with workplace and periods, lactation and maternity pregnancy, menstruation, in employees female for as intensity physical fourth-level the of work any in females arrange to prohibited is it or other prohibited work. With well-established procedures specified in national regulations throughout compliance ensure we recruitment, and employment as such areas key in use of child labour in practices. Forced labour is the employment process and eliminate of labour protection system is supervised by the labour prevented and the implementation of violation any involve not did Group the 2019, December 31 ended year the During union. on child labour and forced labour. standards, rules and regulations Labour Standards (Continued) Pictures of Skills Competition 重慶市機械冶金行業數控車工、裝配鉗工、維修電工、焊工技能大 ) sponsored by Chongqing Trade Union Council, and 3 of them won the first individual 3 of them won and Chongqing Trade Union Council, ) sponsored by 賽 8 won the third individual prizes. second individual prizes and prizes, 7 won the The Group has 18 employees forming a team to participate in the Skills Competition of CNC of Competition Skills in the to participate a team forming employees has 18 Group The in Chongqing Electrician and Welders Assembly Technicians, Maintenance Lathe Workers, ( Industry Metallurgical Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 129 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, The Company holds analyst meetings, online conferences, road shows and other activities The Company holds analyst meetings, prospective and investors with communication enhance to events, major for or regularly of change and composition number, the of analysis and statistics prepare investors; suggestions; establish and investors and prospective investors and collect their opinions or associations, media, other maintain sound public relations with stock exchanges, industry false detect timely to media online monitor and institutions; relevant and companies listed public image. A scientific reports on the Company and safeguard the Company’s positive the Company’s sustainable dividend distribution model has been established considering listing in June 2008 up to development and return to shareholders. Since the Company’s approximately RMB1.691 the end of 2019, the Company has distributed dividends totaling attractive return to its long- billion (totaling RMB143 million in 2018 (after tax)), providing an term shareholders through the secondary market. Return to Shareholders With a focus on standard and efficient operation, the Group has established a clear clear a established has Group the operation, efficient and standard on focus a With the meeting, “general namely levels four covering framework governance corporate and the management” with well-defined board composition Board, Supervisory Committee exercised are functions supervisory system, governance corporate the Under roles. and decision-making, “ownership, namely powers four The improvements. ongoing for check-and independent, rational, a on established are management” and supervision basis, providing an impetus for the Company’s balance, intervention-free and coordinated sustainable and organic growth. Corporate Governance The Group operates in strict compliance with laws and regulations and international international and regulations and laws with compliance strict in operates Group The the In interests. shareholders’ and value corporate maximize to aim an with practices, of pursuit in interests stakeholders’ of heed takes Group the development, of course and suppliers customers, employees, shareholders, its with benefit mutual and harmony other stakeholders. Operational Practices (Continued) Product liability the Group is committed to Adhering to the principle of “quality first, customer foremost”, has witnessed continuous providing customers with superior products and services, and manufactured by the improvements in brand image and customer satisfaction. All products and laws and regulations Group are in compliance with national standards on the industry in relation to product liability. 2 percentage points higher The customer satisfaction as at 31 December 2019 was 93%, than that of the same period last year. The Group is always open to mutual benefit through collaboration with upstream and and upstream with collaboration through benefit mutual to open always is Group The transparent Group adheres to open, fair and in the industry chain. The downstream players cost, quality, price, of every year in terms suppliers evaluate suppliers, criteria in selecting establish a dual-sourcing management to service, and insist the delivery and after-sales raw of procurement the In vitality. and competitiveness core with platform chain supply to the use of procurement, giving priority deeply implemented green materials, the Group damage. environmental low-level and environmentally-friendly low-carbon, with products vigorously and energy clean purchased Group the sources, energy of selection the In energy, municipal solid waste, material energy and other promoted the use of low-grade supplies and other consumer goods, we try to choose non-fossil energy. For daily office the meantime, the In recycled. easily be can that packaging simple with products the in upgrading management and technologies, seeking Group continues to assist suppliers with growth mutual for system chain supply sustainable the optimize and consolidate to platform procurement and bidding centralised a established has Group The suppliers. our products and bearings. The centralised procurements for for bulk materials including steel approximately RMB530 million, representing a direct cost the latest 3 years amounted to million. reduction of approximately RMB31.6 material raw high-quality uses strictly and quality product pursues strictly Group The conduct extensive screening and comparison, suppliers. We perform bidding management, ensure and tendering, and bidding of result and process the incorporate and check of 31 December 2019, the total number of suppliers of the bidding fairness and equity. As domestic suppliers; suppliers and 1,577 3 foreign are which there 1,580, among is Group 789 suppliers from approximately 521 suppliers are from the eastern China, approximately China. the middle China and approximately 270 suppliers from the western Supply chain management Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 131 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, In order to strengthen product quality management, the Group has formulated a set of of set a formulated has Group the management, quality product strengthen to order In for accumulated experience management its with methods management quality effective include the following: firstly, the “three-inspection system” a long time. Specific measures to self-inspection of operators, cross inspections among will be implemented, which refers by professionals; secondly, a dual manager system will the staff and specific inspection meaning that there will be inspectors onsite when the be adopted for the key procedures, staff or acceptors on behalf technical procedures, and other key operators would conduct In required. be will reinspection quality thirdly, necessary; when onsite be will users of the products to be delivered, the products will be subject order to ensure the quality of technical and laboratory production, design, the from personnel of reinspection the to Meanwhile, by adhering to departments after acceptance of storage and before delivery. and improve the satisfactionthe principle of being responsible to customers and to maintain Group has also set up the of customers and to avoid affecting the Group’s reputation, the collect the information product recall system, for which the sales department will proactively keep a record of defective of quality of products, including the complaints of customers, department. management quality the to report and information relevant and products defective the for analysis comprehensive make will department management quality The settlement measures. The products to identify the causes quickly and offer corresponding customers and providing after-sales service department is responsible for negotiating with proper solutions. The Group is committed to starting from three aspects of energy conservation, safety and safety of energy conservation, three aspects to starting from is committed The Group or eliminate The Group can reduce and developing new products. ecology, by researching waste energy while disposing of industrial energy and save substantial the use of natural energy- our of process production the In pollution. environmental reducing and residue out carry to utilization waste of mode production the adopt Group the products, saving sources can once again become energy so that the wastes generated clean production the reduce also but resources, substantial save only not will This recycled. be and give we materials, of selection In pollution. environmental reduce and waste of generation to avoid the second use of the materials, to the scrapping, recycling, and full consideration of wastes that cannot be recycled and are difficult the subsequent issues like generation substances in the design process. With the principle to dispose. We avoid using harmful and production both takes process design our disposal, clean and production clean of energy-saving of development the accelerate to consideration into factors environmental and environmentally friendly products. (Continued) The Group attaches particular importance to maintenance and protection of intellectual intellectual of protection and maintenance to importance particular attaches Group The Property Intellectual the with partnership strategic into entered has and rights, property to promote the enhancement of enterprise patent level. Office of Chongqing Municipality invention authorized 20 including patents, authorized 227 obtained Group the 2019, In pool to 2,506 patents, including 190 invention patents. patents, and expanded its patent public the with collaborates Municipality Chongqing of Office Property Intellectual The in regard to quality and technical supervision, commerce security bureau, the authorities the infringing counterfeits on down crack to authorities relevant other and industry and greatly assist the Group Group’s products. These intellectual property protection initiatives environment. in consolidating market share and maintaining a fair market competition Intellectual Property In respect of services and complaints, the Group has established pre-sales consultation, consultation, established pre-sales the Group has and complaints, of services In respect complaints customer receive we When system. service after-sales and reception sales to reported be will results the and promptly, them with deal will staff our inquiries, or and first service customer of principle the up sets Group The immediately. customers of kind whatever for that requires Group The proceedings. legal avoid to best its tries shall assignees the circumstances, the of seriousness the of regardless complaints, 31 ended year the For customers. to respect their express and customers to apologize for safety and health reasons. the Group did not recall any products December 2019, promotion product in statements misleading and false of use the prohibits Group The and itself of privacy the protecting to attention pays also Group The transactions. and a sign to matters confidential in involved employees our require We customers. its Company and strictly protect customers’ personal data confidentiality agreement with the and information when serving them. Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 133 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, The Group attaches great importance to its responsibility in anti-corruption in order to to order in anti-corruption in responsibility its to importance great attaches Group The Code the formulated has Group The environment. business positive and fair a maintain accepting from abstain to required are employees which under Employees of Ethics of or decision business their affect might that hospitality and gift money, any offering or Company’s interests. The independent judgment, or exploiting their positions against the falsification, prevent to established also is System Control and Procedures Anti-Fraud outsiders or insiders by behaviors illegal other and fraudulence truth, of concealment Company the State, the of interests infringe might activities which Group’s the in involved to monitor and review all or other parties. In addition to an internal audit system in place regulations, the Group has employees as to their compliance with anti-corruption laws and a special email address and established whistle-blowing system and procedures, including cases will be rewarded hotline to accept whistle-blowing reports. Whistle-blowers of verified any corruption or bribe- accordingly. As to 31 December 2019, the Group did not identify taking case. Anti-corruption and Internal Control Following the relevant existing national standards in combination with the present situation present the combination with in standards national relevant existing the Following room machine central the established Company the development, informationization of indicator the satisfies which system, information operation security the safeguard to protection electrical engineering, fire terms of structure, area, temperature, requirements in prevented system or information network are resources in the information and security. The network external and internal through damages and interference threats, various from other means. Relevant management regulations have been isolation, data line, firewall and equipment, network server, of terminal procedures the operational standardise to formulated destruction, from data the prevent to and system, application and terminal personal databases and systems important of backup recovery Disaster leakage. or modification data recovery after a major disaster. In accordance were made on time to ensure speedy Security Law of the People’s Republic of China, the with the requirements of the Internet network of training and evaluation protection rating security network conducted Group and construction simultaneous planning, simultaneous the ensure to personnel security measures and business systems. simultaneous use of security technology Information Security (Continued) Under an innovative supervision model, the internal audit department directly reports to to reports directly department audit internal the model, supervision innovative an Under Management Risk and Audit the by guidance and supervision accepts and Board the “manage asset audit and financial audit, to “manage assets” through Committee, strives economic “manage personnel” through inspection and investigation, compliance” through through risk” “manage audit, project through matters” “manage audit, responsibility the to play full give and supervision ensure earnestly to assessment effectiveness “service, supervision and compliance”. of auditing through adequate immunising power by five of Enterprises jointly promulgated Basic Rules on Internal Control Pursuant to the the Ministry of Finance and the Code on Corporate ministries and commissions including Companies on the Hong Kong Stock Exchange, the Group Governance Practices for Listed control system. Through the evaluation and inspection has established a sound the internal as subsidiaries, its and Company the of system control internal the of operation the on and monitoring of improvement on internal control system, well as the continuous tracking or evaluation 2019, In promoted. been has system control internal of effectiveness the on the effectiveness of the internal control system for improvement has been conducted and Tools Machine Chongqing General, Chongqing subsidiaries its and Company, the improvement on internal control system has been tracked Chongqing Pump as well as the Water and Chongqing Compressor Gas Chongqing Pump, for Chongqing and monitored Turbine. framework treatment and prevention risk legal effective an established has Group The Legal on Measures Management the and System Management Contract the comprising economic regulations, and rules for established been has mechanism review Legal Affairs. In 2019, the Group reviewed 138 contracts; and quarterly contracts, and material decisions. legal the resolve to established been has risks legal significant of mechanism reporting risks in a timely manner. Environmental, Social and Governance Report Governance Social and Environmental,
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CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 135 (Continued) Environmental, Social and Governance Report Governance Social and Environmental, The picture shows that on 8 January 2019, Chongqing Cummins Engine Co., Ltd. carried The picture shows that on 8 January 2019, Chongqing Cummins volunteers Warmth”, Send and Festival Spring the “Celebrate titled activity charity a out food special other and dumplings scarves, oil, rice, lanterns, red couplets, brought Training Rehabilitation Vocational Huiling Chongqing to Festival Spring the for materials in atmosphere Year’s New the enjoy to students the with dumplings made and Center, advance. As a municipal state-owned key enterprise in Chongqing and a listed company, the Group and a listed company, state-owned key enterprise in Chongqing As a municipal its to addition in welfare public support to activities community in part takes actively local economy proactively contributes to business growth. The Group efforts in delivering welfare, its spirit of caring for public livelihood. The Group demonstrated development and Group The society. to dedication selfless making and responsibilities social on taking mutual benefit. a harmonious environment for strives to create Feedback to Community (Continued) The picture shows that on 20 June 2019, Yibin Distribution Center of Chongqing Pigeon The picture shows that on 20 (重慶鴿牌電線電纜有限公司) conducted a material donationElectric Wires & Cables Co., Ltd. area, Changning County, Yibin, Sichuan. activity to the earthquake stricken Environmental, Social and Governance Report Governance Social and Environmental,
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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 AUDITOR’S AUDITOR’S REPORT publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ Independent Auditor’s Report Auditor’s Independent FOR OPINION BASIS 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 2019, 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 2019, 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: To the Shareholders of Chongqing
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n e, ji the stocktaking of the the of stocktaking the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di Evaluate the design and implementation Supervise Company and checks the quantity, of date expiration the and status the inventories. of internal control related to the the to related control internal of in Company’s provision for decline value of inventories. R. , P. Chaoyangm cheng Responding measures
(Continued) – The main audit procedures we have have we procedures audit main The implemented are as follows: –
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㓏 countants c ac ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ in Note VI.8 of the Company’s Company’s the of VI.8 Note in Statements, Financial Consolidated was inventories of value book the RMB1,981,484,606.34 yuan, and the of value in decline for provision inventories was RMB156,264,087.26 yuan. It has a significant impact on the financial statements. Provision for decline in value of inventories Provision for decline in value As of December 31, 2019, as stated
Key Audit Matters 1. KEY
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 context of our audit of the financial statements as a matters were addressed in the opinion thereon, and we do not express a separate whole and, in forming our audit opinion on these matters.
3. AUDIT MATTERS Independent Auditor’s Report Auditor’s Independent
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n e, ji the aging and expiration expiration and aging the the calculation table of of table calculation the ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di date of the Company’s inventories, date of the Company’s inventories, of review analytical an conducts the long-age inventories to analysis for the reasonableness of provision decline in value of inventories. 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 Company; the of policies accounting exam the current period movement of value in decline for provision of inventories recognized in the previous years; and analyze whether the the whether analyze and years; of value in decline for provision inventories is sufficient; Obtain Combine R. , P. Chaoyangm cheng Responding measures
– –
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㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ are measured at the the at measured are predicted the future market trends bypredicted the future market trends price. market historical the considering material involves issue this Since we Management, the and amounts in decline for provision consider value of inventories depreciation as a key audit matter. used significant judgments and and judgments significant used lower of cost and net realisable 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 of completion, the estimated costs to necessary costs estimated the taxes. relevant and sale the make estimated the determining When Management the price selling Provision for decline in value of inventories (continued) Provision for decline in value Inventories
1. Key Audit Matters
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n e, ji whether the accounting accounting the whether samples from the sales sales the from samples ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di statements are appropriate. treatment of provision for decline in treatment of provision for decline value of inventories by the Management financialthe in information of relevant and the presentation and disclosure Evaluate Choose order after the current accounting accounting current the after order selling the compare and period, selling estimated the with price price; R. , P. Chaoyangm cheng Responding measures
(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┰ Provision for decline in value of inventories (continued) Provision for decline in value
1. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
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n e, ji an internal control test test control internal an ቲ en Beida 9 a ᓗ strict, Beijing, hin A C Di the Company and the customer to the Company and the customer check the key terms, for example, method the of reasonableness the used to calculate the variable price shipping and acceptance, payment shipping and acceptance, payment Understandetc. policies, settlement and and adoption of the method. Estimate of the transaction price, the price of 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 measurement the and transaction, the expected money of amount the of to be refunded to the customer. Obtain the agreement signed between Perform related to sales and collection collection and sales to related cycles of the Company to analyze and check the validity of the internal revenue company’s the of control recognition. R. , P. Chaoyangm cheng Responding measures
The main audit procedures we have have we procedures audit main The implemented are as follows: – –
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㓏 countants c ac ing publi eW Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ the Company’s Consolidated Financial Revenue recognition of In 2019, as stated in Note VI.50 Statements, the total revenue is is revenue total the Statements, RMB5,516,812,105.87 yuan. significant a has recognition Revenue impact on net profit. Revenue recognition the whether risks, inherent has accurate and complete is revenue material of risk a is there period, records in the appropriate accounting accounting appropriate the in records considerwe Therefore, misstatement. revenue recognition as a key audit revenue recognition as a key audit matter.
2. Key Audit Matters
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n e, ji whether the accounting accounting the whether an analytical review processreview analytical an 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 accounting period by performing a cut-off test cut-off a performing by period after and before revenue sales on the balance sheet date. Evaluate Differentiate product and sales types, E Perform treatment of revenue recognition by and Management Company’s the of disclosure and presentation the relevant information in the financial statements is appropriate. to evaluate the reasonableness reasonableness the evaluate to profit gross and revenue sales of industry the combined changes, Company the which development operates in. and choose samples separately. separately. samples choose and check to sample material Select relevant supportingby checking revenue accounting including documents, contracts, records, sales voucher, documents, shipping invoices, sales to records receiving and receipts verify the authenticity and accuracy of revenue recognition. R. , P. Chaoyangm cheng Responding measures
(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┰ Revenue recognition (continued)
2. Key Audit Matters
Independent Auditor’s Report Auditor’s Independent
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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┰ INFORMATION OTHER 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 2019 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.
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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 OF THE MANAGEMENT AND THOSE ing publi eW Shin certified ≰㻇₼✛↩帰ℚ┰ CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS RESPONSIBILITIES RESPONSIBILITIES 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. Independent Auditor’s Report Auditor’s Independent
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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 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 RESPONSIBILITIES FOR THE AUDIT OF THE 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. 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. Obtain Identify
FINANCIAL FINANCIAL STATEMENTS AUDITOR’S AUDITOR’S 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.
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 (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┰ RESPONSIBILITIES RESPONSIBILITIES FOR THE AUDIT OF THE 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. 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. Obtain sufficient and appropriate audit evidence on the financial information of Obtain sufficient and appropriate audit evidence on the financial to issue entities or business activities of Chongqing Mechanical and Electrical for directing, an audit opinion on the financial statements. We are responsible for our supervising and performing group audits, and we are fully responsible audit opinions. Evaluate Conclude Evaluate communicate with those charged with governance regarding, among other other among regarding, governance with charged those with communicate
FINANCIAL FINANCIAL STATEMENTS (CONTINUED) AUDITOR’S AUDITOR’S (6) matters, the planned scope and timing of the audit and significant 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) (5) (3) We
6. Independent Auditor’s Report Auditor’s Independent
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
146 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 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)
+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 (Engagement Partner) 㓏 27 March 2020 CICPA:Xiong Hongwei CICPA:Hu Xiaoqin
countants c ac ing publi eW
Independent Auditor’s Report Auditor’s Independent Shin certified ≰㻇₼✛↩帰ℚ┰ RESPONSIBILITIES RESPONSIBILITIES FOR THE AUDIT OF THE
FINANCIAL FINANCIAL STATEMENTS (CONTINUED) AUDITOR’S AUDITOR’S 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. Accountants LLP
6. China,Beijing ShineWing Certified Public
– – 2018 5,124,292.21 6,039,285.98 31 December 81,059,064.90 20,538,197.57 383,447,758.44 249,077,553.98 264,987,827.45 928,431,789.73 2,164,670,306.18 1,115,437,102.20 1,949,892,938.13 1,128,945,186.86 2,636,400,832.87 10,530,066,180.49
– – 2019 269,494.13 31 December 17,500,000.00 41,915,619.38 921,848,681.16 436,478,069.56 296,071,386.86 368,454,512.15 470,685,913.42 266,180,611.67 2,094,619,648.56 1,981,484,606.34 2,688,114,256.49 1,203,555,781.66 10,350,700,511.82
VI.1 VI.2 VI.3 VI.8 VI.9 VI.4 VI.5 VI.6 VI.7 VI.10 VI.11 VI.12 VI.7.2 VI.7.1 Notes VI.13(1)
Unit: RMB
Dividends receivable Cash and cash equivalents Financial assets held for trade Financial assets held Notes receivable Loans and advances to customers Inventories Contract assets Held-for-sale assets Non-current assets due within one year Other current assets Accounts receivable
Receivable financing Prepayments Other receivables Including: Interests receivable Total current assets Items Current assets
Consolidated Statement of Financial Position Financial of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
148 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 149 – 2018 Unit: RMB
(Continued) 31 December
21,495,341.97 29,927,674.79 33,200,000.00 83,609,256.52 38,880,000.00 46,693,061.00 103,686,673.46 224,093,001.19 143,312,435.00 617,595,163.06 171,249,276.77 5,747,617,618.18 1,009,154,785.28 3,224,720,949.14 16,277,683,798.67
2019 31 December 16,610,242.60 95,700,000.00 78,047,637.67 52,314,020.88 251,701,138.83 121,906,877.97 232,876,050.24 143,312,435.00 656,254,825.20 358,581,230.46 996,391,965.41 207,448,578.58 117,000,000.00 6,167,114,793.05 2,838,969,790.21 16,517,815,304.87
VI.26 VI.25 VI.24 VI.23 VI.22 VI.21 VI.20 VI.15 VI.18 VI.14 VI.17 VI.16 VI.19 Notes VI.13(2)
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Statement of Financial Position Financial of Statement Consolidated Other non-current assets Deferred tax assets Long-term deferred expenses Goodwill Development expenditures Intangible assets Right-to-use assets Long-term equity investments Property, plant and equipment Long-term receivables Investment properties Other equity instruments investment Construction in progress Loans and advances to customers Loans and advances Total non-current assets Total assets Items Non-current assets
– – 2018 1,176,168.16 31 December 79,509,594.57 13,156,812.78 27,519,691.51 20,617,240.24 16,294,000.00 63,635,374.54 170,826,135.24 405,298,663.38 599,204,267.53 147,696,759.15 220,974,568.70 799,143,854.22 685,648,864.72 843,184,922.99 911,696,617.94 6,736,276,820.76 2,311,745,034.55 9,048,021,855.31 1,334,738,381.17 1,225,850,904.13 1,522,525,538.63
(Continued) – –
2019 3,259,736.35 4,505,143.84 6,759,000.00 31 December 28,451,140.35 21,754,527.73 49,949,000.00 65,766,577.42 109,458,767.32 281,511,419.08 301,172,088.60 456,796,531.42 127,703,443.23 186,244,866.97 807,469,495.64 7,014,765,937.40 2,213,959,194.74 9,228,725,132.14 1,642,606,224.02 1,156,886,625.41 1,117,908,116.74 1,202,637,121.55 1,686,336,446.82
VI.37 VI.25 VI.36 VI.44 VI.41 VI.43 VI.42 VI.35 VI.40 VI.32 VI.34 VI.33 VI.38 VI.39 VI.27 VI.28 VI.29 VI.30 VI.31 Notes VI.35.1 VI.35.2
Unit: RMB
Interests payable Dividends payable
Other current liabilities Deferred tax liabilities Non-current liabilities due within one year
Including: Deferred revenue Long-term payables Provisions Long-term employee benefits payable Other payables Lease liabilities Repurchase agreements Taxes and levies payables Employee benefits payables Long-term loans Bonds payable Short-term loans Due to customers, banks and other financial institutions Due to customers, banks Notes payable Accounts payable Contract liabilities Total liabilities Total non-current liabilities Non-current liabilities Total current liabilities Items Current liabilities
Consolidated Statement of Financial Position Financial of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
150 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 151 2018 Unit: RMB
(Continued) 31 December
31,052,427.09 50,311,968.20 420,762,299.14 334,373,473.12 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
2019 accounting department: 31 December 21,514,640.55 50,311,968.20 444,669,172.15 364,663,370.96
Person in charge of 6,844,421,000.58 7,289,090,172.73 2,723,290,866.87 3,684,640,154.00 16,517,815,304.87
VI.49 VI.45 VI.48 VI.47 VI.46 Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: accounting function:
Consolidated Statement of Financial Position Financial of Statement Consolidated Company Retained profits 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 the Total equity attributable to shareholders Non-controlling interests Items Shareholder’s equity Legal Representative: Person in charge of
– – – – 2018 293,943.72 4,480,970.09 3,309,478.99 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 4,558,366,763.45 2,653,801,966.74 4,916,122,330.05 7,569,924,296.79 1,434,961,752.73 1,215,530,735.02
– – – 2019 293,943.72 4,515,158.77 3,722,935.34 2,800,000.00 31 December 52,314,020.88 35,610,757.03 19,998,224.66 17,500,000.00 436,478,069.56 838,000,000.00 4,602,220,235.53 2,588,540,749.23 5,552,952,340.59 8,141,493,089.82 1,455,032,793.77 1,109,485,020.12
XVI.2 XVI.1 Notes XVI.1.2 XVI.1.1
Unit: RMB
Dividends receivable Other equity instruments investment Property, plant and equipment Construction in progress Right-to-use assets Intangible assets Goodwill Non-current assets due within one year Other current assets Long-term equity investments Including: Interests receivable Long-term receivables Cash and cash equivalents Financial assets held for trade Financial assets held Notes receivable Other receivables Total non-current assets Total assets Non-current assets: Total current assets Items Current assets:
Statement of Financial Position of the Company the of Position Financial of Statement Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
152 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 153 – – 2018 Unit: RMB 123,232.06
1,887,413.85 8,367,050.00 9,261,300.00 (Continued) 31 December
53,500,000.00 62,986,536.29 398,497,182.20 280,000,000.00 316,100,000.00 799,143,854.22 1,123,610,904.22 1,522,108,086.42
– – – – 2019 251,357.01 1,780,697.30 9,262,442.99 8,367,050.00 31 December 22,100,000.00 730,175,497.30 696,781,000.00 1,202,367,050.00 1,932,542,547.30 1,194,000,000.00
Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Dividends payable Non-current liabilities due within one year Employee benefits payables Taxes and levies payables Including: Interests payable Other payables Long-term loans Bonds payable Lease liabilities Deferred tax liabilities Short-term loans
Statement of Financial Position of the Company of Position of Financial Statement Total non-current liabilities Total liabilities Non-current liabilities Total current liabilities Items Current liabilities
2018 616,640.00
31 December 348,748,849.03 140,716,900.00 (Continued)
1,873,093,667.34 6,047,816,210.37 7,569,924,296.79 3,684,640,154.00
2019 6,237,599.88 accounting department: 31 December 379,038,746.87 140,716,900.00
Person in charge of 1,998,317,141.77 6,208,950,542.52 8,141,493,089.82 3,684,640,154.00
Notes
Unit: RMB
accounting function:
Person in charge of Retained profits Other comprehensive income Other comprehensive Surplus reserves Share capital Capital reserves Total shareholder’s equity Total liabilities and shareholder’s equity Items Shareholder’s equity Legal Representative:
Statement of Financial Position of the Company of Position of Financial Statement Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
154 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 155 – – Unit: RMB 118,839.98 400,393.61
(109,704.27) 9,317,288.09 63,485,555.23 68,548,323.06 38,473,948.90 (19,704,902.99) (76,668,574.02) 100,360,500.73 369,941,950.32 298,156,677.80 513,983,557.96 240,974,839.39 128,937,348.85 122,653,496.31 133,621,128.92 418,925,355.40 5,284,011,305.97 5,284,317,532.90 4,029,037,198.67 5,215,368,816.23 For The Year 2018
– – 25,268.05 123,001.27 (134,308.57) (4,288,527.68) 11,006,384.78 57,996,330.33 77,451,736.38 36,845,305.60 (69,673,119.31) 131,720,191.68 283,867,094.72 308,120,591.52 544,178,374.13 308,915,489.59 158,203,133.72 133,915,851.96 227,230,135.88 295,372,688.12 5,855,552,796.45 5,516,812,105.87 4,467,009,491.11 5,439,335,101.44 For The Year 2019
VI.58 VI.59 VI.60 VI.57 VI.50 VI.56 VI.50 VI.50 VI.50 VI.51 VI.50 VI.52 VI.50 VI.53 VI.50 VI.54 VI.54 VI.54 VI.55 VI.56 Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Income Statement and joint ventures joint and listed with “-”) assets measured at amortized cost (Loss listed with “-”) associates
Net exposure to hedging (Loss financial of derecognition of Income (Loss listed with “-”) Impairment loss of credit (Loss is listed by “-”) Impairment loss of assets (Loss is listed by “-”) Gain on disposal of assets (Loss listed with “-”) Gain arising from the changes in fair value
Transaction cost and commission fees Business taxes and surcharges Selling and distribution expenses Interest expenses Administrative expenses Interest income Research and development expenses Transaction fees and commission income Transaction fees and Financial expenses Interest income Add: Other income Investment income (Loss listed with “-”) Including: Income from investments in
Total operating cost Total operating revenue Total operating revenue Including: Operating cost Including: Operating revenue Including: Operating
Including: Interest expenses
1. 2. Items
– – – 5,155,078.09 5,514,177.09 1,384,451.00 1,384,451.00 15,877,488.95 60,500,227.64 16,935,459.00 51,110,995.63 556,730,030.70 495,171,833.01 555,672,060.65 495,171,833.01 495,171,833.01 495,171,833.01 444,060,837.38 For The Year 2018
– (861,339.00) 5,620,959.88 (9,537,786.54) (9,432,447.54) (8,228,716.00) 12,740,116.51 39,031,257.93 11,280,249.97 19,080,054.90 (12,988,336.88) 241,486,369.54 203,914,978.15 242,946,236.08 203,914,978.15 203,914,978.15 203,914,978.15 184,834,923.25 For The Year 2019
(Continued) VI.47 VI.61 VI.47 VI.63 VI.47 VI.47 VI.47 VI.47 VI.62
Notes
Unit: RMB
benefit plan benefit earnings retained investments instrument controlling company controlling (Net loss listed with “-”) (Net loss listed with “-”) (3) Changes in fair value of other equity (2) Transfer changes of defined benefit plan to
(1) Changes from recalculation of defined 1.Net profit attributable to continuing operation 1.Net profit attributable to continuing operation 1.Net profit attributable to shareholders of the 1.Net profit attributable to shareholders 2.Net profit attributable to discontinued operation 2.Net profit attributable to discontinued 2.Net profit attributable to non-controlling interests 2.Net profit attributable to non-controlling operation reclassified into profit or loss shareholders of the Company 1. Other comprehensive incomes that cannot be Add: Non-operating income Add: Non-operating Net other comprehensive income after tax Net other comprehensive income after Operating profit (Loss listed with “-”) Operating profit (Loss Net other comprehensive income after tax attributable to (1) Classification by continuing or discontinued Net profit (Net loss listed with “-”) Less: Income tax expenses Total profit (Loss listed with “-”) Total profit (Loss
Less: Non-operating expenses Less: Non-operating (2) Classification by ownership
6. 3. 5. 4. Items
Consolidated Income Statement Statement Income Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
156 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 157 0.12 0.12 Unit: RMB 359,099.00 475,865.00 719,541.75
4,234,206.34 3,770,627.09 (Continued) (1,658,986.00)
51,470,094.63 500,686,010.10 449,215,915.47 For The Year 2018
– – 0.05 0.05 105,339.00 1,261,528.40 (2,570,598.94) (1,309,070.54) accounting department: 19,185,393.90 194,482,530.61 175,297,136.71
Person in charge of For The Year 2019
VI.47 VI.47 VI.47 VI.47 VI.47 VI.47 Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
accounting function: Consolidated Income Statement Statement Income Consolidated
of available-for-sale financial assets of available-for-sale hedging gains and losses statements in foreign currencies of investee company under equity method that can be reclassified as profit or loss
4. Translation differences of financial 2. Share of other comprehensive income 2. Share of other comprehensive 1. Gain or loss from fair value changes 1. Gain or loss from 3. Effective portion of net investment non-controlling interests non-controlling shareholders of the Company reclassified into profit or loss reclassified into profit Basic earnings per share Diluted earnings per share
non-controlling interests 2. Other comprehensive income that can be 2. Other comprehensive 1. Total comprehensive income attributable to 1. Total comprehensive income attributable Earnings per share (1) Total comprehensive income
(2) Net other comprehensive income after tax attributable to Net other comprehensive income after tax 2. Total comprehensive income attributable to 2. Total comprehensive income attributable
8. 7. Items
Legal Representative: Person in charge of
– – – – – – – 8,708.56 629,481.47 875,434.19 2,247,005.78 6,048,873.70 (3,644,517.34) 16,030,766.46 43,868,142.60 74,769,054.57 86,587,848.78 368,563,411.66 374,603,576.80 435,654,044.70 365,625,074.86 For The Year 2018
– – – – – – 50,000.21 34,805.00 271,600.02 713,200.55 750,000.00 2,397,300.84 10,878,437.20 47,108,641.30 70,745,604.48 78,186,096.51 (29,963,944.85) 302,898,978.43 303,598,978.22 389,559,496.26 291,928,962.98 For The Year 2019
XVI.3 XVI.4 XVI.4 Notes
Unit: RMB
Interest income listed with “-”) and joint ventures with “-”) measured at amortized cost (Loss listed Financial expenses Impairment loss of assets (Loss is listed by “-”) Impairment loss of assets (Loss is listed “-”) Gain on disposal of assets (Loss listed with Administrative expenses Selling and distribution expenses Selling and distribution operating cost surcharges Business taxes and Impairment loss of credit (Loss is listed by “-”) Impairment loss of credit (Loss is listed Gain arising from the changes in fair value (Loss Gain arising from the changes in fair value Investment income (Loss listed with “-”) Including:Income from investments in associates Income of derecognition of financial assets Other income
Operating revenue Less: Less: Income tax expenses Total profit (Loss listed with “-”) Add: Non-operating income Operating profit (Loss listed with “-”) Less: Non-operating expenses Including: Interest expenses Add:
1. 3. 2. Items
Income Statement the of Company Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
158 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 159 – – – – – – – – Unit: RMB
(Continued)
368,563,411.66 368,563,411.66 368,563,411.66 For The Year 2018
– – – – – – 5,620,959.88 5,620,959.88 5,620,959.88 accounting department: 302,898,978.43 302,898,978.43 308,519,938.31
Person in charge of For The Year 2019
Notes
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: accounting function:
Income Statement of the Company of the Statement Income investments retained earnings available-for-sale financial assets investee company under equity method that can be reclassified as profit or loss Changes from recalculation of defined benefit plan Changes from recalculation of defined benefit
Transfer changes of defined benefit plan to Transfer changes of defined benefit plan Changes in fair value of other equity instrument Changes in fair value of other equity instrument (Net loss listed with “-”) (Net loss listed with (Net loss listed with “-”) (Net loss listed with into profit or loss reclassified into profit or loss Share of other comprehensive income of Share of other comprehensive income of Gain or loss from fair value changes of
Net profit attributable to continuing opeartion Net profit attributable to discontinued operation Net profit attributable Other comprehensive income that can be reclassified Other comprehensive income that can be Other comprehensive incomes that cannot be Other comprehensive incomes that cannot
(1) (2) (3) 2. 1. 2. (2) (1) Net profit (Net loss listed with “-”) Net profit (Net loss Total comprehensive income 1. Net other comprehensive income after tax Net other comprehensive income after
4. 6. 5. Items
Legal Representative: Person in charge of – 8,528,897.62 10,000,000.00 12,329,593.95 81,642,837.38 30,000,000.00 83,252,825.45 32,838,560.49 427,680,931.17 102,560,214.54 875,830,676.03 367,491,397.93 605,794,412.50 531,538,013.11 5,323,456,455.98 4,384,588,756.25 6,357,123,948.82 6,438,766,786.20 For The Year 2018
10,362,787.69 82,298,566.20 18,103,339.73 49,949,000.00 (10,000,000.00) (21,728,871.32) (30,000,000.00) 120,165,517.95 989,860,944.69 298,056,103.68 642,734,935.85 591,668,948.07 (220,597,205.84) (125,569,906.13) 5,764,272,319.37 4,331,813,455.12 6,125,529,449.58 6,245,694,967.53 For The Year 2019
Unit: RMB
Net increase in central bank payments Net increase in central Cash flows from operating activities Cash flows from operating sales of goods and rendering of services Cash received from Net increase in customer deposits and interbank deposits Net increase in customer Net increase in central bank and interbank payments Net increase in central bank and interbank Net cash flows from operating activities Cash paid for goods and services Net increase in loans and advances to customers Net increase in loans and advances to Net increase in interbank payments Net increase in interbank Cash paid for interest, surcharges and commission fee Cash paid for interest, surcharges and 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 received from interest, surcharges and commission fee Cash received from Cash received from tax refund Net increase in repurchase agreements Cash received relating to other operating activities Cash received relating to other operating Sub-total of cash inflows from operating activities Sub-total of cash inflows from operating
1. Items
Consolidated Statement of Cash Flows Cash of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by:
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
160 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 161 Unit: RMB
(Continued)
40,000,000.00 48,194,021.94 150,000,001.00 263,263,119.20 425,389,449.20 276,188,941.05 428,307,039.39 902,576,645.80 364,382,962.99 1,266,959,608.79 For The Year 2018
58,025,047.91 26,507,182.29 494,000,000.00 257,822,921.23 116,538,402.05 175,441,428.69 492,030,472.70 926,386,371.19 232,407,287.51 899,879,188.90 For The Year 2019
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Consolidated Statement of Cash Flows of Statement Consolidated other long-term assets intangible assets and other long-term assets intangible assets 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 Cash received relating to other investing activities Cash received relating to other investing Cash paid for investments Sub-total of cash inflows from investing activities Sub-total of cash inflows from investing Net cash flows from investing activities Cash paid to acquire fixed assets, intangible assets and Cash paid to acquire fixed assets, intangible
Cash paid relating to other investing activities Sub-total of cash outflow from investing activities Sub-total of cash outflow from investing
2. Items
(5,710,451.38) 19,860,430.92 84,915,416.50 340,256,690.38 276,973,008.62 395,804,097.06 (582,704,934.74) 1,903,601,200.00 2,243,857,890.38 1,570,343,395.06 2,464,674,400.00 1,174,539,298.00 2,826,562,825.12 For The Year 2018
(411,572.55) accounting department: (Continued) 73,310,106.86 23,767,842.85
(32,776,300.47) 304,999,203.74 117,332,521.06
Person in charge of (179,037,428.16) 2,676,529,520.00 2,749,839,626.86 1,537,567,094.59 2,506,545,330.22 1,570,343,395.06 2,928,877,055.02 For The Year 2019
Unit: RMB
accounting function:
interests by subsidiaries by interests period equivalents Net increase in cash and cash equivalents Balance of cash and cash equivalents at the end of this Effects of changes in exchange rate on cash and cash Effects of changes in exchange rate on Cash flows from financing activities Cash flows from financing loans granted Cash received from Cash received relating to other financing activities Cash received relating Sub-total of cash inflows from financing activities Sub-total of cash inflows
Net cash flows from financing activities
Cash paid for repayment of borrowings Cash paid for dividends, profits or payments of interests Cash paid for dividends, profits or payments Including: dividends and profits paid to non-controlling Including: dividends and profits paid to Cash paid relating to other financing activities Add: opening balance of cash and cash equivalents Add: opening balance of cash and cash Sub-total of cash outflows from financing activities Sub-total of cash outflows from financing
5. 6. 4. 3. Items
Consolidated Statement of Cash Flows of Statement Consolidated Ltd. & Electric Co., Chongqing Machinery Prepared by: Legal Representative: Person in charge of
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
162 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 163 – – – Unit: RMB 984,953.00 693,231.90
19,799,466.65 23,206,643.54 43,699,342.09 27,086,676.44 27,086,676.44 23,000,000.00 (16,612,665.65) 150,000,001.00 325,891,841.36 1,179,505,915.15 2,503,099,025.79 2,978,990,868.15 1,775,500,000.00 1,799,484,953.00 For The Year 2018
– – 894,100.00 804,420.30 1,723,728.00 21,380,365.06 12,169,908.77 34,354,694.13 21,321,262.72 21,321,262.72 (13,033,431.41) 450,000,000.00 344,415,444.06 453,000,000.00 (311,768,201.32) 1,928,106,924.91 2,723,416,468.97 2,580,460,942.29 3,035,184,670.29 For The Year 2019
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by: Cash Flows Statement of the Company the of Statement Flows Cash and other long-term assets intangible assets and other long-term assets Cash flows from investment activities Cash received from return of investments Cash received from investments income Net cash received from disposal of fixed assets, Net cash received from disposal of fixed Cash received relating to other investing activities Cash received relating to other investing Sub-total of cash inflows from investing activities Sub-total of cash inflows from investing Cash paid for investments 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 operating activities Cash flows from operating sales of goods and rendering of services Cash received from Cash received relating to other operating activities Cash received relating Sub-total of cash inflows from operating activities Sub-total of cash inflows Cash paid relating to other investing activities Sub-total of cash outflow from investing activities
2. Items 1.
– (446,717.50) 47,865,666.03 193,795,244.37 122,385,621.60 970,196,461.00 1,092,582,082.60 1,848,400,000.00 2,090,060,910.40 1,050,000,000.00 1,050,000,000.00 (1,040,060,910.40) For The Year 2018
6,968.13 (Continued) accounting department:
11,373,893.41 32,567,758.74 (73,477,956.16) 251,316,708.44 233,158,156.89
Person in charge of 1,019,104,126.44 1,586,719,000.00 1,831,251,050.30 2,050,000,000.00 2,082,567,758.74 1,092,582,082.60 For The Year 2019
Unit: RMB
accounting function:
period and cash equivalents Balance of cash and cash equivalents at the end of this Balance of cash and cash equivalents Effects of changes in exchange rate on cash Effects of changes in exchange rate on Net increase in cash and cash equivalents
Net cash flows from financing activities Cash paid for repayment of borrowings Cash paid for dividends, profits or payments of interests Cash paid for dividends, profits or payments Cash paid relating to other financing activities Sub-total of cash outflows from financing activities Sub-total of cash outflows from financing Cash flows from financing activities Cash flows from financing loans granted Cash received from Sub-total of cash inflows from financing activities Sub-total of cash inflows Cash received relating to other financing activities Cash received relating Add: opening balance of cash and cash equivalents Add: opening balance of cash and cash
6. 4. 5. Items 3.
Cash Flows Statement of the Company of Statement Flows Cash Ltd. & Electric Co., Chongqing Machinery Prepared by: Legal Representative: Person in charge of
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
164 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 165 Unit: RMB
2. Appropriation to staff bonus and welfare and bonus staff to Appropriation (450,770.36) – (450,770.36) – – – – – – – – – –
1. Appropriation to statutory reserve statutory to Appropriation – – (30,289,897.84) – 30,289,897.84 – – – – – – – –
(3) Profit appropriations Profit 1816243)(469217)(172,535,668.22) (24,699,291.70) (178,126,274.36) – 30,289,897.84 – – – – – – – –
4. Others – – – – – – – – – – – – –
3. Equity increase from Share-based payments Share-based from increase Equity
– – – – – – – – – – – – –
Capital contribution from holders of other equity instruments equity other of holders from contribution Capital 2. – – – – – – – – – – – – –
1. Common stock capital contribution from shareholders from contribution capital stock Common 600000 36,000,000.00 36,000,000.00 – – – – – – – – – – –
(2) Capital contribution and reduction from shareholders from reduction and contribution Capital 600000 36,000,000.00 36,000,000.00 – – – – – – – – – – –
(1) Total comprehensive income comprehensive Total 8,3,2.51,8,9.0207,470,867.49 19,185,393.90 184,834,923.25 – – – 3,450,550.34 – – – – – –
Increase/Decrease for the period (Decrease listed with “-”) with listed (Decrease period the for Increase/Decrease 3. 966722 442784 64,871,591.94 24,422,768.44 19,696,712.20 – 30,289,897.84 – (9,537,786.54) – – – – – –
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
2. Balance at 1 January 2019 January 1 at Balance ,0,9,5.74026437 7,224,218,580.79 420,246,403.71 2,703,594,154.67 – 334,373,473.12 – 31,052,427.09 – 50,311,968.20 – – – 3,684,640,154.00
Add: Changes in accounting policies accounting in Changes Add: 497471)(1,9.3 (5,443,362.57) (515,895.43) (4,927,467.14) – – – – – – – – – –
1. Balance at 31 December 2018 December 31 at Balance ,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
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred Other
Consolidated Statement of Changes in Equity Changes of Statement Consolidated
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Items For the year 2019 year the For (Continued)
(6) Others 235)(,6,3.6 (6,063,607.33) (6,063,333.76) (273.57) – – – – – – – – – –
2. Used – – – – – – – – – – – – –
1. Appropriation – – – – – – – – – – – – –
(5) Special reserves Special – – – – – – – – – – – – –
5. Others – – – – – – – – – – – – –
Transfer other comprehensive income to retained earnings retained to income comprehensive other Transfer 4. – – 12,988,336.88 – – – (12,988,336.88) – – – – – Unit: RMB –
3. Surplus reserves transfer to make up for losses for 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 – – – – – – – – – – – – –
(4) Transfer – – 12,988,336.88 – – – (12,988,336.88) – – – – – –
4.
Others – – – – – – – – – – – – –
3. Appropriation to shareholders to Appropriation 1735661)(469217)(172,084,897.86) (24,699,291.70) (147,385,606.16) – – – – – – – – – –
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Items For the year 2019 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 2019
166 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 167 Unit: RMB
(Continued)
accounting function: accounting accounting department: accounting
Person in charge of charge in Person Legal Representative: Legal of charge in Person
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
4. Balance at 31 December 2019 December 31 at Balance ,2,9,6.74469121 7,289,090,172.73 444,669,172.15 2,723,290,866.87 – 364,663,370.96 – 21,514,640.55 – 50,311,968.20 – – – 3,684,640,154.00
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Consolidated Statement of Changes in Equity Changes of Statement Consolidated Company controlling the of holders equity the to attributable Equity
Items For the year 2019 year the For (Continued)
4. – – – – – – – – – – – – – Others
3. – – – – – – – – – – – – – payments Share-based from increase Equity
Capital contribution from holders of other equity instruments equity other of holders from contribution Capital 2. – – – – – – – – – – – – –
1. – – – – – – – – – – – – shareholders – from contribution capital stock Common
(2) – – – – – – – – – – – – – shareholders from reduction and contribution Capital
(1) 4,6,3.95,7,9.3500,686,010.11 51,470,094.63 444,060,837.39 – – – 5,155,078.09 – – – – – – income comprehensive Total
Unit: RMB
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 – – – – Increase/Decrease for the year (Decrease listed with "-") 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.
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
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Items 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 2019
168 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 169 Unit: RMB
(Continued)
6. – – – – – – – – – – – – – Others
Transfer other comprehensive income to retained earnings retained to income comprehensive other Transfer 5. – – – – – – – – – – – – –
Transfer changes of defined benefit plan to retained earnings retained to plan benefit defined of changes Transfer 4. – – – – – – – – – – – – –
3. – – – – – – – – – – – – losses – for up make to transfer reserves Surplus
2. – – – – – – – – – – – – – capital share to reserves surplus of Transfer
– – – – – – – – – – – – – capital share to reserves capital of Transfer 1.
(4) – – – – – – – – – – – – – Transfer
4. – – – – – – – – – – – Others
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
3. Appropriation to shareholders to Appropriation 1059246)(271120)(133,260,356.65) (22,721,152.03) (110,539,204.62) – – – – – – – – – –
2.
Appropriation to staff bonus and welfare and bonus staff to Appropriation (444,498.51) – (444,498.51) – – – – – – – – – –
1.
Appropriation to statutory reserve statutory to Appropriation – – (36,856,341.12) – 36,856,341.12 – – – – – – – –
Profit appropriations Profit (3) 1780042)(271120)(133,704,855.16) (22,721,152.03) (147,840,044.25) – 36,856,341.12 – – – – – – – –
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Consolidated Statement of Changes in Equity Changes of Statement Consolidated Company controlling the of holders equity the to attributable Equity
Items For the year 2018 year the For
(Continued)
accounting function: accounting accounting department: accounting
Legal Representative: Legal of charge in Person
Person in charge of charge in Person
Unit: RMB
,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 December 2018 December 31 at Balance
4.
(6) 199522)(1,342,559.00) (1,909,592.20) – – – – – – 567,033.20 – – – – Others
2.
Used – – – – – – – – – – – – –
1.
Appropriation – – – – – – – – – – – – –
Special reserves Special (5) – – – – – – – – – – – – –
Total equity Total interests profits provision reserves reserves income shares treasury reserves Others bond shares capital Share
Non-controlling Retained risk General Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Equity attributable to the equity holders of the controlling Company controlling the of holders equity the to attributable Equity
Items 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 2019
170 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 171 Unit: RMB
Transfer of capital reserves to share capital share to reserves capital of Transfer 1.
– – – – – – – – – – –
(4) Transfer – – – – – – – – – – –
3. Others – – – – – – – – – – –
2. Appropriation to shareholders to Appropriation
1735661)(147,385,606.16) (147,385,606.16) – – – – – – – – –
Appropriation to statutory reserve statutory to Appropriation 1.
