1.Stock code: 600320 900947 Stock Name: Zhenhua Heavy Zhenhua B-share
1.
Shanghai Zhenhua Heavy Industries Co., Ltd.
Annual Report 2018
DenitionsCompany Prole and Principal Financial IndexesBusiness ProleDiscussion and Analysis of the PerformanceImportant EventsChanges in Ordinary Shares and Information about ShareholdersPreference SharesDirectors, Supervisors, Senior Management and EmployeesCorporate GovernanceCorporate BondsFinancial StatementContents of Reference Files
Section ISection IISection IIISection IVSection VSection VISection VIISection VIII
Section IXSection XSection XISection XII
1. The Board of Directors, Board of Supervisors, directors, supervisors and senior executivesof the Company hereby guarantee the truthfulness, accuracy and completeness of the contentscarried in this annual report, guarantee no false record, serious misleading statement or greatomission carried in this annual report and guarantee to assume the legal responsibilities jointlyand separately.
2. All directors of the Company are present at the board meeting.
3. Ernst & Young LLP. (Special General Partnership) issues the standard audit report withoutqualied opinion for the Company.
4. Zhu Lianyu, the chairman of the Company, Huang Qingfeng, responsible person foraccounting, and Zhu Xiaohuai , the person in charge of accounting organ (accountant in charge)hereby declare that the nancial statements in this Annual Report are true, accurate and complete.
5. Proposal for prot distribution or common reserves capitalizing during the reporting periodreviewed by the board of directors
Prot distribution proposal for 2018: based on the total share capital of 5,268,353,501 sharesby Dec. 31, 2018, a cash dividend of RMB 0.5 Yuan per 10 shares (tax-included) will be distributedto all shareholders from the undistributed prot by Dec. 31, 2018 and the total cash dividend to bedistributed will be RMB 263,417,675.05 Yuan. The Company will not distribute the bonus sharesor transfer the capital public reserves into the paid-in capital.
6. Risk declaration of forward-looking statements
√Applicable □Not applicable
7. Does the Company have non-operating funds occupied by the holding shareholder and itsrelated parties?
No
8. Does the Company provide the external guarantees in breach of the stipulated decision-making procedure?
No
9. Major Risk Warning
The company has described the related potential risks in this annual report. Please refer todiscussion and analysis of the performance and related chapters for the risks the company maybe confronted with in the future development.
10. Others
□Applicable √Not applicable
This English version is converted from the Chinese version. In case of any discrepancybetween the Chinese version and the English version, the Chinese version shall prevail.
Important Notice
The terms used in this report shall be dened as follows, unless otherwise specied:
Denitions of high frequency termsCompany, the CompanyRefers toShanghai Zhenhua Heavy Industries Co., Ltd.CCCCRefers toChina Communications Construction Company Ltd.CCCGRefers toChina Communications Construction GroupCCCG HKRefers toCCCG (HK) Holding Limited
PPPRefers to
Public-Private-Partnership, a cooperation mode between thegovernment and the social capital, which means the poolingof interest, allocation of risks and the long-term cooperationrelationship established by and between the government andthe social capital by means of licensed operation, serviceprocurement and stock equity cooperation in order to increase thesupply capability of the public goods and service and improve thesupply efciency.Reporting periodRefers toFrom Jan. 1, 2018 to Dec. 31, 2018
I.Denitions
Section IDefinitions
1.Company Information
Company name in Chinese上海振华重工（集团）股份有限公司Abbreviation of the Company name in Chinese振华重工Company name in EnglishShanghai Zhenhua Heavy Industries Co., Ltd.Abbreviation of the Company name in EnglishZPMCLegal representative of the CompanyZhu Lianyu
2.Contact information
Board SecretaryNameSun LiAddressNo. 3261, Dongfang Road, ShanghaiTelephone021-50390727Fax021-31193316E-mailIR@ZPMC.COM
3.Basic information
Registered addressNo. 3470, Pudong South Road, ShanghaiPostal code of registered address200125Ofce addressNo. 3261, Dongfang Road, ShanghaiPostal code of ofce address200125Websitehttp://www.zpmc.comE-mailIR@ZPMC.COM
4.Information disclosure and placement location
Newspaper designated by the Company for informationdisclosure
Shanghai Securities News, Hong Kong Wen Wei PoWebsite designated by China Securities RegulatoryCommission (CSRC) for publishing the annual report of theCompany