– (30,289,897.84) 30,289,897.84 – – – – – – – –
(3) rft appropriations Profit 029878 1765540)(147,385,606.16) (177,675,504.00) 30,289,897.84 – – – – – – – –
4. Others – – – – – – – – – – –
3. Equity increase from Share-based payments Share-based from increase Equity – – – – – – – – – – –
Capital contribution from holders of other equity instruments equity other of holders from contribution Capital 2. – – – – – – – – – – –
Common stock capital contribution from shareholders from contribution capital stock Common 1. – – – – – – – – – – –
Capital contribution and reduction from shareholders from reduction and contribution Capital (2) – – – – – – – – – – –
(1) Total comprehensive income comprehensive Total 0,9,7.3308,519,938.31 302,898,978.43 – – 5,620,959.88 – – – – – –
Increase/ Decrease for the period (Decrease listed with “-”) with listed (Decrease period the for Decrease Increase/ 3. 029878 2,2,7.3161,134,332.15 125,223,474.43 30,289,897.84 – 5,620,959.88 – – – – – –
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
2. Balance at 1 January 2019 January 1 at Balance 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
Add: Changes in accounting policies accounting in Changes Add: – – – – – – – – – – –
1. Balance at 31 December 2018 December 31 at Balance 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
Share capital Share treasury shares treasury reserves Others bond shares Total equity Total profits reserves reserves income
Preferred Capital Perpetual comprehensive Less: Retained Special Surplus
Other
Other equity instruments equity Other
Statement of Changes in Equity of the Company the of in Equity Changes of Statement
Items For The Year 2019 Year The For
(Continued)
accounting function: accounting accounting department: accounting
Legal Representative: Legal of charge in Person
Person in charge of of charge in Person
7,3,4.719837117 6,208,950,542.52 1,998,317,141.77 379,038,746.87 – 6,237,599.88 – 140,716,900.00 – – – 3,684,640,154.00 2019 December 31 at Balance 4.
(6) Others – – – – – – – – – – –
Unit: RMB 2. Used – – – – – – – – – – –
1. Appropriation – – – – – – – – – – –
(5) pca reserves Special – – – – – – – – – – –
6. Others – – – – – – – – – – –
Transfer other comprehensive income to retained earnings retained to income comprehensive other Transfer 5. – – – – – – – – – – –
Transfer changes of defined benefit plan to retained earnings retained to plan benefit defined of changes Transfer 4. – – – – – – – – – – –
3. Surplus reserves transfer to make up for losses for up make to transfer reserves Surplus – – – – – – – – – – –
Transfer of surplus reserves to share capital share to reserves surplus of Transfer 2. – – – – – – – – – – –
Total equity Total profits reserves reserves income shares treasury reserves Others bond shares capital Share
Retained Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Items For The Year 2019 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 2019
172 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 173 Unit: RMB
(Continued)
1. Transfer of capital reserves to share capital share to reserves capital of Transfer – – – – – – – – – – –
(4) Transfer – – – – – – – – – – –
3. Others – – – – – – – – – – –
2. Appropriation to shareholders to Appropriation 1059242)(110,539,204.29) (110,539,204.29) – – – – – – – – –
1. Appropriation to statutory reserve statutory to Appropriation – (36,856,341.03) 36,856,341.03 – – – – – – – –
(3) rft appropriations Profit 686310 1735553)(110,539,204.29) (147,395,545.32) 36,856,341.03 – – – – – – – –
4. Others – – – – – – – – – – –
3. Equity increase from Share-based payments Share-based from increase Equity – – – – – – – – – – –
Capital contribution from holders of other equity instruments equity other of holders from contribution Capital 2. – – – – – – – – – – –
Common stock capital contribution from shareholders from contribution capital stock Common 1. – – – – – – – – – – –
Capital contribution and reduction from shareholders from reduction and contribution Capital (2) – – – – – – – – – – –
(1) Total comprehensive income comprehensive Total 6,6,1.6368,563,411.66 368,563,411.66 – – – – – – – – –
,6,8.32117863 223,529,246.37 221,167,866.34 2,361,380.03 – – – – – – – – Increase/Decrease for the period (Decrease listed with “-”) with listed (Decrease period the for Increase/Decrease 3.
Prepared by: Chongqing Machinery & Electric Co., Ltd. & Electric Co., Chongqing Machinery Prepared by:
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 – – – 3,684,640,154.00 2. Balance at 1 January 2018 January 1 at Balance
Add: Changes in accounting policies accounting in Changes Add: 693,328.00 2,773,313.00 – – (2,079,985.00) – – – – – –
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 – – – 3,684,640,154.00 1. Balance at 31 December 2017 December 31 at Balance
Share capital Share treasury shares treasury reserves Others bond shares Total equity Total profits reserves reserves income
Preferred Capital Perpetual Retained Surplus Special comprehensive Less:
Other
Other equity instruments equity Other
Items For the year 2018 year the For Statement of Changes in Equity of the Company Equity of in of Changes Statement
(Continued)
accounting function: accounting accounting department: accounting
Legal Representative: Legal of charge in Person
Person in charge of of charge in Person
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 December 2018 December 31 at Balance 4.
(6) Others (34,494,961.00) – (34,494,961.00) – – – – – – – –
Unit: RMB 2. Used – – – – – – – – – – –
1. Appropriation – – – – – – – – – – –
(5) pca reserves Special – – – – – – – – – – –
6. Others – – – – – – – – – – –
Transfer other comprehensive income to retained earnings retained to income comprehensive other Transfer 5. – – – – – – – – – – –
Transfer changes of defined benefit plan to retained earnings retained to plan benefit defined of changes Transfer 4. – – – – – – – – – – –
3. Surplus reserves transfer to make up for losses for up make to transfer reserves Surplus – – – – – – – – – – –
Transfer of surplus reserves to share capital share to reserves surplus of Transfer 2. – – – – – – – – – – –
Total equity Total profits reserves reserves income shares treasury reserves Others bond shares capital Share
Retained Surplus Special comprehensive Less: Capital Perpetual Preferred
Other
Other equity instruments equity Other
Items 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 2019
174 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 175 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 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 & Yufu Chongqing called originally company”, (“Yufu Ltd Co., Group Management Management Co., Ltd. (“Huarong Co., Ltd), China Huarong Asset Assets Management (“CCEG”). Ltd. Co. Group Engineering Construction Chongqing and Company”), registered office is No. 60, Huangshan Road Central, The address of the Company’s 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 RMB2,679.74 million (RMB1 per share). established with a registered capital foreign to shares H million 1,004.90 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 million. capital increased to RMB3,684.64 capital of the Group was RMB3,684,640,154 As of the end of the year, the registered “the as to referred collectively (hereinafter Subsidiaries its and Group The yuan. the manufacturing, sales and services of clean energy Group”) are mainly engaged in equipment and high-end intelligent equipment. issue by the Board of The consolidated financial statements have been approved for Directors of the Group on 27 March 2020. Notes to the Consolidated Financial Statements Financial Consolidated the to Notes
I. (Continued)
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 are prepared in accordance with the Accounting Accounting the with accordance in prepared are statements financial The specific the and Standard, Basic – Enterprises Business for Standard relevant regulations issued by the Ministry of accounting standards and other in subsequent periods (hereafter collectively Finance on 15 February 2006 and Standards for Business Enterprises” or “CAS”) referred to as “the Accounting Information of Convention Preparation the in requirements disclosure the and Securities to the Public No.15-General Rules Disclosure by Companies Offering the China Securities Regulatory Commission, on Financial Reporting issued by ” and based on the accounting policies Hong Kong’s “Companies Ordinance POLICIES and accounting estimates set out in “IV. SIGNIFICANT ACCOUNTING AND ACCOUNTING ESTIMATES” in this note.
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 Ltd.. 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
III. II. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
176 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 177 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Functional Currency Business Cycle Accounting Period Declaration on Compliance with CAS Declaration on Compliance with The Group’s functional currency is Renminbi (RMB). The financial statements of The Group’s functional currency is Renminbi (RMB). The financial the Group are expressed in RMB unless otherwise stated. main the to according currency functional own their decide subsidiaries The converts currency functional Their operate. they which in environment economic to RMB when the financial statements were prepared. The Group treats 12 months as a business cycle and the criteria for classifying The Group treats 12 months as a business cycle and the criteria current and non-current assets and liabilities. The Group’s accounting period is from 1 January to 31 December. The Group’s accounting period 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.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(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. the in acquired liabilities contingent and liabilities assets, identifiable The the same control are measured at fair value on merger of enterprises not under cost is the sum of fair value of cash paid the acquisition date. The consolidation control of acquiree, liabilities issued or assumed, or non-cash assets paid to get direct costs during business combination (forequity securities issued and all other in stages, the consolidation cost equals those business combination achieved The excess of consolidation cost over the fair to the sum of each transaction). of the acquiree shall be recognised as goodwill. value of net identifiable assets through achieved assets identifiable all of value fair the reassess should It or assets non-cash liabilities, contingent or liabilities consolidation, business fair value of net equity securities issued if the consolidation cost is less than the is still less than identifiable assets. After reassessment, if the consolidation cost 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.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
178 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 179 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 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 accounting the where statements, financial consolidated the preparing In are subsidiaries and Group the of periods accounting the and policies in adjusted are subsidiaries the of statements financial the inconsistent, the of period accounting the and policies accounting the with accordance Group. 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 “Non- Interests”, “Minority as listed be shall equity shareholders’ minority “Non- to attributable Income” Comprehensive “Other and Interest” controlling non- to attributable income” comprehensive total and Interest controlling financial statements. controlling interest in the consolidated 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 after the merger financial statements are adjusted. The reporting subject formed party began to is always present since the time when the ultimate controlling control.
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) Preparation of Consolidated Financial Statements Financial Statements Preparation of Consolidated For the subsidiary acquired through the business combination not under under not combination business the through acquired subsidiary the For the in included be should flows cash and results operating control, common on which control is transferred statements from the date consolidated financial consolidated financial statements, it shall adjust to the Group. When preparing fair the of basis the on company subsidiary the of statements financial the liabilities determined liabilities and contingent values of the identifiable assets, on the acquisition date. the long-term equity investments in subsidiaries The Group partially disposes of financial statements, the difference without loss of control. In the consolidated disposal of long-term equity investments shall between the disposal price and 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. the entity, of control losing and investment equity the of disposing of part When investment equity remaining the of value fair the re-measure shall Group the when control. lost Group the when date the at disposal the to subsequent disposal the of sum The statements, financial consolidated the preparing investment less consideration amount and the fair value of the remaining equity subsidiary the difference between the share of the net assets that the original is recorded from the acquisition date or the combination date, the difference and write down in the loss of control investment income in the current period investment of the goodwill. Other comprehensive income related to the equity the profit and loss in the original subsidiaries shall be transferred to investment current period when the control was lost.
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
180 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 181 (Continued)
(continued) From 31 December 2018 to 31 December 2019 2018 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 disposes of the equity investment in the subsidiary through multiple the subsidiary through multiple of the equity investment in The Group disposes the to related transactions several When control. loses it until transactions the control over the subsidiary investment in a subsidiary until disposal of equity a basket, each of which is accounted for as is lost belong to transactions in transaction until the control over a subsidiary is disposal of a subsidiary with a the amount of disposal prior to the loss of lost; however, the different between subsidiary attributable to the disposal investment control and the net assets of a income in consolidated financial shall be recognized as other comprehensive or loss at the time when the control is lost. statements and transferred to profit are profits unrealized and transactions balances, intra-group significant All financial statements. The portion of subsidiaries’ eliminated in the consolidated net profits and losses and comprehensive equity and the portion of subsidiaries’ 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 resulting from to shareholders of the Company. Unrealized profits and losses allocated are eliminated and 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 with the to shareholders of the Company and minority interests in accordance allocation proportion of the parent in the subsidiary.
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)
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 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 which are capitalised as part of the cost of those assets. translated at the spot exchange rates at the balance sheet date; equity translated at the spot exchange rates at the balance sheet date; exchange items other than undistributed profits are translated at the spot 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. Translation of foreign currency financial statements Asset Foreign currency transactions Foreign
F Cash and Cash Equivalents Cash and Cash denominated in foreign currency (1) 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 and highly liquid investments short-term (3 months or less), statement represent amounts of cash and which are subject to that are readily convertible to known insignificant risk of change in value. (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 8. statements financial of translation and transactions currency oreign 7.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
182 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 183 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts on the business mode for management of the Group and and Group the of management for mode business the on cash flow characteristics of contracts, the financial assets are are assets financial the contracts, of characteristics flow cash measured assets categories:(i)financial following the into classified other through value fair at assets financial (ii) cost; amortized at through value fair at assets financial (iii) income; comprehensive profit or loss. Classification, recognition basis and measurement of financial assets Classification, recognition basis Based (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.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) Group classifies the financial assets into financial assets assets financial into assets financial the classifies Group as subsequently measured at amortized cost if all the following 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 is measured initially at asset Such financial of amount initial the into recognized be shall costs transaction amortized at measured subsequently is and asset, financial the the financial asset is designated for cost. Except for the case that from derecognition, impairment hedging project, gain or loss arising and amount initial the between difference the for amortization or recorded are method interest effective the using due amount the at cash include assets financial These loss. or profit current in other receivable, accounts receivable, notes hand, on and bank long-term and investments debt assets, contractual receivables, within receivables. Debt investments and long-term receivables due 1 year (inclusive) at the balance sheet date are listed as the current investments debt date, acquiring at assets; non-current of portion with maturities within one year (inclusive) are listed as other current assets. Classification, recognition basis and measurement of financial assets basis and measurement Classification, recognition (continued) The (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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
184 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 185 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 recognized previously losses or gains accumulated derecognized, profit in other comprehensive income shall be transferred to current assets financial These income. comprehensive other from loss or instrument equity other and financing receivables as listed are investments. 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) Group recognises its equity instruments that have no control, control, no have that instruments equity its recognises Group financial assets held for trading that are measured at fair value at trading that are measured for assets held financial joint control and significant influence on the fair value through profit through value fair the on influence significant and control joint assets held for trading; the equity or loss and list them as financial from instruments that are expected to be held for more than a year financial non-current other as listed are date sheet balance the assets. Besides, the Group specifies certain non-tradable equity instrument value fair at measured are that assets financial as investments equity through other comprehensive income and presented as other such of income dividend relevant The investments. instrument financial assets is included in the current profit and loss. through profit or loss. At the initial recognition, for eliminating or or eliminating for recognition, initial the At loss. or profit through specifies Group the mismatch, accounting reducing dramatically through value fair at measured those as assets financial of parts current profit or loss. Equity instruments The Classification, recognition basis and measurement of financial assets basis and measurement Classification, recognition (continued) that do not meet the criteria The Group lists those debt instruments through other comprehensive income for amortised cost or fair value as (CONTINUED)
1) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
186 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 187 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (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 neither transfers 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). Recognition basis and measurement of transferring financial assets and measurement of transferring Recognition basis The (CONTINUED)
Financial assets Financial assets 3)
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) and measurement of transferring financial assets assets financial transferring of and measurement (continued) n the basis of expected credit losses, the Group performs performs Group the losses, credit expected of basis the n impairment treatment on the financial assets at amortized cost, debt impairment treatment on the financial assets at amortized cost, at fairinstrument investments, loan commitments and contract assets loss value through other comprehensive income, and recognize the provision. current events, past as such information reasonable on Based conditions and economic forecasts, the Group calculate the default- agreed the between difference the of value present risk-weighted and expected cash flow to project the default loss of our contracts. (continued) asset qualifies for derecognition, If a transfer of part of a financial 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 cumulative amount of changes in fair received from the transfer and has which derecognized part the to allocated be shall that value other comprehensive income and the been previously recognized in loss or profit current in recorded is amount, carrying allocated above asset give rise to cash flows (the contractual terms of the financial principal the on interest and principal of payments solely are that amount outstanding). Impairment of financial assets O Recognition basis Recognition basis (CONTINUED)
4) 3) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
188 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 189 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) Group measures loss provisions according to the following following the to according provisions loss measures Group circumstances: (i) the credit risk on a financial instrument has not circumstances: (i) the credit risk measure Group the recognition, initial since significantly increased instrument at an amount equal the loss allowance for that financial (ii) the credit risk on a financial to 12-month expected credit losses; the Group measure the loss instrument has increased significantly, full to equal amount an at instrument financial that for allowance considered is asset financial (iii) losses; credit expected lifetime the beginning, the at or acquisition of time the at credit-impaired at instrument financial that for allowance loss the measure Group expected credit losses. Except for an amount equal to full lifetime loss rate can be expected with the the amounts of which the credit loss credit expected the calculates Company the obvious evidence, on a group basis. Impairment of financial assets (continued) Impairment of financial The (CONTINUED)
Financial assets Financial assets 4)
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)
good payment within the credit period bills period Other general customers Customers who have received
(continued) (continued) portfolio repayment within creditrepayment period General customer fund Name of groups Basis of determination of groups Name of groups Basis of determination of groups Bank acceptance notes low credit risk Banks with Trade acceptance bill Notes other than bank acceptance Related company funds Related company funds Quality margin portfolio Quality deposit not in collection Good combination of The Group classifies accounts receivable and other receivables The Group classifies accounts receivable into several groups according to the credit risk characteristics into several groups according to losses on a group basis. and calculates the expected credit is as follows: The basis of determination of groups receivable: Classification and basis of notes Accounts receivable division and combination and basis:
i) Impairment of financial assets (continued) Impairment of financial ( (CONTINUED)
4) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
190 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 191 (Continued)
customers or others reserve fund receivable government companies Accounts receivable from general Accounts receivable from general Deposits, security deposit and
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) payments and reserve fund General or other Name of groups of groups Basis of determination Government fundsRelated company funds Accounts receivable from Accounts receivable from related Deposit, security deposit (continued) receivables: Classification and basis of other For the accounts receivable and other receivables classified classified receivables other and receivable accounts the For as accounts receivable from general customers or others, the Group refers to the historical credit loss experience, combined economic future the and current the of forecast the with condition to calculate the expected credit loss according to the and aging receivables other and aging receivable accounts expected credit loss through full life time in reference.
Impairment of financial assets (continued) Impairment of financial (i) (CONTINUED)
Financial assets Financial assets 4)
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)
contracts Contracts other than construction Construction contract
(continued) (continued) group divides the contract assets into the following following the into assets contract the divides group the accounts receivable and other receivables classified classified receivables other and receivable accounts the by general business to construction contracts Contract assets formed Name of groups Basis of determination of groups Contract assets related The (continued) For combinations according to the characteristics of credit credit of characteristics the to according combinations the on based loss credit expected the calculates and risk, and its basis as follows: combination. Confirm the combination as accounts receivable from government, accounts receivable as accounts receivable from government, security deposit and reserve from related companies, deposits, the expected credit loss fund receivable, the Group calculates credit expected and exposure risk default the to according or throughout the lifetime. loss rates over the next 12 months
(ii) Impairment of financial assets (continued) Impairment of financial (i) (CONTINUED)
4) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
192 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 193 (Continued)
companies companies
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) group divides long-term receivables into the following following the into receivables long-term divides group Related company funds Accounts receivable from related Other payments Other payments except related Name of groups Basis of determination of groups For the contract assets and long-term receivables divided divided receivables long-term and assets contract the For into portfolios, the group, referring to the historical credit loss future and situation current the with combined experience, asset contract the reconciliation table of forecast, prepares the aging and the expected credit loss rate of the duration through the default risk exposure and the expected credit loss rate of the whole duration, and calculates the expected credit loss. The combinations according to the characteristics of credit credit of characteristics the to according combinations the on based loss credit expected the calculates and risk, basis are as follows: combination. The combination and
iii) Impairment of financial assets (continued) Impairment of financial ( (CONTINUED)
Financial assets Financial assets 4)
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) recognition basis and measurement of financial financial of measurement and basis recognition (continued) For loans and advances, the Group classifies loans into normal, For loans and advances, the Group concerned, secondary, suspicious and loss combinations combinations loss and suspicious secondary, concerned, guiding the and characteristics risk credit the to according of Bank people’s the of classification risk loan of principles the on calculates the expected credit loss based and China, combination.
iv) Classification, 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 asincluding financial liabilities held for trading and those designated measured at fair value through profit or loss upon initial recognition, the to according disclosed is basis classification (relevant classification basis of financial assets), are measured subsequently valueat fair value, and profits or losses resulting from changes in fair are and dividends and interest expense related to financial liabilities recognized in current profits and losses. Impairment of financial assets (continued) Impairment of financial ( (CONTINUED)
) Financial liabilities 1 4) Financial assets Financial assets
(2) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
194 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 195 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 (continued) Classification, liabilities (continued) liabilities financial of disclosure (specific liabilities, financial Other at measured subsequently are situation), actual to according interest method. The Group classify amortized cost using effective measured at amortised cost, all financial liabilities as subsequently through value fair at measured liabilities Financial (a) for: except liabilities held for trading (including profit or loss, including financial those designated as measured at derivatives that are liabilities) and upon initial recognition; (b) Financial fair value through profit or loss 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 to provide a loan at a below- satisfied (a) and (b), and commitments satisfied (a). market interest rate that do not consideration contingent by constituted liability financial The under confirmed by the buyer through a business combination not through value fair at measured is Group the by control common current profit or loss. (CONTINUED)
Financial liabilities 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) (continued) inancial liability shall be derecognized. A contract is entered into into entered is contract A derecognized. be shall liability inancial between the Group and the creditor to replace the existing financial new of terms contract the if And liability. financial new a by liability 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 financial liabilities or part of it existing financial liabilities, the existing liabilities after term revision will shall be derecognized. And financial between difference The liability. financial new a as recognized be the and derecognized liability financial the of amount carrying the in current profit or loss. consideration paid is recognized Derecognition criteria of financial liabilities Derecognition criteria 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 (CONTINUED)
2) Financial liabilities Financial liabilities
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
196 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 197 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) at the prices in principal market, or in the absence of of absence the in or market, principal in prices the at a principal market, measures the fair value at the prices in the the in prices the at value fair the measures market, principal a are that techniques valuation use and market, advantageous most and for which sufficient data and appropriate in the circumstances measure fair value. The input value other information are available to is divided into three levels: the first used in fair value measurement quotation of the same assets level of input value is the unadjusted on the measurement day in the and liabilities that can be obtained of input value is the direct or indirect active market; the second level addition in liabilities and assets related of value input observable the is value input of level third the value; input level first the to of related assets and liabilities. The Group unobservable input level input of level third the uses and values, input of level first prefers the first values at last. Investment of other equity instruments uses the is level of input values. The level of fair value measurement results great of are which values input of level lowest the by determined significance to fair value measurement as a whole. fair at instruments equity of investment the measures Group The to used information short-term the if cases, limited in But value. estimated possible the if or insufficient, is value fair determine amount of fair value is widely distributed, and the cost represents the range, the cost can represent in fair value the best estimate of its proper estimate of fair value in the range of distribution. Methods for determination of the fair value of financial assets and of the fair value of Methods for determination financial liabilities of financial assets and financial The Group measures the fair value liabilities (CONTINUED)
Financial liabilities Financial liabilities (3)
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) (continued) n the balance sheet and are not offset by each other. However, However, other. each by offset not are and sheet balance the n Elimination between financial assets and financial liabilities financial assets and financial Elimination between of the Group are shown separately The financial assets and liabilities i when the following conditions are met at the same time, the net net the time, same the at met are conditions following the when the balance sheet: a) the Group has amount offset shall be shown in amount, and the statutory a statutory right to set off the recognized its settle to intends Group the b) enforceable. currently is right net amount, or liquidate the financial financial assets and liabilities in at the same time. assets and settle the financial liabilities (CONTINUED)
(4) Financial liabilities Financial liabilities
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
198 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 199 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) between financial liabilities and equity instruments and and instruments equity and liabilities financial between relevant measurement equity and liabilities financial between distinguishes Group The the If principles:(1) following the with accordance in instruments fulfilling a contractual obligation Group cannot unconditionally avoid contractual the assets, financial other or cash delivering by some Although liability. financial of definition the meets obligation contain terms and conditions financial instruments do not explicitly they assets, financial other or cash deliver to obligation the for terms other through obligations contractual form indirectly may instrument is to be settled with the and conditions. (2) If a financial it is necessary to consider whether Group’s own equity instruments, instrument the settle to used instruments equity own Group’s the assets, financial other or cash for substitute a as used be to are in equity residual take to instrument the of holder the enable to or is the the assets after the issuer deducts all liabilities. If the former is case, the instrument is the issuer’s financial liabilities. If the latter some the case, the instrument is the issuer’s equity instrument. In shall use group that the sets financial instrument contract a cases, or use its own equity instruments to settle the financial instrument, to in which the amount of contractual rights or obligations is equal the number of its own equity instruments available or to be delivered the whether settlement, of time the at value fair the by multiplied amount of the contractual rights or obligations is fixed or changes other totally or partially based on the division of this set variables (such than the market price of the group’s own equity instruments as interest rates, the price of a commodity or the price of a financial instrument), the contract is classified as financial liabilities. Difference (CONTINUED)
Financial liabilities Financial liabilities (5)
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) (continued) between financial liabilities and equity instruments and and instruments equity and liabilities financial between relevant measurement (continued) the in components) their (or instruments financial classifying In terms all account into takes Group the statements, consolidated the members of the Group and the and conditions reached between If the group as a whole assumes the holders of financial instruments. in accounts settle or assets financial other cash, deliver to obligation becoming a financial liability, other ways that result in the instrument as a financial liability. the instrument should be classified financial are components their or instruments financial Where gains bonus), stock (or dividends interest, relevant the liabilities, or redemption from arising losses or gains as well as losses, or the profits and losses of the current refinancing, shall be included in period. equity Where a financial instrument or its components belong to an repurchased, refinancing), (including issued is it when instrument, sold or cancelled, the Group shall account as a change of equity, equity and shall not recognize the change of the fair value of the instrument. Difference (CONTINUED)
(5) Financial liabilities Financial liabilities
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
200 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 201 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Contractual assets Inventories Contractual assets refer to the Group’s right (depends on factors other than than other factors on (depends right Group’s the to refer assets Contractual or goods for exchange in customers from costs collect to time) of passage distinguishable services transferred by the Group. If the Group sells two clearly one of the goods goods to its customers, it has the right to collect payment for commodity, the delivered, but the collection depends on the delivery of another Group regards the right to collect payment as a contractual asset. the on group the of losses credit expected the determining for method The contract assets is as shown in Note IV.9. The Group’s inventories include but not limited to the raw materials, packaging to the raw materials, packaging include but not limited The Group’s inventories products, and merchandise consumption goods, unfinished material, low-value inventories. at valued is Inventory Group. the by adopted is system inventory Perpetual average method and individual valuation actual cost when acquired. Weighted the actual cost of the inventory used or issued. method are used to determine amortized at one time when they are used. Low-value consumption goods are and products unfinished inventory, merchandise of value realizable Net selling price in the ordinary course of materials held for sale is the estimated selling expenses and related taxes. Net business less the applicable variable held for production is the estimated selling realizable value of material inventory variable applicable completion, of costs estimated less products the of price selling expenses and related taxes.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 11. 10.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
for determining the amount of assets related to contractual contractual to related assets of amount the determining for (CONTINUED) 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. Method
Contractual costs (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 12.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
202 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 203 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (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 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 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.
Contractual costs Contractual costs (3) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 12.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(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 13.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
204 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 205 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 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 13.
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 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 13.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
206 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 207 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 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 13.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(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.
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
208 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 209 Annual rate (%) (Continued)
depreciation
(%) residual 0.00-5.00 1.90-3.33 Estimated value rates
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December useful life Estimated 30-50 years (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(continued) (CONTINUED) land-use right) Buildings (including the Category Investment Properties Long-term Equity Investment Long-term Equity
Investment properties comprise land-use rights and buildings which are held held are which buildings and rights land-use comprise properties Investment not occupied by the Group, and uncompleted for long-term rental yields and hold for rent. Investment properties are initially buildings which are intended to 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 useful lives, value) over the estimated useful life. Below is the table of estimated residual value rate and annual depreciation (amortization) rates: If the transaction from step-by-step disposal to the loss of controlling rights does from step-by-step disposal to If the transaction for accounted is transaction each transaction, of package the to belong not transaction a as treated are transactions transaction", “package a In separately. of before the loss However, and lose control rights. 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 as other comprehensive income, and when the disposed equity is recognized transferred to current profits and losses of losing control rights are lost, it will be control rights.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 14. 13.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) plant and equipment comprise buildings, machineries, machineries, buildings, comprise equipment and plant (CONTINUED) transportations, office equipments end etc. 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. Recognition and Initial measurement of property, plant and equipment Recognition and Initial measurement of property, plant and Property,
Property, Plant and Equipment Investment Properties Investment Properties (1) If the usage is changed into owner-occupied, the investment property is is property investment the owner-occupied, into changed is usage the If or an intangible asset since a property, plant and equipment reclassified into intangible or fix the contrary, the On made. been has change the day the property if the usage of these properties is asset is transferred into investment When a transfer occurs, the previous to earn rentals or capital appreciations. useful estimated The value. book new the as used be shall amount carrying rates and depreciation method shall be annually lives, estimated residual value reviewed and adjusted properly. the when or disposal on derecognized be shall property investment An withdrawn from use and no future economic investment property is permanently 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 15. 14.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
210 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 211 Annual rate (%) (Continued)
depreciation
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
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (years) Estimated 6-12 years 20-50 years useful lives
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) is calculated using a straight-line method to allocate the the allocate to method straight-line a using calculated is recognition is recorded when the future economic benefits benefits economic future the when recorded is recognition Office equipments 3-14 years Transportations Buildings Machinery equipments 7-28 years
(CONTINUED) 4 3 1 2 No. Category Depreciation of property, plant and equipment Depreciation of property, plant Depreciation Recognition and Initial measurement of property, plant and equipment Initial measurement of property, Recognition and (continued) Subsequent 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. associated with the asset is likely to flow into the entity and the cost of associated with the asset is likely The value of the replaced part shall the asset can be measured reliably. The other subsequent expenses are be derecognized its carrying amount. or loss. recognized in the current profit The estimated useful lives, estimated residual value rate and depreciation method shall be annually reviewed and adjusted properly.
Property, Plant and Equipment Property, Plant (1) (2)
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) (CONTINUED) when the property, plant and equipment is permanently withdrawn withdrawn permanently is equipment and plant property, the when When the recoverable amount of property, plant and equipment is lower is equipment and property, plant of amount recoverable When the amounts shall be decreased to thethan the carrying amounts, the carrying recoverable amounts. from use and no future economic benefits are expected from its disposal. from use and no future economic or destroy of the property, plant The gains from sale, transfer, written-off be shall taxes relevant and amount carrying the less equipment and recognized in current profit or loss. Disposal of property, plant and equipment Disposal of property, plant and should be derecognized on disposal The property, plant and equipment or Depreciation of property, plant and equipment property, plant and equipment Depreciation of
Construction in Progress Property, Plant and Equipment Property, Plant (3) Construction in progress is recognized according to the actual costs. The actual Construction in progress is recognized for eligible costs borrowing cost, installment cost, construction include costs the make to order in incurred expenses necessary other and capitalization progress reaches construction in progress ready to use. When construction in asset and be the predetermined usable state, it should be transferred to fixed of construction depreciated from the next month. When the recoverable amount be shall amount carrying the amount, carrying the than lower is progress in decreased to the recoverable amount. (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 16. 15.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
212 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 213 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Right-of-use assets Borrowings costs Right-of-use assets refer to the right of the Group as a lessee to use leased Right-of-use assets refer to the right of the Group as a lessee the Group mainly assets during the lease term. The types of leased assets of include buildings, machinery and equipment and site use rights. 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, complete and prepare the asset of time that is required to during the period 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 earned bank or any income unused part deposited in the interest earned by the a of part are funds where capitalized; be shall investment temporary the on is determined by applying a capitalization rate general pool, the eligible amount weighted the be will rate capitalization The asset. that on expenditure the to applicable to the general pool. average of the borrowing costs
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 18. 17.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) the start of the lease period, the Group adopts a cost model for for model cost a adopts Group the period, lease the of start the asset at cost. The cost includes the following four items: (i) The initial The (i) items: four following the includes cost The cost. at asset subsequent measurement of the right-of-use asset, that is, the cost-of-use subsequent measurement of the right-of-use asset, that is, the accumulatedand depreciation accumulated less cost at measured is asset impairment losses. the relevant If the Group remeasures the lease liability in accordance with asset provisions of the lease standards, the book value of the right-of-use shall be adjusted accordingly. Subsequent measurement After Initial measurement measures the right-of- lease period, the Group initially At the start of the use measurement amount of the lease liability, that is, the present value of the measurement amount of the lease recognized as the lease liability, except for outstanding lease payments is low-value assets;(ii) Lease payments paid short-term leases and leases of lease incentives exist, the lease period, where on or before the start of The enjoyed;(iii) already incentives lease of amount relevant the deduct is, the incremental costs incurred to reach initial direct costs incurred, that leased remove and demolish to incurred costs Expected lease;(iv) the restore located, or are assets leased the where site the rehabilitate assets, costs for except terms, lease the in agreed state the to assets leased incurred for the production of inventory.
Right-of-use assets Right-of-use assets (1) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 18.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
214 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 215 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) ssets. The right-of-use asset is generally depreciated from the month month the from depreciated generally is asset right-of-use The ssets. Depreciation of right-of-use assets Depreciation of the right-of-use the lease period, the Group depreciates From the start of a in which the lease term begins. The amount of depreciation accrued accrued depreciation of amount The begins. term lease the which in asset or the current profit or loss is included in the cost of the relevant asset. based on the use of the right-of-use asset, right-of-use the of method depreciation the determining When of the based on the expected consumption decision the Group makes a the depreciates and right-of-use asset, the to related economic benefits basis. right-of-use asset on a straight-line asset, right-of-use the of period depreciation the determining When reasonably can it If principles: following the to adheres Group the lease the of end the at asset leased the of ownership the determine within the remaining useful life of the period, depreciation will be accrued determined that the lease can be leased asset; it cannot be reasonably obtained when the lease period expires For asset ownership, depreciation the and term lease the between period shortest the during accrued is remaining useful life of the leased asset. book value If the right-of-use asset is impaired, the Group depreciates the of the right-of-use asset after deducting impairment losses.
Right-of-use assets Right-of-use assets (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 18.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
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. 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 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. 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 (CONTINUED)
2) 3) Categories of intangible assets 1)
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 19.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
216 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 217 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (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 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)
Categories of intangible assets Categories of intangible 4) 5)
Intangible Assets Intangible Assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 19.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) 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. Research and development Internal Franchise rights (continued) Franchise rights I (CONTINUED)
6) 5) Categories of intangible assets Categories of intangible
Intangible Assets Intangible Assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 19.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
218 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 219
(Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts development and to use or sell the intangible asset are are asset intangible the sell or use to and development on development projects are recognized as intangible intangible as recognized are projects development on is technically feasible to complete the intangible asset so so asset intangible the complete to feasible technically is (continued) It can be demonstrated how the intangible asset will generate It can be demonstrated how the probable future economic benefits; other resources to complete Adequate technical, financial and the The expenditure attributable to the intangible asset during its development can be reliably measured. It the intangible asset to use or Management intends to complete sell it; available; and that it will be available for use or sale; that it will be available for use or
(d) If development costs don’t meet the above criteria, they are recognized (c) (e) (b) Research and development (continued) Research and development as expenses as incurred. Costs Research expenditure is recognized incurred assets when all the following criteria are fulfilled: assets when all the following criteria (a) 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)
Categories of intangible assets Categories of intangible 6)
Intangible Assets Intangible Assets (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 19.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(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 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. 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
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 and lives useful definite with assets intangible asset, right-of-use progress, there when Group the by impairment for assessed are assets lease operating assets intangible and Goodwill impaired. be may asset an that indication any is the end of each with indefinite useful lives shall be assessed for impairment at or not. reporting period no matter there is any indication for impairment (2) (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 20. 19.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
220 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 221 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Impairment of long-term assets Impairment of long-term The recoverable amount is the higher of an asset’s fair value less costs of of costs less value fair asset’s an of higher the is amount recoverable The amount should be determined value in use. The recoverable disposal and its the recoverable amount asset. If it is not possible to determine for an individual amount shall be determined for cash- for an individual asset, the recoverable asset’s an of identification The included. asset the which in units generating on whether the main cash inflows generatedcash-generating unit shall be based from inflows unit are independent of the cash cash-generating by the asset’s an of amount recoverable the When units. cash-generating or assets other is less than its carrying amount, the carrying asset or a cash-generating unit 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. 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 are compared. goodwill, and the carrying amount and the recoverable amount impairment the amount, carrying the than lower is amount recoverable the If allocated to the loss is allocated first to reduce the carrying amount of goodwill then, reduce the cash-generating units or groups of cash-generating units; and units or carrying amounts of the other assets included in the cash-generating groups of cash-generating units pro rata on the basis. Reversal of an impairment loss for the above assets is prohibited.
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) Employee Benefits Contract liabilities Long-term deferred expenses Long-term deferred 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. The Group lists the obligations it has received or receivable from customers customers from receivable or received has it obligations the lists Group The as contract liabilities, such as the amount the to transfer goods to customers the promised goods. company has received before transferring assets and contract liabilities under the same The Group will show the contract contract as each other in net amounts. Long-term deferred expenses include the improvement expenditures of property, expenses include the improvement Long-term deferred incurred which expenses other and lease, under operating equipment and plant for more than one fiscal but are required to be amortized in the current period basis straight-line the on amortized are expenses deferred Long-term period. and are recorded as the actual expenses less over the expected benefit period the accumulated amortization. deferred expenses, they are amortized As for the molds stated in the long-term which for times estimated on based method units-of-production the adopting period. they can be used over the benefit
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 23. 22. 21.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
222 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 223 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Employee Benefits Employee Benefits Short-term employee benefits include salaries, bonus, allowance and subsidies, bonus, allowance and subsidies, benefits include salaries, Short-term employee maternity insurance, injury employment insurance, medical benefits, staff short-term appropriations, educational and union fund, housing insurance, benefits are recognized as liabilities during the paid absences, etc. Short-term Employee Group. the to service render employees when period accounting or loss in the current period or allocated to the benefits are recognized as profit benefits are measured at fair value. cost of related assets. The non-monetary plan contribution defined as classified are schemes benefit Post-employment contribution plans of the Group are a kind and defined benefit plan. Defined to fees fixed pays Group the which in scheme benefit post-employment of payments. further make to obligated longer no is and fund independent an benefit plans other than a defined Defined benefit plans are post-employment benefits of the Group mainly refer to contribution plans. The post-employment insurance during this reporting period, both basic pension and unemployment plan. of which belong to the defined contribution insurance employee’s endowment in involved all are Group the of Employees The Group policy implemented by local labour and social security department. endowment employee’s of institution local the to payment monthly the makes retired, are employees After proportion. and base regulated a at insurance to pay their basic local labour and social security department has the obligation render employee when policy the to according made payment The pension. or loss or profit as stated and liability a as recognized is Group the to service allocated to the cost of related assets during the period.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 23.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (CONTINUED) Employee Benefits Employee Benefits Termination benefits are the compensations made to employees when the Group are the compensations made Termination benefits of expire the to prior employees with relationship employment the terminates encourage to offer an as compensations provides or contracts employment the termination provides Group the When layoffs. voluntary accept to employees liabilities generated from termination benefits benefits, the employment benefit in the current period on the early date of the are recognized to profit or loss 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 benefits. a restructuring related to termination 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 statutory retirement employee 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 generated termination benefits were satisfied, the employment benefit liabilities shall be from wages and social insurance paid for the early retired employees difference Any once. at all period current the in loss or profit to recognized of the welfare arising from the changes of actuarial assumptions or adjustment period. standard shall be included to the profit and loss in the current balance sheet The termination benefits expected to be paid within a year since day are presented as current liabilities.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 23.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
224 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 225 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts to the right to use leased assets during the lease period, period, lease the during assets leased use to right the to including: (i)fixed payments and substantial fixed payments, where including: (i)fixed payments and (ii) incentives; lease to related deductions exist, incentives lease on the index or ratio, which A variable lease payment that depends or index the on based measurement initial the at determined is period; (iii)The Group reasonably ratio on the start date of the lease purchase price when the purchase determines the exercise option term reflects the amount to be paidoption is exercised; (iv)The lease option to terminate the lease; (v) when the Group will exercise the the value of on the residual The amount expected to be paid based guarantee provided by the Group. Lease payment made by the Group to the lessor Lease payments refer to payments related (CONTINUED)
Initial measurement on the present value measures lease liabilities based The Group initially been paid at the start of the lease period, of lease payments that have not leases of low-value assets. except for short-term leases and 1)
Lease liabilities (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 24.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) (continued) n calculating the present value of lease payments, the Group Group the payments, lease of value present the calculating n uses the incremental borrowing rate as the discount rate because uses the incremental borrowing The lease. the in inherent rate interest the determine cannot it refers to the interest rate payable incremental borrowing interest rate in conditions mortgage similar with funds borrow to Group the by the of value the to close assets obtain to order in periods similar interest The environment. economic similar a in asset right-of-use (i) The Group’s own situation, namely rate is related to the following: of the “borrowing", term The (ii) status; credit and solvency group’s the that funds, “borrowed” of amount The (iii) term; lease the is, that that conditions", “Mortgage liability; (iv) is, the amount of the lease Economic (v) assets; underlying the of quality and nature the is, in which the lessee is located, environment, including the jurisdiction etc. contract, the signing of time the valuation, of currency the above the adjusted Group the rate, interest loan bank the on Based factors to obtain the incremental borrowing interest rate. Discount rate I (CONTINUED)
fter the start of the lease period, the Group conducts subsequent subsequent conducts Group the period, lease the of start the fter measurement of the lease liability according to the following principles: principles: following the to according liability lease the of measurement the carrying (i) When confirming the interest of the lease liability, increase reduce amount of the lease liability; (ii) When paying the lease payment, payment lease the When (iii) liability; lease the of amount carrying the of the lease changes due to revaluation or lease change, the book value liability is remeasured. Subsequent measurement A 2) Initial measurement Initial measurement
(2) Lease liabilities (1)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
226 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 227 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) (CONTINUED) Remeasurement Subsequent measurement Subsequent measurement The interest expense of the lease liability in each period of the lease lease the of period each in liability lease the of expense interest The in included is and rate interest periodic fixed a at calculated is period capitalized. be should that those for except loss, and profit current the the discount rate used by the Group in the Recurring interest rate refers to or when lease payments need to be initial measurement of lease liabilities, rate due to changes in lease payments remeasured at a revised discount rate adopted by the group. or lease changes, The revised discount After the start of the lease period, when the following circumstances occur,After the start of the lease period, lease changed the on based liability lease the remeasures Group the calculated by the revised discount rate, payments and the present value the If accordingly. asset right-of-use the of value book the adjusts and asset has been reduced to zero, but the carrying value of the right-of-use reduced, the Group will include the lease liability still needs to be further the actual remaining amount in the current profit and loss. (i) Changes in of amount expected payable the in Changes (ii) amount; payment fixed the determine to used ratio or index the in Changes (iii) value; residual the option lease payment amount; (iv) The evaluation result of the purchase lease of exercise actual or results evaluation the in Changes changes; options.
Lease liabilities (3) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 24.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Provision 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 of economic benefits and the is likely to result in the outflow such obligations 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 underlying events and the time value of money uncertainties that surround the the effect of time value of money is material, etc, are taken into account. Where Where flow. cash future the of value present the be shall estimate best the of a provision to reflect the passage of time discounting is used, the increase costs. shall be recognized as borrowing at balance sheet date and adjusted to reflect Provisions shall be reviewed as the current best estimates. 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 25.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
228 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 229 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Group shall recognize revenue when the Group satisfies the the satisfies Group the when revenue recognize shall Group Revenue recognition The 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 or services. all of the benefits from the goods on obligations, performance more or two contains contract the When each to allocated is price transaction the contract, the of inception the in proportion to the stand-alone price of separate performance obligation and the revenue is recognized according the promised goods or services, to each performance obligation. to the transaction price allocated
Revenue Recognition and Measurement Revenue Recognition The Group’s operating revenue mainly includes sales revenue of goods, revenue revenue mainly includes The Group’s operating income, interest contract, construction EPC of revenue services, providing of contract, etc. revenue of leasing (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) 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 less. If the the customer pays for that good or service will be one year or more services or goods the of control acquire to expected is customer significant the consider price, the pays customer the after year one than financing element in the contract. 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
230 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 231 the group the Group the Group
(Continued)
the Group has
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) customers have accepted the goods or services.
⑤ (CONTINUED) has transferred the significant risks and rewards of the ownership to the has transferred the significant risks and rewards of the ownership customers; transferred physical possession of the goods to customers; ④ has transferred the legal title of the goods to customers; ③ Revenue recognition Revenue recognition The Group satisfies a performance obligation over time, if one of the the of one if time, over obligation performance a satisfies Group The it satisfies a performance obligation at following criteria is met; otherwise, consumes and receives simultaneously customer the (i) time: in point a performance as the Group performs; the benefits provided by the Group’s asset which is created by the Group’s (ii) the customer can control the does not create an asset with performance; (iii) the Group’s performance has an enforceable right to payment for an alternative use and the Group during the whole contract period. performance completed to date 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 process towards complete satisfaction of the performance obligation. Group shall For a performance obligation satisfied at a point in time, the goods or recognize revenue when the customer obtains control of relevant goods services. In judging whether customers obtain control of promised or services, the Group considers the following indications: ① has a present right to the payment for the goods or services; ②
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) 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 good; 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 consume and receive 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, contract 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) generating activities are described below: generating activities (a) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
232 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 233 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts from construction contracts (Only applicable if control is is control if applicable (Only contracts construction from accounting policies related to the Group’s main revenue- main Group’s the to related policies accounting transferred over a period of time) its and Group the between contracts business project the For progress to according revenue recognizes Group the customers, for satisfying such performance of performance within such period time. Progress of performance refers obligations during a period of as basis cumulative a on incurred actually cost contract the to total expected the of percentage a as date sheet balance the of method). Based on the progress of cost under contract (the input contracts business project from revenue project, the of performance actually incurred plus the gross is recognized as the contract cost to likely is cost contract total the If contract. under margin profit the expected loss is recognized as exceed total contract revenue, immediately. If the sum of the cost expenses for the current period under margin profit gross recognized the and incurred actually taken is excess the fee, settlement contract the exceed contract the exceeds settlement fee contract the Where assets. to contract profit gross recognized the and incurred actually cost the of sum liabilities. contract to taken is excess the contract, under margin contracts business project of performance of progress the When cannot be reasonably determined, if the costs incurred are expected the on based revenue recognizes Group the compensated, be to be amount of costs incurred, until the progress of performance can to expected not are incurred costs the If determined. reasonably period current the for expenses as recognized is it recovered, be immediately when the contract cost is incurred. For changes, claims it is and awards under contract, revenue is recognized only when likely to happen and the amount can be reliably estimated. Revenue (CONTINUED)
Specific generating activities are described below: (continued) generating activities (c)
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) accounting policies related to the Group’s main revenue- main Group’s the to related policies accounting Warranty obligations and legal requirements, In accordance with contractual arrangements the Group provides warranty for goods that it sells and assets that the Group provides warranty for warranties under which the Group it builds. For the guarantee-type pre- certain satisfy sold goods the that customers the to warrants IV.23. Note in out set as are treatments accounting criteria, set under which the Group provides a For the service-type warranties that customers the to warranty the to addition in service separate a as treated is it criteria, pre-set certain satisfy sold goods the and part of the transaction price standalone performance obligation warranty based on the proportion is apportioned to the service-type the guarantee-type and service- of the separate selling prices under customer the when recognized is revenue and warranties, type separate a whether assessing In service. the of control acquires that service is provided to the customer in addition to the warranty the goods sold satisfy certain pre-set criteria, the Group considers of whether the warranty is a statutory requirement, the validity period the warranty and the nature of the Group’s commitment to perform. (CONTINUED)
generating activities are described below: (continued) generating activities (d) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
234 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 235
(Continued)
From 31 December 2018 to 31 December 2019 2018 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 shall recognize revenue in the Otherwise, the Group, as an agent, to which it expects to be entitled. amount of any fee or commission total of amount net on based determined be shall amount The less amounts payable to other consideration received or receivable the established amount or proportion interested parties, or based on 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 (f) (g) generating activities are described below: (continued) generating activities (e)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
236 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 237 (Continued)
From 31 December 2018 to 31 December 2019 2018 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
238 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 239 (Continued)
(continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) The asset is not highly dependent or highly related to other assets in the The asset is not highly dependent or highly related to other assets contract. The lessee can profit from using the asset alone or with other resources The lessee can profit from using the asset alone or with other that are readily available;
lessor and lessee, shall conduct accounting treatment after splitting the the splitting after treatment accounting conduct shall lessee, and lessor
Lease Deferred tax assets and deferred tax liabilities Deferred tax assets Where the contract contains both the leased and non-leased parts, the group, Where the contract contains both the leased and non-leased as (ii) leased and non-leased parts. On the contract start date, the Group evaluates whether the contract is a lease On the contract start date, the control to right the transfers contract the in party one If lease. a includes or assets within a certain period in exchange for the use of one or more identified lease or contains lease. In order to determine consideration, the contract is a up the right to control the use of the identified whether the contract has given the whether assesses Group the time, of period certain a within assets economic the of all almost receive to entitled are contract the in customers the period of use during identified assets the benefits arising from the use of dominates the use of identified assets. and have the right to This use period separate leases, the Group will split the contractIf the contract includes multiple lease. If the following conditions are met at the and account for each separate identified assets constitutes a separate lease in same time, the right to use the the contract: (i) 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)
asset during the lease term as a right-of-use asset, and and asset, right-of-use a as term lease the during asset Initial measurement recognizes its right to use the On the lease start date, the Group leased recognizes the present value of outstanding lease payments as as payments lease outstanding of value present the recognizes leases and leases of low-value lease liabilities, except for short-term value of lease payments, the assets. When calculating the present it if rate; discount the as rate interest embedded the uses Group rate, the lessee’s incremental cannot determine the leased interest the discount rate. borrowing interest rate is used as which the Group is entitled to The lease term is the period during If the Group has a renewal use the leased asset and is irrevocable. it is option, that is, it has the right to choose to renew the asset and lease reasonably determined that the option will be exercised, the The period also includes the period covered by the renewal option. has the right is, the lease, that the option to terminate has Group to choose to terminate the lease of the asset, but it is reasonably determined that the option will not be exercised. The lease period a If option. lease termination the by covered period the includes affects and control Group’s the within occurs or change event major corresponding the that certain reasonably is Group the whether determine reasonably will Group the exercised, be will option or option purchase option, renewal lease the exercise will it whether not terminate the lease option Rights for reassessment. (CONTINUED) types of leased assets of the Group mainly include buildings, buildings, include mainly Group the of assets leased of types
(continued) Lessor machinery and equipment and site use rights. machinery and equipment and site (a) The
Lease (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
240 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 241 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) f the leased asset at the expiry of the lease term, the Group Group the term, lease the of expiry the at asset leased the f depreciates it over the remaining useful life of the leased asset. asset. leased the of life useful remaining the over it depreciates of ownership the that determine reasonably to possible not is it If the expires, term lease the when obtained be can asset leased the lease the between period shortest the within it depreciates Group of the leased asset. term and the remaining useful life in liability lease the of expense interest the calculates Group The based on the cyclical interest rate of each period of the lease period it into the current profit and loss. the fixed assets, and calculates of measurement the in included not payments lease variable The they lease liabilities are included in the current profit and loss when actually occur. After the start of the lease period, when the actual fixed payment the of amount payable residual estimated the changes, amount lease guarantee changes, the index or ratio used to determine the payment amount changes, the purchase option, the lease renewal or the option, or the termination option evaluation When the result lease actual exercise situation changes, the Group remeasures the liability based on the present value of the changed lease payments If and adjusts the book value of the right-of-use asset accordingly. zero, the book value of the right-of-use asset has been reduced to will but the lease liability still needs to be further reduced, the Group include the remaining amount in the current profit and loss. Subsequent measurement method to depreciate the right-of- The Group uses the straight-line possible to determine the ownership use assets. If it is reasonably o (CONTINUED)
(continued) Lessor (b)
Lease (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
increased consideration is equivalent to the individual individual the to equivalent is consideration increased The lease change expands the scope of the lease by adding The lease change expands the assets; the right to use one or more lease The price of the enlarged part of the lease scope adjusted for the price of the enlarged part of the contract. lease duration that are outside of the original contract terms, terms, contract original the of outside are that duration lease
(continued)
ii) ( If the lease change is not accounted for as a separate lease, on on lease, separate a as for accounted not is change lease the If re-determines Group the change, lease the of date effective the discount to rate discount revised the uses and term lease the In liability. lease the remeasure to payment lease changed the change, the after payments lease of value present the calculating the Group uses the leased interest rate in the remaining lease period leased the determine to possible not is it if rate; discount the as on interest rate in the remaining lease period, the Group’s increment the the lease change effective date The borrowing rate is used as discount rate. including adding or terminating the right to use one or more leased including adding or terminating the in stipulated period lease the shortening or extending assets, contract. following conditions are also met, When a lease is changed and the change as a separate lease: the Group accounts for the lease (i) Lease changes the lease scope, lease consideration, Lease changes are changes in and (CONTINUED)
(continued) Lessor (c)
Lease (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
242 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 243 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts the lease change results in a reduction in the scope of the of scope the in reduction a in results change lease the For other lease changes, the Group adjusts the book value of For other lease changes, the Group the right-of-use asset accordingly. If lease or a shortened lease term, the Group reduces the book term, the lease or a shortened lease complete or partial the reflect to asset right-of-use the of value losses gains or the Group counts termination of the lease. The termination of the lease in related to the termination or partial the current profit and loss. Group distinguishes the following situations for accounting accounting for situations following the distinguishes Group
(continued)
(ii) treatment: (i) Lease changes (continued) Lease changes adjustments on lease liabilities, Regarding the impact of the above the (CONTINUED)
(continued) Lessor (c)
Lease (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
the lease start date, the Group’s lease term does not exceed exceed not does term lease Group’s the date, start lease the (continued) 12 months, and leases that do not include purchase options are are options purchase include not do that leases and months, 12 whose single leased assets are considered short-term leases; leases considered are RMB30,000 exceed not do that assets new brand anticipates or subleases Group the Where leases. asset low-value lease is not recognized as a subleasing leased assets, the original right-of-use recognize not does Group The lease. asset value low short-term leases and leases of low- assets and lease liabilities for asset relevant the term, lease the of period each In assets. value accordance in calculated are loss and profit current the or costs the contingent rent is included in with the straight-line method, and it actually occurs. the current profit and loss when Short-term leases and leases of low-value assets Short-term leases On (CONTINUED)
(continued) Lessor Leases that substantially transfer all of the risks and rewards associated Leases that substantially transfer all of the risks and rewards date of the with the ownership of leased assets on the commencement lease are finance leases. All other leases are operating leases. Lessor (d)
(2) Lease (1)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
244 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 245 (Continued)
profit or loss for the profit From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts the lease start date, the Group recognizes finance lease lease finance recognizes Group the date, start lease the (continued) receivables for financial leases and ceases to recognize financial financial recognize to ceases and leases financial for receivables measurement of performs the initial lease assets. When the Group the as used is investment lease net the payments, lease financial lease net The receivables. lease financial the of value recorded residual value and the investment is the sum of the unguaranteed at received been not have that payments lease the of value present at the interest rate included the start of the lease period, discounted in the lease. each for income interest recognizes and calculates Group The periodic interest rate. The variableperiod of the lease term at a fixed Group that have not been included lease payments obtained by the lease investment shall be included in in the measurement of the net the current profit and loss when they actually occur. Operating lease loss Rental income from operating leases is recognized as profit or of the for the current period on a straight-line basis over each period lease term, and contingent rent is charged to Finance lease On period when it actually occurs. (CONTINUED)
(continued) Lessor (b) (a)
Lease (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
Lessor Lessee If the asset transfer in a sale-and-leaseback transaction belongs to If the asset transfer in a sale-and-leaseback transaction belongs and sales, the Group act as lessors to account for asset purchases the foregoing provisions;with accordance in for asset leases account belong not do transaction sale-and-leaseback a in transfers asset to sales. The Group as the lessor do not recognize the transferred transferred the to equal asset financial a recognize but assets, Note income, and account for the financial asset in accordance with IV.9. Where the asset transfer in a sale-and-leaseback transaction is is transaction sale-and-leaseback a in transfer asset the Where asset right-of-use the measures lessee, a as Group, the sale, a the of portion the on based sale-and-leaseback the by formed to the use-right obtained from the original asset’s book value related the lease Confirm the relevant gains leaseback, and only transfers if the asset transfer in the sale or losses of the rights of the person; not belong to the sale, the Group and leaseback transaction does the transferred asset and at the as the lessee continues to recognize liability equal to the transfer income, same time confirms a financial treatment of this financial in accordance with notes IV.9 Accounting asset. (CONTINUED) Group evaluates whether the transfer of assets in the sale-and- the in assets of transfer the whether evaluates Group
(continued) (b) leaseback transaction is a sale in accordance with Note IV.26. leaseback transaction is a sale (a) Sale and leaseback transactions Sale and leaseback The
Lease (3)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 29.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
246 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 247 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts assets or disposal groups meeting the following conditions conditions following the meeting groups disposal or assets (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 If the non-current assets or disposal group acquired exclusively for resale If the non-current assets or disposal group acquired exclusively by Non-current completed within one year on the acquisition date, and is likely to meet completed within one year on the acquisition date, and is likely a short other conditions for the classification of held-for-sale assets within held-for- as classified be shall it months), three within (usually period the initial sale assets on the acquisition date. In the initial measurement, compared is sell to costs less value fair the and amount measurement as and measured at a lower level under the condition that is not classified assets or disposal groups non-current Except for the held-for-sale assets. the net acquired in the merger of enterprises, the difference resulting from the deducting after groups disposal or assets non-current the of amount costs to sell from the fair value shall be taken as the initial measurement amount, and shall be included in the current profit or loss. 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 recognized.
Held-for-sale assets (1) (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) equity investment after the sale, when the investment in subsidiaries subsidiaries in investment the when sale, the after investment equity the net amount of the non-current assets classified as held for sale on sale for held as classified assets non-current the of amount net the the subsequent balance sheet date increases, the amount previously previously amount the increases, date sheet balance subsequent the and shall be reversed within the amount written down shall be restored 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 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 shall be divided into held-for-sale assets, the investment of subsidiaries parent the of statements financial individual the in whole a as assets of the subsidiaries shall be listed company, and all assets and liabilities financial statements. as held-for-sale in the consolidated If If the Group loses control of subsidiaries due to the sale of its investment control of subsidiaries due to If the Group loses the Group retains part of other reasons, whether or not in subsidiaries or its
Held-for-sale assets Held-for-sale assets (3) (4)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
248 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 249 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) attributable to the liabilities of a disposal group classifies as as classifies group disposal a of liabilities the to attributable (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 The non-current assets classified as held for sale or non-current assets in The non-current assets classified as held for sale or non-current and other the disposal group are not depreciated or amortized. Interest expenses For the amount of loss of impairment of assets confirmed by the disposal of loss of impairment of assets For the amount amount of goodwill in the as held for sale, the carrying group classified carrying amount of non- shall be offset first, and then the disposal group 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 held for sale shall continue to recognize. 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 be included in the current profits and assets. The reversed amount shall goodwill that has been written down and loss. The carrying amount of the assets recognized before they are the losses of impairment of non-current shall be not reversed. classified as held-for-sale assets the by recognized losses impairment the of reversals subsequent The carrying the increase shall sale for held as classified group disposal the disposal group in proportion accordingamount of non-current assets in except to the proportion of the carrying amount of the non-current assets goodwill in the disposal group.
Held-for-sale assets Held-for-sale assets (6) (5)
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) the non-current asset or the disposal group classified as held held as classified group disposal the or asset non-current the (CONTINUED) 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 recognized been have would that impairment or amortization depreciation, group not been classified as held had the non-current asset or disposal for sale; b) its recoverable amount. When derecognizing of non-current assets or disposal group classified as When derecognizing of non-current gains or losses shall be included in the held for sale, the unrecognized current profits and losses. When
Discontinued operation Held-for-sale assets Held-for-sale assets Discontinued operations referring to be clearly distinguished component which Discontinued operations referring 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 (7) (8)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 31. 30.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
250 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 251 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (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. components within the Group that satisfy all Operating segment refers to the components can generate income and expenses the following conditions:(1) the regularly are components the of results operating the activities;(2) daily in the Group to make decisions about resources reviewed by the management of and assess its performance;(3) Discrete financial to be allocated to the segment position, operating results and cash flow of information including the financial similar have segments operating more or two If available. is component the into merged be can they conditions, certain meet and characteristics economic one operating segment.
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 33. 32.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(CONTINUED) Taxation The Group is subject to various taxes in many countries, such as income The Group is subject to various is required in determining the account tax and VAT. Significant judgment which for calculations and transactions many are There taxes. such for of is uncertain during the ordinary course the ultimate tax determination Group the items, tax anticipated of estimates the on Based business. are required in the future to recognizedetermines whether additional taxes the final tax outcome of these matters is the liabilities of tax items. Where differences such recorded, initially were that amounts the from different is made. will affect the tax amount for the period in which the judgment 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.
IV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
252 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 253 (Continued)
(continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts of ascertaining of performance progress for construction construction for progress performance of ascertaining of (CONTINUED) Method contracts (Only applicable to situations where control is transferred applicable to situations where contracts (Only of time) within a period of progress the ascertain to Group the by adopted is method input The Specifically, the construction costs performance of construction contracts. estimated of percentage a as basis cumulative a on incurred actually progress of performance. Costs actually total costs is used to ascertain include direct and indirect costs incurred incurred on a cumulative basis of goods to customers. The Group by the Group in the course of transfer with signed contracts construction of consideration the that considers construction The costs. construction on based determined is customers of percentage a as basis cumulative a on incurred actually costs reflect the progress of performance of estimated total costs can practically determines progress of performance the construction service. The Group cumulative a on incurred actually costs construction the to referring by total costs, and recognizes revenue basis as a percentage of estimated of construction contracts is relatively accordingly. As the period of validity Group shall long and may span over a number of accounting periods, the contracts construction the of duration the as budget revise and review continues, and adjust the amount of recognized revenue accordingly.
Critical Accounting Estimates and Judgments Critical Accounting (2)
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) Group conducts an annual impairment test on goodwill. The The goodwill. on test impairment annual an conducts Group recoverable amount of cash-generating units or groups of cash- of groups or units cash-generating of amount recoverable generating units to which goodwill has been allocated is the present (20)). IV (Notes of basis the on estimated flows cash future its of value 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 The (CONTINUED)
of financial instruments. The application of the anticipated credit loss loss credit anticipated the of application The instruments. financial of 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
Critical Accounting Estimates and Judgments Critical Accounting (4) (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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
254 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 255 (Continued)
(continued) From 31 December 2018 to 31 December 2019 2018 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. 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 rate impairment on long-term assets when the modified gross profit is lower than the current gross profit rate. 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)
Impairment of non-financial assets Impairment of non-financial (a) (b)
Critical Accounting Estimates and Judgments Critical Accounting (4)
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) debt provision for receivable is based on the recoverability of of recoverability the on based is receivable for provision debt he Group reviews the estimated useful lives of fixed assets and and assets fixed of lives useful estimated the reviews Group he nventories are measured at the lower of cost and net realizable value. value. realizable net and cost of lower the at measured are nventories intangible assets at least once at the end of the year. Estimated useful intangible assets at least once at the end of the year. Estimated experience lives are determined by the management based on historical Corresponding advancement. technological expected and assets similar of in made be will periods future for expenses depreciation to adjustment case of substantial changes in previous estimates. 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. are estimates and judgments management’s The receivable. assessed provision for receivable. The difference required for determining bad debt carrying the affect will estimate original and outcome actual the between debt provision for receivable and reversal amount of receivable and bad revision period. of such provision during the estimated Estimated useful lives of fixed assets and intangible assets Estimated useful lives of fixed T Bad debt provision for receivable Bad Valuation of inventory I
Critical Accounting Estimates and Judgments Critical Accounting (6) (7) (5)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
256 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 257
(Continued)
(continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts maintenance fee charge based on historical data on and and on data historical on based charge fee maintenance (CONTINUED) Ministry of Finance issued “CAS 21 – Lease” (hereinafter referred referred (hereinafter Lease” – 21 “CAS issued Finance of Ministry Changes in critical accounting policies The Defined benefit plan determines the net liabilities of the defined The management of the Group value of the defined benefit obligation benefit plan based on the present assets calculated by the model. The minus the fair value of the planned of the defined benefit obligation includes a calculation of the present value Quality warranty the Group reasonably with similar characteristics, For groups of contracts estimates 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. current situation of maintenance, and taking into account all relevant relevant all account into taking and maintenance, of situation current re- Group The changes. market and upgrade product including data date sheet balance every on least at charge fee maintenance assesses re-assessed the on based provisions and accruals determines and maintenance fee charge. to as “New Lease Standards”) on 13 December 2018. It issued “"The “"The issued It 2018. December 13 on Standards”) Lease “New as to Financial Notice of Revising and Issuing the Format of General Enterprise on interpretation its 6)”and No. [2019] (Caikuai 2019” in Statements 31 for statements financial its prepared has Group The 2019. April 30 and standard above-mentioned the with accordance in 2019 December notice.
Changes in critical accounting policies and estimates Critical Accounting Estimates and Judgments Critical Accounting (1) (8) (9)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35. 34.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. (Continued)
(continued) operating leases prior to the date of first execution, execution, first of date the to prior leases operating For For financial leases before the first execution date, the Group For financial leases before the measures the right-of-use assets and lease liabilities according to the original book value of the assets leased under finance leases and finance lease payables; the Group measures idle liability discounted based on the the on based discounted liability idle measures Group the incremental the at discounted payments lease remaining based and execution, first of date the on rate borrowing and liability lease the to equal amount an at lease each on assets. right-of-use of measurement the Adjust rent prepaid the from adopted is standard lease new the that Assume beginning of the lease period, and the incremental borrowing rate of the Group as the lessee on the first execution date is used to measure the book value of the right-of-use asset; December 13, 2018, the Ministry of Finance promulgated promulgated Finance of Ministry the 2018, 13, December
b) ( the revised “Accounting Standards for Business Enterprises No. No. Enterprises Business for Standards “Accounting revised the lease standard”). The new lease21-Leasing” (referred to as the “new accounting current the to similar model single a adopts standard person The leases. requires and leases financial of treatment leases all for liability lease and asset right-of-use the recognizes recognizes and leases, low-value and leases short-term except 1, January Since respectively. expenses interest and depreciation accounting treatment in accordance 2019, the Group has carried out no made has and standards, leasing revised newly the with comparable periods in accordanceadjustments to the information for income. with the convergence requirements. (a) The impact of New Lease Standard The impact of New On (CONTINUED)
The impact of major accounting policies changes The impact of major (i)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
258 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 259
(Continued)
(continued) (continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts measuring lease liabilities, leases with similar similar with leases liabilities, lease measuring Group conducts impairment tests on the right-of-use right-of-use the on tests impairment conducts Group option before the date of first execution and other latest latest other and execution first of date the before option contract before the first execution, and adjusts the use of the contract before the first execution, and adjusts the use of the asset based on the amount of loss provisions included in the balance sheet before the first execution date; As an alternative to the right-of-use asset impairment test, the As an alternative to the right-of-use asset impairment test, the Group evaluates whether the guarantee lease contract is a loss When If there is an option to renew or terminate the lease, the Group determines the lease period based on the actual exercise of the The conditions; assets and performs corresponding accounting treatment in in treatment accounting corresponding performs and assets accordance with Note IV.20. leases operating for treatment simplified adopts Group The first the before assets low-value are assets leased whose to be completed within 12 execution date, or operating leases assets and lease liabilities. In months, without the right-of-use treatment simplified following the adopts Group the addition, first execution date. for operating leases before the characteristics may use the same discount rate; the the rate; discount same the use may characteristics asset may not include initial measurement of the right-of-use direct costs;
c) (f) (d) (e) The impact of New Lease Standard (continued) The impact of New ( (CONTINUED)
The impact of major accounting policies changes accounting policies changes The impact of major (i)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. – 4.13% Amount 88,966,411.92 11,086,032.66 11,086,032.66 75,187,637.84 217,134,238.70 219,826,980.12 213,082,952.31
(Continued)
(continued) (continued) lease changes before the date of first implementation, implementation, first of date the before changes lease For the Group performs accounting treatment based on the final final the on based treatment accounting performs Group the arrangements for lease changes. 2018 are reclassified to the amount reported for non-current liabilities due within one year have been reclassified to expire within one year) 2019
Minimum lease payments for major operating leases on 31 December 2018 Minimum lease payments for major operating Less: Minimum lease payments with simplified processing Including: Short-term lease Low value lease Plus: Minimum lease payments for financial leases on 31 December 2018 Less: Minimum lease payments for financial leases as of December 31, Leasing liabilities on 1 January 2019 (Including non-current liabilities that Minimum lease payments under the new lease standard on 1 January 2019 Weighted average of incremental borrowing interest rates on 1 January Items g) For the minimum unpaid lease payments for major operating leases For the minimum unpaid lease discounted Group the statements, financial 2018 the in disclosed borrowing rate of the Group as the present value of the incremental compared with January 1, 2019 The a lessee on January 1, 2019, the in included liabilities lease for process adjustment difference balance sheet is as follows: The impact of New Lease Standard (continued) The impact of New (
(CONTINUED)
(i) The impact of major accounting policies changes accounting policies changes The impact of major
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
260 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 261
amount Carrying standards 1 Jan 2019 5,750,158.29 applying new 2,896,783,779.00 (Continued)
– –
(515,895.43) 420,246,403.71 (344,799.95) 264,643,027.50 1,366,198.49 1,523,891,737.12 (4,927,467.14) 2,703,594,154.67 (8,845,553.45) 215,247,447.74 28,749,276.66 199,575,411.90 (continued)
– – – – – –
(continued) 141,946,600.86 42,387,074.78 184,333,675.64 327,937,170.14 76,249,540.76 404,186,710.90 Reclassification Recalculation
– – From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
amount original Carrying applying standards 31 Dec 2018 420,762,299.14 170,826,135.24 147,696,759.15 (141,946,600.86) 264,987,827.45 224,093,001.19 2,708,521,621.81 3,224,720,949.14 (327,937,170.14) 1,522,525,538.63 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts to shareholders of the Company equipment within one year Non-controlling interests Accounts payable Total equity attributable Long-term payables Lease liabilities Items Prepayments Long-term deferred expenses Right-to-use assets Property, plant and Non-current assets due Consolidated financial statement
The impact of New Lease Standard (continued) The impact of New in accounting policies caused by The main impact of the changes on the Group’s financial statements the above New Lease Standard (unaffected items are not listed): as at 1 January 2019 is as follows ① (CONTINUED)
The impact of major accounting policies changes accounting policies changes The impact of major (i)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
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 standards 1 Jan 2019 applying new
(Continued)
5,373,171.48 5,373,171.48 5,373,171.48 58,873,171.48 (continued)
– –
(continued) Reclassification Recalculation
–
amount original Carrying applying standards 31 Dec 2018 53,500,000.00 within one year Items Right-to-use assets Non-current assets due Financial statement of the Company
The impact of New Lease Standard (continued) The impact of New ② (CONTINUED)
(i) The impact of major accounting policies changes accounting policies changes The impact of major
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
262 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 263 (Continued)
(continued) (continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts ssuing the Format of General Corporate Financial Statements for for Statements Financial Corporate General of Format the ssuing 2019” (Caihui [2019] No. 6) and its interpretation, in addition to the 2019” (Caihui [2019] No. 6) and from the implementation of the new presentation changes resulting The “Bills and Accounts Receivable” lease standard, the Group will and “Accounts Receivable”, and item is split into “Bills Receivable” Accounts Payable” item is split into the original “Bills Payable and “Receivables item new A Payable”. “Accounts and Payable” “Bills receivable accounts and notes reflect to added was Financing” and date sheet balance the at value fair at measured are that The income. comprehensive other in included are changes whose receivables” item and the “interest “interest receivable” in the “other item only reflect the interest that thepayable” in the “other payables” expired but can be collected but relevant financial instrument has The has not been received or has been due but has not been paid should method rate interest actual the on based accrued interest financial corresponding the of balance book the in included be have that instruments financial relevant on Interest instrument. reported date is expired but are not receivable at the balance sheet is losses” impairment asset “minus: and Receivable”, “Interests in Adjust “-”)”, by (losses losses impairment asset “plus: to adjusted losses “minus: credit impairment losses” to “plus: credit impairment “fair (losses are marked with “-”)”, and move the above two items to of value” After changing the “Profit and Loss” item, increase the item at investment income, which is the item “financial assets measured amortized cost, derecognised income”. Financial statement reporting adjustment Financial statement Ministry of Finance on Revising and According to the “Notice of the I (CONTINUED)
The impact of major accounting policies changes accounting policies changes The impact of major ii)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV. – – 1 Jan 2019
(Continued)
(continued) 454,859,482.38 454,859,482.38 674,085,704.48 674,085,704.48 Reclassification 1,225,850,904.131,522,525,538.63 1,225,850,904.13 1,522,525,538.63 2,636,400,832.87 2,636,400,832.87 (continued)
– – – – – 31 Dec 2018 911,696,617.94 1,821,232.74 913,517,850.68 599,204,267.53799,143,854.22 (13,156,812.78) 9,261,300.00 586,047,454.75 808,405,154.22 928,431,789.73 (2,148,080.34) 926,283,709.39 1,154,317,102.20 2,148,080.34 1,156,465,182.54 2,748,376,442.76 (2,748,376,442.76) 1,334,738,381.17 2,074,280.04 1,336,812,661.21 3,765,346,019.73 (3,765,346,019.73)
payable other financial institutions receivable Loans and advances to customers Notes payable Accounts payable Notes payable and accounts Short-term loans Due to customers, banks and Other payables Bonds payable Notes receivable and accounts Other receivables Accounts receivable Receivable financing Notes receivable Items Consolidated financial statement
retrospective restatement of the financial statements due to to due statements financial the of restatement retrospective
changes in the format of the new financial statements has the the has statements financial new the of format the in changes company’s parent the and consolidation the on effects following 31, 2018: balance sheet as of December ① Financial statement reporting adjustment (continued) Financial statement The (CONTINUED)
ii) The impact of major accounting policies changes accounting policies changes The impact of major
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (2)
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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
264 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 265 1 Jan 2019 (Continued)
(continued) Reclassification (continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 31 Dec 2018 62,986,536.29 (9,261,300.00) 53,725,236.29 799,143,854.22 9,261,300.00 808,405,154.22
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Other payables Bonds payable Items Financial statement of the company
Financial statement reporting adjustment (continued) Financial statement ② (CONTINUED)
There are no major adjustments of prior accounting errors in the current There are no major adjustments period. There are no significant changes in accounting estimates in the current There are no significant changes period. The impact of major accounting policies changes accounting policies changes The impact of major ii)
Changes in critical accounting policies and estimates accounting policies and estimates Changes in critical (3) (2) (2)
SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING AND ACCOUNTING ACCOUNTING POLICIES SIGNIFICANT ESTIMATES 35.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IV.
3% 6% year 12% 39% 16.5% 5%, 9%, Tax rate 34%, 1.2%, 5% and 7% 2% and 3% 25% and 0% 10%, 20%, (Continued)
15%, square metre/year, 13%, metre/year, RMB16/ year, RMB20/square RMB10/square metre/ RMB14/square metre/ 15.2%, 16%, year, RMB8/square metre/ RMB8/square year,
rental income VAT collection rate is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible VAT input of the current period)
70% of the original value of the property or 70% of the original value of the property Taxable value-added amount multiplied by Taxable value-added amount multiplied Taxable value-added amount (Tax payable Taxable value-added amount (Tax payable Tax base Land occupation area – – nd General Administration of Customs [2019] No.39) jointly issued by the Ministry Ministry the by issued jointly No.39) [2019] Customs of Administration General nd According to the announcement (Ministry of Finance, State Taxation Administration According to the announcement (Ministry of Finance, State Taxation Administration a of Finance, State Taxation Administration and General Administration of Customs of Finance, State Taxation Administration and General Administration to 16% on 20 March 2019, VAT on sales or imported goods originally applicable and 10% will be adjusted to 13% and 9% respectively from 1 April 2019.
construction tax Taxable amounts of VAT tax(“VAT”) regions/countries Kong Educational surcharge Taxable amounts of VAT Property tax City maintenance and VAT(easy to collect) Value-added Chinese enterprise Enterprise income tax income Taxable Land use tax Profit tax for other Profit tax in Hong Category of tax Main categories of tax and corresponding tax rate Main categories
Note:
TAXATION 1.
V. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
266 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 267 (Continued)
– Income tax preference (1) Income tax preference (1) Income tax preference (3) Income tax preference (1) Income tax preference (1) Income tax preference Income tax preference (1) Income tax preference (1) Income tax preference (2) Income tax preference (1) Income tax preference (2) Income tax preference (2) Income tax preference (1) Income tax preference (2) – Income tax preference (2) Income tax preference (1) Income tax preference (1) Income tax preference (2) Income tax preference (1)
25% 15% 15% 15% 15% 15% 15% 25% 15% 15% 15% 15% 15% 25% 15% 15% 15% 15% 15% Income tax rate (continued) Half levy
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Co., Ltd. Co., Ltd. Affairs Co., Ltd. Manufacturing Co., Ltd. Equipment Co., Ltd. Co., Ltd. Taxpayers Chongqing Machinery & Electric Co., Ltd. Chongqing Water Turbine Works Co., Ltd. Chongqing CAFF Automotive Braking & Steering System Chongqing CAFF Automotive Braking & Chongqing General Industry (Group) Tong Kang Water Chongqing Pump Industry Co., Ltd. Chongqing Gas Compressor Factory Co., Ltd. Chongqing Machinery & Electronic Intelligent Chongqing Pigeon Electric Wires & Cables Co., Ltd. Chongqing Pigeon Electric Wires & Cables Chongqing Pigeon Electric Porcelain Co., Ltd. Chongqing Pigeon Electric Porcelain Co., Chongqing Pigeon Electric Materials Co., Ltd. Chongqing Pigeon Electric Materials Co., Chongqing General Industry (Group) Co., Ltd. Chongqing General Industry (Group) Co., Chongqing Chongtong Wide Wisdom Air Conditioning Chongqing Chongtong Wide Wisdom Air Chongqing Mengxun Electronic & Technology Co., Ltd. Chongqing Chongtong Turbine Technology Co., Ltd. Chongqing Chongtong Turbine Technology Jilin ChongTong Chengfei New Material Co., Ltd. Jilin ChongTong Chengfei New Material Chongqing ChongTong Chengfei New Material Co., Ltd. Chongqing ChongTong Chengfei New Material Gansu Chong Tong Chengfei New Material Co., Ltd. Gansu Chong Tong Chengfei New Material Chong Tong Chengfei Wind Power Equipment Jiangsu Xilin Hot Chenfei Wind Power Equipment Co., Ltd. Chongqing Shunchang General Electric Equipment 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)
Income tax preference (1) Income tax preference (4) Income tax preference (2) Income tax preference (1) – Income tax preference (1) Income tax preference (1) Income tax preference (2) – Income tax preference – Income tax preference (1) Income tax preference (1) – – – – – – – –
15% 15% 15% 25% 15% 15% 15% 25% 25% 15% 15% 20% 34% 39% 20% 20% 20% 15.20% 16.50% Income tax rate (continued) Exemption
(CONTINUED) Co., Ltd. Co., Ltd. Co., Ltd. Manufacturing Co., Ltd. Co., Ltd. Taxpayers Chongqing Mechanical and Electrical Additive Chongqing Mechanical and Electrical Additive Fu Baotian Cotton picking services Co., Ltd. Fu Baotian Cotton picking services Co., Chongqing Tool Factory Co., Ltd. Chongqing No. 2 Machine Tools Factory Co., Ltd. Chongqing No. 2 Machine Tools Factory Chongqing Yinhe Forging & Founding Co., Ltd. Chongqing Yinhe Forging & Founding Co., Chongqing Shengong Machinery Manufacturing Co., Ltd. Chongqing Shengong Machinery Manufacturing Chongqing Holroyd Precision Rotors Manufacturing Chongqing Holroyd Precision Rotors Manufacturing Chongqing Industrial Enabling Innovation Center Chongqing Industrial Enabling Innovation Chongqing Shengpu Material Co., Ltd. Chongqing Machinery & Electric Holding Group Finance Chongqing Machine Tool (Group) Co., Ltd. Chongqing Sino-Germany Smart Factory Solutions Chongqing Sino-Germany Smart Factory Precision Technologies Group (PTG) Limited. Precision Technologies Group(US) Limited (PTG US) Holroyd Precision Screw and RotorsCompany PTG Heavy Industries Ltd. Milnrow Investments Ltd. Precision Components Ltd. PTG Deutschland GmbH PTG Investment Development Company Ltd. 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: (continued) of different enterprise Explanation of taxpayers
TAXATION 1.
V. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
268 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 269 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts to announcement of in-depth implementing the western western the implementing in-depth of announcement to (CONTINUED) following companies in this Group enjoy a preferential tax rate rate tax preferential a enjoy Group this in companies following According to the relevant tax preferential policies of the state for high-tech According to the relevant tax preferential enterprises can enjoy preferential policies enterprises, certified high-tech enterprise income tax at a reduced rate of enterprise income tax and pay of 15%. The According 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 No. enterprises high-tech of (certificate Ltd. Co., Manufacturing Intelligent Center Co., GR201751100272), Chongqing Industrial Enabling Innovation Chong GR201851100040), No. enterprises high-tech of (certificate Ltd. (certificate Ltd. Co., Jiangsu Equipment Power Wind Chengfei Tong Pigeon Chongqing No.GR201832003842). enterprises high-tech of No. enterprises high-tech of (certificate Ltd. Co., Porcelain Electric of high- GR201651100225). Chongqing Tool Factory Co., Ltd. (certificate tech enterprises No. GR201651100175). development strategy on the problem of enterprise income tax which was on the problem of enterprise development strategy April 6, 2012 (The State Taxation Administration on issued by the State 2012), management of the announcement No.12, Taxation Administration which were approved by Chongqing Group believes that its subsidiaries enjoy 15% preferential enterprise income State Taxation Administration to preferential 15% enjoy to eligible still is 2011, to 2001 from rate tax 2012 to 2020. enterprise income tax rate from
Corporate income tax preferences Corporate income (1) (2)
TAXATION 2. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
V. (Continued)
the urban sewage treatment program engaged by Chongqing Chongqing by engaged program treatment sewage urban the (CONTINUED) Group’s subsidiary, Xinjiang Fubaotian Cotton-picking Service Co., Co., Service Cotton-picking Fubaotian Xinjiang subsidiary, Group’s Ltd. (“Fubaotian”) is engaged in agricultural machinery operations and its Ltd. (“Fubaotian”) is engaged in income tax. income is exempted from enterprise General Industry (Group) Tong Kang Water Affairs Co., Ltd. meets the the meets Ltd. Co., Affairs Water Kang Tong (Group) Industry General 166), the corporate incomedocument (Cai shui [2009] No. requirements of halved and year third the to year first the from exempted be shall tax which in year from the tax the sixth year starting 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 income tax preference on July 12, 2016. Company has filed the corporate The Since
Corporate income tax preferences Corporate income (3) (4)
TAXATION 2.
V. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
270 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 271 balance Beginning 879,802.59 (Continued)
13,349,574.40 594,326,911.12 2,164,670,306.18 1,569,463,592.47
Ending balance 589,731.55 64,767,665.24 557,052,553.97 2,094,619,648.56 1,536,977,363.04
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts There is no limit on the remittance of the group’s overseas deposits.
Including: cash deposited abroad Total Items Other cash equivalents Cash at bank Cash in hand Cash and Cash Equivalents Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 1. Unless otherwise stated, among the following disclosed data in the financial financial the in data disclosed following the among stated, otherwise Unless (Adjust 2019 January, 1 on amount the to refers balance” “Beginning statements, format, and new financial statement apply the new Lease standards for the first time in the the balances of other items items that need to be adjusted, in addition to the 2019, December 2018 and 1 January have the same figure as 31 financial statements amount the to refers balance” “Ending and IV.35(1)) notes this to refer details the period” refers to the period from 1 January 2019 on 31 December, 2019. “Current refers to the period from 1 January 2018 to 31 to 31 December 2019. “Last period” is RMB. December 2018. Currency unit
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Ending balance balance Beginning 123,356.84 5,124,292.21 5,000,935.37 5,124,292.21 4,198,010.81 70,729,672.21 91,580,893.68 557,052,553.97 248,680,383.57 141,863,593.70 (Continued)
– Ending balance 269,494.13 269,494.13 269,494.13
(CONTINUED) (continued) Money market fund Total including: Equity instrument investment Total Items Items Financial assets held for sales Deposits for bank acceptance bills Deposits for letters of credit Guarantee deposit Restricted term deposits Statutory reserve Financial Assets held for sale Cash and Cash Equivalents Cash and Cash
Restricted cash at the end of the year Restricted cash
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 2. 1.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
272 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 273 (Continued)
1 Jan 2019 31 Dec 2018 42,916,934.70 42,916,934.70 518,035,990.22 518,035,990.22 198,966,648.96 653,826,131.34 674,085,704.48 1,128,945,186.86
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 31 Dec 2019 6,051,761.14 117,905,218.88 184,217,929.12 296,071,386.86 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED) The aging of ending balances of notes receivable are all within one year. The aging of ending balances of notes
Less: provision for bad debts Commercial acceptance bills Bank acceptance bills Total Items Notes receivable not pledged by the Group at the end of the year Notes receivable not pledged Classification of notes receivable Classification Notes:
Notes receivable (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. receivable to account The amount 158,602,202.56 158,602,202.56 (Continued)
(CONTINUED) (continued) Commercial acceptance bills Item Total been endorsed or discounted and had not matured at the balance balance the at matured not had and discounted or endorsed been sheet date Notes receivable that is transferred to an account receivable because Notes receivable that is transferred his contra the drawer has failed to perform At
Notes receivable (3) had that receivable bills no had Group the year, the of end the (4)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
274 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 275 Carrying amount (Continued)
2.00 296,071,386.86 3.55 113,720,204.18 1.01 182,351,182.68 2.00 296,071,386.86 Proportion of bad debt provision (%)
Amount Provision for bad debts 6,051,761.14 4,185,014.70 1,866,746.44 6,051,761.14 31 Dec 2019
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 39.03 60.97 100.00 100.00 Proportion (%) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED) Book Balance Amount 302,123,148.00 117,905,218.88 184,217,929.12 302,123,148.00
(continued) The refers to the expected credit loss of RMB1,866,746.44yuan accrued by the refers to the expected credit loss of RMB1,866,746.44yuan accrued group, financial company of Chongqing mechanical and electrical holding the to according assets discount bill its for group, the of subsidiary a risk credit risk characteristics and referring to the guiding principles of loan classification of the people’s Bank of China.
commercial acceptance bill acceptance bill by portfolio Total Items General customer Including: bank Provision for bad debtsProvision for bad Classified by bad debt provision method Classified by Note: year the of end the at bill acceptance bank for provision debt bad
Notes receivable (5)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 69,994,510.22 268,961,159.18 198,966,648.96 Carrying amount
– – – (Continued) 3.66 674,085,704.48 9.58 405,124,545.30 9.58 405,124,545.30
Proportion of bad debt provision (%)
– – – Amount Provision for bad debts (Continued) 1 Jan 2019
9.76 37.51 62.49 42,916,934.70 27.75 62.49 42,916,934.70 100.00 42,916,934.70 Proportion (%)
(CONTINUED) Book Balance Amount 69,994,510.22 717,002,639.18 268,961,159.18 448,041,480.00 198,966,648.96 448,041,480.00
(continued) by portfolio acceptance bill acceptance bill by single item commercial acceptance bill Total Items Provision for bad debtsProvision for bad Including: commercial Including: bank Provision for bad debtsProvision for bad General customer (Continued) Classified by bad debt provision method Classified by
Notes receivable (5)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
276 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 277 69,994,510.22 723,820,641.56 653,826,131.34 Carrying amount (Continued)
– – – 3.66 1,128,945,186.86 9.58 405,124,545.30 9.58 405,124,545.30 Proportion of bad debt provision (%)
– – – Amount Provision for bad debts 31 Dec 2018
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 9.67 61.77 90.33 38.23 42,916,934.70 100.00 42,916,934.70 100.00 42,916,934.70 Proportion (%) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED) Book Balance Amount 69,994,510.22 723,820,641.56 448,041,480.00 653,826,131.34 448,041,480.00 1,171,862,121.56
(continued) by portfolio acceptance bill acceptance bill by single item commercial acceptance bill Total Items Provision for bad debtsProvision for bad Including: commercial Including: bank Provision for bad debtsProvision for bad General customer Classified by bad debt provision method Classified by (Continued)
Notes receivable (5)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending balance
(Continued)
provision receivable to bad debt of accounts Reclassification
Change amount for the year 1,866,746.44 38,731,920.00 6,051,761.14 1,866,746.44 38,731,920.00 6,051,761.14 Loans issued and advances reclassified to notes receivable
(CONTINUED) balance Beginning 42,916,934.70 42,916,934.70
(continued) debts of notes receivable Total Item Provision for bad The year. or transferred back in the current year or transferred back Provision for bad debts of notes receivable that are accrued, collected debts of notes receivable that Provision for bad
Notes receivable (7) the during off written actually receivable notes no has Group (6)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 3.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
278 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 279 balance Beginning (Continued)
414,932,370.73 2,636,400,832.87 3,051,333,203.60
Ending balance 423,220,675.82 2,688,114,256.49 3,111,334,932.31
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) the provision of technology and related services, and construction engineering engineering construction and services, related and technology of provision the with the terms stipulated in the relevant operations, and are settled in accordance receivables usually expire within one to transaction contracts. Relevant warranty accounts Group’s The completion. project and delivery product after years two receivable are non-interest bearing. Carrying amount Items Less: provision for bad debts Accounts receivable Accounts receivable mainly generated through the sale of commodities, Note: The Group’s receivables are
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
–
66,975,926.83 560,103,251.65 174,078,131.41
– – – (Continued)
bad debts Carrying amount Provision for
– – –
(%) 5.97 29,810,453.79 469,891,171.63 1.81 19,663,684.25 1,068,348,440.48 9.54 280,025,268.49 2,653,994,866.57 Ending balance 18.81 45,740,336.68 197,371,678.46 26.77 39,266,942.54 107,425,425.77 75.63 30,411,670.37 9,800,840.34 13.13 280,025,268.49 1,852,837,556.68 13.60 423,220,675.82 2,688,114,256.49 80.76 143,195,407.33 34,119,389.92 100.00 115,132,180.86 percentage
40,212,510.71 66,975,926.83 Book balance (CONTINUED) 243,112,015.14 146,692,368.31 499,701,625.42 115,132,180.86 560,103,251.65 174,078,131.41 177,314,797.25 1,088,012,124.73 2,132,862,825.17 3,111,334,932.31 2,934,020,135.06
(continued) credit warranty 2-3 years 3-4 years 1-2 years 4-5 years Over 5 years General customers Customers with goodwith Customers Retention money of recognized by group recognized separately Including: Within 1 year Total Classification Provision for bad debts is Provision for bad debts is Including: Related parties to group of expected credit risk characters to group of expected The accounts receivable recognized provision for bad debts according recognized provision The accounts receivable
Accounts receivable Accounts receivable (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
280 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 281
4,836.01 9,348,992.54 302,179,023.36 (Continued)
– –
bad debts Carrying amount Provision for
– –
(%) 5.35 21,212,496.26 375,098,275.47 9.37 247,023,448.25 2,387,894,548.86 1.22 16,927,334.63 1,364,924,547.02 5.70 7,065,783.30 116,958,821.52 12.07 26,045,870.69 189,677,660.99 61.6381.50 33,639,712.36 38,576,703.79 20,947,653.42 8,754,738.53 13.60 414,932,370.73 2,636,400,832.87 40.32 167,908,922.48 248,506,284.01 10.91 239,957,664.95 1,959,407,711.44 Beginning balance 100.00 103,555,547.22 percentage From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 9,348,992.54 Book balance 54,587,365.78 47,331,442.32 (CONTINUED) 215,723,531.68 396,310,771.73 103,560,383.23 124,024,604.82 416,415,206.49 302,179,023.36 2,634,917,997.11 3,051,333,203.60 1,381,851,881.65 2,199,365,376.39
(continued)
warranty credit 2-3 years 4-5 years 3-4 years 1-2 years Over 5 years General customers Retention money of Customers with goodwith Customers The receivable at an amount equivalent to the expected credit loss over the the over loss credit expected the to equivalent amount an at receivable the on based loss credit expected its calculates and duration, entire number of overdue days and the default loss rate. The LGD is calculated and is based on the actual credit loss experience in the past 3-5 years, the during conditions economic the between differences the on based the historical data collection period, the current economic conditions, and economic conditions estimated by the Group during the expected duration Make adjustments.
recognized by group recognized separately Provision for bad debts is Including: Related parties Total Classification Including: Within 1 year Provision for bad debts is The accounts receivable recognized provision for bad debts according recognized provision The accounts receivable to group of expected credit risk characters (continued) to group of expected (Continued) Note: accounts of allowance impairment the measures always Group
Accounts receivable Accounts receivable (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable be recoverable to be fully recoverable Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to Not expected to
Not expected (Continued) 69.14
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 rate(%) Reason Excepted credit loss
Ending balance bad debts Provision for
9,413,799.49 9,413,799.49 4,652,004.71 4,652,004.71 3,635,346.55 3,635,346.55 2,941,756.50 2,941,756.50 2,820,000.00 2,820,000.00 2,738,600.00 2,738,600.00 2,303,014.00 2,303,014.00 2,247,309.99 2,247,309.99 2,007,908.43 2,007,908.43 Book Balance 22,840,155.15 22,840,155.15 11,150,019.24 11,150,019.24 177,314,797.25 143,195,407.33 110,564,883.19 76,445,493.27
(CONTINUED)
(continued) Group’s receivables based on single item provision for bad debts in debts bad for provision item single on based receivables Group’s The 2019 are mainly due to financial difficulties of the debtor or a longer ageing 2019 are mainly due to financial difficulties of the debtor or a longer of the account or a lower probability of full recovery.
Machinery Co., Ltd. and Cable Co., Ltd. Chengdu Department Ltd.–Debt Transfer Refrigeration Equipment Company Co., Ltd. Group Jinzhong Co., Ltd. Equipment Co., Ltd. Machinery Co., Ltd. Total Name Credit Transfer of Chongqing Jiangbei Chongqing Pigeon Brand Wire Chongqing Huahao Smelting Co., Shanghai Zhongtong Air Conditioning MorganTechnologies Chongqing Quanhai Machinery Shanxi Tianfu Gas Co., Ltd. Shanxi Compressed Natural Gas Zhongtian (Jiangsu) Defense Chongqing Bishan Shunshan R&HRisingLimited Other sporadic customers
Note: separately The
Accounts receivable Accounts receivable (2) (2) debts bad for provision recognized receivable accounts
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
282 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 283 (%) (%) 7.64 4.71 1.57 1.38 percentage (Continued)
Percentage
bad debts bad debts Provision for Provision for Ending balance
Beginning balance From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Book Balance 74,699,506.04 66,628,774.28 89.20 75,482,077.0660,226,423.16 44,322,470.56 45,585,132.85 58.72 75.69 Book Balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 202,456,530.66 198,453,891.61 98.02 190,233,134.93 190,228,298.92 100.00 176,666,099.28 41,602,334.14 23.55 248,308,042.65 65,356,182.64 26.32 273,614,987.60 59,732,520.37 21.83 501,533,984.36 38,337,125.87 719,522,822.77 33,877,477.99 1,975,549,541.44 31,103,159.89 1,664,374,985.96 22,925,677.43 3,111,334,932.31 423,220,675.82 13.60 3,051,333,203.60 414,932,370.73 13.60
(CONTINUED) (continued) to the date of invoice, the age of accounts receivable is is receivable accounts of age the invoice, of date the to 4-5 years Over 5 years 3-4 years 4-5 years Over 5 years 3-4 years 2-3 years 2-3 years 1-2 years 1-2 years Within 1 year Within 1 year Total Aging Total Aging According analyzed as follows
(Continued)
Accounts receivable Accounts receivable (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Ending balance 423,220,675.82 423,220,675.82
amount Write off Less: 6,392,275.01 reclassified
of bad debt provision for (Continued) to the amount contract assets
off Resale of write
back transferred Collected or 24,461,280.28 6,392,275.01 4,554,504.20 24,461,280.28 6,392,275.01 4,554,504.20
Change amount for the year receivable of bad debt reclassification Plus: Amount of provision for bills
Accrued (CONTINUED)
balance Beginning 414,932,370.73 4,964,444.58 38,731,920.00 414,932,370.73 4,964,444.58 38,731,920.00 (continued)
account receivable Provision for bad debts of Item Total Items The accounts receivable actually written off in the current year P
actually write off in the current year The account receivable that is
Accounts receivable Accounts receivable (4) collected or back transferred accrued, are that debts bad for rovision (5)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
284 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 285
–
No generated by related payment is Whether the transactions
(Continued) –
General manager’s office
–
Reason Procedure the court’s decision Both sides agreed to From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 5,227,213.68 5,227,213.68 Write off amount (CONTINUED)
– Nature Sales of product
(continued) assets and liabilities have been formed due to the transfer and and transfer the to due formed been have liabilities and assets Yazuihe Hydropower Development Co., Ltd. Total Name Sichuan Huarun The (continued) that is actually write off: The significant account receivable continuing involvement of account receivable. financial assets in current year. No No
Accounts receivable Accounts receivable (5) year current the in off write actually is that receivable account (7) (6) of transfer the to due derecognized are that receivable account
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. outstanding negotiate to pay according to each other’s payment plan outstanding market, customer project progress is delayed performance contract, it has not been settled Rolling payments, Both parties Rolling payments, No settlement reason Affected by the According to the – –
(Continued)
bad debts 310,373.02 provision for
(%) 2.38 3,469,261.02 2.01 3.91 2,690,829.08 2.67 14,478,009.50 5.35 12,556,820.43 16.32 33,505,293.05 Percentage
1-3 years, year, 1-2 years 1-5years, over 5 year 2-3years, 3-4years Within 1 year Within 1 year, Within one Within 1 year, – Aging 1-2 years, –
(CONTINUED) 74,120,768.05 62,506,150.82 83,088,353.34 Book Balance 121,642,717.66 507,963,789.87 166,605,800.00
(continued) Co., Ltd. Co., Ltd EPC Project (Longhai Group Ltd. NONGHAIGROUPLTD) Co., Ltd. Co., Ltd. Mingyang Smart Energy Group Minjiang Chenya Transmission Laos Nanye 2B Power Station Taiyuan Heavy Industry Total Name of debtors Beijing Wanyuan Industry Top five debtors of account receivable Top five debtors
Accounts receivable Accounts receivable (8)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 4.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
286 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 287 – – Amount pledged (Continued)
182,429,375.84 182,429,375.84
1 Jan 2019Dec 2018 31 454,859,482.38 454,859,482.38
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 31 Dec 2019 470,685,913.42 470,685,913.42
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) according to the needs of daily fund management, the group classifies the according to the needs of daily fund asset which is measured at fair value bank acceptance bill as a financial other comprehensive income. and whose changes are recorded in The Group does not have a single bank acceptance bill for for bill acceptance bank single a have not does Group The of the year, the Group measures impairment provision. At the end expected credit losses throughout bad debt provisions based on the held bills bank acceptance the believes that its lifetime. The Group significant cause not will and risk credit significant have not do losses due to bank defaults.
Bank acceptance bill Bank acceptance bill Item Total Total Items Notes receivable that have been used for pledge at the end of the year Notes receivable that have been used for pledge at the end Classification of receivables financing Classification
Note:
(2) Receivable financing (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 5.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
– – terminated amount is not The confirmed (Continued)
amount Termination confirmation 1,641,616,611.99 1,641,616,611.99
(CONTINUED) (continued) receivable of RMB1,641,616,611.99 yuan (balance at the beginning of the receivable of RMB1,641,616,611.99 to the supplier to pay for the purchase year: RMB1,346,078,011.10 yuan) management of the group, the risks and of materials. In the opinion of the substantially been have notes undue such of ownership the of rewards accounts and receivable notes such of recognition the so transferred, group’s The terminated. completely been has supplier the to payable continuous involvement in such fully derecognized undue notes receivable is limited to the extent that the issuing bank is unable to settle accounts with the noteholder. The possible maximum loss sustained by the group’s the by endorsed receivable notes undue the is involvement continuous RMB1,641,616,611.99 of amount year-end the with supplier, the to group yuan (balance at the beginning of the year: RMB1,346,078,011.10 yuan). At the end of the year, the group endorsed the same amount of undue notes At the end of the year, the group endorsed
Item Total Bank acceptance bill Notes receivable that have been endorsed or discounted by the Group that have been endorsed or Notes receivable the balance sheet date year and have not expired at at the end of the Note:
Receivable financing Receivable financing (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 5.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
288 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 289 (Continued)
2,168,074.68 2,168,074.68 4,743,971.56 4,743,971.56 14,204,492.91 14,204,492.91 26,431,176.83 26,431,176.83 264,643,027.50 264,987,827.45 266,811,102.18 267,155,902.13 221,431,460.88 221,776,260.83 1 January 2019 31 December 2018
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 833,724.00 16,335,602.70 10,516,169.32 34,446,116.81 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 266,180,611.67 267,014,335.67 205,716,446.84 (CONTINUED) 31 December 2019
diminution in value At more than one year were RMB61,297,888.83 (The beginning of the year: year: the of beginning (The RMB61,297,888.83 were year one than more RMB45,379,641.30), which were mainly prepayments for materials, because the delivery cycle was long and the materials had not arrived. provision for
More than 3 years 2-3 years Net value Total Aging Less: Within 1 year 1-2 years Aging analysis
Note: of age an with accounts prepaid Group’s the year, the of end the
Prepayments (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 6.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (%) 5.05 0.83 2.26 0.57 0.61 0.79 Percentage
(Continued)
No settlement reason Not yet received Not yet received
2-3 years 2-3 years Aging
1-2 years Not yet received 1-2 years Not yet received 1-2 years, 1-2 years Not yet received 1-2 years, Ending balance 1,517,000.02 1,636,896.62 6,027,750.88 2,097,000.00 2,210,430.00 13,489,077.52 (CONTINUED)
(continued) Technology Co., Ltd. Technology Engineering Co., Ltd. Engineering Group Corporation Limited Company Construction Corporation Total Name of debtors MCC Sadie Electric Anshan Zhengfa Surface Chongqing Construction Chengdu Feiyi Trading Liaoning Ankuang 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 FINANICAL 6.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
290 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 291
(%) 4.68 7.01 2.38 2.26 12.53 28.86 Percentage (Continued)
for material purchase as agreed in the performance contract for material purchase as agreed in the performance contract for material purchase as agreed in the performance contract for material purchase as agreed in the performance contract No settlement reason Outstanding balance
Advance payment From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Within 1 year Advance payment Within 1 year Advance payment Aging Within 1 year Within 1 year Advance payment
1-2 years,2-3 years Ending balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 6,367,233.22 6,027,750.88 12,499,836.56 18,723,054.00 77,074,983.65 33,457,108.99 (CONTINUED)
(continued) Technology Co., Ltd. Co., Ltd. Xicheng Branch Energy Technology Co., Ltd. Trade Group Co., Ltd. Engineering Group Co., Ltd. Weihai Weisai New Material Beijing Kolas Technology Shandong Yingjiu New Total Name of debtors China Copper International Chongqing Construction The prepayment target
Prepayments (3) by collected balance year-end by prepayments five top
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 6.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Ending balance 833,724.00 833,724.00
20,538,197.57 – – (Continued)
write off Resale of –
1 Jan 2019 31 Dec 2018 back 96,227,641.45 96,227,641.45 639,063,592.40 620,673,475.17 383,447,758.44 383,447,758.44 926,283,709.39 928,431,789.73 transferred 1,022,511,350.84 1,024,659,431.18 collected or 1,334,350.68 1,334,350.68
– – – Change amount for the year accrued 31 Dec 2019
950,732,242.50 436,478,069.56 183,654,530.40 1,387,210,312.06 1,203,555,781.66 (CONTINUED)
balance Beginning 2,168,074.68 2,168,074.68
(continued) bad debts of prepayment Total Item Provision for in the current year P
Other receivables Dividend receivable Less: provision for bad debts Interest receivable Total Net value Items Other receivables Prepayments
(4) collected or back transferred accrued, are that debts bad for rovision
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7. 6.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
292 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 293 4,816,103.40 2,148,080.34 (Continued)
18,390,117.23 20,538,197.57 378,631,655.04 383,447,758.44
– – –
1 Jan 2019 31 Dec 2018 1,937,456.38
434,540,613.18 436,478,069.56 – – – Ending balance Beginning balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 31 Jun 2019
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) Automotive Suspension Co., Ltd. Chongqing Hongyan Fangda Chongqing Cummins Engine Co., Ltd Investees Total The classification of dividend receivable
Related party borrowings Total Items Loan Dividend receivable (1) Interest receivable
Other receivables Other receivables 7.2 7.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. occurred and the enterprise operate normally occurred and the enterprise operate normally Whether the impairment occurs and its judgment basis
(Continued)
The reason for not receiving
Aging 1-2 years No payment No impairment has 1-2 years No payment No impairment has
1,937,456.38 Book Balance 166,726,358.24 168,663,814.62 (CONTINUED)
(continued) (continued) Engine Co., Ltd. Hongyan Fangda Automotive Suspension Co., Ltd. Chongqing Cummins Total Item(or investee) Chongqing The major dividend receivable aged over 1 year The major dividend
(2) Dividend receivable Dividend receivable
Other receivables Other receivables 7.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
294 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 295 – – (Continued)
– – 1 Jan 2019 31 Dec 2018 44,134,374.78 44,134,374.78 19,824,500.00 19,824,500.00 37,789,608.64 37,789,608.64 85,032,555.39 85,032,555.39 23,135,900.48 23,135,900.48 34,470,011.74 34,470,011.74 71,123,714.37 71,123,714.37 96,227,641.45 96,227,641.45 45,008,575.55 45,008,575.55 121,403,432.39 121,403,432.39 157,140,919.06 138,750,801.83 639,063,592.40 620,673,475.17 542,835,950.95 524,445,833.72
– From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 31 Dec 2019 12,622,437.20 88,531,658.42 89,961,698.18 29,861,801.68 23,836,239.61 34,554,133.81 19,574,222.28 41,879,073.45 246,203,177.03 214,687,758.58 149,020,042.26 183,654,530.40 950,732,242.50 767,077,712.10
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) agency basis for pledged notes receivable companies Prepayment for house purchase Borrowing and interest Others Collection and payment on Receivable from Bank of China Large group receivable Land disposal receivable Housing repair fund The related companies of other Deposit Receivable Less: provision for bad debts Advance payments to third party Total Net value Nature Imprest fund Other receivables are classified by the nature of the amount listed are classified by the nature Other receivables below
Other receivables (1)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
(Continued)
1 Jan 2019 31 Dec 2018 6,556,378.48 6,556,378.48 3,125,759.00 3,125,759.00 49,941,974.00 49,941,974.00 10,730,019.07 10,730,019.07 67,220,910.30 67,220,910.30 96,227,641.45 96,227,641.45 639,063,592.40 620,673,475.17 542,835,950.95 524,445,833.72 501,488,551.55 483,098,434.32
31 Dec 2019 6,768,657.75 56,228,292.90 40,316,178.69 92,163,305.28 950,732,242.50 100,887,533.18 767,077,712.10 183,654,530.40 654,368,274.70
(CONTINUED) (continued) (continued) The ageing of other receivables of the Group is calculated from the The ageing of other receivables of the Group is calculated from the date when other receivables are recognized.
Total 4-5 years Over 5 years 3-4 years 2-3 years 1-2 years Aging Net value Less: provision for bad debts Within 1 year Aging analysis Note:
(2) Other receivables Other receivables
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
296 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 297 amount Carrying 5,057,175.52 222,820,123.34
(Continued)
– – bad debts Provision for
– – (%) 31 Dec 2019 8.04 10,293,923.37 117,732,056.37 2.58 14,781,785.97 557,079,005.64 2.62 4,314,819.00 160,662,035.17 0.05 36,890.96 71,794,266.38 0.31 173,043.60 55,864,790.76 0.03 11,000.00 33,312,716.39 1.862.20 332,985.46 73,109.04 17,579,933.47 3,245,532.65 44.57 168,872,744.43 209,998,706.46 19.32 183,654,530.40 767,077,712.10 11.51 3,860,833.54 29,672,410.76 Percentage
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Book balance 3,318,641.69 5,057,175.52 71,831,157.34 56,037,834.36 33,323,716.39 33,533,244.30 17,912,918.93 128,025,979.74 378,871,450.89 571,860,791.61 222,820,123.34 164,976,854.17 950,732,242.50
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED)
Total 1-2 years Over 5 years 2-3 years 3-4 years 4-5 years (continued) government others deposit and reserve fund receivable Receivable from
Deposits, security Related parties Including: Within 1 year General receivables and (continued) recognized separately recognized by group Provision for bad debts is Provision for bad debts is Including: Classification The other receivables recognized provision for bad debts according recognized provision for The other receivables characters to group of expected credit risk
Other receivables Other receivables (3)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. amount Carrying 1,785,275.06 4,917,470.58 34,470,011.74 99,062,557.03 118,394,854.13
– – – – – (Continued)
bad debts Provision for
– – – – – 1 Jan 2019 (%) 0.23 508,856.00 218,775,751.99 0.07 20,081.39 27,911,974.46 1.95 100,000.00 5,038,328.65 1.84 5,273,174.07 281,136,925.61 0.98 5,273,174.07 533,064,348.51 16.98 4,644,236.68 22,708,124.87 90.30 90,954,467.38 9,771,602.44 15.06 96,227,641.45 542,835,950.95 Percentage
Book balance 1,785,275.06 5,138,328.65 4,917,470.58 27,352,361.55 27,932,055.85 34,470,011.74 99,062,557.03 219,284,607.99 286,410,099.68 118,394,854.13 100,726,069.82 538,337,522.58 639,063,592.40
(CONTINUED)
Over 5 years 4-5 years 1-2 years 3-4 years 2-3 years Total (continued) government and reserve fund receivable others Receivable from
Including: Within 1 year Deposits, security deposit General receivables and Related parties (continued) recognized separately recognized by group Provision for bad debts is Provision for bad debts is Including: Classification The other receivables recognized provision for bad debts according recognized provision for The other receivables characters (continued) to group of expected credit risk (Continued)
(3) Other receivables Other receivables
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
298 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 299 amount Carrying 1,785,275.06 4,917,470.58 34,470,011.74 99,062,557.03 100,004,736.90
(Continued)
– – – – – bad debts Provision for
– – – – – (%) 31 Dec 2018 0.230.07 508,856.00 218,775,751.99 20,081.39 27,911,974.46 1.95 100,000.00 5,038,328.65 1.84 5,273,174.07 281,136,925.61 1.01 5,273,174.07 514,674,231.28 16.98 4,644,236.68 22,708,124.87 90.30 90,954,467.38 9,771,602.44 15.50 96,227,641.45 524,445,833.72 Percentage
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Book balance 1,785,275.06 5,138,328.65 4,917,470.58 27,352,361.55 27,932,055.85 34,470,011.74 99,062,557.03 219,284,607.99 286,410,099.68 100,004,736.90 100,726,069.82 519,947,405.35 620,673,475.17
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED)
Over 5 years 4-5 years 1-2 years 3-4 years 2-3 years Total (continued) government and reserve fund receivable others Receivable from
Including: Within 1 year Deposits, security deposit General receivables and Related parties (continued) recognized separately recognized by group Provision for bad debts is Provision for bad debts is Including: Classification The other receivables recognized provision for bad debts according recognized provision for The other receivables characters (continued) to group of expected credit risk (Continued)
Other receivables Other receivables (3)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. fully recoverable recoverable recoverable recoverable recoverable recoverable recoverable recoverable recoverable fully recoverable not expected to be not expected to be not expected to be not expected to be not expected to be not expected to be not expected to be not expected to be not expected to be – not expected to be
(%) Reason (Continued) 60.04 44.57 30.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Percentage
Ending balance bad debts Provision for
Book balance 1,000,000.00 1,000,000.00 1,341,455.00 1,341,455.00 2,942,437.20 2,942,437.20 3,264,844.35 3,264,844.35 3,969,301.71 3,969,301.71 9,680,000.00 9,680,000.00 25,703,025.52 15,433,250.93 14,430,194.00 14,430,194.00 31,213,147.59 31,213,147.59 285,327,045.52 85,598,113.65 378,871,450.89 168,872,744.43
(CONTINUED) (continued) other receivables recognized provision for bad debts debts bad for provision recognized receivables other Co., Ltd. (Hui Gong Building) other Chongqing Ruishida Power Technology Co., Ltd. Chongqing Tooth Auto Parts Co., Ltd. Chongqing Major Gaoke Property Development Chongqing Huahao Smelting Co., Ltd. Chongqing Gangtian Property Co., Ltd. WaterGenPowerS.r.l Chen Yulan Chongqing Shangshe Chemical Co., Ltd. (Note 2) Total Name Chongqing Jiangbei Machinery Co., Ltd. (continued) separately The
) The other receivables recognized provision for bad debts according recognized provision for The other receivables characters (continued) to group of expected credit risk 1
(3) Other receivables Other receivables
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
300 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 301 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) (continued) bad debts were made individually in 2019 were mainly due bad debts were made individually accounts of the debtor. to financial difficulties or long-aging expected to be unable to The management of the Group is full. recover them or to recover them in (referred to as PTG Hong Investment Development Co., Ltd. Co., Chemical Shangshe Chongqing and Company) Kong started Chemical) Shangshe Chongqing as to (referred Ltd. representation legal the to Due business. trading rubber a The possible not is it Chemical, Shangshe Chongqing of rubber purchased by PTG Hong Kong was entrusted to pay of balance principal a paid Group The time. on payment the RMB285,327,045.52 yuan due at the end of the year due to the bank letter of credit issued by the trading business. The Commercial Chongqing with negotiating actively is Group parties relevant other and shareholders its and Corporation the of management The solutions. appropriate study to of loss credit expected the calculated and tested Group RMB85,598,113.65yuan on the advance payment. other receivables recognized provision for bad debts debts bad for provision recognized receivables other (continued) The separately Note1: The other receivables of the Group in which the provision for Note1: The other receivables of the Precision Technology Group Note2: The Group’s overseas subsidiary
) The other receivables recognized provision for bad debts according recognized provision for The other receivables characters (continued) to group of expected credit risk 1
Other receivables Other receivables (3)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Ending balance 183,654,530.40 183,654,530.40
(Continued)
write off
collected or transferred back
Change amount for the year accrued
balance (CONTINUED) Beginning 96,227,641.45 89,920,322.09 2,507,620.63 (14,187.49) 96,227,641.45 89,920,322.09 2,507,620.63 (14,187.49)
(continued) for bad debts that are accrued, collected or transferred transferred or collected accrued, are that debts bad for (continued) of other receivable Total Items Provision for bad debts back during current year Provision The amount of other receivable that is actually write off in the current The amount of other receivable year is RMB -14,187.49.
(4) Other receivables Other receivables (5)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
302 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 303 – – amount bad debts Provision for
(Continued)
(%) 6.74 6.44 31,213,147.59 4.87 10,293,923.37 12.10 30.11 85,598,113.65 60.26 127,105,184.61 Percentage
Within 1 year,1-3 years Within 1 year Within 1 year Within 1 year,2-4 years Within 1 year,1-3 years –
Aging 60.26 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 64,034,072.01 61,213,147.59 46,273,714.96 Book balance 115,059,463.57 286,289,999.73 572,870,397.86
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) and interest arising from trading operations Land disposal fund Affiliate payments Affiliate payments Land disposal fund Advances, borrowings
Nature
(continued) (continued) Group has no assets or liabilities arising from the transfer of of transfer the from arising liabilities or assets no has Group Construction Investment Co., Ltd. Machinery Co., Ltd. Automotive Transmission Co., Ltd. Construction Investment Co., Ltd. Chemical Co., Ltd. Chongqing Jinye Industrial Chongqing Jiangbei Chongqing Shenjian Chongqing Mindray Urban Chongqing Shangshe Total Name of debtors Top five debtors of other receivables Top five debtors other receivables and continued involvement in the current year. due to transfer of financial assets. No The
Other receivables Other receivables (6) (7) year the during Group the by derecognised receivables other (8)
Other receivables Other receivables 7.3
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 7.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 5,462,492.65 7,684,210.71 26,277,927.00 70,607,300.33 Carrying amount (Continued)
Carrying amount
– – – – impairment impairment Provision for Provision for Ending balance Beginning balance
5,462,492.65 7,684,210.71 Book balance 26,277,927.00 70,607,300.33 Book balance 387,843,140.68661,281,164.01 35,468,228.47 63,308,544.28 352,374,912.21 597,972,619.73 297,365,982.08684,454,694.68 42,147,840.40 65,766,138.86 255,218,141.68 618,688,555.82 (CONTINUED) 1,032,146,297.81 58,878,818.622,107,548,529.50 973,267,479.19 157,655,591.37 1,949,892,938.13 1,072,174,013.15 48,350,108.00 1,023,823,905.15 2,137,748,693.60 156,264,087.26 1,981,484,606.34
materials Raw materials Work in progress Finished goods Low value consumables Total Total Items Items Raw materials Work in progress Finished goods Consigned processing release products Low value consumables Classification of inventory Classification (Continued)
Inventory (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 8.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
304 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 305 Ending balance 42,147,840.40 48,350,108.00 65,766,138.86 156,264,087.26
(Continued) – –
Other transfer
– – Decrease Back good with provision impairment for inventory in previous year is increased rose, provision for impairment is transferred back rose, provision for impairment is transferred back Transferred Collected or The reasons of collected and transferred back The net realizable value of finished The price of the final product The price of the final product
9,987,110.87 5,680,031.79 9,987,110.87 5,680,031.79
– – – – Other From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
Increase (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Accrued (CONTINUED) 14,275,638.55
realize value and the book value of finished good realize value and the book value of raw materials realize value and the book value of raw materials balance The determine basic of net realizable value
Beginning of borrowing costs is not included in the Group’s Group’s the in included not is costs borrowing of 35,468,228.47 6,679,611.93 63,308,544.28 2,457,594.58 58,878,818.62 5,138,432.04 157,655,591.37
of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of (continued) Raw materials Items Total Items Finished goods The balance between the net Work in progress the net The balance between Raw materials The balance between the net Work in progress Finished goods Capitalization Provision of impairment of inventory Provision back in the current year back in the current inventory at the end of the year.
Inventory (4) (3) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 8.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – amount Carrying 66,943,824.37 249,077,553.98 Carrying amount (Continued)
– – impairment Provision for Provision for Ending balance impairment Beginning balance
Book balance 66,943,824.37 Book balance 49,508,552.84 49,508,552.84 411,866,777.75 43,412,265.60 368,454,512.15 344,922,953.38 43,412,265.60 301,510,687.78 249,077,553.98 298,586,106.82 49,508,552.84 249,077,553.98
(CONTINUED) above will be fulfilled within one year at the end of the year. above will be fulfilled within one year construction contracts general business Contract assets formed by general business Contract assets related to Total Contract assets formed by Contract assets related to construction contracts Total Items Items The situation of contractual assets The situation of Note: The management of the Group expects that the contract assets mentioned Note: The management of the Group (Continued)
Contractual assets (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 9.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
306 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 307 Ending balance 43,412,265.60 43,412,265.60 (Continued)
Back Transferred Collected or
transfer of more than one year to other non- current assets the contract revenue recognized according to the performance progress is earlier than the time when the payment node receives the consideration Accounts receivable Reclassify contract assets with a maturity Reclassify contract assets with a maturity In the process of contract performance,
Reason
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Change amount for the year amount Change Accrued for the year (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 301,510,687.78 119,376,958.17
(182,133,729.61)
(CONTINUED) balance Beginning 49,508,552.84 3,805,789.78 4,554,504.18 14,456,581.20 49,508,552.84 3,805,789.78 4,554,504.18 14,456,581.20
(continued) construction contracts general business impairment of contract assets Contract assets related to Contract assets formed by Item Provision for Total Total Items Provision for impairment of contract assets this year Significant changes in the book value of contract assets during the in the book value of Significant changes year and the reasons
Contractual assets Contractual assets (3) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Balance Beginning Whether the money was generated by a connected transaction No
6,039,285.98 6,039,285.98 (Continued)
(continued) – – Performed write-off procedures General Manager’s Office
Ending Balance ruled, and both parties agree with the court’s decision Reason for write-off The court has
Write-off amount 14,456,581.20
(CONTINUED) Payment 14,456,581.20 Nature –
(continued) Resources Yazuihe Hydropower Development Co., Ltd. Total Company name Sichuan China The write-off of important contract assets The write-off of important Provision for impairment of contract assets this year of contract assets this Provision for impairment
Total Item Assets held for sale Assets held for sale Contractual assets Contractual assets (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 10. 9.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
308 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 309 balance Beginning 242,114.28 (Continued)
3,513,765.43 81,059,064.90 77,303,185.19 joint ventures Borrowings from
– – – Ending balance Nature balance Beginning 8,707,824.35 41,915,619.38 33,207,795.03
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Ending balance (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 17,500,000.00 17,500,000.00 (CONTINUED)
within one year Deferred expenses
Total Items Total Item Unused deductible VAT Prepaid tax Related party loans due 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 FINANICAL 12. 11.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – (%) Proportion
(Continued)
31 Dec 2018
(%) Proportion 1 Jan 2019 31 Dec 2018
2,148,080.34 73,239,939.63 73,239,939.63 33,652,837.43 33,652,837.43 1,151,238,019.97 1,149,089,939.63 1,117,585,182.54 1,115,437,102.20 1,075,850,000.00 1,075,850,000.00
1 Jan 2019
(%) 100.00 1,151,238,019.97 100.00 1,149,089,939.63 100.00 100.00 1,151,238,019.97 100.00 1,149,089,939.63 100.00 Proportion 31 Dec 2019 1,975,138.84 62,491,603.50 23,646,491.18
945,495,172.34 921,848,681.16 881,028,430.00 (CONTINUED)
of loans and advances to customers (excluding (excluding customers to advances and loans of 31 Dec 2019 945,495,172.34 945,495,172.34
industry Industry Manufacturing Total
accrued interest) based on industry Classification – Discount – Accrued interest impairment corporations – Loans
Less: Provision for Carrying amount Loans and advances to Total Items Loans and advances to customers aged within one year to customers aged within Loans and advances 1)
Loans and advances to customers Loans and advances (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 13.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
310 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 311 (%) Proportion
(Continued)
(continued) 31 Dec 2018
(%) Proportion 1 Jan 2019 31 Dec 2018
121,226,194.41 121,000,000.00 654,671,543.29 653,450,000.00 139,760,777.85 139,500,000.00 235,579,504.42 235,139,939.63 260,986,972.26 260,500,000.00 1,151,238,019.97 1,149,089,939.63
1 Jan 2019 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(%) 100.00 1,151,238,019.97 100.00 1,149,089,939.63 100.00 100.00 1,151,238,019.97 100.00 1,149,089,939.63 100.00 Proportion (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019 62,491,603.50
945,495,172.34 181,975,138.84 273,030,430.00 427,998,000.00 335,522,033.50 (CONTINUED)
of loans and advances to customers (excluding (excluding customers to advances and loans of of loans and advances to customers (excluding (excluding customers to advances and loans of 31 Dec 2019 945,495,172.34 945,495,172.34
beginning balance and ending balance of the group are no no are group the of balance ending and balance beginning Pledged loan Mortgaged loan Southwest Total Total
Items Unsecured loan Area Guaranteed loan Collateral loan Including: accrued interest) based on location Classification Classification accrued interest) based on type of security accrued interest) based on type The overdue loans.
Loans and advances to customers aged within one year to customers aged within Loans and advances 2) 3) 4)
Loans and advances to customers Loans and advances (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 13.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – expected credit loss balance 5,619,880.43 Beginning 28,032,957.00 33,652,837.43
1,120,000.00 40,000,000.00 40,000,000.00 40,000,000.00 38,880,000.00 – – – – (continued) (Continued)
Amount last year
Single item
3,000,000.00 expected 120,000,000.00 120,000,000.00 120,000,000.00 117,000,000.00 credit loss Ending balance 1,866,746.44 (8,139,599.81) 33,652,837.43 23,646,491.18
– – – – Amount this year Single item (continued)
(CONTINUED) of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of bad debt provision for receivables Less: Reclassification to Accrued in current year Ending balance Items Beginning balance back in the current year Provision – Loans
Less: Provision for impairment Loans and advances to corporations
Items
Total Carrying amount 5) Loans and advances to customers aged within one year to customers aged within Loans and advances Loans and advances to customers aged over one year
Loans and advances to customers Loans and advances (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 13.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
312 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 313 (%) (%) 100.00 100.00 100.00 100.00 Proportion Proportion balance Beginning (Continued)
40,000,000.00 40,000,000.00 (continued)
balance balance Beginning Beginning Ending
balance (%) (%) 100.00 40,000,000.00 100.00 40,000,000.00 100.00 40,000,000.00 100.00 40,000,000.00 120,000,000.00 120,000,000.00 Proportion Proportion
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
Ending Ending balance balance (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 120,000,000.00 120,000,000.00 120,000,000.00 120,000,000.00 (CONTINUED)
of loans and advances to customers (excluding (excluding customers to advances and loans of of loans and advances to customers (excluding (excluding customers to advances and loans of of loans and advances (excluding accrued interest) interest) accrued (excluding advances and loans of Total Item Area Southwest Industry Manufacturing industry Guaranteed loan Total Total accrued interest) based on location based on type of security Classification Classification accrued interest) based on industry Classification
2) 3) Loans and advances to customers aged over one year to customers aged over Loans and advances 1)
Loans and advances to customers Loans and advances (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 13.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. amount Carrying 25,329.00 8,800,000.00 42,000,000.00 33,200,000.00 1,094,671.00 1,120,000.00
– – –
– – – (Continued)
(continued) impairment Amount last year Provision for Beginning balance
Single item Portfolio item Book
balance 8,800,000.00 42,000,000.00 33,200,000.00
Expected credit loss 1,880,000.00 1,120,000.00 3,000,000.00 amount Carrying
17,500,000.00 95,700,000.00 113,200,000.00 – – –
– – – Amount this year Single item impairment (continued) Provision for Ending balance
(CONTINUED) Book balance 17,500,000.00 95,700,000.00 113,200,000.00
of impairment that are accrued, collected or transferred transferred or collected accrued, are that impairment of beginning balance and ending balance of the group are no no are group the of balance ending and balance beginning Accrued in current year Beginning balance Ending balance Items The overdue loans Provision back in the current year due within one year related parties (Please refer to Note)
Less: long-term receivables Total Long-term receivables from Item 4) Situation of Long-term Receivable Loans and advances to customers aged over one year to customers aged over Loans and advances 5)
Long-term receivable Loans and advances to customers Loans and advances (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 14. 13.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
314 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 315 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) were no long-term receivables derecognised by the Group Group the by derecognised receivables long-term no were 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 capital investment. The total amount entrusted loan to the Group for project which is restricted to the construction of this loan is RMB122,000,000yuan production line technology and high-powered engine of R&D center the of term of the loan is from 14 March 2016 project of high-powered engine. The shall be calculated at the fixed annual to 14 March 2026. The loan interest Chongqing Cummins borrowed from the rate of 1.2% and paid quarterly. Group through shareholder loan. Group did not transfer long-term receivables and continued continued and receivables long-term transfer not did Group the Group’s financial asset accounting policies, no provision for bad bad for provision no policies, accounting asset financial Group’s the There The Provision of bad debts are loans to related parties. According The Group’s long-term receivables to Situation of Long-term Receivable Situation of Long-term during the reporting period due to financial asset transfers. the during liabilities and assets of formation the in participate to reporting period. debts is made. Note: In order to construct the R&D center of high-powered engine technology technology engine high-powered of center R&D the construct to order In Note:
Long-term receivable Long-term receivable (4) (3) (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 14.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
(Continued)
(refer to Note 1) Note to (refer ,5,3.6(3,520,745.31) 2,651,933.96 – 1,185,849.90 78,029,543.84 – 16,880,157.00 33.33 27.00 method Equity Exedy 80,084,205.09
(refer to Note 1) Note to (refer – – – (8,793,384.08) 123,406,148.77 – 51,306,166.00 42.86 44.00 method Equity Hongyan 114,612,764.69
– – – – (335,438.00) 335,438.00 4,000,000.00 20.00 20.00 Ltd. method Co., Equity Gas Yongtong Chongqing –
– 29,349,033.00 – 5,301,113.55 248,255,606.76 – 236,651,166.00 37.80 37.80 method ABB”) Equity (“Chongqing Ltd. Co., 224,207,687.31
Chongqing ABB Power Transformer Transformer Power ABB Chongqing
Associates
– 267,814,254.94 – 279,213,561.46 – 360,896,119.24 370,189,551.00 – – – 372,295,425.76 Subtotal
– 267,814,254.94 – 279,213,561.46 360,896,119.24 – 370,189,551.00 50.00 50.00 method Equity Cummins CQ 372,295,425.76
Joint ventures Joint
balance investment rights Voting shareholdings method investee of Name investment method Decrease declared income Ending balance Ending
Beginning Beginning of Cost of Percentage Accounting Decrease in in Decrease under equity equity under Cash dividend dividend Cash comprehensive
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 15.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
316
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 317
August 6, 2019. The company has not completed liquidation by the end of the year. the of end the by liquidation completed not has company The 2019. 6, August
difficulties, the company has submitted a voluntary bankruptcy liquidation application to the relevant Italian court on on court Italian relevant the to application liquidation bankruptcy voluntary a submitted has company the difficulties, Note2: The Group has fully recognized the investment loss of Italian WGP equity investment in 2018. Due to WGP’s operating operating WGP’s to Due 2018. in investment equity WGP Italian of loss investment the recognized fully has Group The Note2:
(Continued)
of shareholders in the board of directors and the percentage of shareholding. of percentage the and directors of board the in shareholders of
Note1: Difference between the percentage of shareholding and voting rights is derived from the difference between numbers numbers between difference the from derived is rights voting and shareholding of percentage the between Difference Note1:
9,1,2.0(3,520,745.31) 299,815,221.90 – 283,867,094.72 (335,438.00) 1,009,154,785.28 873,058,619.00
Total 996,391,965.41
200969 (3,520,745.31) 32,000,966.96 – 4,653,533.26 648,258,666.04 (335,438.00) 502,869,068.00 Subtotal 624,096,539.65
– – – (8,061,868.26) 89,742,246.20 – 85,808,049.00 35.00 35.00 method Ltd Equity Co., Part Drive From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 81,680,377.94
Automotive Automotive
Chongqing Shenjian Shenjian Chongqing
– – – – – – 6,058,193.00 49.00 49.00 method Italy Equity in Company WPG –
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
– – – (892,360.84) 59,014,532.44 – 57,933,968.00 20.00 41.00 method Equity 2) Note to (refer 58,122,171.60
Machinery Machinery
Chongqing Jiangbei Jiangbei Chongqing
40 421390 49,475,150.03 44,231,369.00 34.00 34.00 method Equity Knorr – – – 15,914,182.99 – 65,389,333.02
balance investment rights Voting shareholdings method investee of Name Decrease declared income method equity investment Ending balance Ending
Beginning Beginning of Cost of Percentage Accounting Cash dividend dividend Cash under comprehensive in recognized Decrease
of other other of loss or gain or Increase
Adjustment Adjustment Investment
Increase or decrease or Increase
Long-term equity investment investment equity Long-term 15. (continued) (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Not applicable
Reasons for transferring other comprehensive income to retained earnings balance
Beginning 46,693,061.00 46,693,061.00 (Continued)
non-transactional purposes Held for
Designated as a reason for measuring at fair value and its changes included in other comprehensive income
– Ending income Amount of other balance earnings to retained transferred comprehensive
52,314,020.88 52,314,020.88 – loss
Cumulative
gain Cumulative 5,620,959.88
– (CONTINUED) during income the year Dividend recognized
Materials Co., Ltd. Powder New Materials Co., Ltd. Equity investment of Youyan Powder New Equity investment of Youyan Powder Equity investment of Youyan Item Total Item
Investment in other equity instruments Investment in other Investment in non-trading equity instruments during the year Investment in non-trading equity
Other equity instruments investment Other equity instruments (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 16.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
318 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 319 Total (Continued)
133,620.68 133,620.68 503,119.03 503,119.03 3,707,507.237,090,159.54 3,707,507.23 7,090,159.54 7,090,159.54 7,090,159.54 4,961,230.444,458,111.41 4,961,230.44 4,458,111.41 2,648,643.222,648,643.22 2,648,643.22 2,648,643.22 3,841,127.91 3,841,127.91 83,609,256.52 83,609,256.52 43,752,018.43 43,752,018.43 41,439,431.21 41,439,431.21 78,047,637.67 78,047,637.67 Buildings and 121,799,656.10 121,799,656.10 125,048,687.73 125,048,687.73 land-use rights
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Transfer of fixed assets Transfer of fixed assets Reduced amount for the year Including: Dispose Ending balance Including: Accrued or amortized Increase this year 2. Beginning balance Reduced amount for the year Including: Dispose Ending balance Including: Purchase Book balance Beginning balance Increase this year Ending balance 1. Ending balance Accumulated depreciation Beginning balance
I. III. II.
Items 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 FINANICAL 17.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (Continued)
257,400.11 257,400.11 1 Jan 2019 31 Dec 2018 2,896,526,378.89 3,224,463,549.03 2,896,783,779.00 3,224,720,949.14
31 Dec 2019 1,694,639.83 (CONTINUED) 2,837,275,150.38 2,838,969,790.21
(continued) At the end of the year, the Group had no investment real estate without a year, the Group had no investment At the end of the property right certificate. no significant impairment in the group’s At the end of the year, there is is made for related impairment. investment property and no accrued Equipment
Total Items Property, Plant and Equipment Disposal of Property, Plant and Property, plant and equipment Investment property Investment property (2) (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 18. 17.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
320 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 321 Total 3,102,834.12 3,707,507.23 4,383,299.82 79,271,198.76 346,268,159.35
(Continued)
– – – – – Office 514,744.50 45,216,060.54 514,744.50 38,405,719.19 equipments 8,019,001.08 61,546,745.53 8,019,001.08 145,201,244.11
– – – – – 2,967,957.21 2,967,957.21 2,405,615.15 2,405,615.15
– From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Machinery equipment Transportation 3,102,834.12 4,383,299.82 346,268,159.35
– – – (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) Buildings (CONTINUED) 704,357.72 50,417,771.58 7,071,799.633,707,507.23 27,851,217.85 10,779,306.86 30,954,051.97 36,919,935.03 42,351,263.73 37,624,292.75 97,152,335.13 2,544,251,383.08 1,390,090,306.27 59,414,502.82 70,304,672.04 4,064,060,864.21 2,517,406,397.19 1,323,892,023.11 59,976,844.88 62,800,415.46 3,964,075,680.64 2,517,406,397.19 1,670,160,182.46 59,976,844.88 62,800,415.46 4,310,343,839.99
in Lease Standards Amount Affected by Changes
Transfer to construction in progress Disposal or scrap Transfer to investment real estate Transfer from Stock goods Purchase Transfer from construction in process
2) Balance at 31 Dec 2019 Decrease (3) (1) ( (3) Increase (2) (1) Less: Book balance of 1 Jan 2019 Book balance of 31 Dec 2018
4. 3. 2. Book balance 1.
Items I 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 FINANICAL 18.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – – – – – Total 503,119.03 4,039,112.28 1,330,097.33 4,039,112.28 4,039,112.28 18,330,989.21
– – – – – – – – – – – – Office (Continued)
485,302.52 25,822,695.84 485,302.52 23,989,479.48 equipments 6,699,458.39 185,059,107.92 6,699,458.39 185,059,107.92
– – – – – – – – – – – – 3,588,419.91 2,239,511.01 3,588,419.91 2,239,511.01
– – – – – – – Machinery equipment Transportation 4,039,112.28 1,330,097.33 4,039,112.28 4,039,112.28 18,330,989.21
– – – – – – – – – – – (continued) Buildings (CONTINUED) 503,119.03 4,529,368.28 18,568,514.03 4,026,249.25 17,238,416.70 58,043,783.56 116,727,446.06 58,043,783.56 116,727,446.06 354,141,387.29 781,551,761.86 44,309,508.91 42,743,943.49 1,222,746,601.55 300,626,972.01 701,723,819.04 42,960,600.01 36,529,787.62 1,081,841,178.68 300,626,972.01 683,392,829.83 42,960,600.01 36,529,787.62 1,063,510,189.47 2,190,109,995.792,216,779,425.182,216,779,425.18 604,499,432.13 636,460,081.00 964,397,251.14 15,104,993.91 17,016,244.87 17,016,244.87 27,560,728.55 26,270,627.84 26,270,627.84 2,837,275,150.38 2,896,526,378.89 3,224,463,549.03
in Lease Standards in Lease Standards Amount Affected by Changes Amount Affected by Changes
Disposal or scrap Accrue Transfer to construction in progress Accrue Transfer to investment real estate Disposal or scrap
2) Balance at 31 Dec 2019 (1) Decrease Increase (1) Balance at 31 Dec 2019 (3) Balance at 1 Jan 2019 Less: Balance at 31 Dec 2019 Balance at 1 Jan 2019 Balance at 31 Dec 2018 Less: Increase Decrease (1) (1) ( Balance at 31 Dec 2018 Balance at 31 Dec 2018 Balance at 1 Jan 2019
4. 3. 4. 2. 1. 2. 3. 2. 3. Net carrying amount Provision for impairment 1. Accumulated depreciation and amortization 1.
IV III Items 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 FINANICAL 18.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
322 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 323 amount 1,860.00 6,187.03 Carrying (Continued)
In process – –
amount Reason Carrying impairment Provision for
583,846,379.86 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December depreciation Accumulated
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Book (continued) (CONTINUED) balance 123,740.52 117,553.49 7,641,487.42 3,358,448.70 3,927,136.86 355,901.86 7,480,546.90 3,205,555.21 3,927,136.86 347,854.83
Office equipments Transportation 37,200.00 35,340.00 Building Total Item Items Machinery equipment The property, plant and equipment without certificate of title The property, plant and equipment Restriction on property, plant and equipment Please refer to VI.66 for details Temporarily idle property, plant and equipment Temporarily idle property, plant At had been fully depreciated and continued to be used was was used be to continued and depreciated fully been had RMB274,737,489.61yuan.
(4) Property, plant and equipment Property, plant (5) (2) that assets fixed of value original the year, the of end the (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 18.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (Continued)
(continued) (CONTINUED) the end of the year, the production conditions of the subsidiaries of the of the subsidiaries of conditions production year, the of the end the Group were good, and the production capacity of each subsidiary was was subsidiary each of capacity production the and good, were Group by the management of the Group, the fully utilized. As judged and tested signs of impairment and no provision for Group’s fixed assets showed no impairment was made this year. Provision for impairment At
Property, plant and equipment Property, plant (6)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 18.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
324 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 325 – 582,806.16 9,780,341.02 4,634,739.94 4,480,970.09 2,248,617.05 2,714,907.34 31,687,980.30 29,441,382.83 74,635,444.79 11,042,087.25 Carrying amount
– – – – – – – – – – (Continued)
impairment Provision for Beginning balance
582,806.16 9,780,341.02 4,634,739.94 4,480,970.09 2,557,627.00 2,557,627.00 2,248,617.05 2,714,907.34 Book balance 31,687,980.30 29,441,382.83 74,635,444.79 11,042,087.25 173,806,903.77 2,557,627.00 171,249,276.77
– – amount Carrying 846,479.75 9,379,791.39 4,480,970.09 1,532,982.57 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 48,357,353.53 29,549,501.47 84,975,566.82 16,735,753.20 11,590,179.76
– – – – – – – – – – impairment Provision for (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Ending balance
(CONTINUED) – 846,479.75 9,379,791.39 4,480,970.09 2,557,627.00 2,557,627.00 1,532,982.57 48,357,353.53 29,549,501.47 84,975,566.82 16,735,753.20 11,590,179.76 Book balance 210,006,205.58 2,557,627.00 207,448,578.58
equipment and supporting projects Rudong Project platform Relocation Project Picking Machine Project Project land related projects laboratory, etc. Others Water wheel production Re-passing into Jiangsu Heavy-duty turbine laboratory Kingdee electronic trading Casting Project Galaxy Casting and Forging Fubaotian-Xinjiang Cotton Production Capacity Building Air pressure relocation and Total Items Blower laboratory, compressor 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 FINANICAL 19.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – Ending Balance 846,479.75 1,532,982.57 4,480,970.09 9,379,791.39 29,549,501.47 84,975,566.82 16,735,753.20 11,590,179.76 159,091,225.05
– – – – – – – Other (Continued) Decrease
715,634.48
– – – – – – – Decrease Transfer into property, plant and equipment
– – Increase
Balance Beginning 9,780,341.02 3,129,202.42 3,529,752.05 4,480,970.09 2,248,617.05 74,635,444.79 10,340,122.03 11,042,087.25 548,092.51 139,561,296.47 61,678,811.02 31,303,438.61 10,845,443.83
(CONTINUED) – – – – – amount Budgeted (continued) 50,000,000.00 29,441,382.83 108,118.64 42,090,000.00 2,714,907.34 14,020,845.86 249,370,000.00 4,634,739.94 33,268,755.97 27,773,686.56 10,129,809.35 142,000,000.00 582,806.16 263,673.59
equipment and supporting projects platform laboratory Picking Machine Project Relocation Project Rudong Project land related projects Building Project compressor laboratory, etc. Water wheel production Kingdee electronic trading Heavy-duty turbine Fubaotian-Xinjiang Cotton Galaxy Casting and Forging Re-passing into Jiangsu Air pressure relocation and Production Capacity Total Project Name Blower laboratory, 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 FINANICAL 19.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
326 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 327 bank’s borrowing bank’s borrowing Self-collected fund Self-collected fund and Self-collected fund Bank’s borrowing Self-collected fund Self-collected fund Self-collected fund Self-collected fund Self-collected fund and
(Continued)
– – – – – – – – amount of 454,884.27 Capitalized in current year Capital Source borrowing costs
– – – – – – – – (Continued) aggregate amount of Capitalized borrowing costs
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December – – – – – 0.60 58.88 39.76 1,408,326.07 100.00 Project Progress(%) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
– – – – – – (CONTINUED) 0.60 58.88 39.76 to budget(%) (continued) The ratio of input
Rudong Project equipment and supporting projects Picking Machine Project Relocation Project platform Project land related projects laboratory, etc. Re-passing into Jiangsu Heavy-duty turbine laboratory Water wheel production Fubaotian-Xinjiang Cotton Galaxy Casting and Forging Kingdee electronic trading Production Capacity Building Air pressure relocation and Project Name Blower laboratory, compressor The situation of construction in progress The situation of (Continued)
Construction in progress Construction in (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 19.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Total 5,110,200.69 5,110,200.69 2,049,616.00 2,049,616.00
– – – – (Continued)
Field 265,141.92 17,935,605.22 265,141.92 17,935,605.22
– – – – – – Machinery equipment
Buildings 5,110,200.69 5,110,200.69 2,049,616.00 2,049,616.00 8,097,507.13 21,293,650.19 21,975,987.46 51,367,144.78 (CONTINUED) 52,739,673.04 352,193,481.30 63,446,105.87 468,379,260.21 17,670,463.30 26,330,270.69 53,040,097.73 30,427,661.33 109,798,029.75 20,282,379.5620,282,379.56 31,746,447.54 31,746,447.54 8,451,673.87 8,451,673.87 60,480,500.97 60,480,500.97 40,179,410.43 352,193,481.30 63,180,963.95 455,553,855.68 17,670,463.30 26,409,402.3532,081,903.30 299,153,383.57 330,899,831.11 33,018,444.54 41,204,976.49 358,581,230.46 404,186,710.90
Including: termination of contract Decrease Increase Including: leased Increase Including: Accrued for the year Including: termination of contract
Book balance of 31 Dec 2019 2. Decrease Balance of 31 Dec 2019 2. 1. 1. Book balance Book balance of 1 Jan 2019 Accumulated depreciation Balance of 1 Jan 2019 Carrying amount 1. Carrying amount of 31 Dec 2019 2. Carrying amount of 1 Jan 2019
I Items II III Right-of-use assets
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 20.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
328 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
329
4. 218544 679632 202529 9,5.343,139,797.58 494,650.03 42,072,522.95 16,779,693.20 82,138,504.47 balance ,9,3.9191,119,503.92 6,494,335.69 – Ending Ending
18,167,588.92 – 13,608,442.48 – – – 1,104,967.85 3,454,178.59 Disposal (1)
(Continued) 3. 18,167,588.92 – 13,608,442.48 – – – 1,104,967.85 3,454,178.59 Decrease
3,0,2.9 777315)(,4,8.9 9,5.3227593 109346)(,7,7.8 (45,627,302.44) (4,673,776.78) (1,059,384.68) 2,277,529.33 494,650.03 (1,548,385.19) (7,717,311.56) (33,400,623.59) others (2)
(1)
081958 ,0,9.911,276,942.32 2,307,191.89 10,851,915.80 Amortization ,9,1.241821 2,2.729,649,844.26 227,720.47 491,862.16 4,494,211.62 –
2,4,0.9 540196)978571 9,5.3671709 57525)(,4,5.1 (15,977,458.18) (4,446,056.31) (567,522.52) 6,771,740.95 494,650.03 9,728,557.13 (5,410,119.67) (22,548,707.79) Increase 2.
0,4,9.52,9,8.232,343,965.82 23,294,780.72 108,141,390.85 balance 638066 415950 090320 225,264,551.02 10,940,392.00 14,175,965.00 36,368,056.63 – Beginning Beginning
1.
Accumulated amortization Accumulated II
Ending Ending 4. 2,3,0.12,0,0.42670388 270800 586540 6,2.0871882 847,374,329.12 8,771,898.24 261,826.00 55,806,564.00 12,750,850.03 216,740,378.80 25,706,508.94 527,336,303.11 balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(1) 81,775,041.83 – 68,746,272.64 – – – 1,970,117.44 11,058,651.75 Disposal
81,775,041.83 – 68,746,272.64 – – – 1,970,117.44 11,058,651.75 Decrease 3.
(2) 4,3,2.9 422877)1561532 9,5.372500 5,1.4(,6,9.6 73,168,394.51 (2,168,493.76) 750,718.64 762,500.00 494,650.03 125,691,533.22 (4,222,887.73) (48,139,625.89) other
13,121,262.36 – – – – – 4,427,376.96 8,693,885.40 Purchase (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (1)
2. 3,4,4.9 0,8.31561532 9,5.372500 5,1.4(,6,9.6 86,289,656.87 (2,168,493.76) 750,718.64 762,500.00 494,650.03 125,691,533.22 204,489.23 (39,445,740.49) Increase
Beginning Beginning 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
1.
Gross carrying amount carrying Gross I
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)
21. Intangible assets Intangible (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI.
The Group has no land use rights without a property right certificate at the end of the year. the of end the at certificate right property a without rights use land no has Group The (2)
The restriction on intangible assets is detailed in VI.66 in detailed is assets intangible on restriction The
(Continued) Note:
Beginning Beginning 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 balance 2. 617,595,163.06 –
4,9,9.4896857 7,6,5.51,5,0.01,6,6.221860 ,7,6.5656,254,825.20 2,277,562.55 261,826.00 12,666,766.42 12,256,200.00 174,667,855.85 8,926,815.74 445,197,798.64 balance Ending Ending
1.
Net carrying amount carrying Net IV
4. Ending Ending – – – – – – – – balance
– – – – – – – – Disposal (1)
3.
– – – – – – – – Decrease
– – – – – – – – impairment for Provision
(1)
2. – – – – – – – – Increase
Beginning Beginning – – – – – – – – balance
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 21. (continued)
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
330 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 331 – – – – – Ending Balance 67,924.53 162,218.42 1,579,432.42 14,800,667.23 16,610,242.60
(Continued) – – – –
36,166.92 116,601.94 569,680.26 profit or loss 1,001,052.77 44,897,844.07 Recognized in
– – – – – – – Decrease assets intangible Transfer into
– – – – – – Other From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 94,339.62 29,592,071.64
Increase – – – Internal (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts expenditure development 1,579,432.42 (CONTINUED) 45,060,062.49 14,800,667.23 29,497,732.02
– – – – Balance 36,166.92 Beginning 116,601.94 569,680.26 1,001,052.77 29,927,674.79 129,892,415.90 9,114,555.80 105,703,057.93 46,621,345.96 28,204,172.90 38,954,521.74 9,020,216.18 76,110,986.29
expenditures maintenance R & D project technology platform introduces innovative projects intelligence technology innovation Southwest University Technology Development wind power blades CNC Machine Tool Efficiency Technology for Machine Tool Automotive Power System Key Parts Processing process and automated production line equipment R & D and industrialization project Other sporadic development Big data operation and Intelligent manufacturing Major topics of artificial Agricultural Machinery Project Total Items Circular economy development of Development and Application of Green high-speed dry cutting Wind blade technology of General Development expenditure
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 22.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – Ending balance 293,946.00 15,368,000.00 127,650,489.00 143,312,435.00
(Continued)
– – – – –
– – – – –
– (CONTINUED) balance Increase Decrease Beginning 293,946.00 15,368,000.00 127,650,489.00 143,312,435.00
Developments Limited, and PTG Deutschland GmbH. PTG six six PTG GmbH. Deutschland PTG and Limited, Developments impairment
provision of PTG six entities comprise Holroyd Precision Limited, PTG Heavy Industries PTG six entities comprise Holroyd Precision Components Limited, PTG Limited, Milnrow Investments Limited, Advanced entities belong to CNC machine tools business section, while Chongqing Chongqing while section, business tools machine CNC to belong entities to CAFF Automotive Braking & Steering System Co. Ltd. (“CAFF”) belongs other segment.
goodwill CAFF PTG six entities Net value of Name of investee Power Transformer Less: Original value of goodwill Original value of Note:
Goodwill (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 23.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
332 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 333 balance Beginning 293,946.00 (Continued)
15,368,000.00 143,312,435.00 127,650,489.00
Ending balance 293,946.00 15,368,000.00 143,312,435.00 127,650,489.00
From 31 December 2018 to 31 December 2019 2018 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 value of the relevant assets or asset group portfolio (including goodwill) withgoodwill) (including portfolio group asset or assets relevant the of value book the than lower is amount recoverable the If amount. recoverable its The value, the relevant difference is included in the current profit and loss. Group’s allocation of goodwill has not changed at the end of the year. (continued) Total Cash-generating units/ Groups of cash-generating units Power Transformer PTG six entities CAFF Impairment generating units Goodwi impairment test, the Group compares the book Note: When conducting a goodwill cash- of groups or units cash-generating of amount recoverable The approved budget five-year the on base determined is units generating method. by the management and calculated using cash flow forecasting rate is below estimated growth over five years, the the cash flow As for applied for calculation.
Goodwill (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 23.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 0% 9.80% (Continued)
39.09%-53.64% PTG six entities
(CONTINUED) (continued) (continued) Items Growth rate Gross profit rate Discount rate Impairment Major assumptions for discounted cash flow method: Major assumptions
The Group determines the growth rate and gross profit margin based on The Group determines the growth a uses and development, market of forecasts and experience historical asset relevant the of risks specific the reflects that rate interest pre-tax as the discount rate. The growth rate group and asset group combination five-year budget average the using determined is period for the forecast sales revenue of the relevant asset growth rate of 2% -9% of the approved The weighted average growth rate of 0% group and asset group portfolio. report and is consistent with the forecast data contained in the industry does not exceed the long-term average growth rate of each product.
Goodwill (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 23.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
334 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 335 – 277,582.03 31 Dec 2019 2,693,015.88 6,555,902.54 236,461,354.87 232,876,050.24 239,431,952.78
– – – – (Continued)
Other decrease
– – 719,244.12
– – Increase Amortization 313,565.24 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
683,260.91 2,759,158.05 1,228,770.13 1,294,912.30 6,555,902.54 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 211,456,805.54 70,092,379.97 33,563,282.46 11,524,548.18 215,247,447.74
(CONTINUED) – – – – – The impact of change of New Lease Standard 1 Jan 2019
683,260.91 31 Dec 2018 2,759,158.05 6,555,902.54 15,749,679.23 (8,845,553.45) 6,904,125.78 11,592,005.26 10,042,591.20 8,453,539.84 211,456,805.54 230,648,903.73 (8,845,553.45) 221,803,350.28224,093,001.19 83,226,720.60 45,620,030.08 19,978,088.02
impairment Property, Plant and Equipment Long-term prepaid rent Other Mold Decrease: Provision for Total Subtotal Items Improvement of leased Long-term deferred expenses Long-term deferred
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 24.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. temporary Deductible tax losses) differences (Deductible (Continued)
Ending balance Deferred (Deferred tax assets 733,376.99 5,937,979.95 1,854,591.79 12,363,945.27 6,391,241.51 42,608,276.66 4,065,792.452,172,109.97 27,105,282.98 7,870,827.28 29,106,305.50 194,042,036.69 73,779,792.89 465,564,079.14 20,444,856.36 86,532,180.10 58,053,013.67 251,112,395.13 34,764,564.16 218,697,944.12 tax liabilities) 121,906,877.97 767,784,390.13 109,458,767.32 544,050,557.19
(CONTINUED) before tax machinery and equipment before tax Deferred tax assets Temporary tax free income Provision for impairment Appreciation of assets valuation One-time deduction of land use right Deductible tax loss One-off deduction of book value of Retirement and termination benefit Accrued expenses Others Deferred revenue Deferred tax liabilities
I Items II Deferred income tax assets and liabilities without set-off tax assets and liabilities without Deferred income
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 FINANICAL 25.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
336 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 337 – losses) temporary Deductible differences (Continued)
(continued) (Deductible tax
– Beginning balance Deferred tax 2,184,750.003,248,386.76 15,613,799.97 2,653,815.32 21,655,911.71 9,477,911.86 tax liabilities) 58,951,859.49 257,104,697.72 20,557,735.08 87,284,704.91 63,887,668.91 401,372,659.24 20,394,413.43 122,896,939.28 11,317,639.04 75,450,926.85 79,509,594.57 344,389,402.63 103,686,673.46 646,468,148.91 assets (Deferred (continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Deferred tax assets before tax Provision for impairment Deductible tax loss Deferred revenue Retirement and termination benefit Accrued expenses Others Deferred tax liabilities
I Appreciation of assets valuation One-time deduction of land use right Temporary tax free income Items II Deferred income tax assets and liabilities without set-off tax assets and liabilities without Deferred income (Continued)
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 FINANICAL 25.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – – – – – balance balance Beginning Beginning 91,937,793.43 55,112,121.57 67,285,911.46 87,862,494.16 820,543,706.27 196,075,809.45 414,207,369.63 820,543,706.27 912,481,499.70 (Continued)
– – Ending Ending balance balance 3,380,277.08 64,068,103.30 58,597,939.91 90,463,947.00 84,360,062.64 522,115,549.89 270,437,495.13 327,724,033.08 218,916,741.07 444,071,212.54 1,865,218,620.57 1,865,218,620.57 2,084,135,361.64 (continued)
(CONTINUED) tax losses not recognized in deferred tax assets will be be will assets tax deferred in recognized not losses tax The above data does not include the accumulated loss of PTG Group’s Group’s PTG of loss accumulated the include not does data above of year the of end the at assets tax income deferred unrecognized year RMB148,706,410.01yuan (the accumulated loss at the beginning of the was RMB49,018,874.30yuan).
2029 2028 2027 2026 Deductible tax losses 2025 2024 2019 Deductible temporary differences 2020 2021 2022 2023 Total Year Total Item Unrecognized deferred tax assets Unrecognized deferred Deductible expired in the following years Note: the so date, expiry no has Group PTG of loss accumulated
Deferred tax assets and deferred tax liabilities Deferred tax assets (2) (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 25.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
338 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 339 – – Beginning 970,027.30 642,616.00 (Continued)
3,534,951.11 21,495,341.97 21,495,341.97 16,347,747.56 balance
642,616.00 2,876,712.91 9,165,379.91 2,654,315.18 22,266,269.47 219,849,271.18 254,577,851.74 251,701,138.83 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) T assets formed by construction contracts with collection rights of more than one assets formed by construction contracts with collection rights of more year according to the expected credit loss model.
assets
Carrying amount of other non-current Carrying amount of other non-current Contract assets formed by construction contracts Contract assets formed by construction Debt housing Prepaid land payment Total other non-current assets Items Less: provision for impairment Prepaid equipment and engineering Prepaid mold Other non-current assets Other non-current Note: Contract for RMB2,876,712.91yuan of provision impairment accrues Group he
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 26.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – (Continued)
1 Jan 2019 31 Dec 2018 1,821,232.74 40,000,000.00 40,000,000.00 913,517,850.68 911,696,617.94 669,086,659.25 669,086,659.25 202,609,958.69 202,609,958.69
225,825.41 31 Dec 2019 30,000,000.00 49,000,000.00 1,156,886,625.41 1,077,660,800.00
(CONTINUED) On December 31, 2019, the annual interest rate of the above borrowings On December 31, 2019, the annual (December 31, 2018: 2.25% to 5.22%). of the Group was 3.82% to 4.785% the year, please refer to Note VI.66.
Category Total Accrued interest Unsecured loans Guaranteed loans Mortgage loans The category of short-term loans The category of At the end of period, there is no overdue short-term loan.
Note2: For information on pledge and mortgage loans of the Group at the end of Note2: For information on pledge and Note1:
Short-term loans (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 27.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
340 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 341 – balance Beginning (Continued)
58,032,097.79 1,225,850,904.13 1,167,818,806.34
1 Jan 2019 31 Dec 2018 2,074,280.04 22,845,451.00 20,392,249.00 20,392,249.00 190,000,000.00 190,000,000.00 1,202,637,121.55 1,179,791,670.55 1,124,346,132.17 1,124,346,132.17 1,336,812,661.21 1,334,738,381.17 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 4,176.25 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019 3,775,173.97 935,128,766.52 179,000,000.00 (CONTINUED) 1,117,908,116.74
The age of notes payable of the Group at the end of the year is within one year. The age of notes payable of the Group at the end of the year is within
Accounts payable Total Notes payable Items Total Current deposit Items Time deposit (including notification deposit) Margin deposit Accrued interest Notes payable Due to customers, banks and other financial institutions Due to customers, Note2: The Group has no bills payable due and unpaid at the end of the year. Note2: The Group has no bills payable due and unpaid at the end of Note1:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 29. 28.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (Continued)
934,085.69 934,085.69 1 Jan 2019 31 Dec 2018 1 Jan 2019 2018 31 Dec 4,846,297.25 4,846,297.25 14,246,099.12 12,879,900.63 62,241,745.33 62,241,745.33 107,525,767.62 107,525,767.62 288,524,128.11 288,524,128.11 1,503,865,255.06 1,503,865,255.06 1,523,891,737.12 1,522,525,538.63 1,065,600,096.06 1,064,233,897.57 1,523,891,737.12 1,522,525,538.63
31 Dec 2019 3,934,920.00 31 Dec 2019 27,145,094.00 15,345,833.23 105,535,388.17 128,349,991.86 275,740,715.71 (CONTINUED) 1,639,910,599.59 1,686,336,446.82 1,176,710,351.08 1,686,336,446.82
The Group’s accounts payable are non-interest bearing. The Group’s accounts payable are
More than 3 years 2-3 years 1-2 years Others Within 1 year Freight payable Equipment payable Total Aging Material payable Total Items The aging analysis of account payable is according to its invoice date The aging analysis of account as follows The types of account payable The types of account
Note:
Accounts payable (2) (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 30.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
342 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 343 (Continued)
for EPC project has not been paid for EPC project has not been paid
Civil engineering payment Unpayment and untransferred reasons Civil engineering payment Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid
8,319,996.44 7,424,433.00 5,047,785.00 4,315,191.29 44,860,390.50 22,317,625.83 19,734,560.99 16,845,888.64 11,042,413.80 10,549,999.80 150,458,285.29 Ending Balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) accounts payable with an age of over 1 year at the end of end the at year 1 over of age an with payable accounts Co., Ltd. RM Investment CompanyPvt.Ltd Total Name Drala Holdings AG Bazhou Huahaote Electric Power Equipment Co., Ltd. Bazhou Huahaote Electric Power Equipment Co., Chongqing Zhonghuan Construction Co., Ltd. Beijing Kangjisen Automation Equipment Technology Beijing Kangjisen Automation Equipment Technology Sichuan Dingxin Construction Engineering Co., Ltd. Sichuan Dingxin Construction Engineering Co., Jinzhou Xinjinhua Machinery Manufacturing Co., Ltd. Jinzhou Xinjinhua Machinery Manufacturing Co., Hangzhou Steam Turbine Co., Ltd. Chongqing Scrap Automobile (Group) Co., Ltd. Chongqing Yanfeng Technology Co., Ltd. Important the yea
Accounts payable Accounts payable (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 30.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. balance Amount Beginning of change 544,548,673.80 422,728,042.88 685,648,864.72 685,648,864.72 (Continued)
Ending balance 807,469,495.64 807,469,495.64
(CONTINUED) C from sales contracts with customers. The advance payment is collected collected is payment advance The customers. with contracts sales from of revenue relevant The customer. the with contract the to according performance its fulfills Group the after recognized be will contract the the of most that expects Group the of management The obligations. to transferred be will year the of end the by formed liabilities estimated income within one year.
revenue for the current year) revenue during current period Increased amount due to cash receipt (excluding recognized Contract liabilities included in 31 Dec 2018that recognized Contract liabilities Items Total Item The situation of contract liabilities The situation of The significant changes of the carrying amount of contract liabilities The significant changes of the
Note: Group the by received advances represent mainly liabilities ontract
Contract liabilities (1) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 31.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
344 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 345 – – Ending balance balance (49,055.81) Beginning 1,885,222.51 3,965,306.55 (Continued)
59,965,104.17 65,766,577.42
Ending balance
49,949,000.00 49,949,000.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) balance Increase Decrease Beginning 807,524.44 75,737.19 932,317.44 3,832,497.55 80,517,014.03 82,464,289.06 1,493,457.54 12,070,942.71 9,599,093.70 57,501,895.01 884,884,108.16 882,420,899.00 63,635,374.54 977,547,802.09 975,416,599.21
– set up a defined contribution plan employee benefits payable Short-term Dismission welfare Others Total Items Dismission benefits Classification of employee benefits payables Classification of employee benefits
Total Item Bank acceptance bill Employee benefits payables Repurchase agreements (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 33. 32.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending Balance 32,049.20 26,554.27 689,690.42 737,593.53 2,275,428.24 1,729,487.59 1,670,884.12 28,946,206.37 25,586,698.02 59,965,104.17
(Continued)
Balance Increase Decrease (3,400.00) 1,904,118.70 1,211,028.28 Beginning (CONTINUED) 496,950.31 33,762,473.80 33,521,830.58 1,815,523.871,273,601.89 47,556,934.81 53,377,024.92 47,097,030.44 52,921,139.22 1,234,739.41 47,630,055.97 47,193,911.26 31,353,938.71 10,035,795.44 12,443,527.78 22,565,280.23 738,247,760.49 735,226,342.70 57,501,895.01 884,884,108.16 882,420,899.00 (continued)
insurance 23,273.87 292,328.73 283,553.41 Insurance 15,588.61 5,454,640.21 5,443,674.55 insurance
Medical Housing fund Maternity Injury employee education fee allowances and subsidies Other short-term benefits Labor union fee and Staff welfare Social insurance Including: Salaries, bonuses, Items Total 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 FINANICAL 33.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
346 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 347 Ending balance 760,024.86 1,125,197.65 1,885,222.51 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) balance Increase Decrease Beginning (continued) 761,567.18 2,273,377.39 2,274,919.70 3,070,930.37 78,243,636.64 80,189,369.36 3,832,497.55 80,517,014.03 82,464,289.06
group participates in the social insurance program established by by established program insurance social the in participates group insurance insurance Basic endowment Unemployment Total Items Defined contribution plan Defined contribution The 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.
Employee benefits payables Employee benefits (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 33.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Balance Beginning 547,750.84 777,333.57 149,904.89 2,964,303.41 1,797,469.28 13,156,812.78 79,755,394.16 220,974,568.70 134,982,412.55 (Continued)
– Ending Balance 1 Jan 2019 31 Dec 2018 687,252.11 3,879,908.49 3,284,492.85 1,433,618.67 2,267,407.56 27,519,691.51 27,519,691.51 72,578,036.62 558,527,763.24 558,527,763.24 586,047,454.75 599,204,267.53 186,244,866.97 102,114,150.67
– 31 Dec 2019 28,451,140.35 428,345,391.07 456,796,531.42 (CONTINUED)
The tax payable by the Group at the end of the year includes Hong Kong income The tax payable by the Group at the tax payable of RMB0yuan.
Others Personal Income Tax Real estate tax City land use tax Total Items Dividends payable Other payables Total Items Interest payable Value-added tax City maintenance and construction tax City maintenance and construction Enterprise income tax Other payables Taxes and levies payables Taxes and levies
Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 35. 34.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
348 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 349 balance Beginning 776,828.61 (Continued) 9,261,300.00 3,118,684.17
13,156,812.78 27,519,691.51 27,519,691.51
– – – – Ending balance 1 Jan 2019 31 Dec 2018 28,451,140.35 28,451,140.35
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December – – – – (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019 (CONTINUED)
bonds Total Item Total Interest payable on corporate Interest payable on Items Deposit interest payable other Common stock dividends Dividends payable Interest payable
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 35.2 35.1
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. balance Beginning 1,384,000.00 7,982,985.82 6,927,906.53 7,433,979.40 9,322,878.96 59,658,666.52 34,309,829.34 10,943,921.55 14,617,373.62 10,431,400.32 73,299,330.89 185,158,508.99 558,527,763.24 137,056,981.30 (Continued)
– Ending balance 855,686.28 1,341,000.00 3,314,829.85 3,104,927.91 39,815,842.93 72,042,607.31 11,446,164.24 32,102,069.48 10,101,448.00 76,910,732.52 52,465,576.16 124,844,506.39 428,345,391.07
(CONTINUED) Deposits and risk fund Auditing fee Payable to other related parties Demolition Payables to third parties Staff housing fund payable Purchase of Engineering equipment Staff payable Transportation fee Maintenance of housing and equipment Payable on behalf of others Bill pledge collection Others 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 FINANICAL 35.3
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
350 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 351
–
(Continued) 75,991,637.84
–
not been settled Reason for unpaid or carried Reason for unpaid or forward The cost of relocation funds has Outstanding Affiliate payments, not yet paid Outstanding
–
1 Jan 2019 31 Dec 2018 1,866,625.00 1,866,625.00 26,245,489.55 26,245,489.55 66,722,382.85 66,722,382.85 199,575,411.90 170,826,135.24 104,740,914.50
– –
16,309,500.00 Outstanding 22,587,367.31 28,494,984.61 31,213,147.59 44,829,866.80 143,434,866.31 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Ending balance
31 Dec 2019 1,346,625.00 74,160,644.08 281,511,419.08 206,004,150.00
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Investment Co., Ltd. Co., Ltd. Total
Company name Chongqing Real Estate Group Chongqing Land Reserve Center Chongqing Mindray Urban Construction Chongqing Jiangbei Machinery Co., Ltd. Chongqing Shenjian Automotive Transmission Chongqing Shenjian Automotive Transmission Top five other payables with an age of over 1 year payables with an age of over Top five other
Items Total Other long-term liabilities due within one year Lease liabilities due within one year Long-term payables due within one year Deferred revenue due within one year Long-term Loans due within one year Non-current liabilities due within one year Non-current liabilities due within Other payables (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 36. 35.3
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – balance balance Beginning Beginning 1,176,168.16 1,176,168.16 77,000,000.00 843,184,922.99 843,184,922.99 302,589,522.99 463,595,400.00 (Continued)
Ending Ending balance balance 3,259,736.35 3,259,736.35 (8,193,775.98) 295,000,000.00 229,000,000.00 1,642,606,224.02 1,126,800,000.00 1,650,800,000.00
(CONTINUED) replacement and compensation Total Total Item Items Plus: Unrecognized financing costs Unsecured loans Total principal Mortgage loans Guaranteed loans Warranty and guarantees for repair, Warranty and guarantees for repair, Long-term loans Other current liabilities
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 38. 37.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
352 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 353 balance Beginning (Continued)
66,722,382.85 89,889,522.99 66,722,382.85 843,184,922.99 145,000,000.00 608,295,400.00
Ending balance 206,004,150.00 109,600,000.00 206,004,150.00 155,000,000.00 1,650,800,000.00 1,386,200,000.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) On 31 December 2019, long-term loan interest rate of the Company is from 1.2% On 31 December 2019, long-term loan to 4.998%). to 4.896% (31 December 2018: 1.2% of the year, For details of the Group’s mortgage and pledge loans at the end please refer to Note VI.66.
2: than 5 years 2 years Items Less: Current liabilities due within one year Less: Current liabilities due within one Total amount under non-current liabilities 5 years after balance sheet date Within 1 year 2 years after balance sheet date, but no more 2 years after balance sheet date, but 1 year after balance sheet date, but no more than1 year after balance sheet date, but Long-term loans Long-term loans Note Note 1: Note
Above loans need be repaid in following period: Above loans need
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 38.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – (Continued)
856,145.78 856,145.78 1 Jan 2019 31 Dec 2018 9,261,300.00 808,405,154.22 799,143,854.22 800,000,000.00 800,000,000.00
– – – – 31 Dec 2019 (CONTINUED)
Regulatory Commission, the Group issued corporate bonds amounting to to amounting bonds corporate issued Group the Commission, Regulatory five of term bond a with 2016, September 29 on yuan RMB800,000,000 at rate coupon the increase to Group the for option the (including years for bond holders to sell back). The the end of the third year and the option simple rate of 4.28%. interest is paid annually with annual bonds par value charges Total Items 16 CQ Machine Tools Plus: accrued interest Unrecognized financing Classification of bonds payable Classification Note: According to Zhengjian Xuke [2016] No. 701 issued by China Securities Securities China by issued 701 No. [2016] Xuke Zhengjian to According Note: MachineryHeavy “16 the of all repurchased Group the 2019, September In provisions Bonds” issued by the Group in accordance with the repurchase Offering set in the “Chongqing Mechanical and Electrical Co., Ltd. Public the paid fully has Group The Prospectus". Bonds Corporate 2016 of principal and interest of the issued bonds in September 2019.
Bonds payable (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 39.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
354 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 355 31 Dec 18 balance Beginning (Continued)
800,000,000.00 800,000,000.00 800,000,000.00 800,000,000.00
– – – – 800,000,000.00 799,143,854.22 800,000,000.00 799,143,854.22 Ending
balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Bond maturity Amount issued – See note above
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 2016 September 29 –
(CONTINUED)
Par value Issue date 800,000,000.00 800,000,000.00
(continued) liabilities Tools bonds par value but no more than 5 years need be repaid in following period: Total amount under non-current 16 CQ Machine Tools bonds par value 16 CQ Machine Total Name of the bond Total Above the carrying value of bonds Classifications of bonds 2 years after balance sheet date, Movements of bonds payable Bonds payable analysis: Bonds payable
Bonds payable
(3) (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 39.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – Amount of interest returned in current year 31 Dec 19 33,421,300.00 33,421,300.00
(Continued)
in current year Interest accruedInterest
Amount of in this year 800,000,000.00 800,000,000.00 principal returned 1 Jan 2019
statement of financial of the format Effect of change (CONTINUED)
31 Dec 18 799,143,854.22 9,261,300.00 808,405,154.22 24,160,000.00 799,143,854.22 9,261,300.00 808,405,154.22 24,160,000.00
(continued) Tools bonds par value Total 16 CQ Machine 16 CQ Machine Tools bonds par value Total Name of the bond Name of the bond Movements of bonds payable Movements of bonds (Continued)
(Continued)
Bonds payable (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 39.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
356 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 357 – – – – – (Continued)
74,160,644.08 74,160,644.08 10,301,317.60 201,864,087.31 127,703,443.23 117,402,125.63 Ending balance
1 Jan 2019 31 Dec 2018 14,093,259.68 28,293,815.10 141,946,600.86 184,333,675.64
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019 13,223,330.60 99,553,960.75 14,926,151.88 127,703,443.23 (CONTINUED)
The Group’s cash flow from other lease payments other than short-term and low- The Group’s cash flow from other value leases for the year totaled RMB114,571,315.83yuan.
Total amount presented in non-current liabilities Total Less: Current liabilities due within one year Items Total Buildings Items Within 1 year no more than 2 years 1 year after balance sheet date, but 2 years after balance sheet date, but no more than 5 years 5 years after balance sheet date mechanical equipment Field Lease liabilities
Above lease liabilities need be paid in following period: Above lease liabilities need be Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 40.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 141,946,600.86 (Continued)
– 1 Jan 2019 31 Dec 2018 1 Jan 2019 31 Dec 2018 3,755,158.29 3,755,158.29 3,755,158.29 145,701,759.15 5,750,158.29 147,696,759.15 3,755,158.29 145,701,759.15 1,995,000.00 1,995,000.00
– 31 Dec 2019 3,495,143.84 3,495,143.84 31 Dec 2019 4,505,143.84 3,495,143.84 1,010,000.00 (CONTINUED)
payable Others Finance lease Total Items Classification of long-term payable
Long-term payables (1)
Total Items Long-term payables Special payables 41.1 Long-term payables
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 41.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
358 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 359 – (Continued) 3,755,158.29
75,991,637.84 45,474,486.42 75,991,637.84 100,227,272.73 145,701,759.15 221,693,396.99 217,938,238.70 Beginning balance
– – – – – 3,495,143.84 3,495,143.84 3,495,143.84 3,495,143.84 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) (continued) but no more than 5 years one year but no more than 2 years liabilities payables need be repaid in following period: Finance lease payable 2 years after balance sheet date, 5 years after balance sheet date Less: Current liabilities due within 1 year after balance sheet date, Total amount under non-current Items Total Above carrying value of long-term Within 1 year Others Long-term payables analysis: Long-term payables
Long-term payables Long-term payables (2)
Long-term payables Long-term payables 41.1
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 41.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Reason See notes
(Continued)
Ending balance 1,010,000.00 1,010,000.00
985,000.00 985,000.00
– – (CONTINUED)
balance Increase Decrease Beginning (continued) 1,995,000.00
Localization of Major Equipment” issued by the National Development Development National the by issued Equipment” Major of Localization [2005] 1201), at the end of the and Reform Commission (Fakai Investment funding was RMB1,010,000.00yuan (the year, the Group’s national project was RMB1,995,000yuan), will be used balance at the beginning of the year approved by the state. for localization of major equipment payables on national project 1,995,000.00 Total Item Special Special payables Note: According to the “Notice on the National Budget Investment Plan for the the for Plan Investment Budget National the on “Notice the to According Note:
Long-term payables Long-term payables 41.2
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 41.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
360 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 361 balance Beginning (Continued)
1,552,000.00 17,846,000.00 16,294,000.00
Ending balance 814,000.00 7,573,000.00 6,759,000.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) one year is listed in Employee Benefits Payable. one year is listed in Employee Benefits through trains Benefits payable to retirees and new Benefits payable to retirees and new Less: Amounts paid within 1 year Total Items Classification of long-term employee benefits payable of long-term employee benefits Classification termination benefits that will be paid within Note: Post-employment benefits and
Long-term employee benefits payables Long-term employee (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 42.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – – – last year Amount of 340,000.00 340,000.00 2,225,000.00 3,493,000.00 5,718,000.00 (1,561,000.00) (1,561,000.00) 16,294,000.00 20,111,000.00 (Continued)
– – – the year 756,000.00 433,000.00 756,000.00 Amount of 1,081,000.00 1,231,402.00 6,759,000.00 2,312,402.00 (6,899,598.00) (6,466,598.00) 16,294,000.00
(continued) (CONTINUED) in defined benefit plans –Present value of defined benefit benefit defined of value –Present plans benefit defined in benefits interest comprehensive income Net Actuarial gains (losses are indicated Settlement gains (losses are indicated Settlement gains (losses are indicated by “-”) Past service costs Current service cost Estimated payment amount within one year and others Paid current profit and loss Consideration paid at settlement by “-”)
Set income cost included in other 1. 4. 3. 2. 1. 2. 3. Ending balance Beginning balance The defined benefit cost included in the The defined benefit cost included in
Items Other changes 1. plan obligations Changes
Long-term employee benefits payables Long-term employee (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 42.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
362 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 363
last year balance Amount of 340,000.00 Beginning (Continued)
5,718,000.00 (1,561,000.00) 16,294,000.00 20,111,000.00 8,001,242.71 12,615,997.53 20,617,240.24
the year 756,000.00 Amount of 2,312,402.00 6,759,000.00 (6,466,598.00) 16,294,000.00 1,229,111.47 20,525,416.26 21,754,527.73 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) comprehensive income current profit and loss Other changes Set income cost included in other Ending balance Beginning balance The defined benefit cost included in the The defined benefit cost included in
Items benefit plans Changes in defined benefit plans –Net liabilities (net assets) of defined benefit plans –Net liabilities Changes in defined
Product quality assurance Loss on repair, replacement and compensation Total Items Provisions Long-term employee benefits payables Long-term employee
(3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 43. 42.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
Ending Balance 8,522,423.36 1,008,547.51 301,172,088.60 174,046,074.16 117,595,043.57
– –
(Continued)
394,900.00
–
Decrease this year the year Other decrease amount for Amortization
6,138,750.39 30,564,267.32
–
Increase this year 35,000.00 14,153,412.80 89,516,755.45 Government (CONTINUED) grant received Other increase
Balance Beginning 1,276,101.33 263,549.33 (136,203.15) 32,947,940.29 405,298,663.38 19,935,244.33 26,244,317.98 147,825,849.88 2,480,287.21 178,151,235.54 19,636,695.00 6,088,357.94 27,744,827.11 2,085,387.21 192,923,386.22 Government Grant Relocation of sale and lease back disposal Total Items Government subsidies- Government subsidies- Unrealized income Proceeds of land Classification of deferred revenue Classification
Deferred revenue (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 44.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
364 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 365
4,830,000.00 9,334,047.24 3,761,309.62 3,638,215.00 7,175,277.43 6,296,000.00 51,637,547.31 22,090,000.00 12,430,000.00 40,477,487.92 14,601,947.44 291,641,117.73 115,369,285.77 Ending Balance
– – – – – – – – – – (Continued)
170,000.00
– – – –
Amount in this year decrease Other recorded in other income
– – – –
2,954.96 5,000,000.00 572,200.00 28,571.43 451,100.00 571,428.57 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 1,006,403.66 1,008,203.68 1,476,042.41 1,477,799.04 1,551,724.14 2,995,098.24 11,710,270.80 89,264,371.25 Other increase
– – – – – – – – – – –
year (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Increase this (CONTINUED)
Balance Beginning 7,177,077.45 8,790,418.67 3,881,638.19 3,638,215.00 5,000,000.00 47,326,275.10 19,671,695.00 3,471,074.77 16,916,110.35 1,915,387.21 11,293,045.04 40,479,244.55 16,045,321.54 22,090,000.00 12,430,000.00 371,074,621.76 19,671,695.00 20,241,770.74 117,261,582.56 2,085,387.21 192,923,386.22 (continued) transformation projects technologies and equipment for CNC precision and efficient shaving machines Testing Center Project Defense Military Production Capacity Building Projects Bureau (high-efficiency hydropower equipment technology development and research center and demonstration base construction project) compensation Innovation Technology Award Subsidies for technological Other government funding Industrialization of key 2018 turbo chiller test bench Government Supported Project grant funds Plant construction subsidy Smart Manufacturing Project Subsidies for National Chongqing Municipal Finance
Total Government subsidies projects General relocation Government grants projects Government grants
Deferred revenue Deferred revenue (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 44.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
– – – – – 3,684,640,154.00 Total
3,684,640,154.00
– – – – – shares 1,100,187,470.00 non-restricted Total 1,100,187,470.00 (Continued)
– – – – – shares 1,100,187,470.00 H listing Overseas 1,100,187,470.00
– – – – – –
– shares Non-restricted
– – – – – 2,584,452,684.00
2,584,452,684.00 shares restricted Total
– – – – – 232,132,514.00 Ltd. 232,132,514.00
Engineering Group Co., Co., Group Engineering
Chongqing Construction Construction Chongqing
– – – – – Ltd. 232,132,514.00 Co., Management 232,132,514.00
Chongqing Yufu Assets Assets Yufu Chongqing
– – – – – Ltd. 195,962,467.00 Co., Management 195,962,467.00
China Huarong Asset Asset Huarong China
– – – – – 1,924,225,189.00 CQMEHG 1,924,225,189.00
– – – – – – – shareholdings person
state-owned legal legal state-owned
Restricted shares – – shares Restricted
Items Beginning balance Beginning Issue new shares Share donation Share shares new Issue into shares into Subtotal Others balance
funds converted converted funds Ending Ending
Reserved Reserved
Changes in current year (+ or -) or (+ year current in Changes
Share capital Share 45.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
366 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 367 Ending balance (Continued)
50,311,968.20 65,478,679.20 (15,166,711.00)
– – – this year Decrease
– – –– From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December this year Increase
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) balance Beginning 50,311,968.20 65,478,679.20 (15,166,711.00)
under original standard Total Items Others Capital reserve transferred Capital Reserve
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 46.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI.
102470 ,6,3.41,8,3.8(7400)(,3,8.4 105,339.00 (9,537,786.54) (87,450.00) 12,988,336.88 3,468,439.34 31,052,427.09
Total other comprehensive income comprehensive other Total 21,514,640.55
– (2,570,598.94) – – (2,570,598.94) 20,742,533.75 currencies foreign in statements 18,171,934.81 Translation differences of financial financial of differences Translation
(Continued)
– 1,261,528.40 – – 1,261,528.40 (4,481,565.66) investment net (3,220,037.26)
Effective portion of hedging gain or loss on on loss or gain hedging of portion Effective
– – – – – 616,639.00 method equity under loss or profit 616,639.00
investee that can be reclassified into into reclassified be can that investee
Other comprehensive income of the the of income comprehensive Other
Including: Including:
– (1,309,070.54) – – (1,309,070.54) 16,877,607.09 reclassified into profit or loss or profit into reclassified 15,568,536.55
Other comprehensive income that can be be can that income comprehensive Other 2.
instrument investments instrument – 5,620,959.88 – – 5,620,959.88 – 5,620,959.88
Changes in fair value of other equity equity other of value fair in Changes
414800 83400)1,8,3.8(7400)(389658)105,339.00 (13,849,675.88) (87,450.00) 12,988,336.88 (843,450.00) plan 14,174,820.00 benefit defined of recalculation 325,144.12
Changes in net assets or net liabilities from from liabilities net or assets net in Changes
Including: Including:
414800 ,7,0.81,8,3.8(7400)(,2,1.0 105,339.00 (8,228,716.00) (87,450.00) 12,988,336.88 4,777,509.88 14,174,820.00 reclassified into profit or loss or profit into reclassified 5,946,104.00
1. Other comprehensive income that cannot be be cannot that income comprehensive Other
shareholders the Company the tax expenses tax loss or Items Pre-tax amount Pre-tax balance Ending balance Ending
non-controlling non-controlling shareholders of of shareholders income to profit profit to income Less: Income Income Less: Beginning Beginning
attributable to to attributable attributable to to attributable comprehensive comprehensive
After-tax amount amount After-tax After-tax amount amount After-tax of previous other other previous of
Reclassifications Reclassifications
Less: Less:
Amount of the year the of Amount
Other Comprehensive Income Comprehensive Other 47.
(CONTINUED)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED FINANICAL STATEMENTS STATEMENTS FINANICAL CONSOLIDATED THE OF ITEMS MAJOR TO NOTES VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
368 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 369 Ending balance (Continued)
364,663,370.96 364,663,370.96
– – last year Decrease
this year From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Increase
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) balance Beginning 334,373,473.12 30,289,897.84 334,373,473.12 30,289,897.84
as a net investment hedging for US subsidiary. On 31 December December 31 On subsidiary. US for hedging investment net a as 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 2019, the fair value of the loan was approximately RMB80,264,402.70yuan. The of the loan was approximately 2019, the fair value corresponding the into borrowings the translating from arising gain exchange 2019 is RMB1,261,528.40yuan, recognized in functional currency on 31 December other comprehensive income.
Total Item Statutory surplus reserves Surplus Reserves Other Comprehensive Income Other Comprehensive
Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 48. 47.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – 444,498.50 The last year 36,856,341.12 444,060,837.38 110,539,204.62 (305,543,321.33) (Continued) 2,412,300,828.67 2,708,521,621.81 2,717,844,150.00
(273.57) 450,770.36 (4,927,467.14) 12,988,336.88 30,289,897.84 184,834,923.25 147,385,606.16 2,703,594,154.67 2,723,290,866.87 2,708,521,621.81 The current year
(CONTINUED) the Company control reduces undistributed profits forward to retained earnings
Business combination under the same Business combination under the same Change in defined benefit plan carried Change in defined benefit plan carried Net profit attributable to shareholders of Net profit attributable to shareholders Appropriation to statutory reserve Appropriation to staff bonus and welfare Declared ordinary share dividends
Add: Ending Balance Beginning balance of current year Items Add: Adjustment of beginning balance Ending balance of last year Ending balance of Less: Retained Earnings
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 49.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
370 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 371 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) (continued) to the “Administrative Measures for the Provision of Provisions for for Provisions of Provision the for Measures “Administrative the to According Financial Enterprise Reserves” (Caijin [2012] No. 20) by the Ministry of Finance, Financial Enterprise Reserves” (Caijin a Ltd., Co., Finance Group Holdings Electrical and Mechanical Chongqing of basis the on reserve risk general a established Group, the of subsidiary related losses potential for up Make provisions. impairment asset withdrawing This general risk reserve is treated as to risky assets that it has not identified. of owner’s equity. In principle, it should profit distribution and is a component balance of risk assets. At the same time, not be less than 1.5% of the year-end of balance reserve general the of proportion the that: stipulates method the balance of risky assets, which is difficult to financial enterprises to the closing into years, and in principle should not reach 1.5% at one time, can be divided & Electrical Holdings Group Finance exceed 5 years. Chongqing Mechanical ratio for 2019 is 1.5% (2018: 1.5%) Co., Ltd.'s general risk reserve withdrawal 2019, the Group reviewed and approved the Group’s 2018 profit distribution distribution profit 2018 Group’s the approved and reviewed Group the 2019, tax) per share, based on distribution of RMB0.04 (including plan, namely the of RMB147,385,606.16yuan was paid. 3,684,640,154 shares issued. A dividend dividends to shareholders in July 2019. The Group has distributed the above
Retained Earnings Retained Earnings At the end of the year, the Group’s undistributed profit included the amount of At the end of the year, the Group’s undistributed profit included Mechanical Chongqing subsidiary the by withdrawn RMB47,419,154.64yuan of the year was and Electrical Holdings Group Finance Co., Ltd. (the beginning RMB51,123,100.83yuan). Note 1: According to the Group’s 2018 Annual General Meeting held on June 26, 26, June on held Meeting General Annual 2018 Group’s the to According 1: Note 2: Note
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 49.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Cost
(Continued)
Amount of last year 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
Cost
(CONTINUED) Amount of the year Revenue 25,268.05 123,001.27 77,451,736.38 11,006,384.78 99,861,331.95 29,384,152.13 5,516,812,105.87 4,478,138,877.16 5,339,473,769.49 4,437,625,338.98
the Finance Company. Interest expense, transaction fees and commission the Finance Company. Interest expense, Company. expense are related to costs of Finance commission income Transaction fees and Interest Other operations Total Items Main operations Operating revenue & operating cost Operating revenue fees and commission income are derived from Note: Interest income, transaction
Operating Revenue & Operating Cost Operating Revenue (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 50.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
372 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 373 Total 460,000.00 (Continued) 107,354,115.44 286,609,491.78 501,668,833.68 753,221,100.32
5,409,457,990.43 3,414,717,467.83 5,015,143,272.19 5,516,812,105.87 5,516,812,105.87 5,516,812,105.87 4,763,131,005.55 1,815,485,146.26 5,516,812,105.87
– – – service business Industrial
business From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December equipment 460,000.00 Clean energy 101,145,307.69 6,208,807.75 753,221,100.32 (continued)
– – – (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) business High-end intelligent equipment 926,739,401.72 2,424,653,319.06 63,324,747.05 1,342,830,277.37 3,927,388,392.43 139,239,320.63 1,194,607,699.12 3,676,649,875.54 143,885,697.53 1,342,830,277.37 4,028,533,700.12 145,448,128.38 1,342,830,277.37 4,028,533,700.12 145,448,128.38 1,342,830,277.37 4,028,533,700.12 145,448,128.38 1,342,830,277.37 3,274,852,599.80 145,448,128.38 1,342,830,277.37 4,028,533,700.12 145,448,128.38
at a point in time revenue China sales contract revenue over time sales contract 310,327,766.26 1,505,157,380.00 contract 105,763,109.39 98,723,001.06 82,123,381.33 sales Recognizes Materials Service Others 148,222,578.25 351,883,824.58 1,562,430.85 Internet Distribution
Equipment Mainland of Recognizes channel revenue recognition Classified by sales Types of contracts Including: Classification of contract Classified by region Including: Including: Direct sales Classified by time of Including: Income from contracts
Operating Revenue & Operating Cost Operating Revenue (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 50.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (Continued)
(continued) (CONTINUED) Group’s transaction types involving performance obligations are are obligations performance involving types transaction Group’s Information related to performance obligations Information related The sales of goods, provision of services and sales of materials. The Group sales of goods, provision of services the when is, that contract, the under obligations performance its fulfills relevant goods or services, the revenue is customer obtains control of the recognized. of obligations performance the from revenue the recognizes Group The the of provision the to related contract performance the for project the some machine project construction contract and EPC station’s hydropower is which guidelines, the with accordance in contracts business tool a certain period of time. The contract determined to be performed within as recognized are profit gross contract the plus incurred actually costs project business contract revenue. is about 3-4 days to 2 years. According to The usual time of performance relevant terms of performance, the Group the type of customer and the production materials. inputting for price part of contract collect required to contract the of part collect Group the completed, are goods the When has been price for shipping the goods. Usually, the control of the goods transferred after the goods has been delivered to the carrier. The hydropower station EPC project has a long contractual performance The stages. by payment of term the stipulates contract The period. the to according settlement the confirm will contract the of parties two 2 usually warranty period is The the contract. of progress of completion years after the completion of the project.
Operating Revenue & Operating Cost Operating Revenue (3)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 50.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
374 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 375 last year Amount of 863,078.97 784,793.14 998,932.10 (Continued)
1,745,197.96 4,016,705.05 5,061,250.87 37,134,764.07 78,162,691.75 60,587,671.96 60,406,589.32 20,906,156.65 17,226,637.88 10,262,208.08 298,156,677.80
the year 609,641.20 999,977.79 Amount of 1,809,000.53 1,842,783.09 5,126,186.75 5,315,843.15 72,168,030.24 26,438,255.25 27,155,194.61 12,868,232.41 30,782,953.64 53,714,643.43 308,120,591.52 69,289,849.43
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) corresponding to the performance obligations of obligations performance corresponding to the Information related to the transaction price allocated to the remaining to the transaction price allocated Information related performance obligations The amount of revenue the Group that have signed the contract at the end of the year but have the Group that have signed the which not yet fulfilled is RMB2,278,499,176.54yuan (of or not been fulfilled performance obligations that have been the revenue corresponding to the and the signed signed but not yet fulfilled is RMB1,922,217,086.96yuan, corresponding to the performance of but not yet The amount of income performance obligations is RMB356,282,089.58yuan).
Others insurance Service fee Rental fee Depreciation expenses Total Items Transportation expense Employee benefits General office expenses Traveling expenses “3-Aspect-Warranty” fee After-sale service fee Advertising expense Business entertainment fee Selling and Distribution Expenses Operating Revenue & Operating Cost Operating Revenue
(4)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 51. 50.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. last year 31,215.08 Amount of 6,756,443.57 1,333,313.94 6,263,947.85 7,175,755.96 10,103,588.62 52,990,327.57 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 18,211,400.87 513,983,557.96 286,476,282.59 (Continued)
the year Amount of 8,989,861.58 1,252,140.29 1,807,548.64 6,029,543.23 4,857,985.40 6,913,069.76 6,141,070.66 10,923,902.51 66,924,206.35 66,298,386.72 18,109,935.55 11,604,981.45 14,334,721.73 20,067,856.44 10,351,619.50 544,178,374.13 289,571,544.32
(CONTINUED) RMB2,400,000.00 yuan (including tax) and interim financial statement reviewing reviewing statement financial interim and tax) (including yuan RMB2,400,000.00 fee RMB600,000 yuan (including tax). Property management fees Others Service fee Transportation fee Amortization of long-term deferred expenses Amortization of long-term deferred Business entertainment fee Total Items Depreciation expenses Amortization of intangible assets Employee benefits Rental fee Consulting fee Repair charges General office expenses Insurance expenses Staff placement funds Traveling expenses Administrative expenses fee auditing statements financial annual 2019 includes fee consulting Current Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 52.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
376 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 377 last year Amount of 290,879.05 (Continued)
7,352,606.01 1,309,995.27 3,296,937.92 3,332,926.86 3,388,265.55 5,738,778.99 8,385,829.95 29,678,769.56 60,633,343.08 240,974,839.39 117,566,507.15
the year 821,369.74 135,988.66 Amount of 3,411,441.94 4,656,334.55 1,794,397.04 9,002,884.20 22,346,868.50 14,008,945.68 10,031,812.10 308,915,489.59 125,591,569.17 117,113,878.01
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Others Trial fee General office expenses Business entertainment fee Amortization of intangible assets Traveling expenses Consulting fee Design fee Total Items Material fee Depreciation expenses Employee benefits Research and Development Expenses Research and Development
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 53.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. last year Amount of 304,973.51 (385,989.60) 7,309,967.53 13,748,907.50 24,389,889.52 38,473,948.90 24,398,707.53 128,937,348.85 122,653,496.31 147,052,203.84 (Continued)
– the year Amount of 4,085,980.60 12,237,871.31 33,836,749.05 10,971,986.40 22,292,537.88 36,845,305.60 158,203,133.72 133,915,851.96 156,208,389.84
(CONTINUED) unrecognized financing expenses of financing leases. unrecognized financing expenses of Add: Amortization of lease liabilities Less: Finance discount Add: bill discount expenditure Add: Other expenditure Total Items Less: interest income Less: Capitalized interest Add: Exchange loss Interest expense Interest expenditure Financial Expenses of amortization the is year previous the in liabilities lease of amortization The Note:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 54.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
378 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 379 – (Continued)
7,000,000.00 6,555,900.00 4,647,019.63 1,103,542.12 11,977,181.31 28,621,504.61 47,000,000.00 15,063,571.87 11,652,409.38 Amount of last 133,621,128.92 year
– – – 4,107,907.78 3,993,855.00 1,810,856.12 30,151,138.85 29,151,528.25 10,189,000.00 227,230,135.88 Amount of the year 147,825,849.88
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) operations grants components manufacturing of over-height components manufacturing of over-height impact type hydroturbine R&D grants Tax returns Stable subsidy Various rewards related to business Various rewards related to business Others Total Items grants Innovative development project Relocation grants Renovation and transformation project Renovation and transformation project Other grants Digital workshop of new model for core Digital workshop of new model Other Income
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 55.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – last year last year Amount of Amount of (84,208.00) 536,755.49 (109,704.27) (109,704.27) 48,530,857.59 418,925,355.40 369,941,950.32 (Continued)
– – the year the year 467,582.95 Amount of Amount of (134,308.57) (134,308.57) 11,038,010.45 295,372,688.12 283,867,094.72
(CONTINUED) for-sale financial assets equity investments assets during holding period investments under equity method or loss Total Total Items Item Others Investment income from disposals of available- Investment income from disposals of Investment income from disposals of long-term Investment income from disposals of financial Investment income from transactional Financial assets at fair value through profit Investment income from long-term equity Investment income from long-term equity Gain and loss arising from the changes in fair value Gain and loss arising from the changes Investment Income
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 57. 56.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
380 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 381 – – last year Amount of (Continued)
5,645,209.43 9,678,629.97 (4,114,465.14) (5,891,659.67) 14,387,188.40 76,668,574.02 19,704,902.99 76,668,574.02 Amount of last year
– the year Amount of 2,876,712.91 3,805,789.78 1,334,350.68 4,288,527.68 4,288,527.68 (6,259,599.82) 87,412,701.46 69,673,119.31 (19,496,835.70) Amount of the year
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) customers Bad debt provision for other non-current assets Bad debt provision for other non-current Bad debt provision for other receivables Bad debt provision for contract assets Bad debt provision for loans and advances to Bad debt provision for loans and advances Bad debt provision for prepayments Total Item Total Items Impairment loss on inventory Bad debt provision for note receivable Bad debt provision for accounts receivable Loss on impairment of Assets Impairment loss on credit Impairment loss
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 59. 58.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. Amount 724,818.84 recorded in 4,672,160.97 3,947,342.13 extraordinary profit and loss (Continued)
– – – last year Amount of 52,450,246.50 59,643,347.93 47,910,254.23 67,404,682.78 100,360,500.73 131,720,191.68 100,360,500.73 127,048,030.71
the year 724,818.84 Amount of 4,672,160.97 3,947,342.13 59,643,347.93 67,404,682.78 131,720,191.68 127,048,030.71
(CONTINUED)
assets which are not classified as held for sale property, plant and equipment classified as held for sale property, plant and equipment Total Items Gains on disposals of non-current Including: Gains on disposals of Gains on disposals of intangible assets Gain on disposal of non-current assets Including: Gains on disposals of Gains on disposals of intangible assets Gains on disposals of assets Gains on disposals
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 60.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
382 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 383 Amount Amount recorded in recorded in 2,280,101.54 6,111,678.41 (Continued) extraordinary extraordinary
profit and loss profit and loss
– – last year last year 40,000.00 100,000.00 Amount of Amount of 8,506,043.95 1,947,313.89 3,306,129.52 1,812,315.22 4,605,898.05 300,000.00 2,664,347.68 88,000.72 3,314,140.14 4,374,463.06 3,812,547.03 707,356.20 1,769,145.39 766,056.26 4,794,696.19 5,533,081.18 16,935,459.00 11,280,249.97 15,877,488.95 12,740,116.51
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December the year the year 88,000.72 300,000.00 707,356.20 100,000.00 766,056.26 Amount of Amount of 1,947,313.89 1,812,315.22 4,374,463.06 2,280,101.54 6,111,678.41 5,533,081.18 11,280,249.97 12,740,116.51 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED)
non-current assets compensation Total Items Total Items Penalty and overdue fine Penalty incomes, default fine and Debt restructuring Debt restructuring Government grants Discounts and quality deductions Unpayable payables Donation expenditure for Commonweal Loss from rejection and damage of Others Others Non-operating Expenses Non-operating Income
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 62. 61.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. last year Amount of 5,281,726.76 60,500,227.64 55,218,500.88 (Continued)
the year Amount of 39,031,257.93 25,350,811.42 13,680,446.51
(CONTINUED) to tax law and relevant provision Total Items Current income tax calculated according Current income tax calculated according Deferred income tax Other Comprehensive Income Income tax expense Please refer to VI. 47 Other Comprehensive Income for details. Please refer to VI. 47 Other Comprehensive
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 64. 63.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
384 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 385
– – – – – – – –
last year Amount of 109,704.27 4,527,499.34 (2,479,826.43) 76,668,574.02 19,704,902.99 81,642,837.38 11,887,798.50 46,016,844.00 34,798,750.50 (91,854,456.78) (11,537,993.46) 495,171,833.01 180,919,078.41 395,804,097.06 169,034,583.90 685,648,864.72 (Continued) (418,925,355.40) (298,586,106.82) (256,716,740.14) (562,745,117.25)
1,570,343,395.06 1,174,539,298.00
– – – – – –
the year 134,308.57 Amount of 4,288,527.68 4,458,111.41 1,947,313.89 69,673,119.31 60,480,500.97 45,620,030.08 29,649,844.26 29,949,172.75 (32,776,300.47) (18,220,204.51) (30,200,164.10) 203,914,978.16 185,059,107.92 120,165,517.95 182,043,937.30 121,820,630.92 137,326,249.61 (295,372,688.12) (333,129,942.11) (147,557,124.36) (131,720,191.68) 1,537,567,094.59 1,570,343,395.06
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (CONTINUED) Depreciation of property, plant and equipment, depletion Depreciation of property, plant and equipment, depletion biological of oil and gas assets, depreciation of productive assets Amortization of investment property Net increase in cash and cash equivalents Net cash flows from operating activities Financing expenses (gain listed as “-”) listed as “-”) Decrease in deferred tax assets (increase listed as “-”) Increase in Contractual liabilities (decrease listed as “-”) Gains or losses on changes in fair value (gain listed as “-”) Gains or losses on changes in fair value (gain listed Investment losses (gain listed as “-”) Others Decrease in contractual assets (increase listed as “-”) Decrease in operating receivables (increase listed as “-”) Increase in operating payables (decrease listed as “-”) Decrease in inventories (increase listed as “-”) Amortization of right-of-use asset Losses on disposal of property, plant and equipment, Losses on disposal of property, plant and equipment, listed as intangible assets and other long-term assets (gain “-”) Amortization of long-term deferred expenses Amortization of intangible assets Losses on retirement of property, plant and equipment (gain Losses on retirement of property, plant and equipment Increase in deferred tax liabilities (decrease listed as “-”) Provisions for asset impairment Impairment loss on credit Beginning balance of cash Ending balance of cash equivalents Beginning balance of cash equivalents
receivable endorsement Ending balance of cash Changes in cash and cash equivalents: Add: Reconciliation of net profit to cash flows from operating Reconciliation of net profit to cash flows from activities Net profit Add: Less: Add: Less: Property, plant and equipment acquired under bill Significant non-cash investing and financing activities:
Items 1. 3. 2. Supplementary information to the consolidated cash flows statement information to the consolidated Supplementary
Cash flow statement (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 65.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. – – – balance Beginning 879,802.59 (Continued) 1,570,343,395.06 1,570,343,395.06 1,569,463,592.47
– – – Ending balance 589,731.55 1,537,567,094.59 1,537,567,094.59 1,536,977,363.04
(CONTINUED) cash equivalents cash equivalent in parent company or subsidiaries of the Company on demand three months Ending balance of cash and Including: Restricted cash and Bank deposits available for use
Bond investment due within Including: Cash in hand Including:
Items Cash Cash equivalents Cash and cash equivalents Cash and cash
Cash flow statement (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 65.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
386 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 387
(Continued)
draft issued by the bank, statutory deposit draft issued by the bank, statutory deposit reserve of the central bank, and restricted deposit certificate for borrowing from the bank Limited reason From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Note 1 Note 1, Note 2 Bill pledge bank opens acceptance bill As the guaranteed amount of acceptance As the guaranteed amount of acceptance
amount (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Carrying (CONTINUED) 171,953,223.68 705,933,644.68 182,429,375.84 557,052,553.97
subsidiary of the Company Machine Tools Group raises a loan of of loan a raises Group Tools Machine Company the of subsidiary Jiangsu Chengfei, a subsidiary of the Group, mortgaged its real estate (Including Jiangsu Chengfei, a subsidiary of the Group, mortgaged its real estate The RMB295,000,000.00yuan in Agricultural Bank of China Yubei Branch (Term of RMB295,000,000.00yuan in Agricultural 2% increase in benchmark interest rate). loan: 30 Mar 2015 to 15 Feb 2023, district Nan’an in located Buildings the mortgages Group Tools Machine Bank Agricultural to C15/1-03 No. section C Chayuan-Lujiao Nanpingzutun was buildings mortgaged the of value original The Branch. Yubei China of and the RMB592,455,785.05yuan (carrying amount: RMB521,971,692.94yuan), (carrying RMB155,532,192.20yuan was land mortgaged the of value original amount: RMB130,866,481.29yuan). Phase I plant, Phase II plant, shift building, R & D center and land) to Jiangsu Phase I plant, Phase II plant, shift building, R & D center and land) RMB49,000,000.00yuan of loan a obtain to Bank Commercial Rural Rudong fixed a is rate interest contract the 21-2020.6.20, 2019.6. period (Borrowing and houses mortgaged of value original the 4.7850%); of rate borrowing RMB183,961,951.74yuan), amount: (carrying RMB194,428,983.16 is buildings (carrying RMB44,179,210.51yuan is land mortgaged of value original the amount: RMB41,086,742.39yuan).
Land-use rights Buildings Items Receivable financing Cash and cash equivalents Assets with restricted ownership or use rights at the end of the year ownership or use rights at Assets with restricted 1: Note
Note 2:
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 66.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. 2.19 23,424.26 1,342,246.47 2,196,024.00 CNY balance 87,830,420.59 66,943,824.37 39,206,140.75 37,148,332.34 198,117,620.20 223,521,431.72 219,849,271.21 140,879,800.00 150,976,650.00
(Continued)
– – – – – – – – – – – – 0.8958 1,508,157.67 9.1501 23,424.26 6.9762 20,796,259.18 7.2028 756,296.30 9.1501 34,982,708.07 7.8155 6.9762 141,699,367.17 7.8155 21,435,544.96 9.1501 64,769,705.25 9.1501 1,342,246.47 0.8958 197,762,756.64 9.1501 25,758,675.08 9.1501 66,943,824.37 6.9762 219,849,271.21 9.1501 58,560,640.00 6.9762 82,319,160.00 9.1501 36,458,966.63 6.9762 2,747,174.12 9.1501 2,196,024.00 9.1501 33,492,401.55 6.9762 3,377,708.68 7.8155 278,222.11 9.1501 150,976,650.00 Ending balance Exchange rate
– – – – – – – – – – – – 0.28 Foreign balance 2,560.00 currency 35,598.76 105,000.32 146,692.00 393,792.34 240,000.00 484,176.01 1,683,587.49 2,981,029.67 3,823,205.00 2,742,696.56 7,078,578.95 2,815,124.98 7,316,185.00 6,400,000.00 3,984,542.97 3,660,331.75 20,311,826.95 31,514,186.98 11,800,000.00 16,500,000.00 220,766,640.59
(CONTINUED) assets Items Cash in hand HKD CHF EUR Accounts receivable USD Prepayments GBP Cash at bank USD GBP EUR GBP GBP Other receivables HKD Contractual assets Other non-current assets-contractual GBP GBP USD Short-term loans USD Accounts payable USD GBP GBP Other payables GBP Contract liabilities USD GBP EUR Non-current liabilities due within one year GBP Foreign currency monetary items Foreign currency
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 67.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
388 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 389 – – – Amount the current included in 1,416,000.00 5,340,000.00 1,810,856.12 4,107,907.78 3,993,855.00 (Continued)
86,160,286.00 30,151,138.85 29,151,528.25 10,189,000.00 profit and loss
Presentation item
Deferred revenue Deferred revenue Deferred revenue Deferred revenue Deferred revenue Other income Other income Other income Other income Other income Other income From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Amount received this year 35,000.00 530,000.00 5,340,000.00 3,219,000.00 1,810,856.12 4,107,907.78 3,993,855.00 99,075,981.00 10,547,695.00 30,151,138.85 29,151,528.25 10,189,000.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
(CONTINUED)
grants development projects grants security subsidies development projects business operations Project-related government Total Items Subsidy funds for innovative R & D grants Government grants-relocation Others R & D grants Post stabilization and social Subsidy funds for innovative Various rewards related to Others Tax return Basic situation of government grants Basic situation
Government grants (1)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 68.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VI. (Continued)
limit by 2 million yuan audit report, return the the return report, audit funds financial central and illegal funds funds according to the the to according funds project budget requirements Reason Exceeding the subsidy subsidy the Exceeding
According to the project project the to According Returning over-disbursed over-disbursed Returning Project termination Income does not meet the Amount returned this year 144,000.00 152,490.00 450,000.00 170,000.00 2,106,490.00 1,190,000.00
(CONTINUED) (continued) Chongqing Nanan District Payment Center machine box parts and components of flexible manufacturing system alloy technology research and application demonstration project (2013ZX04012- 041) refund financial funds Technology Bureau Project (R & D project of high-end lathe high-power direct-drive key technology) Project Total Items Returned to the Industrial Bank of High-precision CNC gear machining Withdrawal from Chongqing Science and Withdrawal from Chongqing Science and Changtai Robot Intelligent Factory Government Supported Testing Center Return of government grants Return of government
Government grants Government grants (2)
NOTES TO MAJOR ITEMS OF THE CONSOLIDATED ITEMS OF THE NOTES TO MAJOR STATEMENTS FINANICAL 68.
VI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
390
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 391
yet invested. yet Chongqing Mechanical and Electrical Additive Manufacturing Co., Ltd. As of the end of the year, each investor has not not has investor each year, the of end the of As Ltd. Co., Manufacturing Additive Electrical and Mechanical Chongqing
(Continued)
Capital Liangjiang Brand Automotive Industry Investment Center (Limited Partnership) jointly invested to establish establish to invested jointly Partnership) (Limited Center Investment Industry Automotive Brand Liangjiang Capital
Xinhong Qianhua Enterprise Management Consulting Partnership (Limited Partnership) and Chongqing Gaoxin Venture Venture Gaoxin Chongqing and Partnership) (Limited Partnership Consulting Management Enterprise Qianhua Xinhong
Chongqing Mechanical and Electrical Intelligent Manufacturing Co., Ltd., a subsidiary of the Group, and Chongqing Chongqing and Group, the of subsidiary a Ltd., Co., Manufacturing Intelligent Electrical and Mechanical Chongqing Note:
equipment, machinery and testing equipment testing and machinery equipment,
manufacturing equipment, complete sets of laser laser of sets complete equipment, manufacturing distrct,Chongqing distrct,Chongqing Ltd. Co., company Manufacturing Additive
Development, production, and leasing of additive additive of leasing and production, Development, Nan’an Nan’an liability Electrical and Limited Mechanical Chongqing
76.00 – 5,000.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
Company name Company
enterprise
Type of of Type location
Major business business Major Indirect Direct (RMB’0000) business of Nature (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts registration
Place of of Place
capital
Shareholding (%) Shareholding Registered
Changes in the scope of consolidation of newly established holding subsidiaries holding established newly of consolidation of scope the in Changes 3.
None.
Business Combination under Common Control Common under Combination Business 2.
None.
Business Combination not under Common Control Common under not Combination Business 1.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes CHANGES IN CONSOLIDATION SCOPE CONSOLIDATION IN CHANGES VII.
(Continued)
Tools and Lathes and Tools
of Gear Processing Machine Machine Processing Gear of Chongqing Chongqing person) legal (sole Ltd.
Chongqing Machine Tools (Group) Co., Co., (Group) Tools Machine Chongqing 3 R&D, Manufacturing and Sales Sales and Manufacturing R&D, district, Nan’an district, company Nan’an liability Limited
Invest 100.00 – 59,424.13
testing equipment testing
equipment, machinery and and machinery equipment,
complete sets of laser laser of sets complete
manufacturing equipment, equipment, manufacturing
and leasing of additive additive of leasing and Chongqing Chongqing Ltd. Co., Manufacturing Additive
Development, production, production, Development, district, Nan’an district, company Nan’an Electrical liability and Limited Mechanical Chongqing 2.2
venture)
(Sino-foreign joint joint (Sino-foreign Ltd. Co., Technology control
under common common under Chongqing Chongqing
enterprise) Chongqing Mengxun Electronic Electronic Mengxun Chongqing 2.1 Limited liability company company liability Limited
60 Invest 76.00 – 5,000.00
by a foreign-invested foreign-invested a by
Business combinations combinations Business 66.26 – Products 5,431.24 Electronic Processing district, Nan’an district, Nan’an
person) (investment (investment person)
owned by a legal legal a by owned
company (wholly Ltd. (wholly Co., company Manufacturing Intelligent
Chongqing Machinery & Electronic Electronic & Machinery Chongqing 2 Limited liability liability Limited
intelligent equipment, etc. equipment, intelligent
and components and district,Chongqing district,Chongqing person) (“CAFF”) legal Ltd. (sole Co., System Steering
sale of industrial robots, robots, industrial of sale Chongqing Chongqing control
under common common under
Manufacturing of vehicle parts parts vehicle of Manufacturing Yubei Yubei 3200 100.00 23,280.00 & company Braking liability Limited Automotive CAFF Chongqing 1 Invest –
Nan’an district, district, Nan’an Design, manufacture and and manufacture district, Design, new Northern
0110 100.00 10,161.04 Business combinations combinations Business –
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
392 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 393 (Continued)
metal smelting metal
metal smelting, special special smelting, metal Chongqing Chongqing person) legal (sole Ltd. Co.,
Chongqing Yinhe Forging & Founding Founding & Forging Yinhe Chongqing 3.5 Casting, forging non-ferrous non-ferrous forging Casting, district, Jiangjin district, company Jiangjin liability Limited
0.0Invest 100.00 – 1,870.41
parts, auto parts, etc parts, auto parts,
machine tools and machine machine and tools machine Chongqing Chongqing person) legal (sole Ltd. Co., Factory
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Chongqing No. 2 Machine Tools Tools Machine 2 No. Chongqing 3.4 Manufacturing, marketing marketing Manufacturing, district, Nan’an district, company Nan’an liability Limited
0.0Invest 100.00 – 8,000.00
State-owned)
Company (Wholly (Wholly Company
Chongqing Chongqing
Chongqing Tool Factory Co., Ltd. Limited Liability Liability Limited Ltd. Co., Factory Tool Chongqing 3.3
0.0Invest 100.00 – 6,000.00 tool Cutting district, Jiangjin district, Jiangjin
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts maintenance
and spare parts sales, sales, parts spare and
for cotton; Cotton machinery machinery Cotton cotton; for Xinjiang Xinjiang companies Ltd.
Fu Baotian Cotton picking services Co., Co., services picking Cotton Baotian Fu 3.2 Mechanized picking services services picking Mechanized district, Tacheng district, liability Tacheng limited Other
venture)
Factory Solutions Co., Ltd.(note 1) Ltd.(note Co., Solutions Factory (Sino-foreign joint joint (Sino-foreign
production and sales and production 10 Invest 51.00 – 500.00
equipment and accessories accessories and equipment Chongqing Chongqing
Chongqing Sino-Germany Smart Smart Sino-Germany Chongqing 3.1 Limited liability company company liability Limited
Automation, intelligent intelligent Automation, district, Nan’an district, Nan’an
00 Invest 40.00 – 10,000.00
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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.
(Continued)
control
not under common common under not
limited liability company United Kingdom United Kingdom Leasing of properties of Leasing Kingdom United Kingdom United company liability Ltd. limited Investments Milnrow 4.3 Business combination combination Business 100.00 – 198 GBP
deep hole boring machines boring hole deep
machine tools, roll grinders, grinders, roll tools, machine control
not under common common under not
limited liability company United Kingdom United Kingdom Large multi-purpose CNC CNC multi-purpose Large Kingdom United Kingdom United company liability Ltd. limited Industries Heavy PTG 4.2
Business combination combination Business 100.00 – 2 GBP
control
parts not under common common under not
limited liability company United Kingdom United Kingdom Screw and various complex complex various and Screw Kingdom United Kingdom United company liability Ltd. limited Components Precision 4.1 Business combination combination Business 100.00 – 1 GBP
control
Limited. not under common common under not
Precision Technologies Group (PTG) (PTG) Group Technologies Precision 4 limited liability company United Kingdom United Kingdom Shell company Shell Kingdom United Kingdom United company liability limited Business combination combination Business – 100.00 million 20 GBP
venture)
(Sino-foreign joint joint Ltd. (Sino-foreign Co., Manufacturing
manufacturing, marketing manufacturing, Chongqing Chongqing
Chongqing Holroyd Precision Rotors Rotors Precision Holroyd Chongqing 3.7 Limited liability company company liability Limited
0.0Invest 100.00 – 4,000.00 design, screw Precision district, Nan’an district, Nan’an
and sales and
special tooling production production tooling special
machine tools, spare parts, parts, spare tools, machine
accessories, special special accessories, Chongqing Chongqing person) legal (sole Ltd. Co., Manufacture
Agricultural machinery and and machinery Agricultural district, Nan’an district, Nan’an Limited liability company company liability Machinery Limited Shengong Chongqing 3.6
0.0Invest 100.00 – 110.28
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
394
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 395
cables Chongqing Chongqing Ltd. Co., Cable
(Continued)
Chongqing Pigeon Electric Wire And And Wire Electric Pigeon Chongqing 6 Invest – 74.00 and wires 10,010.00 electric Manufacture district, Yubei district, Yubei company liability Limited
Devices
Governors and Auxiliary Auxiliary and Governors
Manufacture of Turbines, Turbines, of Manufacture Chongqing Chongqing person) legal (sole Ltd.
Design, Development and and Development Design, district, Jiangjin district, company Co., Jiangjin liability Works Limited Turbine Water Chongqing 5
RotorsCompany (US HPR) (US RotorsCompany Invest 100.00 – 14,709.71
limited liability company The United States The United States Manufacturing of screws of Manufacturing States United The States United The company liability and limited Screw Precision Holroyd 4.7.1.1 0.0Invest 100.00 – 1 USD
Limited (PTG US) (PTG Limited American plant American
limited liability company The United States The United States Second class SPV built for for built SPV class Second States United The States United The company liability Group(US) limited Technologies Precision 4.7.1 0.0Invest 100.00 – 1,000 USD
Limited (US Holding) (US Limited American plant American
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
limited liability company United Kingdom United Kingdom First class SPV built for for built SPV class First Kingdom United Kingdom United company (US) liability Group limited Technologies Precision 4.7 0.0Invest 100.00 – 1 GBP
control
not under common common under not tools
limited liability company United Kingdom United Kingdom Manufacturing of machine machine of Manufacturing Kingdom United Kingdom United company liability limited Limited. Precision HoIroyd 4.6 Business combination combination Business 100.00 – 100 GBP
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
materials Ltd.
PTG Investment Development Company Company Development Investment PTG 4.5 0.0Invest 100.00 – raw 600,000 and HKD machinery in Trade Kong Kong Hong Hong company liability limited
control
Sales not under common common under not
PTG Deutschland GmbH Deutschland PTG 4.4 Machine Tool Production and and Production Tool Machine Germany company Germany liability limited Business combination combination Business 100.00 – 2,5000 EUR
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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.
equipment Chongqing Chongqing person) legal (sole (Continued) Ltd Co., Material
0.0Invest 100.00 – 5,000.00 wind-power of Manufacturing district, Jiangjin district, company New Jiangjin liability Chengfei Limited Chongtong Chongqing 7.3.1
Control
not under Common Common under not equipment Jilin (unlisted) 5) Ltd.(note Co.,
Jilin Chongtong Chengfei New Material Material New Chengfei Chongtong Jilin 7.3 Business Combination Combination Business 96.03 – 16,000.00 wind-power of Manufacturing district, Baicheng province Jilin corporations Other
transformation
system maintenance and and maintenance system
testing, equipment and and equipment testing, Chongqing Chongqing shares Ltd Co., Technology
Chongqing Chongtong Turbine Turbine Chongtong Chongqing 7.2 Turbo mechanical product product mechanical Turbo district, Nan’an district, by Nan’an limited Company
(note 1) (note
chillers 66 Invest 66.67 – 3,000.00
Air Conditioning Equipment Co., Ltd. Co., Equipment Conditioning Air cooled and air-cooled air-cooled and cooled
evaporative cooling, water- cooling, evaporative Chongqing Chongqing
Chongqing Chongtong Wide Wisdom Wisdom Wide Chongtong Chongqing 7.1
Design and manufacture of of manufacture and Design district, Nan’an district, company Nan’an liability Limited
Chongqing Chongqing person) legal (sole Ltd. Co.,
20 Invest 42.00 – 6,000.00
Chongqing General Industry (Group) (Group) Industry General Chongqing 7 Invest 100.00 – etc. 51,509.01 coolers, fan of Production district, Nan’an district, company Nan’an liability Limited
Chongqing Chongqing 2) Ltd.(note Co.,
Chongqing Pigeon Electric Materials Materials Electric Pigeon Chongqing 6.2 00 Invest 50.00 – 680.00 product tubular district, PPR\PPC district, Changshou company Changshou liability Limited
Co., Ltd. Co., porcelain Chongqing Chongqing person) legal (sole
Chongqing Gepai Electric Porcelain Porcelain Electric Gepai Chongqing 6.1 Limited liability company company liability Limited Manufacture electrical electrical district, Manufacture district, Changshou Changshou 0.0Invest 100.00 – 5,300.00
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
396 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 397 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
person)
by a non-natural non-natural a by
invested or controlled controlled or invested
owned legal person person legal owned
Company (Wholly- Ltd. Co., Company Jiangsu Equipment
Chongtong Chengfei Wind Power Power Wind Chengfei Chongtong 7.3.3
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Liability Limited
person)
equipment Jiangsu Jiangsu
by a non-natural non-natural a by
invested or controlled controlled or invested
Rudong district, district, Rudong 0.0Invest 100.00 – 10,000.00 wind-power of Manufacturing district, Rudong
owned legal person person legal owned
Material Co., Ltd. Co., Material Company (Wholly- Company
Gansu Chongtong Chengfei New New Chengfei Chongtong Gansu 7.3.2 Limited Liability Liability Limited
equipment
Gansu province Gansu province Manufacturing of wind-power wind-power of Manufacturing province Gansu province Gansu 0.0Invest 100.00 – 5,000.00
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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. (Continued)
and Pressure Vessels Pressure and
Industrial Pumps and Parts Parts and Pumps Industrial Chongqing Chongqing person) legal (sole
Limited liability company company Ltd. Co., liability Limited Industry Pump Chongqing 8 Design and Manufacture of of Manufacture and district, Design district, Shapingba Shapingba
Invest 100.00 – 19,641.15
BOT business BOT
operation management, management, operation Chongqing Chongqing Ltd Co., Affairs Water Kang Tong
Chongqing General Industry (Group) (Group) Industry General Chongqing 7.5 Sewage collection, treatment, treatment, collection, Sewage district, Tongnan district, company Tongnan liability Limited
0.0Invest 100.00 – 1,000.00
gas products sales products gas
environmental products and and products environmental Chongqing Chongqing person) Ltd. legal Co., (sole Equipment Electrical
person) Network products, products, Network district, Nan’an district, company Nan’an liability General Limited Shunchang Chongqing 7.4
by a non-natural non-natural a by
0.0Invest 100.00 – 100.00
invested or controlled controlled or invested
owned legal person person legal owned
Equipment Co., Ltd. Co., Equipment Company (Wholly- Company
Xilinhaote Chenfei Wind-Power Wind-Power Chenfei Xilinhaote 7.3.4 Limited Liability Liability Limited
gas products sales products gas
environmental products and and products environmental Control
not under Common Common under not
Xilin, Neimeng Xilin, Neimeng Network products, products, Network Neimeng Xilin, Neimeng Xilin,
Name of subsidiaries of Name No. Business category Business
Business Combination Combination Business 100.00 – 5,000.00
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
398
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 399
(Continued)
Limited (“CMEFC”) Limited
Holding Group Finance Company Company Finance Group Holding member units member
financing services to to services financing Chongqing Chongqing
Chongqing Machinery and Electronics Electronics and Machinery Chongqing 12
Providing financial and and financial district, Providing new district, Northern new company Northern liability Limited
enterprise) Invest – 70.00 60,000.00
by a foreign-invested foreign-invested a by
person) (investment (investment person)
owned by a legal legal a by owned
company (wholly (wholly company enterprise)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December by a foreign-invested foreign-invested a by
Chongqing Shengpu Materials Co., Ltd. Limited liability liability Limited Ltd. Co., Materials Shengpu Chongqing 11
person) (investment (investment person)
owned by a legal legal a by owned
company (wholly 3) (wholly Ltd.(note company Co., Center Innovation business Chongqing Chongqing
Chongqing Industrial Enabling Enabling Industrial Chongqing 10 Limited liability liability Limited Invest 100.00 – trade other 2,140.50 and steel of district, Sales new district, Northern new Northern
Technology
and Electrical Equipment Equipment Electrical and
Components
Development of Mechanical Mechanical of Development Chongqing
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Chongqing
Compressors and and Compressors Chongqing Chongqing Ltd. Co.,
control
Northern new district, district, new Northern Consultation on Research and and Research on district, Consultation new Northern
under common common under
Chongqing Gas Compressor Factory Factory Compressor Gas Chongqing 9 Manufacturing of Gas Gas of district, Manufacturing district, Shapingba company Shapingba liability Limited
Invest 100.00 – 18,721.39
Business combinations combinations Business 100.00 – 3,000.00
and Pressure Vessels Pressure and
Chongqing Pump Industry Co., Ltd. Co., Industry Pump Chongqing Industrial Pumps and Parts Parts and Pumps Industrial Chongqing Chongqing
Yongchuan General Machinery Factory, Factory, Machinery General Yongchuan 8.1 Design and Manufacture of of Manufacture and District, Design District, Yongchuan Yongchuan Branch
0.0Invest 100.00 – –
Name of subsidiaries of Name No. Business category Business
location
business business Nature of business of Nature registration Acquisition method Indirect Acquisition Direct (RMB’0000)
Major Major Place of of Place
Shareholding (%) 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. (Continued)
(CONTINUED) (continued) (continued) to as “Pigeon Electric”). The reason why Pigeon Electric is is Electric Pigeon why reason The Electric”). “Pigeon as to Group holds less than 50% shares of these companies. These These companies. these of shares 50% than less holds Group April 19, 2019, Chongqing Machinery & Electric Equipment Equipment Electric & Machinery Chongqing 2019, 19, April its major shareholder Chongqing General Industry (Group) Co., Ltd. Ltd. Co., (Group) Industry General Chongqing shareholder major its On Chengfei New Material Co., On December 13, 2019, the Jilin Zhongtong New Material Co., Ltd., a third- Ltd. branch of Jilin Zhongtong Chengfei level subsidiary of the Group, has completed industrial and commercial registration and cancellation. Jilin In October 2019, the third-level subsidiary of the Group’s subsidiary Chongtong Chengfei New Materials Co., Ltd. (“Jilin Chengfei”) referred to The Group holds 74% shares of Pigeon Wire and the Pigeon Wire holds The Group holds 74% shares of Pigeon Electric Materials Co., Ltd (hereinafter 50% shares of Chongqing Pigeon referred The regarded as a subsidiary of the Group is that the Group has majority majority has Group the that is Group the of subsidiary a as regarded to control its strategy, operations, voting rights in its board of directors investment and financing activities. (“General Industry”) An additional 195,007,800 shares were issued, with (“General Industry”) An additional 195,007,800 shares were issued, per a par value of 1 yuan per share, and an issue price of 1.0256 yuan as share. General Industry used Jilin Chengfei’s debt of 200 million yuan additional above-mentioned the for subscribe to contribution capital a shares, thereby realizing the debt-to-equity conversion of Jilin Chengfei. Jilin in shareholding Industrial’s General swap, debt-to-equity the After Chengfei increased from 91.18% to 96.03%. Jilin Chengfei has completed the business and industry change registration on November 4, 2019. Technology Research Institute Co., Ltd., a subsidiary of the Group, was Technology Research Institute Co., Innovation Center Co., Ltd. renamed Chongqing Industrial Enabling companies are regarded as subsidiaries of the Group because the the because Group the of subsidiaries as regarded are companies in the board of directors of these rights Group has the majority of voting articles of association. The Group is companies in accordance with the investment and financing activities. controlling their strategy, operations,
5: Group structure Group structure Note Note 3: Note Note 4: Note Note 1: Note 2: Note
Interests in Subsidiaries Interests in Subsidiaries (1)
INTERESTS IN OTHER ENTITIES INTERESTS 1.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
400 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 401 interest interest 86,412,454.64 249,151,270.65 31 Dec 2019 of non-controlling (Continued)
1 Jan 2019 of
84,809,783.29 non-controlling –
– Dividends to minority distributed shareholders interest of the new
The impact changes on – non-controlling lease standard
interest Change in non-controlling defined income plan belongs to interest
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) non-controlling 31 Dec 2018 of
to minority attributable Profit or loss shareholders (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (%)
30.00 229,672,056.89 (3,723.47) 229,668,333.42 26.00 84,809,783.29 of minority interest shareholders Shareholding (continued)
1 Jan 2019 of 84,809,783.29 26,196,624.05 105,339.00 24,699,291.70 non-controlling 229,668,333.42 19,482,937.23
Turbine Works Co., Ltd. Turbine Works Co., Ltd. CMEFC Chongqing Water Name of subsidiary Name of subsidiary Chongqing Water CMEFC Significant partly-owned subsidiaries Significant partly-owned
(Continued)
Interests in Subsidiaries Interests in Subsidiaries (2)
INTERESTS IN OTHER ENTITIES INTERESTS 1.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII. Total liabilities Total liabilities 2,807,649,911.91
– (Continued) liabilities
liabilities Non-current Non-current
Ending balance Beginning balance Total assets Current liabilities Total assets Current liabilities (CONTINUED)
assets assets Non-current Non-current
(continued) Current assets 707,108,300.44 227,172,244.52 934,280,544.96 561,486,503.29 12,482,160.68 573,968,663.97 678,202,765.87 237,419,837.13 915,622,603.00 534,778,643.66 21,073,762.58 555,852,406.24 Current assets 3,668,118,514.14 18,961,885.37 3,687,080,399.51 2,854,361,973.44 2,214,190.69 2,856,576,164.13 3,561,731,413.37 11,492,021.37 3,573,223,434.74 2,807,649,911.91
Turbine Works Co., Ltd. Turbine Works Co., Ltd. Name of subsidiaries Name of subsidiaries Chongqing Water CMEFC Chongqing Water CMEFC Key financial information of significant partly-owned subsidiaries of significant partly-owned Key financial information
(Continued)
Interests in Subsidiaries Interests in Subsidiaries (3)
INTERESTS IN OTHER ENTITIES INTERESTS 1.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
402 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 403 activities activities Cash flows Cash flows 31,482,524.00 from operating 280,151,764.97 160,268,444.47 176,499,328.85 from operating (Continued)
Total Total income income 52,985,902.97 64,943,124.11 comprehensive 156,449,705.68 101,602,293.75 comprehensive
Amount of last year Amount of the year Net profit Net profit 52,985,902.97 64,943,124.11 From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 156,449,705.68 101,197,143.75 (CONTINUED)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 116,794,872.98 121,813,432.68 1,379,182,051.07 1,480,573,654.98 Operating revenue Operating revenue
(continued) Co., Ltd. Co., Ltd. CMEFC Name of subsidiaries Chongqing Water Turbine Works Name of subsidiaries Chongqing Water Turbine Works CMEFC Key (continued) (Continued)
(Continued)
Interests in Subsidiaries Interests in Subsidiaries (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. (Continued)
(CONTINUED) (continued) Group has no structured entities included in the scope of of scope the in included entities structured no has Group Group has no financial or other support to structured entities entities structured to support other or financial no has Group he Group and its subsidiaries have not issued equity or debt debt or equity issued not have subsidiaries its and Group he consolidated financial statements. securities. group assets and settlement of corporate group debts. settlement of corporate group group assets and included in the scope of consolidated financial statements. included in the scope of consolidated The T The The
The Interests in Subsidiaries Interests in Subsidiaries changes and the subsidiary company is still under control changes and the subsidiary company In October 2019, the third-level subsidiary of the Group’s subsidiary Jilin Jilin subsidiary Group’s the of subsidiary third-level the 2019, October In its to referred Chengfei”) (“Jilin Ltd. Co., Materials New Chengfei Chongtong (“General Ltd. Co., (Group) Industry General Chongqing shareholder major value par a with issued, were shares 195,007,800 additional An Industry”) share. per yuan RMB1.0256 of price issue an and share, per yuan RMB1 of a as yuan million RMB200.00 of debt Chengfei’s Jilin used Industry General shares, additional above-mentioned the for subscribe to contribution capital After the debt- thereby realizing the debt-to-equity conversion of Jilin Chengfei. increased Chengfei Jilin in shareholding Industrial’s General swap, to-equity from 91.18% to 96.03%. (7) (4) corporate of use the on restrictions significant no has Group (5) (6)
INTERESTS IN OTHER ENTITIES INTERESTS 2. 2. company subsidiary a of share equity owner’s the which in situation 1.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
404
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 405
(Continued)
Machinery”)
Jiangbei Jiangbei
chongqing”)
Ltd.(“Chongqing Ltd.(“Chongqing
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December limited(“ABB machinery Co., Co., machinery
Chongqing systems
company company
Chongqing
joint venture) joint
Chongqing jiangbei jiangbei Chongqing
District, District, company machinery and its its and machinery
transformer transformer
District, District,
(Sino-foreign (Sino-foreign
of large separation separation large of
Chongqing
insulator
Cummins”) Yufu, Jiangbei Jiangbei Yufu, liability Limited
ABB chongqing chongqing ABB company company Chongqing
Yufu,Jiangbei Yufu,Jiangbei
District, District,
transformer, sets of of sets transformer, limited (“CQ (“CQ limited joint venture) joint Manufacturing and sale sale and Manufacturing
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts ventures–– Joint District, District,
Limited liability liability Limited
Jiulongpo Jiulongpo
transformer, UHV AC AC UHV transformer,
engine company company engine (Sino-foreign (Sino-foreign Equity method Equity – 41.00
power engines in China in engines power
Huayan, Jiulongpo Jiulongpo Huayan,
reactor, HVDC converter converter HVDC reactor,
company company
Chongqing
Huayan, Huayan,
Chongqing cummins cummins Chongqing duty and high-horse high-horse and duty
District, District, Chongqing
Power transformer, transformer, Power
Associates–– Limited liability liability Limited manufacturer of heavy- of manufacturer
Shapingba Shapingba District, Shapingba
Equity method Equity – 37.80 Largest professional professional Largest
Equity method Equity – 50.00
or joint venture joint or ietyIndirectly Directly
category
Name of associates associates of Name business
Business Business Accounting method (%) Accounting shareholding business of Nature registration
Principal place of of place Principal
Place of of Place
Proportion of of Proportion
Significant joint ventures or associates or ventures joint Significant (1)
Interests in Joint Ventures or Associates or Ventures Joint in Interests 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII.
(Continued)
(“Shenjian”)
Pieces Co., Ltd. Co., Pieces
Auto Transmission Transmission Auto
Chongqing Chongqing company
Chongqing Shenjian Shenjian Chongqing
Equity method Equity 35.00 – transmission Automobile District, Nanan District, Nanan liability Limited
(Hongyan fangda) (Hongyan arm and other auto parts auto other and arm
suspension Co., Ltd. Co., suspension air suspension, guide guide suspension, air
fangda automobile automobile fangda of car leaf spring, auto auto spring, leaf car of
manufacturing and sales sales and manufacturing Chongqing Chongqing company
Chongqing hongyan hongyan Chongqing
chongqing”)
Development, Development, District, Yubei District, Yubei liability Limited
limited(“EXEDY limited(“EXEDY joint venture) joint
company company
(Sino-foreign (Sino-foreign Equity method Equity – 44.00
company company
Exedy chongqing chongqing Exedy
clutch and clutch pump clutch and clutch Chongqing Chongqing
Limited liability liability Limited
Nanan District, District, Nanan Equity method Equity – of 27.00 sale and manufacturing District, Nanan
or joint venture joint or ietyIndirectly Directly
category
Name of associates associates of Name business
Business Business Accounting method (%) Accounting shareholding business of Nature registration
Principal place of of place Principal
Place of of Place
Proportion of 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 3. (continued)
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
406 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 407
(Continued)
commercial cancellation in December of this year. this of December in cancellation commercial
disposal gains of RMB774,887.32yuan during the current year, and the company has completed industrial and and industrial completed has company the and year, current the during RMB774,887.32yuan of gains disposal
The Group has withdrawn its equity investment in Chongqing Gas Engineering Co., Ltd. and obtained equity equity obtained and Ltd. Co., Engineering Gas Chongqing in investment equity its withdrawn has Group The Note:
construction company
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
Equity method Equity – 49.00 station Hydropower Italy Italy liability limited S.r.l Power Gen Water
(Chongqing) Ltd. (Chongqing)
joint venture) joint
Vehicles Vehicles
and domestic domestic and
Commercial Commercial Kong, Macao Macao Kong,
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Systems for for Systems
(Taiwan, Hong Hong (Taiwan,
company company Knorr-Bremse Knorr-Bremse
vehicle valves vehicle
Limited liability liability Limited
sale of commercial commercial of sale Chongqing Chongqing
Manufacturing and and Manufacturing District, Yubei District, Yubei
Equity method Equity – 34.00
Name of associates of Name
ietyIndirectly Directly category
business
Business Business
Accounting method Accounting (%) shareholding business of Nature registration
place of of place
Place of of Place
Proportion of of Proportion Principal Principal
Unimportant associate Unimportant (2)
Interests in Joint Ventures or Associates Associates or Ventures Joint in Interests 3. (continued)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
INTERESTS IN OTHER ENTITIES ENTITIES OTHER IN INTERESTS (CONTINUED) VIII. – – Beginning of last year (3,295,125.65) 98,737,620.94 462,610,362.85 708,145,201.70 721,792,238.48 360,896,119.24 360,896,119.24 106,272,641.02 643,793,524.17 643,793,524.17 302,582,956.35 177,446,963.62 balance/Amount 1,634,367,203.07 1,648,014,239.87 2,356,159,441.55 1,535,629,582.13 2,987,530,210.38 (Continued)
– – year CQ Cummins Ending balance/ (8,833,512.25) Amount of the 607,989,686.56 941,771,608.90 175,381,356.88 744,590,851.52 372,295,425.76 372,295,425.76 105,106,669.70 569,522,039.84 569,522,039.84 267,814,254.94 211,905,296.80 2,041,636,243.15 1,844,455,485.77 2,786,227,094.67 1,866,254,886.27 2,864,552,641.15
(continued) (CONTINUED) Company ventures offer Total liabilities Non-controlling interest Current assets Including: cash and cash equivalents Non-current assets Total assets Current liabilities Non-current liabilities Items Total equity attributable to shareholders of the Total equity attributable to shareholders Net assets calculated based on shareholding ratio Net assets calculated based on shareholding Carrying amount of equity investment in joint Fair value of investment in joint ventures with public Operating revenue Income tax expense Net profit Total comprehensive income Recognized dividends from joint ventures Received dividends from joint ventures Financial expenses Key financial information of significant joint ventures of significant joint Key financial information
Interests in Joint Ventures or Associates Interests in Joint (3)
INTERESTS IN OTHER ENTITIES INTERESTS 3.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
408 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 409 – – – last year balance/ Beginning Amount of 775,213.95 6,148,038.62 4,999,713.72 25,626,268.64 25,626,268.64 19,301,425.49 32,020,557.04 886,441,307.41 123,406,148.77 123,406,148.77 280,468,519.94 241,963,691.71 236,963,977.99 541,733,637.14 132,676,099.77 409,057,537.37 (Continued)
– – Hongyan fangda Ending the year balance/ 423,559.94 Amount of 1,811,402.86 2,878,647.02 4,360,521.00 9,717,744.55 17,429,841.07 (23,271,886.95) (23,271,886.95) 721,304,694.53 114,612,764.69 114,612,764.69 260,483,556.11 259,348,326.57 254,987,805.57 537,261,723.75 118,748,296.40 418,513,427.35
– – last year balance/ Beginning Amount of From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (3,022,324.33) 13,149,657.27 72,170,372.38 77,650,013.00 79,590,988.45 72,170,372.38 32,763,003.35 77,821,301.18 726,597,886.02 248,255,606.76 248,255,606.76 656,760,864.44 700,105,222.14 667,342,218.79 225,401,318.72 1,356,866,086.58 1,131,464,767.86 (continued)
(CONTINUED) – – ABB chongqing Ending the year (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts balance/ Amount of 3,666,405.94 2,152,297.23 4,465,067.30 4,465,067.30 29,349,033.00 29,349,033.00 43,641,968.29 591,597,690.04 224,207,687.31 224,207,687.31 593,142,029.93 823,860,944.59 780,218,976.30 179,990,310.51 212,490,215.37 1,417,002,974.52 1,204,512,759.15
associates with public offer associates investment in associates associates on shareholding ratio to shareholders of the Company equivalents Financial expenses Operating revenue Income tax expense Net profit Fair value of investment in Total comprehensive income Received dividends from Carrying amount of equity Recognized dividends from Net assets calculated based Total equity attributable Non-controlling interest Total liabilities Non-current liabilities Current liabilities Total assets Including: cash and cash Items Non-current assets Current assets Key financial information of significant associates Key financial information
Interests in Joint Ventures or Associates Interests in Joint (4)
INTERESTS IN OTHER ENTITIES INTERESTS 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII. – – – – – year balance/ Beginning 5,848,064.08 5,848,064.08 1,794,582.28 3,090,000.00 8,850,692.52 89,742,246.20 89,742,246.20 Amount of last 155,104,136.95 256,406,417.71 234,709,103.77 231,619,103.77 491,115,521.48 314,438,509.98 176,677,011.50
– – – – – Shenjian year Ending (Continued) balance/
9,293,256.88 4,462,500.00 3,304,569.99 81,680,377.94 81,680,377.94 (17,319,328.49) (17,319,328.49) 162,558,405.92 233,372,508.40 Amount of theAmount of 348,733,935.38 344,271,435.38 582,106,443.78 352,904,602.25 229,201,841.53
(Continued) – – – – year balance/ Beginning 134,443.95 2,068,532.78 2,068,532.78 6,165,527.19 9,199,952.67 59,014,532.44 59,014,532.44 10,883,000.00 Amount of last 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
– – – – year Ending balance/ 263,907.95 5,666,476.62 4,858,281.02 (6,362,711.41) (6,362,711.41) 58,122,171.60 58,122,171.60 17,254,982.34 Chongqing Jiangbei Machinery 132,948,335.71 141,761,394.14 218,327,366.22 213,469,085.20 Amount of theAmount of 360,088,760.36 175,862,140.85 184,226,619.51
(continued) (CONTINUED) – year balance/ Beginning 560,676.28 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 Amount of last 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
– – – year Ending EXEDY (Chongqing) balance/ 2,651,933.96 2,651,933.96 5,324,161.34 5,324,161.34 1,433,119.31 4,532,562.12 7,887,961.49 80,084,205.09 80,084,205.09 383,261,560.61 296,608,166.99 127,852,224.52 127,852,224.52 424,460,391.51 166,079,915.64 Amount of theAmount of 258,380,475.87
associates associates associates with public offer investment in associates on shareholding ratio to shareholders of the Company equivalents Received dividends from Recognized dividends from Total comprehensive income Net profit Income tax expense Financial expenses Operating revenue Fair value of investment in Carrying amount of equity Net assets calculated based Total equity attributable Non-controlling interest Total liabilities Non-current liabilities Current liabilities Total assets Non-current assets Including: cash and cash Items Current assets (Continued) Key financial information of significant associates of significant associates Key financial information
Interests in Joint Ventures or Associates Interests in Joint (4)
INTERESTS IN OTHER ENTITIES INTERESTS 3.
VIII. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
410 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 411 – last year balance/ Beginning Amount of 7,865,510.89 7,865,510.89 (Continued)
49,810,588.03
– Ending the year balance/ Amount of 42,869,184.16 65,389,333.02 42,869,184.16
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (continued) (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts – Other comprehensive income – Net profit Total comprehensive income
Items Total amounts by shareholding ratio: Associates Total investment par value
The Group has no contingent liabilities related to investments in joint The Group has no contingent liabilities related to investments ventures or associates. There are no significant restrictions on the ability of the Group’s joint There are no significant restrictions funds to the company. ventures or associates to transfer the Group’s joint ventures or associates. No excess losses incurred by venture The Group has no unconfirmed commitments related to joint investment. Financial information of insignificant associates Financial information
Group has no structured entities that are not included in the scope of of scope the in included not are that entities structured no has Group
7) The Group has no significant joint operations. The Interests in Joint Ventures or Associates Interests in Joint consolidated financial statements. ( (8) (9) (6) (5)
. . INTERESTS IN OTHER ENTITIES INTERESTS 5 4. 3.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes VIII. (Continued)
Group mainly operates in mainland China. Main business business Main China. mainland in operates mainly Group is settled in RMB. But foreign exchange risk arises when future future when arises risk exchange foreign But RMB. in settled is are liabilities or assets recognized or transaction commercial currency. functional entity’s is that currency a in denominated foreign of scale the monitors Group the of department Financial negative the reduce to liabilities and assets transactions, currency lowest the to performance business Group the on risks of impact sign forward exchange contracts or level. There for the Group may end of the year, the Group didn’t currency swap contracts. At the sign any contracts mentioned above. Foreign exchange risk The
Market risk 1)
Various risk management objectives and policies Various risk management (1)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED 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 basic and liquidity risk. The Group’s interest rate risk), credit risk exchange risk and impact market to reduce the negative the unpredictability of financial strategy aims at results of the Group. of risks to the financial
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
412 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 413
Total 2,196,024.00 1,342,246.47 66,943,824.37 39,206,140.75 219,849,271.21 150,976,650.00 223,521,431.72 140,879,800.00
– – – – – – – –
(Continued) 2.19 87,853,844.85 EUR
278,222.11 37,148,332.34 278,222.11 370,406,947.09 21,435,544.96 198,117,620.20
– – – – – – – – – – –
CHF
–
Ending balance GBP (continued) 2,196,024.00 1,342,246.47 66,943,824.37 36,458,966.63 33,492,401.55 34,982,708.07 58,560,640.00 150,976,650.00 281,684,682.18
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December – – – – – – – – – –
HKD 197,762,756.64 25,758,675.08
– – – – –
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts USD 2,747,174.12 3,377,708.68 88,444,042.80 82,319,160.00 20,796,259.18 1,508,157.67 64,793,129.51 756,296.30 219,849,271.21 141,699,367.17 382,344,897.56 199,270,914.31 193,820,583.50 756,296.30 21,435,547.15 797,628,238.82
(continued) contractual assets one year financial liabilities financial assets Other non-current assets- Other payables Non-current liabilities due within Prepayments Contractual assets Foreign currency Accounts payable Contract liabilities Foreign currency Accounts receivable Other receivables Total Total Items Short-term loans Cash and cash equivalents Foreign exchange risk (continued) Foreign exchange financial assets and liabilities held The amount of foreign currency are shown follows: by the Group converted into RMB
Market risk 1)
Various risk management objectives and policies objectives and policies Various risk management (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 19,039,277.56 147,495,400.00 128,618,490.76 114,371,659.07 116,674,400.00
– – – – – – – EUR 202,182.32 68,463,932.82 (Continued) 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 Beginning balance (continued) 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
– – – – – – USD 9,638,190.29 38,737,321.55 95,411,249.94 16,031,670.85 76,669.84 13,373,736.31 116,674,400.00 111,442,920.79 76,669.84 234,445,462.19 2,202,240.80 8,077,328.45165,049,911.84 356,244,622.07
(continued) liabilities assets Long-term loans Accounts payable Other payables Contract liabilities Other receivables Short-term loans Accounts receivable Prepayments Cash and cash equivalents Foreign currency financial Foreign currency financial Total Total Items Foreign exchange risk (continued) Foreign exchange (Continued)
1) Market risk
Various risk management objectives and policies objectives and policies Various risk management (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 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
414 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 415 (Continued) 910,705,132.24 915,000,000.00
1,825,705,132.24 Beginning balance
Ending balance 1,731,459,557.35 1,273,637,450.00 3,005,097,007.35
(continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (continued) Group’s interest rate risk arises from interest bearing bank bank bearing interest from arises risk rate interest Group’s Borrowings at fixed rates Total Nature of borrowings Borrowings at floating rates deposits and borrowings. Bank deposits and borrowings at floating deposits and borrowings. Bank flow interest rate risk. Bank deposits rates expose the Group to cash the Group to fair value interest and borrowings at fixed rates expose the related proportions of its fixed rate risk. The Group determines market prevailing the on depending contracts rate floating and floating at borrowings and deposits bank Group’s The conditions. USD, EUROS, HKD, and UKP. The rates were denominated in RMB, its exposure to interest rate risk. Group currently does not hedge floating rates and at fixed rates are The Group’s bank borrowings at as follows: Interest rate risk The
Market risk 2)
Various risk management objectives and policies objectives and policies Various risk management (1)
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) formulates relevant policies to control credit risk. The formulates relevant policies to control he subsidiaries are responsible for their own cash flow forecast, forecast, flow cash own their for responsible are subsidiaries he according to which the finance department of the Group continuously continuously Group the of department finance the which to according Group the that So needs. capital long-term and short-term the monitors at any maintains adequate cash reserve portfolio and available securities compliance time. At the same time this department continuously monitors from the with the provisions of the loan agreement, obtaining commitment long-term main financial institutions of funds to meet the short-term and funding requirements. Group assesses the credit quality of each customer by taking into account into taking by customer each of quality credit the assesses Group parties, third from guarantees obtaining of possibility position, financial its situation marketing current as such factors, other and experience past The Group periodically monitors the and set the appropriate credit period. with poor credit, the Group takes customer’s credit record. For customers cancels the credit period so as to ensure written collections, shortens or the overall credit risk under control. Liquidity risk T Credit risk credit risk portfolio. Credit credit risk according to The Group manages cash Equivalents, accounts receivable, risk mainly comes from cash and etc. other receivables and notes receivable, in state-owned banks and listed The Group’s liquid capital is deposited So the Group believes that there is no banks of large and medium-scale. not be significant losses due to default by significant risk since there will the other units. Otherwise, the Group
Various risk management objectives and policies objectives and policies Various risk management (2) (3)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) 1.
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
416 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 417 Total 269,494.13 4,505,143.84 17,558,096.44 49,949,000.00 133,648,044.08 219,849,271.18 297,279,335.53 411,866,777.75 807,469,495.64 456,796,531.42 267,014,335.67 470,685,913.42 302,123,148.00 1,102,423,100.66 1,387,210,312.05 1,686,336,446.82 3,111,334,932.31 1,202,637,121.55 1,124,891,682.30 1,190,119,200.38
(Continued)
– – – – – – – – – – – – – – – – – – – – Over 5 years 52,314,020.88 52,314,020.88 141,863,593.70 2,094,619,648.56
– – – – – – – – – – – – – – – – – – 2-5 years 3,495,143.84 (continued) 219,849,271.18 Ending balance
– – – – – – – – – – – – – – – – – – From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 1-2 years 1,010,000.00 123,126,023.05 10,522,021.03
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts – – – – 578,919.45 36,573,941.92 44,642,965.48 17,418,019.73 99,213,846.58 269,494.13 Within 1 year 69,520,800.68 1,464,053,938.64 161,124,972.08 116,235,386.66 1,810,935,098.06 17,558,096.44 49,949,000.00 976,911,013.16 77,145,525.00 48,366,562.50 297,279,335.53 411,866,777.75 807,469,495.64 456,796,531.42 267,014,335.67 470,685,913.42 302,123,148.00 1,387,210,312.05 1,686,336,446.82 3,111,334,932.31 1,202,637,121.55 1,062,273,543.41 62,618,138.89 6,822,381,475.43 1,650,808,100.58 175,142,136.95 116,235,386.66 8,764,567,099.62 8,898,308,997.241,190,119,200.38 113,719,466.92 312,858,799.16 211,595,634.31 9,536,482,897.63 1,952,756,054.86
(continued) investment contractual assets one year within one year from other banks Other equity instruments Long-term payables Long-term receivables Loans and advances Lease liabilities Other non-current assets- Long-term loans Non-current assets due within Non-current liabilities due Contract assets Contract liabilities Other receivables Other payables Prepayments Repurchase agreements Receivable financing Accounts payable Accounts receivable Notes payable Notes receivable Receipt of deposits and deposits Trading financial assets Total Total Financial liabilities Short-term loans Financial assets Cash and cash equivalents Items Liquidity risk The major financial assets and liabilities held by the Group are analyzed assets and liabilities held The major financial without obligations contractual remaining the of maturity the of terms in discounting as follows:
Various risk management objectives and policies objectives and policies Various risk management (3)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) 1.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX. Total 5,124,292.21 33,996,800.00 298,586,106.82 894,160,000.00 267,305,712.21 267,155,902.13 599,204,267.53 685,648,864.72 930,290,350.44 1,223,487,779.36 1,024,659,431.18 3,051,333,203.60 1,334,738,381.17 1,171,862,121.56 1,522,525,538.63 1,225,850,904.13
– – – – – – – – – – – – – – – – (Continued)
Over 5 years 46,693,061.00 46,693,061.00 157,873,516.68 2,164,670,306.18
– – – – – – – – – – – – – – – 2-5 years (continued) 7,084,000.00 7,084,000.00 204,566,577.68 9,287,569,004.04 Beginning balance
– – – – – – – – – – – – – – 1-2 years
– 398,400.00 26,514,400.00 5,124,292.21 Within 1 year 34,240,000.00 34,240,000.00 825,680,000.00 92,792,461.61 69,454,652.12 105,058,598.48 79,615,859.24 113,832,117.11 649,335,950.00 153,893,000.00 996,676,926.35 298,586,106.82 267,155,902.13 599,204,267.53 685,648,864.72 930,290,350.44 1,181,773,786.21 41,713,993.15 1,024,659,431.18 3,051,333,203.60 1,334,738,381.17 1,171,862,121.56 1,522,525,538.63 6,504,906,627.47 217,526,769.23 1,580,074,548.48 153,893,000.00 8,456,400,945.18 9,007,690,033.21 68,228,393.15 1,225,850,904.13 2,006,796,789.50 (continued)
investment deposits from other banks equivalents Long-term receivables Other equity instruments Contract assets Loans and advances Bonds payable Long-term payables Prepayments Other receivables Long-term loans Accounts receivable Other payables Contract liabilities Receipt of deposits and Notes receivable Accounts payable Trading financial assets Total Total Financial liabilities Short-term loans Items Notes payable Financial assets Cash and cash (Continued) Liquidity risk
Various risk management objectives and policies objectives and policies Various risk management (3)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) 1.
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
418 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 419
Effect on owners’ equity (Continued)
During last year Effect on net profit 7,162,030.52 7,162,030.52 2,680,349.55 2,680,349.55 (7,162,030.52) (7,162,030.52) (2,680,349.55) (2,680,349.55)
Effect on owners’ equity From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
During the year Effect on net profit 4,393,204.93 4,393,204.93 (4,393,204.93) (4,393,204.93) 14,695,042.73 14,695,042.73 (14,695,042.73) (14,695,042.73) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Exchange rate down 5% Exchange rate up 5%
Change in exchange rate Exchange rate down 5% Exchange rate up 5% hypothesis of sensibility analysis of foreign exchange risk: all the the all risk: exchange foreign of analysis sensibility of hypothesis GBP GBP Items USD USD Sensitivity analysis of foreign exchange risk Sensitivity analysis of foreign The foreign operations and investments and cash flows are highly effective. foreign operations and investments of exchange rates on the current The influence of reasonable movements on the above assumptions with other net profit and loss and equity based follows: variables holding constant is as
Sensitivity analysis The Group applies sensitivity to analyse the rationality of technical risk risk technical of rationality the analyse to sensitivity applies Group The or on the current profit and loss effect of possible changes variables and the and independently, varies seldom variable risk any As equity. shareholders’ of a amount in the ultimate role major a will play variables correlation among the followings are carrying out on the assumed special risk variable. Therefore, independently. condition that each variable changes (1)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) 2.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes IX.
Effect on owners’ equity
During last year (Continued)
Effect on net profit 427,001.73 427,001.73 (427,001.73) (427,001.73)
Effect on owners’ equity
During the year Effect on net profit 594,366.55 594,366.55 (594,366.55) (594,366.55)
1% 1% Decrease by
Change in interest rate Increase by (continued) sensitivity analysis of interest rate risk is based on the following following the on based is risk rate interest of analysis sensitivity interest rate interest rate Borrowings with floating Items
Borrowings with floating assumptions: rate will have impact on interest income The fluctuation of market interest financial instrument; or expense of variable interest-rate value, fair at measured instrument financial interest-rate fixed the For or income interest its affect only can rate interest market the changes of expense; balance sheet date shows the fair value The market interest rate at the instrument and other financial assets and changes of derivative financial cash flow method. liabilities calculated on discounted movements of interest rate on the The influence after tax of reasonable equity based on the above assumptions current net profit and loss and with other variables holding constant is as follows: Sensitivity analysis of interest rate risk Sensitivity analysis The
Sensitivity analysis Sensitivity analysis (2)
RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS WITH FINANCIAL RISKS ASSOCIATED (CONTINUED) 2.
IX. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
420 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 421 Total 269,494.13 269,494.13 (Continued)
– – Level 3 fair value 52,314,020.88 52,314,020.88 measurement 470,685,913.42 470,685,913.42 522,999,934.30 523,269,428.43
– – – – – From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Level 2 fair value measurement
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts – – Level 1 fair value 269,494.13 269,494.13 269,494.13 measurement
investment sale investment Other equity instruments Financial assets held for Including: Stock Receivable financing Total Items Fair value of assets and liabilities measured at fair value at the end of the year and liabilities measured at fair Fair value of assets Amounts of assets and liabilities measured at fair value at the end of year and fair value at the end of year and and liabilities measured at Amounts of assets measurement. levels of fair value
DISCLOSURE OF FAIR VALUE DISCLOSURE 1. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
X. (Continued)
Fair value of assets and liabilities measured at fair value at the end of the year and liabilities measured at fair Fair value of assets The above table presents the fair value of the Group’s financial instruments instruments financial Group’s the of value fair the presents table above The a recurring basis, categorized end of the reporting period on measured at the value Fair 13, IFRS in defined as hierarchy value fair three-level the into is classified is measurement value fair a which into level The measurement. inputs the of significance and observability the to reference with determined as follows: used in the valuation technique using only Level 1 inputs i.e. unadjusted quoted Level 1: Fair values measured measurement the at liabilities or assets identical for markets active in prices date. inputs observable i.e. inputs 2 Level using measured value Fair 2: Level inputs. unobservable significant using not and 1, Level meet to fail which for which market data are not available. Unobservable inputs are inputs significant unobservable inputs. Level 3: Fair value measured using
DISCLOSURE OF FAIR VALUE DISCLOSURE 1.
X. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
422 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 423 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts and non-on-going second-level fair value measurement projects, projects, measurement value fair second-level non-on-going and On-going Basis for determining the market value of continuous and non-continuous first- the market value of continuous Basis for determining projects level fair value measurement qualitative and quantitative information on valuation techniques and important qualitative and quantitative information parameters used The fair value of financial instruments without active markets is determined determined is markets active without instruments financial of value fair The techniques make the best use of available using valuation techniques. Valuation estimates specific on possible as little as rely and data market observable data required to determine the fair value of from entities. When all significant included is bar instrument financial the observable, is instrument financial a based on in the second level. If one or more significant data is not obtained in the third observable market data, the financial instrument column is included included in level. At the end of the year, the Group had no financial instruments the second tier. The fair value of financial instruments traded in active markets is determined determined is markets active in traded instruments financial of value fair The in When a quote is available quotes at the balance sheet date. based on market dealer, broker, industry a regular basis from a stock exchange, real time and on an represents quote the and regulator, or provider, service pricing insider, quote based on fair trade principles, the actual and regular market transaction The quoted market price of financial assets market is considered Active market. bid price. These financial toolbars are listed held by the Group is the current included in the first tier at the end of the year on the first level. The instruments in tradable financial assets. were classified as stock investments
DISCLOSURE OF FAIR VALUE DISCLOSURE 3. 3. 2. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes
X. (Continued)
(CONTINUED) and non-on-going third-level fair value measurement projects, projects, measurement value fair third-level non-on-going and technology changes and reasons for the Group that did not occur occur not did that Group the for reasons and changes technology Group’s continuous fair value measurement items have not undergone undergone not have items measurement value fair continuous Group’s Group has assets and liabilities that are not measured at fair value but but value fair at measured not are that liabilities and assets has Group The Valuation The The On-going during the year. disclosed at fair value adjustment information between the beginning and end of the year and the the and year the of end and beginning the between information adjustment parameters. sensitivity analysis of unobservable during the year. conversion between various levels qualitative and quantitative information on valuation techniques and important techniques and important quantitative information on valuation qualitative and parameters used The financial instruments included in the third level are mainly unlisted equity mainly unlisted equity are third level included in the The financial instruments use Group The Group. the by held financing receivables and investments The investments. major for value fair their determine to techniques valuation the and models flow cash discounted mainly are used models valuation the same industry. The input values of valuation analogy of listed companies in income, Expected return maturity, weighted techniques mainly include expected discount rate, etc. average cost of capital, illiquidity
DISCLOSURE OF FAIR VALUE DISCLOSURE 8. 6. 6. 7. 5. 5. no has project measurement value fair third-level continuous Group’s 4. 4.
X. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
424 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 425
(%) rights Voting
(Continued)
52.54 52.54 Shareholding proportion (%)
capital 184,288.50 Registered (RMB’0000) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December of state- owned assets authorized by Chongqing SASAC Business nature Management
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Section of Huangshan Avenue, New North Zone, Chonqing Place of Registration No. 60 Middle
C proportion of restricted shares in the Group’s total equity is 52.22%, proportion of restricted shares in the the Group’s total equity is 0.32%. and the overseas listed H shares of
CQMEHG Controlling shareholder and ultimate controlling party Controlling Shareholder and Ultimate-controlling Party and Ultimate-controlling Controlling Shareholder Note: the which of shares, Group’s the of 52.54% holds QMEHG
Controlling Shareholder and Ultimate-controlling Party and Ultimate-controlling Controlling Shareholder (1)
RELATED PARTIES 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION AND RELATED-PARTY RELATED PARTIES (I)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XI. 53.21 Ending balance Beginning proportion 184,288.50
(Continued) –
(Continued) 52.54 Ending this year Decrease proportion
– balance this year Increase Beginning 196,075.32
Ending balance balance Shareholding amount Shareholding proportion (%) Beginning 193,587.72 184,288.50 attributable to controlling shareholders(Unit: shareholders(Unit: controlling to attributable
(CONTINUED) million yuan of restricted shares (amount of RMB1,924.23 million yuan million RMB1,924.23 of (amount shares restricted of yuan million at the beginning of the year), and RMB11.65 million yuan of H-share tradable shares listed overseas (amount of RMB36.53 million yuan at the beginning of the year). Controlling shareholder CQMEHG Controlling shareholder CQMEHG Registered capital of the controlling shareholder (Unit: RMB’0000) of the controlling shareholder Registered capital Shareholdings RMB’0000) Note: The shares held by the controlling shareholder include RMB1,924.23
(2) Controlling Shareholder and Ultimate-controlling Party and Ultimate-controlling Controlling Shareholder (3)
RELATED PARTIES RELATED PARTIES 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
426 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 427 (Continued)
Relationship with the Group Associate Associate Associate Associate Associate Associate
From 31 December 2018 to 31 December 2019 2018 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 Vehicles (Chongqing) Ltd. suspension Co., Ltd. Pieces Co., Ltd. ease refer to “VIII.8.3. (1) Significant joint ventures or associates” for for associates” or ventures joint Significant (1) “VIII.8.3. to refer ease Joint venture or associates
limitedChongqing cummins engine company Exedy chongqing company limited Joint venture Water Gen PowerS.r.l Knorr-Bremse Systems for Commercial Chongqing hongyan fangda automobile Chongqing jiangbei machinery Co., Ltd. Chongqing Shenjian Auto Transmission Joint Ventures and Associates Pl Subsidiaries Please subsidiaries. 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.
RELATED PARTIES RELATED PARTIES 3. 2.
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 XI. (Continued)
Relationship with the Group Relationship with the 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 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 A subsidiary of parent company A subsidiary of parent company (CONTINUED) Standard Parts Material Reform Factory Branch Standard Parts Material Reform Factory Management Co., Ltd. Shuangqiao Enterprise Management Co., Ltd. Shuangqiao Enterprise Management Branch Technology Co. Ltd. Ltd. Asset Management Co., Ltd. Electrical Microfinance Co., Ltd. Vehicle Co., Ltd. Metal Material Restructuring Branch Qijiang Gear Transmission Co. Ltd. Other related parties Ltd. Chongqing Chongqing Standard Parts Industry Co., Chongqing Standard Fasteners Industrial Co. Ltd.Chongqing Standard Fasteners Industrial Institute Chongqing Electrical Science Research Asset Chongqing Mechanical and Electrical Group A subsidiary of parent company CQMEHG Electrical Industry Investment Co. Ltd.CQMEHG Electrical Industry Investment CQMEHG Mechanical & Electrical Engineering A subsidiary of parent company Chongqing Mechatronics Holding Group Foundry Co., Chongqing Mechatronics Holding Group Chongqing Mechanical and Electrical Holding Group Chongqing Mechanical and Electrical Holding Chongqing Military Industry Group Co., Ltd. Chongqing Liangjiang New Area Mechanical and Chongqing Crane Works Co. Ltd. Chongqing Ruishida Power Technology Co., Ltd.Chongqing General Machinery Industry Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Chongqing Chongtong Power Transformer Co. Ltd. A subsidiary of parent company Chongqing Heavy Vehicle Group Special Purpose A subsidiary of parent company Chongqing Standard Parts Industry Co., Ltd. Huazhan Other Related Parties
RELATED PARTIES RELATED PARTIES 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (I)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
428 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 429 (Continued)
company company company company company company company company company company company company company company Relationship with the Group Relationship with the parentof control same the Under
Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (Continued) (CONTINUED) Limited Commercial Vehicle Co., Ltd. Co. Ltd. institute co. LTD CAFUC Chongqing General Aviation Training Company CAFUC Chongqing General Aviation Training Chongqing Huazhan Metal Material Reforming Co., Ltd. Chongqing Huazhan Metal Material Reforming Other related parties Fittings Sales Company, Shangqiyiweike Red Rock Fittings Sales Company, Shangqiyiweike Qijiang Qichi Xinxin Welfare Co., Ltd. Qijiang Qichi Forging Factory Qijiang Gear Factory Chongqing qichi riant transmission co., LTD Chongqing qichi riant transmission co., Chongqing Hongyan Automobile Engineering Property Chongqing High Strength Fasteners Factory Chongqing Bosen Electrical Group Switchgear Co. Ltd. Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Xinan Computer Co., Ltd. Chongqing ernst general aviation technology research Chongqing Jidian Property Management Co. 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 XI. (Continued)
company company company company company company company company company company company company company company Under the same control of parentof control same the Under Under the same control of parentof control same the Under Relationship with the Group Relationship with the parentof control same the Under
Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under Under the same control of parentof control same the Under An affiliate of the parent An affiliate of the parent An affiliate of the parent An affiliate of the parent (Continued) (CONTINUED) Ltd. Development Co. Ltd. Automobile Spring Co. Ltd. Co. Ltd. Ltd. company Co.,Ltd. Chongqing Qichi Automobile Parts and Components Co. Chongqing Qichi Automobile Parts and Chongqing Automotive standard parts factory Co., Ltd. Chongqing Automotive standard parts factory Chongqing Juntong Automobile Co. Ltd. Chongqing Jianan Instrument Co. Ltd. Other related parties Chongqing Shuangqiao Hongyan Automobile Real EstateChongqing Shuangqiao Hongyan Automobile Chongqing Heavy Automobile Group Hongyan Chongqing Heavy Automobile Group Hongyan Chongqing Heavy Automobile Group Hongqi Property Chongqing Heavy Automobile Group Hongqi Chongqing Heavy Automobile Group Kafu Parts Co., SAIC IVECO hongyan commercial vehicles Limited Chongqing panlian transmission technology co. LTD Chongqing rail transit industry investment co. LTDChongqing Heavy Automobile Group Transportation An affiliate of the parent Chongqing Special Motor Factory Co., Ltd. Chongqing electric machine federation 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)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
430 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 431 (Continued)
associate associate associate associate company Subsidiary of parent company Subsidiary of parent company Subsidiary of parent company Subsidiary of parent company Relationship with the Group Relationship with the
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts (Continued) (CONTINUED) Chongqing Xitong Electric Co., Ltd. Chongqing General Aircraft Industry Co., Ltd. Chongqing General Aircraft Industry Co., Chongqing General Aviation Co., Ltd. SAIC-Iveco Hongyan Axle Co., Ltd. Chongqing General Aviation Industry Group Co., Ltd.Chongqing General Aviation Industry Group An affiliate of the parent 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 XI.
– – – – last year Amount of
328,403.43 412,000.00 169,700.00 6,753,144.31 2,875,400.77 1,247,006.30 7,285,901.65 6,882,127.32 4,288,012.69 10,034,244.19 44,914,880.80
– – – (Continued)
3,850.00 4,370.00 the year 473,009.38 Amount of 3,142,523.29 2,494,223.95 2,028,027.04 3,325,407.15 2,401,112.15 3,747,693.78 5,431,825.65 48,053,955.97 25,001,913.58 Pricing methods and decision- making procedures
Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Purchase goods Agreement price Transactions Purchasing services Agreement 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. Ltd.* New Material Co. Ltd Switchgear Co. Ltd.* Co., Ltd.* LTD. * Industry Co. Ltd.* Co., Ltd.* Industrial Co. Ltd.* Transformer Co. Ltd.* factory Co., Ltd.* Transportation Co.,Ltd. * ongqing electric machine federation machine electric ongqing Chongqing Juntong Automobile Co. Chongqing Youyan Heavy Metallurgy Chongqing Bosen Electrical Group Chongqing General Aircraft Industry Chongqing Boshun Electric Co., Ltd.* Purchase goods Agreement price Chongqing Xinan Computer Co., Ltd.* Purchase goods Agreement price Chongqing General Machinery Ch Chongqing Crane Works Co. Ltd.* Purchase goods Agreement price Chongqing Bosen Electric (Group) Chongqing Standard Fasteners Chongqing Chongtong Power Chongqing Automotive standard parts Total Related parties Chongqing Heavy Automobile Group
Procurement of goods Procurement of
*
RELATED PARTY TRANSACTIONS RELATED PARTY 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
432 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 433
– last year 34,662.88 Amount of 173,700.00 1,445,328.11 1,886,792.45 4,238,777.12 37,135,620.24 44,914,880.80
(Continued) – –
the year Amount of
Pricing methods and decision- making procedures
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED)
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Accept labor Agreement price Accept labor Agreement price Accept labor price Agreement Accept labor price Agreement Be guaranteed Agreement price Accept labor price Agreement Accept labor price Agreement 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. Engineering Property Co. Ltd.* Transportation Co.,Ltd.* Management Co. Ltd.* Co., Ltd.* Electrical Holding Group Asset Management Co., Ltd.* Hongqi Property Co. Ltd.* Chongqing Hongyan Automobile Chongqing Heavy Automobile Group Chongqing Jidian Property CQMEHQ* Chongqing Bosen Electric (Group) Chongqing Mechanical and Total Chongqing Heavy Automobile Group Related parties
Accepting labor or services Accepting labor *
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 XI.
– – – last year 45,653.55 Amount of 1,355,531.46 4,859,491.87 2,554,574.17 8,148,708.28 10,926,076.55 14,292,833.95 55,779,149.20 59,915,083.78 10,670,317.36 96,236,567.29
(Continued)
the year 523,389.25 815,783.99 Amount of 1,270,958.85 1,472,292.40 2,182,272.41 3,176,856.88 3,452,595.12 9,651,473.79 9,640,909.31 6,915,034.90 10,014,601.59 15,988,557.69 34,396,229.83 137,964,066.40 Pricing methods and decision- making procedures
(CONTINUED) Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Transactions
Ltd. Vehicles (Chongqing) Ltd. Transformer Co. Ltd. Ltd. Reforming Co., Ltd. Transmission Pieces Co., Ltd. LTD. Engineering Technology Co. Ltd. investment co. LTD vehicles Limited company Chongqing Crane Works Co. Ltd. Sale of goods Agreement price CQMEHQ Chongqing Changjiang Bearing Co. Knorr-Bremse Systems for Commercialfor Systems Knorr-Bremse Chongqing Chongtong Power Chongqing Xinan Computer Co., Ltd. Sale of goods Agreement price Qijiang Gear Transmission Co. Ltd. Sale of goods Agreement price Chongqing Juntong Automobile Co. Chongqing Huazhan Metal Material Chongqing Shenjian Auto Chongqing electric machine federation machine electric Chongqing CQMEHG Mechanical & Electrical Chongqing rail transit industry SAIC IVECO hongyan commercial Related parties Sale of goods
RELATED PARTY TRANSACTIONS RELATED PARTY 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
434 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 435
– – last year 6,576.85 86,466.32 Amount of 171,891.30 693,081.14 12,058,685.83 13,964,595.91 10,596,322.59 36,646,074.78 339,007,682.18
(Continued) – – –
4,501.76 the year 12,330.09 42,351.06 116,196.64 203,870.02 380,533.72 Amount of 9,275,536.14 247,500,341.84 Pricing methods and decision- making procedures
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price Sale of goods Agreement price 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. Group Foundry Co., Ltd. Mechanical and Electrical Microfinance Co., Ltd. Industrial Co. Ltd. Ltd. factory Co., Ltd. New Material Co. Ltd Industry Co. Ltd. technology co. LTD Co., Ltd. SAIC-Iveco Hongyan Axle Co., Ltd. Sale of goods Agreement price Chongqing Mechatronics Holding Chongqing Liangjiang New Area Chongqing Standard Fasteners Chongqing jiangbei machinery Co., Chongqing Automotive standard parts Chongqing Youyan Heavy Metallurgy Chongqing General Machinery Chongqing panlian transmission Total Related parties Chongqing Bosen Electric (Group)
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 XI.
– – last year Amount of 1,091,662.11 1,091,662.11
(Continued)
the year 63,396.23 83,039.37 Amount of 2,192,455.24 2,338,890.84 Agreement price Pricing methods and decision- making procedures
(CONTINUED) Providing services Agreement price Management fees, consulting fees Transactions
The related party transactions above are in accordance with the continuing The related party transactions above Chapter14A of the Listing Rules. related party transactions defined in Engineering Technology Co. Ltd.* Co. Engineering Technology limited Exedy chongqing company limited Consulting fee Agreement price CQMEHG Mechanical & Electrical Total Chongqing cummins engine company Related parties
Collect management fees and provide labor services Collect management
*
RELATED PARTY TRANSACTIONS RELATED PARTY 4.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (II)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
436 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 437
– 94.34 94.34 94.34 377.36 last year 5,278.30 7,067.67 5,444.69 14837.33 18,909.98 14,948.11 86,226.42 39,109.00 Amount of 133,301.89 325,783.77
(Continued) – – – – – – – – –
43.64 8,399.56 5,742.88 the year 11,081.97 155,000.00 180,268.05 Amount of
Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Agreement price Pricing methods and decision- making procedures
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee 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. Ltd.* Group Foundry Co., Ltd.* Electrical Holding Group Asset Management Co., Ltd.* Ltd. Engineering Technology Co. Ltd.* Co. Engineering Technology Industry Co. Ltd.* Transformer Co. Ltd.* Special Purpose Vehicle Co., Ltd.* Ltd.* Others Chongqing Xinan Computer Co., Ltd.* Chongqing Juntong Automobile Co. Chongqing Mechatronics Holding Chongqing Mechanical and Chongqing Xitong Electric Co., Ltd.* Chongqing jiangbei machinery Co., Chongqing Crane Works Co. Ltd.* CQMEHG Mechanical & Electrical Chongqing General Machinery Chongqing Chongtong Power Qijiang Gear Transmission Co. Ltd.* Chongqing Heavy Vehicle Group Total Chongqing Changjiang Bearing Co. Related parties
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 XI.
– last year Amount of 116,273.58 116,273.58 245,998.42 690,937.61 418,121.07 390,651.81 910,410.75 628,019.18 1,095,433.97 1,702,488.41 3,991,546.77 2,764,176.49 6,290,826.13 7,350,405.66 6,332,886.39 14,874,642.07 47,919,091.89
– – – – – – – (Continued)
the year 214,237.50 429,900.38 Amount of 1,015,736.14 2,305,762.37 5,748,110.54 2,865,689.49 5,757,416.35 9,462,313.34 8,339,929.48 15,353,106.26 51,492,201.85 Pricing methods and decision-making procedures
(CONTINUED) Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest Agreement price Loan Interest price Agreement Loan Interest price Agreement Loan Interest price Agreement Transactions
Co., Ltd.* Group Foundry Co., Ltd.* Ltd.* Ltd. Industrial Co. Ltd.* Training Company Limited* Industry Co. Ltd.* Transformer Co. Ltd.* Group Co., Ltd.* Special Purpose Vehicle Co.,Ltd.* Vehicle Purpose Special Ltd.* Chongqing General Aviation Co., Ltd.* Loan Interest Agreement price Chongqing General Aircraft Industry Chongqing Xinan Computer Co., Ltd.* Loan Interest Agreement price Chongqing Xitong Electric Co., Ltd.* Loan Interest Agreement price Chongqing Mechatronics Holding Chongqing Juntong Automobile Co. Chongqing jiangbei machinery Co., Chongqing Standard Fasteners CAFUC Chongqing General Aviation Chongqing General Machinery Chongqing Crane Works Co. Ltd.* Loan Interest Agreement price Chongqing Chongtong Power Chongqing General Aviation Industry Qijiang Gear Transmission Co. Ltd.* Loan Interest Agreement price CQMEHQ* Chongqing Heavy Vehicle Group Total Related parties Chongqing Changjiang Bearing Co. 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)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
438 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 439 (Continued)
(Continued) From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts related party transactions above are in accordance with the the with accordance in are above transactions party related financial company of the Group’s subsidiary financed loans and and loans financed subsidiary Group’s the of company financial The *The continuing related party transactions defined in Chapter14A of the Listingcontinuing related party transactions Rules. of income interest confirm to company subsidiary the to advances agreement and negotiation the to According RMB10,288,943.74. the Group, Estate Real Chongqing and company water the between Group for the water company’s unpaid funds of Chongqing Real Estate the of completion the After project relocation protection environmental process, the fund occupation fee land acquisition, auction, and bidding yuan interest of the water company will be deducted from the 50 million 2018, 16, November On relocation. protection environmental to due Group Estate Real Chongqing and Factory Turbine Hydro Chongqing tripartite a signed Center Remediation Reserve Land Chongqing and the under obligations and rights of transfer the realize to agreement the from loan the of interest the summary, In agreement. sale land is actually receivable from the water company to the finance company Chongqing Land Reserve Remediation Center.
Interest income from loans and advances Interest income Note 2: 2: Note Note 1: 1: Note
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 XI.
last year 24,652.38 75,981.31 79,594.29 Amount of 167,309.62 938,202.96 154,895.79 156,727.55 216,223.59 1,026,604.01 1,907,198.15 1,339,756.27 2,726,718.41
(Continued)
the year 46,425.09 46,360.58 51,169.93 121,606.73 126,335.18 127,033.92 316,585.52 603,854.36 713,073.19 Amount of 1,075,263.13 1,413,848.52 4,085,586.69 Pricing methods and decision- making procedures
(CONTINUED) Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Transactions
Co., Ltd.* Group Foundry Co., Ltd.* Special Purpose Vehicle Co., Ltd.* Ltd.* Industry Co. Ltd.* Ltd.* Industrial Co. Ltd.* Engineering Technology Co. Ltd.* Co. Engineering Technology Electrical Holding Group Asset Management Co., Ltd.* Qijiang Gear Transmission Co. Ltd.* Deposit Interest Agreement price Chongqing Military Industry Group Chongqing Mechatronics Holding Chongqing Heavy Vehicle Group Chongqing Changjiang Bearing Co. Chongqing General Machinery Chongqing Jianan Instrument Co. Chongqing Xinan Computer Co., Ltd.* Deposit Interest Agreement price Chongqing Standard Fasteners CQMEHG Mechanical & Electrical CQMEHQ* Chongqing Mechanical and Related parties 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)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
440 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 441
– – – last year 9,317.66 8,208.34 22,767.80 12,981.72 16,371.22 31,104.35 11,897.45 35,083.08 81,340.72 16,314.14 Amount of
(Continued)
2,196.38 3,919.33 5,045.48 9,066.03 5,834.46 9,992.62 the year 25,071.11 29,584.97 26,368.65 39,032.10 31,208.84 42,674.16 43,916.97 Amount of Pricing methods and decision- making procedures
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (Continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Transactions
group airport co. LTD* Co., Ltd.* Hongqi Property Co. Ltd.* Ltd. Management Co. Ltd.* Transformer Co. Ltd.* Mechanical and Electrical Microfinance Co., Ltd.* Group Co., Ltd. * Hongyan Automobile Spring Co. Ltd.* Ltd.* Chongqing general aviation industry Chongqing Bosen Electric (Group) Qijiang Gear Factory* Chongqing Heavy Automobile Group Chongqing jiangbei machinery Co., Chongqing Jidian Property Chongqing Chongtong Power Chongqing Crane Works Co. Ltd.* Deposit Interest Agreement price Chongqing Liangjiang New Area Chongqing Xitong Electric Co., Ltd.* Deposit Interest Agreement price Chongqing General Aviation Industry Chongqing Heavy Automobile Group Related parties Chongqing Juntong Automobile Co. 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 XI.
– – – – – – – – – – – last year 9,931.73 13,404.47 Amount of
– 1.35 3.04 23.87 23.04 82.30 (Continued) 406.71 465.61 466.68 635.07 315.08
1,093.41 the year 1,405.35 Amount of Pricing methods and decision- making procedures
(CONTINUED) (Continued) Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Transactions
Kafu Parts Co., Ltd.* Ltd.* Investment Co. Ltd.* Transmission Pieces Co., Ltd. limited Training Company Limited* Automobile Real Estate Development Co. Ltd.* and Components Co. Ltd.* technology research institute co. LTD* Co., Ltd.* Chongqing Heavy Automobile Group Chongqing Special Motor Factory Co., CQMEHG Electrical Industry Qijiang Qichi Forging Factory* Qijiang Qichi Xinxin Welfare Co., Ltd.* Deposit Interest Agreement price Chongqing Shenjian Auto Chongqing General Aviation Co., Ltd.* Deposit Interest Agreement price Chongqing cummins engine company CAFUC Chongqing General Aviation Chongqing Shuangqiao Hongyan Chongqing Qichi Automobile Parts Chongqing ernst general aviation Chongqing General Aircraft Industry Related parties 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)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
442 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 443
last year 1,589.03 2,835.16 6,049.15 23,949.10 Amount of 9,117,009.45
(Continued) – – – –
the year Amount of 9,005,975.45 Pricing methods and decision- making procedures
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (Continued) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Deposit Interest Agreement price Deposit Interest Agreement price Deposit Interest Agreement price Transactions Deposit Interest Agreement price
The related party transactions above are in accordance with the continuing The related party transactions above Chapter14A of the Listing Rules. related party transactions defined in Switchgear Co. Ltd.* Engineering Property Co. Ltd.* Others Chongqing Bosen Electrical Group Total Chongqing Hongyan Automobile Related parties Chongqing transformer co. Ltd*
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 XI.
The Group has no associated leasing associated no has Group The (2)
Total 246044 669961 080503 4,791,364.17 20,890,570.36 16,619,956.13 32,496,004.47
(Continued)
Manufacturing Co., Ltd. Co., Manufacturing
and Electrical Intelligent Intelligent Electrical and Ltd.* Co., (Group)
Chongqing Mechanical Mechanical Chongqing Electric Bosen Chongqing
,9,4.268686 691,912.65 638,688.60 2019 Dec 3,193,443.02 31 2018 Nov 15 Building –
Complete Plant Co., Ltd. Co., Plant Complete
Group Shengpu Machinery Machinery Shengpu Group
Chongqing Machine Tools Tools Machine Chongqing CQMEHQ*
,0,0.575222 ,4,3.7451,050.01 1,041,536.47 735,202.21 2021 Jul 2,205,606.65 31 2018 Aug 1 Building
Center Co., Ltd. Co., Center
Empowerment Innovation Innovation Empowerment
Chongqing Industrial Industrial Chongqing CQMEHQ*
,8,1.0148959 ,7,7.92,126,123.47 5,173,179.49 1,448,945.97 2022 May 8,687,412.50 31 2016 Jun 1 Building
LTD
holding group finance co. co. finance group holding
Chongqing electromechanical electromechanical Chongqing CQMEHQ*
1 Feb 2019 31 Jan 2022 Jan 31 2019 Feb 1 Building ,2,0.5213135 ,0,0.02,214,190.69 2,300,005.90 2,113,183.50 6,725,606.45
LTD
holding group finance co. co. finance group holding
Chongqing electromechanical electromechanical Chongqing CQMEHQ*
1 Dec 2018 30 Nov 2021 Nov 30 2018 Dec 1 Building Asset Management Co., Ltd.* Co., Management Asset
Co., Ltd. Co., Group Holding Electrical
Braking & Steering Systems Systems Steering & Braking
and Mechanical Chongqing
Chongqing CAFF Automotive Automotive CAFF Chongqing
,1,6.7630743 6,310,764.37 6,310,764.37 2019 Dec 6,310,764.37 31 2019 Jan 1 Building – Electric Co., Ltd. Co., Electric
CQMEHQ* Chongqing Machinery & & Machinery Chongqing 1 Jan 2019 31 Dec 2019 Dec 31 2019 Jan 1 Building ,7,7.8533114 5,373,171.48 5,373,171.48 5,373,171.48 –
Name of lessor of Name Name of lessee of Name
assets
start date start leased leased
depreciation asset use date Lease Lease Types of of Types lease liability lease assets
Termination Termination
use asset asset use right-of- the of Book value of of value Book right lease of
Original value Right-of- value Original depreciation depreciation
Associated renting Associated (1)
Accumulated Accumulated
Associated rental conditions rental Associated 8.
RELATED PARTY TRANSACTIONS TRANSACTIONS PARTY RELATED (II) (CONTINUED)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION RELATED-PARTY AND PARTIES RELATED XI. (CONTINUED) Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
444 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 445 No No Whether guarantee has been fulfilled
(Continued)
14 Mar 2018 14 Mar 2026 14 Mar 2016 14 Mar 2031 Starting date Due date
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December amount Guaranteed (CONTINUED) 52,900,000.00 113,200,000.00 166,100,000.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts & Electric Co., Ltd. & Electric Co., Ltd. Chongqing Machinery
Guaranteed party Chongqing Machinery CQMEHQ Total Guarantor CQMEHQ The Group as guaranteed party The Group has no guarantee as a guarantor The Group has no
Guarantees (1) (2)
RELATED PARTY TRANSACTIONS RELATED PARTY 9.
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 XI. – – – – – – – 4,495.00 853,587.94 772,829.26 4,594,244.72 1,618,498.00 4,130,411.33 4,470,600.67 1,470,774.74 3,983,055.92 25,802,835.01 13,326,229.18 17,941,949.07 55,211,902.83 134,181,413.67 (Continued)
Beginning balance
– Ending balance 11,800.00 56,400.57 64,693.67 811,971.64 731,192.00 466,913.71 169,963.54 143,622.82 111,677.00 431,743.46 3,381,692.88 3,713,941.81 1,426,904.45 1,192,400.00 4,683,920.22 49,885,626.24 27,561,227.59 16,215,078.62 63,017,361.19 174,078,131.41
LTD Ltd. & Electrical Installation Engineering Co., Ltd. Ltd. Technology Co. Ltd. Limited company Co., Ltd. LTD Chongqing Changjiang Bearing Co. Ltd. Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Crane Works Co. Ltd. Chongqing panlian transmission technology co. Chongqing panlian transmission technology SAIC-Iveco Hongyan Axle Co., Ltd. Chongqing electric machine federation LTD. Chongqing electric machine federation Water Gen Power S.r.l Chongqing Chongtong Power Transformer Co. Chongqing jiangbei machinery Co., Ltd. CQMEHQ Chongqing Construction Engineering Mechanical Chongqing Juntong Automobile Co. Ltd. Chongqing Standard Fasteners Industrial Co. CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering SAIC IVECO hongyan commercial vehicles SAIC IVECO hongyan commercial vehicles Chongqing Shenjian Auto Transmission Pieces Chongqing Shenjian Auto Transmission Chongqing rail transit industry investment co. Chongqing rail transit industry investment Total Qijiang Gear Transmission Co. Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Xinan Computer Co., Ltd. Related parties Accounts receivable
BALANCES WITH RELATED PARTIES BALANCES WITH (1)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
446 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 447 – – – 15,000.00 60,000.00 359,572.99 155,000.00 3,557,160.96 8,800,000.00 3,628,770.00 1,341,455.00 1,000,000.00 2,039,799.38 3,923,650.00 4,433,105.63 (Continued)
45,855,318.01 61,213,147.59 136,381,979.56 Beginning balance
– – – 60,000.00 55,000.00 15,000.00 800,981.02 907,888.46 359,572.99 113,000.00 7,540,541.62 6,457,214.42 1,341,455.00 1,000,000.00 22,882,526.20 46,273,714.96 61,213,147.59 149,020,042.26 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Co., Ltd. Group Asset Management Co., Ltd. Components Co. Ltd. Ltd. Vehicles Ltd. Technology Co. Ltd. Ltd. Qijiang Gear Transmission Co. Ltd. Chongqing Shenjian Auto Transmission Pieces Chongqing Shenjian Auto Transmission Chongqing cummins engine company limited Total Chongqing jiangbei machinery Co., Ltd. Related parties Chongqing Mechanical and Electrical Holding Chongqing Mechanical and Electrical Holding Chongqing Special Motor Factory Co., Ltd. Chongqing Qichi Automobile Parts and Chongqing Ruishida Power Technology Co., Chongqing Ruishida Power Technology Knorr-Bremse Systems for Commercial Chongqing qichi riant transmission co., LTD Chongqing Standard Fasteners Industrial Co. CQMEHG Mechanical & Electrical Engineering CQMEHQ Chongqing Jidian Property Management Co. Water Gen Power S.r.l Others Chongqing Bosen Electric (Group) 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 XI. – – – 833,122.24 391,245.44 341,380.00 100,496.80 4,816,103.40 378,631,655.04 383,447,758.44 (Continued)
Beginning balance Beginning balance
15,000.00 69,000.00 85,333.14 391,245.44 392,451.68 980,500.00 1,933,530.26 1,937,456.38 429,187,106.01 431,124,562.39 Ending balance Ending balance
(CONTINUED) suspension Co., Ltd. Total Related parties Chongqing cummins engine company limited Chongqing electric machine federation LTD. Chongqing electric machine federation Total Related parties Chongqing hongyan fangda automobile Chongqing Crane Works Co. Ltd. Chongqing Xinan Computer Co., Ltd. Knorr-Bremse Systems for Commercial Vehicles Knorr-Bremse Systems for Commercial Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Special Motor Factory Co., Ltd. Prepayments Dividends receivable
BALANCES WITH RELATED PARTIES BALANCES WITH (4) (3)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
448 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 449 – – balance 543,956.61 Beginning (Continued)
19,325,365.24 19,869,321.85 33,200,000.00 33,200,000.00 Beginning balance Beginning balance
– – – Ending balance 17,500,000.00 17,500,000.00 Ending balance Ending balance 95,700,000.00 95,700,000.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts limited Chongqing cummins engine company limited Related parties Chongqing cummins engine company Total Chongqing cummins engine company limited Total Qijiang Gear Transmission Co. Ltd. Total Related parties Related parties Long-term receivables Non-current assets due within one year Non-current assets due within Interests receivable
BALANCES WITH RELATED PARTIES BALANCES WITH (7) (6) (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 XI. – – – – 16,000,000.00 49,500,000.00 63,050,000.00 90,000,000.00 307,000,000.00 158,000,000.00 150,000,000.00 267,600,000.00 1,101,150,000.00 (Continued)
Beginning balance
– (0.02) 29,257,100.00 19,525,965.82 19,400,477.78 47,791,624.15 83,221,602.57 57,903,737.09 97,683,425.00 348,809,174.48 188,806,199.29 146,449,375.00 Ending balance 1,038,848,681.16
(CONTINUED) Ltd. Ltd. Purpose Vehicle Co., Ltd. Co., Ltd. Chongqing Military Industry Group Co., Ltd. Chongqing Military Industry Group Co., Co. Ltd. Chongqing General Machinery Industry Chongqing cummins engine company limited Chongqing Xitong Electric Co., Ltd. Chongqing Standard Fasteners Industrial Co. Total Chongqing Changjiang Bearing Co. Ltd. Related parties Chongqing Chongtong Power Transformer Co. Chongqing Chongtong Power Transformer Qijiang Gear Transmission Co. Ltd. Chongqing Heavy Vehicle Group Special Chongqing Heavy Vehicle Group Special CQMEHQ Chongqing Crane Works Co. Ltd. Chongqing General Aviation Industry Group Chongqing General Aviation Industry Group Loans and advances to customers Loans and advances
BALANCES WITH RELATED PARTIES BALANCES WITH (8)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
450 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 451 – – – – – – – 17,034.89 23,840.00 1,595,785.00 1,174,098.78 2,252,875.91 1,985,766.83 1,839,000.00 (Continued)
21,682,553.66 12,794,152.25 Beginning balance
– – – 8.00 1,033.30 (1,954.40) 18,037.87 977,952.20 188,188.00 830,000.00 1,033,863.46 6,609,378.50 2,380,240.51 1,799,919.76 1,152,917.37 14,989,584.57 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Transportation Co.,Ltd. Co., Ltd. Ltd. Ltd. Technology Co. Ltd. Co., Ltd. Total Chongqing Heavy Automobile Group Related parties Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Shenjian Auto Transmission Pieces Chongqing Shenjian Auto Transmission Chongqing electric machine federation LTD. Chongqing electric machine federation Qijiang Qichi Forging Factory Chongqing Xinan Computer Co., Ltd. Chongqing Standard Fasteners Industrial Co. Chongqing Standard Fasteners Industrial Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Bosen Electric (Group) Co., Chongqing Chongtong Power Transformer Co. Chongqing Chongtong Power Transformer Chongqing Crane Works Co. Ltd. Chongqing Special Motor Factory Co., Ltd. Chongqing Changjiang Bearing Co. Ltd. Qijiang Qichi Xinxin Welfare Co., Ltd. CQMEHG Mechanical & Electrical Engineering Chongqing Automotive standard parts factory 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 XI. – – – 45,315.00 34,600.00 654,552.74 175,174.90 658,274.40 474,988.00 331,569.95 479,353.50 34,309,829.34 11,733,765.23 19,722,235.62 (Continued)
Beginning balance
– – – 114.88 675,887.43 255,704.94 100,000.00 164,902.26 140,000.00 8,242,511.90 1,873,600.00 72,042,607.31 29,824,250.22 30,765,635.68 Ending balance
(CONTINUED) Transportation Co.,Ltd. Co., Ltd. Group Asset Management Co., Ltd. Technology Co. Ltd. Chongqing High Strength Standard Parts Chongqing High Strength Standard Parts Factory Branch Property Co. Ltd. Property Co. Ltd. Co. Ltd. Total Chongqing Heavy Automobile Group Chongqing Shenjian Auto Transmission Pieces Chongqing Shenjian Auto Transmission CQMEHQ Chongqing Mechanical and Electrical Holding Chongqing Mechanical and Electrical Holding Related parties CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering Chongqing Standard Parts Industry Co., Ltd. Chongqing Standard Parts Industry Co., Chongqing Xinan Computer Co., Ltd. Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Heavy Automobile Group Hongqi Chongqing Heavy Automobile Group Hongqi Chongqing Hongyan Automobile Engineering Chongqing Bosen Electrical Group Switchgear Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Crane Works 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)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
452 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 453 172.47 7,691.52 14,297.73 40,301.51 14,630.44 16,589.16 24,071.66 34,060.17 50,003.37 80,209.16 823,602.63 279,763.28 1,385,393.10 (Continued)
Beginning balance
– – – – – – – – – – – – – Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Chongqing High Strength Standard Parts Chongqing High Strength Standard Parts Factory Branch Foundry Co., Ltd. Co., Ltd. Technology Co. Ltd. Group Asset Management Co., Ltd. Co., Ltd. Others Related parties Related parties Chongqing Standard Parts Industry Co., Ltd. Chongqing Standard Parts Industry Co., Chongqing Mechatronics Holding Group Chongqing Jianan Instrument Co. Ltd. Chongqing General Aviation Industry Group Chongqing General Aviation Industry Group Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Changjiang Bearing Co. Ltd. Chongqing Xinan Computer Co., Ltd. CQMEHQ CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering Chongqing Mechanical and Electrical Holding Chongqing Mechanical and Electrical Holding Chongqing General Aviation Industry Group Interests payable
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 XI. – 345,447.79 4,417,074.89 4,554,047.34 9,450,104.39 4,049,480.87 1,678,436.26 3,631,478.66 75,160,987.76 90,671,059.98 15,135,752.57 10,998,760.04 46,946,297.25 32,119,785.76 15,178,758.30 217,127,617.50 391,824,799.76 346,862,432.28 (Continued)
Beginning balance
9,890,949.83 8,808,184.75 5,475,840.69 5,374,689.47 7,944,917.56 6,637,283.84 38,180,765.67 15,896,306.69 36,901,317.78 18,480,705.23 23,495,946.74 186,455,386.88 167,922,807.95 126,768,505.41 123,591,001.83 117,800,706.80 103,855,490.38 100,279,546.04 Ending balance
(CONTINUED) Group Asset Management Co., Ltd. Technology Co. Ltd. Ltd. and Electrical Microfinance Co., Ltd. Co., Ltd. Purpose Vehicle Co., Ltd. Automobile Spring Co. Ltd. Ltd. Co., Ltd. Chongqing Mechanical and Electrical Holding Chongqing Mechanical and Electrical Holding Related parties CQMEHQ CQMEHG Mechanical & Electrical Engineering CQMEHG Mechanical & Electrical Engineering Chongqing Jianan Instrument Co. Ltd. Chongqing Xinan Computer Co., Ltd. Chongqing Standard Fasteners Industrial Co. Chongqing Standard Fasteners Industrial Chongqing Juntong Automobile Co. Ltd. Chongqing Changjiang Bearing Co. Ltd. Chongqing Liangjiang New Area Mechanical Chongqing General Machinery Industry Co. Ltd. Chongqing General Machinery Industry Chongqing Automotive standard parts factory Chongqing Military Industry Group Co., Ltd. Chongqing Heavy Vehicle Group Special Chongqing Heavy Automobile Group Hongyan Chongqing Heavy Automobile Group Hongyan Chongqing Chongtong Power Transformer Co. Chongqing General Aviation Industry Group Chongqing Crane Works Co. Ltd. Qijiang Gear Transmission Co. Ltd. Deposits from banks and other financial institutions Deposits from banks
BALANCES WITH RELATED PARTIES BALANCES WITH (12)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
454 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 455 – – – – 1.39 361.06 959.65 6,210.19 17,388.02 15,032.71 199,435.42 423,437.44 421,237.89 194,557.48 4,885,355.93 4,569,394.58 9,283,558.14 1,179,352.73 3,034,161.05 3,241,650.68 (Continued)
Beginning balance
(Continued) – – – 1.39 82.30 167.14 267.91 406.71 362.41 862.96 1,895.00 45,996.49 33,084.15 218,603.56 165,185.81 2,680,428.30 1,773,432.41 1,024,688.16 2,882,114.68 1,553,242.41 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts research institute co. LTD Foundry Co., Ltd. Co., Ltd. Real Estate Development Co. Ltd. Xinbo Investment Management Co., Ltd. Co., Ltd. Components Co. Ltd. Ltd. Property Co. Ltd. Ltd. Chongqing Zili Machinery Factory Chongqing ernst general aviation technology Chongqing Mechatronics Holding Group Chongqing Mechatronics Holding Group Chongqing General Aircraft Industry Co., Ltd. Chongqing General Aircraft Industry Co., Chongqing Shenjian Auto Transmission Pieces Chongqing Shenjian Auto Transmission Chongqing Shuangqiao Hongyan Automobile Chongqing Shuangqiao Hongyan Automobile Qijiang Qichi Xinxin Welfare Co., Ltd. Chongqing Electromechanical Holding Group Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Electrical Science Research Institute Chongqing Heavy Automobile Group Kafu Parts Chongqing Qichi Automobile Parts and Chongqing Jidian Property Management Co. Chongqing Jidian Property Management Related parties Chongqing Xitong Electric Co., Ltd. Chongqing Heavy Automobile Group Hongqi Chongqing Heavy Automobile Group Hongqi Chongqing jiangbei machinery Co., Ltd. Qijiang Gear Factory Chongqing cummins engine company limited CQMEHG Electrical Industry Investment Co. Chongqing Special Motor Factory Co., Ltd. Deposits from banks and other financial institutions and other financial institutions Deposits from banks
BALANCES WITH RELATED PARTIES BALANCES WITH (12)
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 XI. 441.25 79,548.05 148,377.22 1,297,852,782.28 (Continued)
Beginning balance
(Continued) – – – Ending balance 1,114,141,175.33
(CONTINUED) Huazhan Metal Material Restructuring Branch Chongqing Standard Parts Industry Co., Ltd. Chongqing Standard Parts Industry Co., Total Related parties Qijiang Qichi Forging Factory Chongqing High Strength Fasteners Factory Deposits from banks and other financial institutions and other financial institutions Deposits from banks
BALANCES WITH RELATED PARTIES BALANCES WITH (12)
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (III)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
456 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 457 – – – – – 19,999.99 19,999.99 (Continued)
Beginning balance
– 9,000.00 29,860.00 292,500.08 134,976.00 2,791,495.08 2,325,159.00 Ending balance
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Electromechanical Engineering Technology Electromechanical Engineering Technology Co., Ltd. Total Chongqing Cummins Engine Co., Ltd. Chongqing Electromechanical Holding Group Related parties Minjiang Gear Transmission Co., Ltd. Chongqing Standard Parts Industry Co., Ltd. Chongqing Standard Parts Industry Co., Chongqing Jiangbei Machinery Co., Ltd. Chongqing Bosen Electric (Group) Co., Ltd. Chongqing Bosen Electric (Group) Co., Related party commitment date. The Group has no related party commitments on the balance sheet Contractual liabilities
BALANCES WITH RELATED PARTIES BALANCES WITH (14) (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 XI. 2019.06.25 2019.06.25 2019.06.26 2019.06.26 2019.06.26 Serving in Dismissed in – – – Dismissed in Serving in – – – – – – – – Serving in – –
60,000.00 30,000.00 30,000.00 80,400.00 80,400.00 80,400.00 60,000.00 60,000.00 60,000.00 30,000.00 193,963.49 965,528.00 136,875.00 816,559.00 882,655.00 1,055,758.64 1,245,547.00 6,871,757.13 1,003,671.00 (Continued)
– – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – Bonus Distribution Total Notes 496,939.00
– – – – – – – – – – – – Social insurance, 436,240.13 3,269,228.00 housing fund and pensions
60,000.00 30,000.00 30,000.00 80,400.00 80,400.00 80,400.00 60,000.00 60,000.00 60,000.00 30,000.00 213,600.00 42,760.64 799,398.00 153,642.00 40,321.49 511,460.00 100,747.00 633,340.00 429,920.00 84,137.00 451,471.00 136,875.00 319,620.00 387,152.00 84,137.00 411,366.00 442,820.00 84,137.00 476,714.00 allowances Salaries and 3,166,289.00
OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF Committee Vice president Supervisor Supervisor Supervisor Employee supervisor Independent Director Independent Director Non-executive Director Independent Director Executive Director/ Duty Executive Director/CEO
Mr. Li Fangzhong Employee supervisor Mr.Zhang Mingzhi Employee supervisor Ms.Wu Yi Mr.Huang Hui Mr. Wang hai bin Mr.Xia Hua Mr.Ren Xiaochang Independent Director Mr.Jin Jingyu Mr.Liu Wei Mr Sun Wenguang Chairman of Supervisory Mr.Huang Yong Non-executive Director Mr.Dou Bo Mr.Wang Peng cheng Non-executive Director Mr. Zhang yong chao Non-executive Director Mr.Lu Huawei Mr.Wang Yuxiang of Directors Chairman Mr.Yang Quan Total Name Ms.Chen Ping Remuneration of directors and supervisors of current year directors and supervisors of Remuneration of
REMUNERATION MANAGEMENT 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
458 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 459 2018.07 Chairman of Supervisory Committee in 2018.11 2018.12 – – Dismissed in – – – – – – – – – – Dismissed in – –
(Continued)
(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 Become 129,722.00 737,115.00 724,708.05 814,772.05
– – – – – – – – – – – – – – – –
– – – – – – – – – – Bonus Distribution Total Notes 470,151.00
– – – – – – – – – – – Social From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 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 81,411.72 112,660.00 516,000.00 89,085.48 751,060.00 440,335.62 1,796,481.10 155,729.00 55,154.38 376,961.00 243,904.00 90,812.05 399,923.00 129,722.00 266,964.00 239,292.00 90,812.05 394,604.00 266,964.00 90,812.05 456,996.00 allowances (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Salaries and 2,695,787.00 498,087.73 2,962,355.00 440,335.62 6,596,565.35 OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF Committee Committee president Supervisor Supervisor Employee supervisor Chairman of Supervisory Independent Director Independent Director Non-executive Director Non-executive Director Independent Director Executive Director/Vice Duty Executive Director/CEO
(CONTINUED) Mr.Zhang Mingzhi Employee supervisor Ms.Wu Yi Mr.Huang Hui Mr.Xia Hua Mr.Xiang Hu Mr.Ren Xiaochang Independent Director Mr.Jin Jingyu Mr.Liu Wei Mr Sun Wenguang Chairman of Supervisory Mr.Huang Yong Non-executive Director Mr.Dou Bo Mr.Wang Pengcheng Director Non-executive Mr.Deng Yong Mr.Lu Huawei Mr.Wang Yuxiang Chairman of Directors Mr.Yang Quan Total Name Ms.Chen Ping Remuneration of directors and supervisors of last year: Remuneration of directors and supervisors Remuneration of directors and supervisors of current year directors and supervisors of Remuneration of
MANAGEMENT MANAGEMENT REMUNERATION 1.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XI.
Total
(Continued)
Bonus
Social insurance, housing fund and pensions
387,152.00341,652.00 84,137.00387,152.00387,152.00 411,366.00 84,137.00339,052.00 84,137.00 882,655.00 276,789.00 84,137.00 409,229.00 84,137.00 702,578.00 411,118.00 880,518.00 253,705.00 882,407.00 676,894.00 442,820.00 84,137.00 476,714.00 1,003,671.00 allowances 2,284,980.00 504,822.00 2,238,921.00 5,028,723.00 Salaries and
Vice president CEO OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF Duty
(CONTINUED) Mr. Qin ShaoboMr. Zhang ShuMr. Deng Rui Vice president Ms. Liu Zhongtang Vice president Vice president/CFO Company secretary Mr.Yang Quan Executive Director/ Name Total Ms.Chen Ping Executive Director/ is as follows: amounts paid and payable to directors, supervisors and senior management)amounts paid and payable to directors, Key management compensation Key management personnel during the year (including The remuneration of key management
REMUNERATION MANAGEMENT MANAGEMENT 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
460 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 461
Total
(Continued)
Bonus
Social insurance, housing fund and pensions
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (Continued) 239,292.00239,292.00 90,812.05239,292.00119,646.00 394,604.00 90,812.05246,435.00 90,812.05 724,708.05 395,216.00 47,589.20 392,160.00 87,372.14 725,320.05 75,600.00 722,264.05 394,218.00 242,835.20 728,025.14 266,964.00 90,812.05 456,996.00 814,772.05 allowances 1,350,921.00 498,209.54 2,108,794.00 3,957,924.54 Salaries and
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Vice president CEO OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF Duty
(CONTINUED) Mr. Deng RuiMr. Zhang ShuMr. Qin Shaobo Company secretary Ms. Liu Zhongtang Vice president president Vice Vice president/CFO Mr.Yang Quan Executive Director/ Total Name Ms.Chen Ping Executive Director/ Key management compensation Key management Key management remuneration for the last year: Key management remuneration
MANAGEMENT MANAGEMENT REMUNERATION 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XI.
Total 882,655.00 965,528.00 1,003,671.00 1,055,758.64 5,153,159.64 1,245,547.00
– – – – – – (Continued)
Bonus Distribution
Social insurance, housing fund and pensions
387,152.00 84,137.00 411,366.00 429,920.00 84,137.00 451,471.00 442,820.00 84,137.00 476,714.00 511,460.00213,600.00 100,747.00 42,760.64 633,340.00 799,398.00 allowances 1,984,952.00 395,918.64 2,772,289.00 Salaries and
OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF president Supervisory Committee CEO Executive Director/ViceExecutive Duty
(CONTINUED) Mr. Yang Quan Mr Sun Wenguang Chairman of Ms. Chen Ping Executive Director/ Name Mr. Xia Hua Employee supervisor Mr. Li Fangzhong Employee supervisor Total Five most well-rewarded employees of current year employees of current Five most well-rewarded
REMUNERATION MANAGEMENT MANAGEMENT 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
462 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 463
Total 734,639.05 728,025.14 814,772.05 737,115.00
– – – – (Continued)
(Continued)
Bonus Distribution 470,151.00
– Social From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December insurance, housing fund and pensions
243,904.00 90,812.05 399,923.00 246,435.00 87,372.14 394,218.00 266,964.00 90,812.05 456,996.00 516,000.00 89,085.48 751,060.00 440,335.62 1,796,481.10 266,964.00 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts allowances 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 Supervisory Committee CEO Chairman Duty
(CONTINUED) Ms. Liu Zhongtang Vice president/CFO Mr. Xia Hua Employee supervisor Mr. Wang Yuxiang Mr Sun Wenguang Chairman of Total Name Ms. Chen Ping Executive Director/ Five most well-rewarded employees of last year: Five most well-rewarded employees Five most well-rewarded employees of current year employees of current Five most well-rewarded
MANAGEMENT MANAGEMENT REMUNERATION 3.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (IV)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XI.
1 0 20 Last Year Number of (Continued)
0 3 19 Number of Current Year
OF DIRECTORS, SUPERVISORS AND SENIOR SENIOR AND SUPERVISORS DIRECTORS, OF RECEIVABLE OF DIRECTORS AND DIRECTORS’ DIRECTORS’ AND DIRECTORS OF RECEIVABLE (CONTINUED) Item Within 1,000,000 RMB RMB1,500,001 to 2,000,000 RMB1,000,001 to 1,500,000
Salary range up any salary. During past recorded periods, the Group never paid paid never Group the periods, recorded past During salary. any up to employees well-rewarded or five most supervisor any director, to make compensation for the employment draw them into the Group or termination. The Group does not provide guarantees for directors and director-related The Group does not provide guarantees for directors and director-related corporate loans. The During current period, none of the directors gives up or agrees to give During current period, none of corporate loans.
BORROWINGS REMUNERATION RELATED PARTIES MANAGEMENT MANAGEMENT 4. 1. director-related and directors from receivables no has Group 5. 2.
RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) (V) (IV)
XI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
464 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 465 balance Beginning (Continued)
53,153,949.02 53,153,949.02
Ending balance 64,843,810.00 64,843,810.00
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts IMPACT OF NEW CORONA VIRUS DISEASE ON COMPANY OTHERS Since the outbreak of the new corona virus disease (“Covid-19”) nationwide fromSince the outbreak of the new corona virus disease (“Covid-19”) implemented January 2020, the Group has positively responded to and strictly and prevention Covid-19 for requirements and regulations various China’s as soon as control. Donated RMB1.5 million to Chongqing Charity Federation and protection virus the that ensure to order In outbreak. the after possible of as production and work resumed has Group the correct, are operation the fight against February 26, 2020. The group will support the country to win responsibility, Covid-19 in a multi-pronged manner from supply security, social internal management, and occupational health. None.
Total House, building and equipment Item COMMITMENTS RELATED PARTIES AND RELATED-PARTY TRANSACTION TRANSACTION AND RELATED-PARTY RELATED PARTIES (CONTINUED) CONTIGENCIES 1.
Capital expenditure contracted during the reporting period but not yet incurred by the Capital expenditure contracted Group are as follows: None (VI) EVENTS AFTER THE REPORTING PERIOD
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XIV. XIII. XII. XI.
Amount (CONTINUED) (Continued) 36,846,401.54 36,846,401.54
(CONTINUED) March 27, 2020. The meeting proposed that the Group distribute dividends dividends distribute Group the that proposed meeting The 2020. 27, March The Group held the first meeting of the fifth session of Board of Directors in 2020 The Group held the first meeting of on to all shareholders at RMB0.01 yuan per share (including tax). The total amount to all shareholders at RMB0.01 yuan The tax). (Including yuan RMB36,846,401.54 is distributed be to dividends of to be approved by the annual shareholders’ dividend distribution plan still needs Therefore, the proposed dividend has not meeting to be held on June 18, 2020. financial statement. been recognised as a liability in this
Items Dividends or profits to be distributed approval Profits or dividends declared after THE GROUP HAS NO ASSET REPLACEMENT IN THIS PERIOD; EXCEPT FOR THE ABOVE DISCLOSURES, THE GROUP HAS NO OTHER EXCEPT FOR THE ABOVE DISCLOSURES, THE GROUP HAS PERIOD. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING THE GROUP HAS NO PREVIOUS ERROR CORRECTION; THE CURRENT THE GROUP HAS NO MAJOR DEBT RESTRUCTURING IN THE PROFIT DISTRIBUTION IMPACT OF NEW CORONA VIRUS DISEASE ON COMPANY CORONA VIRUS DISEASE IMPACT OF NEW BALANCE SHEET DATE. PERIOD;
The Group expects that the Covid-19 will have a temporary impact on on impact temporary a have will Covid-19 the that expects Group The extent of the impact will depend operations of the Group. The production and the and control, and prevention virus the of duration and progress the on cause not will it but policies, control and prevention local of implementation Group. significant negative effects to the Note:
. OTHER SIGNIFICANT EVENTS 2 1. 4. 3. THE AFTER RETURNS SALES SIGNIFICANT NO HAS GROUP 2. 1. 3. EVENTS AFTER THE REPORTING PERIOD THE REPORTING PERIOD EVENTS AFTER
XIV. XV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
466 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 467 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts NO NEW GUIDELINES TO BE IMPLEMENTED; NO NEW GUIDELINES SEGMENT INFORMATION THE GROUP DOES NOT YET HAVE AN ANNUITY PLAN; NOT YET HAVE AN ANNUITY THE GROUP DOES DURING THE YEAR; NOT CEASED OPERATIONS THE GROUP HAS 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 independently manages its production and strategy, each segment of the Group 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 9 reportable segments and sales of engines; Engine: in charge of production of sales and production of charge in equipment: generation Hydroelectric hydroelectric generation equipment; Electrical wire and cable: production and sales of wire and cable; General machinery: production and sales of general machinery; 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.
OTHER SIGNIFICANT EVENTS OTHER SIGNIFICANT 7. 5. 6. 4.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XV.
7,1,6.64,5,0.31756039 5,0,1.9 741735 2391401)531135 639456)7,6,5.4(,2,9.9 203,914,978.15 (1,523,195.99) 79,860,557.64 (6,359,425.66) 5,301,113.55 (283,941,450.16) 37,451,783.54 (57,400,417.89) 107,556,043.93 43,756,407.73 279,213,561.46 profit Net
58050)1,5,8.0125959 380807 (9,582,324.60) 13,880,860.79 1,245,945.98 16,952,089.70 (518,065.03) – expense tax Income 39,031,257.93 – 17,052,751.09 – –
7,1,6.64,3,4.01458136 5,5,7.1 132643 2353747)531135 639456)9,1,0.3(,2,9.9 242,946,236.08 (1,523,195.99) 96,913,308.73 (6,359,425.66) 5,301,113.55 (293,523,774.76) 51,332,644.33 (56,154,471.91) 124,508,133.63 43,238,342.70 279,213,561.46 profit Total
283,867,094.72 – 7,414,287.97 – 5,301,113.55 (8,061,868.26) – – – – 279,213,561.46 ventures associates and joint joint and associates (Continued)
Investment income from from income Investment
,3,0.7540968 7,998,500.01 5,400,946.87 2,938,802.57 – costs Interest 133,915,851.96 – 80,475,490.47 311,642.67 – 36,790,469.37 –
7,3.224923 1,514,809.17 234,902.37 872,530.42 – income Interest 36,845,305.60 – 21,456,616.94 36,098.24 – 12,730,348.46 –
7,1,6.64,1,3.71425615 5,0,4.6 225979 2367202)531135 623889)9,2,7.4(,2,9.9 241,486,369.54 (1,523,195.99) 97,429,671.44 (6,273,868.99) 5,301,113.55 (293,697,280.26) 52,205,967.96 (55,707,043.56) 124,225,611.56 40,311,832.37 279,213,561.46 (loss)/profit Operating
18.83 – 3.00 6.11 – 46.47 85.64 9.12 14.28 27.10 – (%) rates profit Gross
2,4,9.412201435 ,8,9,9.51,2,8.5455,476,630.51 11,129,386.05 1,185,091,096.55 1,252,091,483.53 422,642,591.24 cost – transaction External 4,478,138,877.16 – 1,092,251,063.36 59,456,625.92 –
45203)(984330)(,2,8.7 1,4,8.8 (35,908,328.38) (16,845,087.68) (6,123,489.17) (19,894,353.04) (465,260.36) – cost (221,007,443.38) – (34,716,662.96) (107,054,261.79) –
Inter-segment transaction transaction Inter-segment
2,0,5.012195865 ,9,1,8.22,7,7.3491,384,958.89 27,974,473.73 1,191,214,585.72 1,271,985,836.57 423,107,851.60 – costs Operating 4,699,146,320.54 – 1,126,967,726.32 166,510,887.71 –
7,6,9.014069319 ,0,4,4.47,7,0.3556,411,087.41 77,477,004.43 1,303,948,340.94 1,460,679,301.94 579,769,499.30 – customers 5,516,812,105.87 – 1,475,202,124.80 63,324,747.05 –
Revenue from external external from Revenue
032998 1,9,5.4 613491)(436482)(35,908,328.38) (44,336,428.25) (6,123,489.17) (19,894,353.04) 20,372,919.88 – revenue Inter-segment (225,690,942.79) – (25,782,280.36) (114,018,983.47) –
5,9,7.214053649 ,1,7,3.11183426 592,319,415.79 121,813,432.68 1,310,071,830.11 1,480,573,654.98 559,396,579.42 – revenue segment Total 5,742,503,048.66 – 1,500,984,405.16 177,343,730.52 –
Items Total Offset segments sales transformers tools services machinery cable and equipment Engines
Other Other Materials High-voltage Machinery Financial General wire Electrical generation
Hydroelectric Hydroelectric
Financial information of reportable segments of the current year as follows: as year current the of segments reportable of information Financial
FINANCIAL INFORMATION OF REPORTABLE SEGMENTS REPORTABLE OF INFORMATION FINANCIAL 8.
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER XV. (CONTINUED) Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
468 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
469
(Continued)
1,0,8.4(,1,5.0 129699 ,5,7.7(36,811,432.82) 7,558,873.77 91,219,649.99 (9,214,457.60) 216,403,482.04 – assets) 135,653,945.17 – (134,666,587.00) 1,164,416.79 –
deferred income tax tax income deferred
investments and and investments
long term equity equity term long
financial instruments, instruments, financial
assets (other than than (other assets
Additions to non-current non-current to Additions
745935)(,4,4.2 623735)(9,9.5 25,302,761.30 (593,398.45) (6,253,783.54) (2,746,443.02) (7,445,953.50) – receivables other and ,6,6.5612325 297500)12,607,710.21 (2,997,500.00) 6,172,362.57 1,169,664.85 –
impairment of accounts accounts of impairment
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December of) for/(reversal Provision
4,288,527.68 – (3,481,566.13) – – 8,532,831.72 – (2,483,989.66) 1,721,251.75 – – inventory on Provision
,8,4.466406 016078 3,1.513,894,448.28 337,219.05 10,186,097.83 676,480.68 1,984,948.94 – assets 29,649,844.26 – 2,570,649.48 – – Amortisation of intangible intangible of Amortisation
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
383655 585086 098374 1,6.575,077,120.62 319,468.85 40,988,367.42 15,815,068.63 33,833,675.57 – property 189,517,219.33 – 23,482,192.28 1,325.96 –
and investment investment and
plant and equipment equipment and plant
Depreciation of Property, Property, of Depreciation
Other items Other Total Offset segments sales transformers tools services machinery cable and equipment Engines
Other Other Materials High-voltage Machinery Financial General wire Electrical generation
Hydroelectric Hydroelectric
Financial information of reportable segments of the current year as follows: follows: as year current the of segments reportable of information Financial (Continued)
FINANCIAL INFORMATION OF REPORTABLE SEGMENTS REPORTABLE OF INFORMATION FINANCIAL 8. (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER XV. (CONTINUED)
1,5,7.91,9,2.81645686 237227 040989 3,1,0.7 720407 ,9,3.2(408469)(370305)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 – –
1,5,7.9989623 9,2,0.52,5,9.63,6,3.5(411007)2,8,0.6150520 1,5,5.6 1,4,2.2 555,672,060.65 (14,848,020.52) (16,452,850.56) 1,590,532.02 27,280,400.76 (24,111,010.79) 39,863,033.65 22,058,196.46 195,026,305.65 9,809,602.39 315,455,871.59 profit Total
(Continued)
369,323,156.44 – 22,888,802.51 – 27,280,400.76 3,698,081.58 – – – – 315,455,871.59
ventures
associates and joint joint and associates
Investment income from from income Investment
,6,3.9754351 37,578,842.47 7,504,365.12 5,461,433.99 – costs interest 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 –
0,9.829380 12,496,330.62 209,318.09 705,598.78 – income Interest 38,473,948.90 – 3,698,093.01 2,221,055.16 – 19,143,553.24 –
1,5,7.9851471 9,2,5.32,7,8.23,3,3.7(227176)2,8,0.6126718 2,7,1.4 1,4,2.2 556,730,030.70 (14,848,020.52) (22,178,817.24) 1,276,711.82 27,280,400.76 (12,247,157.63) 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 –
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 9,8,4.8 394044)(8100)(139,351,488.04) (88,120.04) (3,914,064.42) (97,283,443.68) –
Inter-segment transaction transaction Inter-segment
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 –
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 – customers 5,284,317,532.90 – 1,391,472,326.96 105,491,817.05 –
Revenue from external external from Revenue
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) – revenue Inter-segment (167,748,272.06) – (3,914,064.42) (100,635,787.38) –
Total segment revenue 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 –
Total Offset segments sales transformers tools services machinery cable and equipment Item Engines
Other Other Materials High-voltage Machinery Financial General wire Electrical generation
Hydroelectric 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 REPORTABLE OF INFORMATION FINANCIAL 8. (CONTINUED)
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER XV. (CONTINUED) Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
470 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
471
(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) (67,769,454.03) – (114,450,818.91) (4,585.06) –
deferred income tax tax income deferred
investments and and investments
long term equity equity term long
instruments, instruments,
(other than financial financial than (other
current assets assets current
Additions to non- to Additions
296114 4,3.83,349,226.15 848,238.38 12,936,121.47 – receivables 23,595,497.30 – 8,330,464.07 (4,754,201.28) – 2,885,648.51 –
accounts and other other and accounts of) impairment of of impairment of)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
Provision for/(reversal for/(reversal Provision
190477 ,2,6.95,497,630.95 5,729,765.79 21,960,417.74 – inventory on Provision 85,874,826.37 – 44,191,256.63 – – 8,495,755.26 –
,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 34,798,750.50 – 2,781,583.68 – –
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
Amortisation of of Amortisation
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 –
equipment and and equipment
Property, plant and and plant Property,
Depreciation of of Depreciation
Engines items Other equipment cable machinery services tools transformers Total Offset segments sales
generation generation wire and and wire General General Financial Financial Machinery Machinery High-voltage High-voltage Materials Materials Other Other
Hydroelectric Hydroelectric Electrical Electrical
Financial information of reportable segments of the previous year as follows: as year previous the of segments reportable of information Financial (Continued)
FINANCIAL INFORMATION OF REPORTABLE SEGMENTS REPORTABLE OF INFORMATION FINANCIAL 8. (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER XV. (CONTINUED)
1,009,154,785.28 – 310,260,813.08 – 248,255,606.76 89,742,246.20 – – – – 360,896,119.24 ventures joint or
Investment of associates associates of Investment
,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 – liabilities Total 5,3,2.827376711 37086304)9,048,021,855.31 (3,760,856,370.40) 2,703,766,781.13 155,138,828.08 – (Continued)
6,9,1.421731660 1,2,0.036883551 ,7,2,3.432634839 4,5,0.61896410 ,1,7,0.8(,7,3,6.4 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 assets Total
Total Offset segments sales Materials transformers tools services machinery cable and equipment Engines balance Beginning
Other Other High-voltage Machinery Financial General wire Electrical generation
Hydroelectric Hydroelectric
(Continued)
996,391,965.41 – 318,208,474.40 – 224,207,687.31 81,680,377.94 – – – – 372,295,425.76 ventures joint or
Investment of associates associates of Investment
,0,0,8.05398639 ,9,8,6.828656141 2,343,853,774.49 2,856,576,164.13 3,095,086,668.18 573,968,663.97 1,507,400,886.10 – liabilities Total 4,8,9.532850326 45585633)9,228,725,131.65 (4,515,815,643.34) 3,218,570,322.67 149,084,295.45 –
7,9,2.620911988 3,8,4.639952166 ,8,8,9.131406250 2,9,5.11355359 07527055 87022967)16,517,815,304.85 (8,740,262,916.72) 10,725,287,015.52 173,545,305.91 222,799,259.31 3,174,086,215.06 3,687,080,399.51 3,909,592,126.66 934,280,544.96 2,059,111,928.88 372,295,425.76 assets Total
Ending Balance Ending Total Offset segments sales transformers tools services machinery cable and equipment Engines
Other Other Materials High-voltage Machinery Financial General wire Electrical generation
Hydroelectric 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 REPORTABLE OF INFORMATION FINANCIAL 8. (CONTINUED)
OTHER SIGNIFICANT EVENTS EVENTS SIGNIFICANT OTHER XV. (CONTINUED) Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
472 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 473 (Continued)
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (CONTINUED) (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts SIGNIFICANT TRANSACTIONS AND EVENTS THAT HAVE HAVE THAT EVENTS AND TRANSACTIONS SIGNIFICANT OTHER IMPACT ON INVESTOR DECISIONS IMPACT ON INVESTOR Chongqing Shangshe Chemical Co., Ltd. (a wholly-owned subsidiary of of subsidiary wholly-owned (a Ltd. Co., Chemical Shangshe Chongqing (Group) Shangshe Chongqing enterprise State-owned Municipal Chongqing of customers the of one is Chemical”) “Shangshe as to referred Ltd., Co., Hong (PTG LTD. co., Development Investment Group Technology Precision the Group. On September 27, 2019, Shangshe Kong Company), a subsidiary of stating Internet, the via customers market to statement a issued Chemical maximize To on. now from business all “suspend will Chemical Shangshe that company, all contracts that have not yet been and guarantee interests of your bank, the to submitted been have documents The stopped. be will executed On refund.” a request to immediately bank the to message a send please Shangshe Chemical (Group) Co., Ltd. issued a October 31, 2019, Chongqing “Qingjun Network: Currency China on Cases” Subsidiary-Related on “Notice Chemical Chongqing of representative legal and board the of chairman Pang, Co., (Group) Shangshe Chongqing of subsidiary wholly-owned a Ltd., Co., process the in is agency investigation the and crime a of suspected is Ltd., currently is Chemical Chongqing on case this of impact The investigation. of to as “Shangshe Chemical Incident”). uncertain. (Hereinafter referred pay not did Chemical Chongqing Incident, Chemical Shangshe the to Due the with accordance in rubber purchased the for company Kong Hong PTG of letters bank relevant the redeem first must Group the that So agreement. the the which of yuan, million RMB314.99 of amount total a involving credit, Kong CompanyCompany was involved is RMB87.57 million yuan and PTG Hong equivalent the after 2019, 31, December of As yuan. million RMB227.42 is Hong Kong seized by PTG Shangshe Chemical the goods of certain offsetting million Company, Shangshe Chemical still owed a total amount of RMB285.33 yuan to the Group.
OTHER SIGNIFICANT EVENTS OTHER SIGNIFICANT 9.
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XV. 52,085,559.19 (Continued)
– 1 Jan 2019 31 Dec 2018 33,485,686.34 33,485,686.34 383,447,758.44 383,447,758.44 1,434,961,752.73 1,434,961,752.73 1,084,999,680.63 1,032,914,121.44
– (CONTINUED) 31 Dec 2019 63,449,631.19 436,478,069.56 1,455,032,793.77 1,082,004,355.40
SIGNIFICANT TRANSACTIONS AND EVENTS THAT HAVE HAVE THAT EVENTS AND TRANSACTIONS SIGNIFICANT debts Total Less: Provision for bad Other receivables Dividend receivables Items Interest receivables OTHER RECEIVABLES OTHER IMPACT ON INVESTOR DECISIONS (CONTINUED) IMPACT ON INVESTOR
Since the Shangshe Chemical Incident, The Group has been communicating communicating been has Group The Incident, Chemical Shangshe the Since related institutions. The Group Shangshe (Group) Co., Ltd. and with Chongqing the of As actions. appropriate search to parties relevant with communicates stage, and there is no investigation is still in the case the date of this report, of the incident, considering the factors clear result. Due to the short duration state- wholly-owned a is Ltd. Co., Chemical Shangshe that fact the as such no default events during the past years, and owned enterprise, there have been in Chongqing to coordinate and handle the a task force has been established the Group evaluated the expected credit loss emergency. The management of is 30.00%. As of December 31, 2019, the Group rate during the reporting period of arrears the for provision debt bad in yuan million RMB85.60 of total a made Chemical still owed the Group a net amount Shangshe Chemical, and Shangshe of RMB199.73 million yuan.
OTHER SIGNIFICANT EVENTS OTHER SIGNIFICANT 1. 9. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS NOTES TO MAJOR ITEMS OF THE COMPANY
XVI. XV. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
474 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 475 (Continued) receivable of joint venture
52,085,559.19 52,085,559.19 Whether impairedWhether and criterion No, Dividends
– – – –
– – period, Pending Payment Reasons for not yet recovered
– Declare in current – Pending Payment Pending Payment 1 Jan 2019 31 Dec 2018 –
balance From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December – – Beginning 4,816,103.40 4,816,103.40 383,447,758.44 378,631,655.04 378,631,655.04
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019
1,937,456.38 (CONTINUED) 436,478,069.56 267,814,254.94 267,814,254.94 168,663,814.62 166,726,358.24 Ending balance
(CONTINUED) receivable Cummins Hongyan Fangda Total Within 1 year Related-party interest Items Total Item Including: Chongqing Over 1 year Including: Chongqing Chongqing Cummins Dividend receivables Interest receivables
OTHER RECEIVABLES OTHER RECEIVABLES 1.2 1.1
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVI. – (Continued)
– 1 Jan 2019 31 Dec 2018 1 Jan 2019 31 Dec 2018 33,485,686.34 33,485,686.34 5,036,395.93 5,036,395.93 33,485,686.34 33,485,686.34 31,185,724.00 31,185,724.00 1,084,999,680.63 1,032,914,121.44 1,051,513,994.29 999,428,435.10 1,051,513,994.29 999,428,435.10 1,084,999,680.63 1,032,914,121.44 1,048,777,560.70 996,692,001.51
31 Dec 2019 63,449,631.19 31 Dec 2019 4,996,395.93 1,000,000.00 63,449,631.19 31,182,624.00 1,082,004,355.40 1,018,554,724.21
1,018,554,724.21 1,082,004,355.40 1,044,825,335.47
(CONTINUED) (CONTINUED) amount for impairment Carrying Total Less: Provision 3-4 years 2-3 years Within one year Aging 1 -2 years Aging analysis
Other receivables Items Less: provision for bad debts Carrying amount Other receivables 1)
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
476 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 477 – (Continued)
– 36,870.71 36,870.71 1 Jan 2019 31 Dec 2018 33,485,686.34 33,485,686.34 34,837,564.93 34,837,564.93 1,051,513,994.29 999,428,435.10 1,084,999,680.63 1,032,914,121.44 1,050,125,244.99 998,039,685.80
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 151,653.56 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 31 Dec 2019 63,449,631.19 34,837,564.93 88,531,658.42 958,483,478.49 1,018,554,724.21 1,082,004,355.40
(CONTINUED) (Continued) (CONTINUED) for impairment receivables related party borrowing and interest Carrying amount Total Less: Provision Others Other For external Nature Petty cash Classification of other receivables by nature Classification of
Other receivables Other receivables 2)
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVI. 962,954.22 962,954.22 151,653.56 957,256,631.27 956,142,023.49
(Continued) – – – – –
bad debts Carrying amount Provision for
– – – – – 31 Dec 2019 (%) 5.86 63,449,631.19 1,018,554,724.21 50.86 63,449,631.19 61,298,092.94 Percentage
962,954.22 962,954.22 151,653.56 Book balance 957,256,631.27 124,747,724.13 956,142,023.49 1,082,004,355.40
(CONTINUED) (Continued)
(CONTINUED) receivables with provision for bad debts based on the the on based debts bad for provision with receivables is recognized by group by recognized is debts is recognized separately parties others 1 year deposit and reserve fund receivable Provision for bad debts Including: Within Total Classification Provision for bad Including: Related General receivables and Deposits, security
expected credit risk portfolio Other
3) Other receivables Other receivables
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
478 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 479 36,870.71 (Continued)
1,050,125,244.99 1,050,162,115.70
– – – bad debts Carrying amount Provision for
– – – 1 Jan 2019 (%) 3.09 33,485,686.34 1,051,513,994.29 96.12 33,485,686.34 1,351,878.59 Percentage From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
36,870.71 (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Book balance 34,837,564.93 1,050,125,244.99 1,050,162,115.70 1,084,999,680.63
(CONTINUED) (Continued) (CONTINUED) receivables with provision for bad debts based on the the on based debts bad for provision with receivables deposit and reserve fund receivable parties based on credit risk portfolio debts is recognized separately Deposits, security Including: Related Provision for bad debts Total Combinatorial classification Provision for bad
Other expected credit risk portfolio (Continued) (Continued)
Other receivables Other receivables 3)
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVI. 36,870.71 998,076,556.51 998,039,685.80
(Continued) – – –
bad debts Carrying amount Provision for
– – – 31 Dec 2018 (%) 3.24 33,485,686.34 999,428,435.10 96.12 33,485,686.34 1,351,878.59 Percentage
36,870.71 Book balance 34,837,564.93 998,076,556.51 998,039,685.80 1,032,914,121.44
(CONTINUED) (Continued) (CONTINUED) receivables with provision for bad debts based on the the on based debts bad for provision with receivables is recognized by group by recognized is anticipated credit loss tests parties deposit and reserve fund receivable Provision for bad debts Total Combinatorial classification Money for separate Including: Related Deposits, security
expected credit risk portfolio (Continued) (Continued) Other
3) Other receivables Other receivables
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
480 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 481 recoverable recoverable recoverable recoverable fully recoverable fully recoverable (Continued)
not expected to be not expected to be not expected to be Reason not expected to be not expected to be not expected to be
10.00 50.86 100.00 100.00 100.00 100.00 100.00 Percentage (%)
Ending balance bad debts From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December Provision for
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts 359,572.99 359,572.99 1,000,000.00 1,000,000.00 3,264,844.35 3,264,844.35 1,341,455.00 1,341,455.00 87,568,704.20 26,270,611.26 31,213,147.59 31,213,147.59 Book balance 124,747,724.13 63,449,631.19
(CONTINUED) (Continued) (CONTINUED) Power Technology Co., Ltd. Chemical Co., Ltd. Co., Ltd. Machinery Co., Ltd. Smelting Co., Ltd. Parts Co., Ltd. Chongqing Ruishida Chongqing Shangshe Jiyarui Ante Transmission Chongqing Jiangbei Chongqing Huahao Total Name Chongqing Tooth Auto The other receivables recognized provision for bad debts separately recognized provision for The other receivables
Other receivables Other receivables 4)
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVI.
– – – – provision of bad debt Ending balance
(%) 8.09 26,270,611.26 (Continued) 16.26 17.59 18.83 21.23 82.00 26,270,611.26
Percentage of ending balance other receivablesother
Within 1 year Within 1 year Within 1 year Within 1 year Within 1 year
Aging
87,568,704.20 Book balance 175,924,370.79 190,292,842.44 203,716,308.47 229,680,918.23 887,183,144.13
Borrowings Borrowings Borrowings Borrowings Borrowings
Nature (CONTINUED) (Continued) (CONTINUED) Chemical Co., Ltd. (Group) Co., Ltd. Works Co., Ltd. (Group) Co., Ltd Co., Ltd. (PTG) Chongqing Shangshe Chongqing Machine Tools Chongqing Water Turbine Chongqing General Industry Precision Technology Group Name of debtors Total Top 5 other receivables at the end of the year Top 5 other receivables at the end The company has no other receivables actually written off during the no other receivables actually The company has year.
5) 6) Other receivables Other receivables
OTHER RECEIVABLES OTHER RECEIVABLES 1.3
1. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
482 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 483
905,441,679.40 Carrying amount
(Continued) –
Impairment Beginning balance
Book balance 905,441,679.40 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
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December 897,555,420.48 Carrying amount
– (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts Impairment Ending balance
(CONTINUED) Book balance 897,555,420.48 3,793,406,273.05 88,741,458.00 3,704,664,815.05 4,690,961,693.53 88,741,458.00 4,602,220,235.53
associates and joint ventures subsidiaries Investment in Investment in Total Items Classification of long-term equity investments Classification
LONG-TERM EQUITY INVESTMENTS LONG-TERM EQUITY (1)
2. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes XVI. – – – – – – – – – – – – Balance of impairment 88,741,458.00 88,741,458.00
– – – – – – – – – – – – – – for (Continued) this year Provision
impairment
88,741,458.00 20,992,435.00 27,080,288.00 120,313,860.15 197,411,466.90 795,639,695.15 126,893,602.52 250,367,260.00 360,948,318.00 448,068,452.58 194,436,937.75 101,375,113.00 Ending balance 1,061,137,386.00 3,793,406,273.05
– – – – – – – – – – – – – – this year Decrease
– – – – – – – – – year (CONTINUED) Increase this
88,741,458.00 25,080,288.00 2,000,000.00 20,992,435.00 120,313,860.15 197,411,466.90 795,139,695.15 500,000.00 126,893,602.52 145,697,206.75 48,739,731.00 250,367,260.00 360,948,318.00 448,068,452.58 101,375,113.00 1,060,637,386.00 500,000.00 3,741,666,542.05 51,739,731.00 Beginning balance
(CONTINUED)
Co., Ltd. Co., Ltd. Co., Ltd (Notes 1) Cables Co., Ltd Limited (Notes 2) Equipment Technology Research Academy Co., Ltd. & Steering System Co., Ltd Co., Ltd. Co., Ltd. Holding Group Finance Co., Ltd. Intelligent Manufacturing Co., Ltd. Chongqing Machine Tools (Group) Chongqing Gas Compressor Factory Chongqing Shengpu Materials Chongqing Pump Industry Co., Ltd. Chongqing Water Turbine Works Chongqing General Industry (Group) Chongqing Huahao Smelting Co., Ltd. Chongqing Pigeon Electric Wires & Precision Technologies Group (PTG) Chongqing Machinery & Electronic Total Investee Chongqing CAFF Automotive Braking Chongqing Machinery and Electronics Chongqing Machinery & Electronic Investments in subsidiaries Investments in
LONG-TERM EQUITY INVESTMENTS LONG-TERM EQUITY (2)
2. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
484 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
485
– – 299,815,221.90 – – 291,928,962.98 – – 905,441,679.40 783,250,570.00
897,555,420.48 Total
– – 32,000,966.96 – – 12,715,401.52 – – 544,545,559.68 413,061,019.00 525,259,994.24 Total Sub
– – – – – – – – – 6,058,193.00 Italy WPG – (Continued)
Machinery
– – – – – (892,360.84) – – 41,858,367.08 57,933,968.00 Jiangbei Chongqing 40,966,006.24
– – – – – 15,914,182.99 – – 49,475,150.03 44,231,369.00 Knorr 65,389,333.02
– – 2,651,933.96 – – 1,185,849.90 – – 81,550,289.15 16,880,157.00 Exedy 80,084,205.09
– – – – – (8,793,384.08) – – 123,406,146.66 51,306,166.00 Fangda Hongyan 114,612,762.58
– – 29,349,033.00 – – 5,301,113.55 – – 248,255,606.76 236,651,166.00 ABB Chongqing 224,207,687.31
– – – – – – – – – – Associates 2. –
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December
– – 267,814,254.94 – – 279,213,561.46 – – 360,896,119.72 370,189,551.00 372,295,426.24 Total Sub
– – 267,814,254.94 – – 279,213,561.46 – – 360,896,119.72 370,189,551.00 Cummins CQ 372,295,426.24
– – – – – – – – – – venture Joint 1. –
(All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts
Investee investment investment investment balance method impairment changes income current period current year balance
Cost of of Cost Reduced Reduced Additional Beginning under equity equity under Balance of of Balance equity Other comprehensive declared in in declared impairment this this impairment Ending Ending
recognized recognized of other other of Cash dividends dividends Cash Provision for for Provision
profit and loss loss and profit Adjustment Adjustment
Investment Investment
Changes in the year the in Changes
Investment in associates and joint ventures joint and associates in Investment (3)
LONG-TERM EQUITY INVESTMENTS EQUITY LONG-TERM 2. (CONTINUED) (CONTINUED)
Notes to the Consolidated Financial Statements Financial to the Consolidated Notes NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS OF THE COMPANY COMPANY THE OF STATEMENTS FINANICAL THE OF ITEMS MAJOR TO NOTES XVI.
– – – Amount 536,756.43 of last year (100,462.00) 6,947,699.25 62,644,976.16
435,654,044.70 365,625,074.86 (Continued)
– – – Amount of last year Revenue Cost Amount 2,247,005.78 2,247,005.78 of the year
– – 10,729,141.46 86,901,391.82 389,559,496.26 291,928,962.98
Amount of the year Revenue Cost 2,397,300.84 2,397,300.84
(CONTINUED) No significant restriction of investment income of the Group.
management products investments in cost method sale financial assets investments in equity method equity investment in a joint venture Item Others Investment income from disposal of wealth Investment income of long-term equity Investment income of long-term equity Investment income from disposal of available-for- Total Investment income from long-term equity Investment income from long-term equity Investment income from disposal of long-term Investment income from disposal of Other operations Items Total INVESTMENT INCOME OPERATING REVENUE & OPERATING COST OPERATING REVENUE Notes: Directors on 27 The financial statements have been approved by the Board of March 2020.
4. 3. NOTES TO MAJOR ITEMS OF THE FINANICAL STATEMENTS FINANICAL STATEMENTS ITEMS OF THE NOTES TO MAJOR OF THE COMPANY
XVI. Notes to the Consolidated Financial Statements Financial to the Consolidated Notes December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
486 CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019 487 962,954.21 6,967,305.77 6,899,597.12 5,534,329.60 (4,074,463.06) 57,694,430.46 26,968,900.91 11,038,010.45 (10,351,619.50) 227,230,135.88 331,266,301.06 395,928,037.29 131,720,191.68 Amount for the year
From 31 December 2018 to 31 December 2019 2018 to 31 From 31 December (All amounts are presented in RMB except otherwise stated) except are presented in RMB (All amounts enterprises included in the profit or loss for the period enterprises included in the profit period individually tested for impairment employment personnel costs the above Funds utilization fees collected from non-financial Funds utilization fees collected Total Sub-total Impact on income tax Impact on non-controlling interest (after tax) Items of non-current assets Gains and losses from disposal Government grants included in the profit or loss for the Government grants included in Debt restructuring gains and losses Employee resettlement compensation that were Impairment reversal of receivables Buy wealth management income policies on post- Impact of changes in social security expenses apart from Other non-operating income and Information Disclosure for Companies Offering Securities to the Public No.1 – No.1 Public the to Securities Offering Companies for Disclosure Information the China Securities Regulatory or Loss (2008)” issued by Extraordinary Profit in 2019 are as follows: profit or loss of the Group Commission, extraordinary In
DETAILS OF EXTRAORDINARY PROFIT OR LOSS FOR THE OR LOSS FOR THE EXTRAORDINARY PROFIT DETAILS OF PERIOD (1) on Announcement “Explanatory the of requirements the with accordance
Supplementary Information to Consolidated Financial Statements Financial Consolidated to Information Supplementary 1. – – – – 0.05 share Diluted (Continued) earnings per
– – – – 0.05 Basic share Earnings per share earnings per
– – – 2.71 (2.14) to parent on equity Weighted attributable company (%) average return
Amount 184,834,923.25 331,266,301.07 (146,431,377.82) 6,826,660,322.40 3,684,640,154.00
the shareholders of the Company net assets attributable to the parent company outstanding profit or loss attributable to the parent company the shareholders of the Company (excluding: extraordinary profit and loss) Net profit attributable to Profit for the reporting year Amount of weighted average Number of common shares Amount of non-recurring Net profit attributable to 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 2019 are as follows:
Chongqing Machinery & Electric Co., Ltd. 27 March 2020 2. Supplementary Information to Consolidated Financial Statements Financial to Consolidated Information Supplementary December 2019 2018 to 31 From 31 December otherwise stated) except are presented in RMB (All amounts
CHONGQING MACHINERY & ELECTRIC CO., LTD Annual Report 2019
488 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 2019 ANNUAL REPORT 2019