www.sse.com.cnPlacement location of the annual report of the CompanySecurities Affairs Ofce
Section IICompany Profile and Principal Financial Indexes
5.Stock information
Stock InformationStock typeStock exchangeStock abbreviationStock codeStock abbreviation before change
A-shareShanghai Stock Exchange (SSE)Zhenhua Heavy600320ZPMC IndustriesB-shareShanghai Stock Exchange (SSE)Zhenhua B-share900947-
6.Other relevant information
Public accountingrm engaged by theCompany (domestic)
NameErnst & Young LLP.Ofce address
Room 01-12, Floor 17
th
, Ernst & Young Tower Oriental Plaza, No.1East Changan Street, Dongcheng District, BeijingSigned by the AccountantsYang Lei, Liu Wei
(I) Main accounting data7.Main accounting data and nancial indexes in recent three years
Unit: Yuan Currency: RMBMain accounting data20182017
Year-on-yearchange (%)
2016Operating revenue21,812,389,64421,858,814,000-0.2124,348,087,928Net prot attributable to the shareholders of the listedcompany
443,005,092300,195,42247.57212,419,946Net prot attributable to the shareholders of the listedcompany after deducting the non-recurring prots and losses
121,335,528277,837,568-56.33157,445,435Net cash ows from operating activities553,943,9791,332,209,274-58.421,658,422,636
At the end of
2018
At the end of
2017
Year-on-yearchange (%)
At the end of
2016Net assets attributable to the shareholders of the listedcompany
15,185,861,95215,011,306,3661.1615,196,736,263Total assets 70,598,364,62767,519,953,8294.5660,823,819,098
(II) Major nancial indexes
Major nancial indexes20182017Year-on-year change (%)2016Basic earnings per share (Yuan/share)0.0840.05747.370.040Diluted earnings per share (Yuan/share)0.0840.05747.370.040Basic earnings per share after deducting non-recurring prots and losses (Yuan/share)
0.0230.053-56.600.030Weighted average ROE (%)2.921.99+0.931.41Weighted average ROE after deducting non-recurringgains and losses (%)
0.801.84-1.041.05
Notes to the main accounting data and nancial indexes in the past 3 years before the end of the reporting period√Applicable □Not applicableIn this year, the Company adopted the prot distribution plan for 2017. Based on the total shares of the Company byDec. 31, 2017, 2 shares per 10 shares were transferred to all of the shareholders with the capital public reserves and thetotal shares after transfer were 5,268,353,501 shares. According to the related rules, the Company recalculated the basicEPS, diluted EPS and EPS after deducting the non-recurring prots and losses in 2016 and 2017.8.Differences in accounting data under domestic and overseas accounting standards
(I) Difference in net profits and net assets attributable to the shareholders of the listed company in the financialstatement synchronously disclosed under the international and national accounting standards
□Applicable √Not applicable
(II) Difference in net profits and net assets attributable to the shareholders of the listed company in the financialstatement synchronously disclosed under the domestic and overseas accounting standards
□Applicable √Not applicable
(III) Explanation for differences between the domestic and overseas accounting standards:
□Applicable √Not applicable9.Main nancial data in 2018 by quarters
Unit: Yuan Currency: RMB
Q1(Jan. to Mar .)
Q2(Apr . to Jun.)
Q3(Jul. to Sep.)
Q4(Oct. to Dec.)Operating revenue4,689,586,6345,382,013,2974,717,407,6737,023,382,040Net prot attributable to the shareholders of the listed Company83,590,25778,528,50932,811,152248,075,174Net prot attributable to the shareholders of the listed companyafter deducting the non-recurring prots and losses
72,514,67749,272,4561,447,664-1,899,269Net cash ows from operating activities20,699,81530,107,60373,165,300429,971,261
Notes to differences between the quarterly data and the data in periodically disclosed reports□Applicable √Not applicable
10.Non-recurring prot and loss items and amount
√Applicable □Not applicable
Unit: Yuan Currency: RMB
11.Items measured at fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMB
12.Others
Non-recurring prot and loss itemsAmount in 2018
Note(if applicable)
Amount in
2017
Amount in
2016Prot or loss from disposal of non-current assets155,557,71613,285,9841,340,612Tax refunds, exemptions and reductions with ultra vires approval orwithout ofcial approval documents
Government grants included in current prots and losses exceptfor government grants closely related to the Company business,in line with national policies and obtained by quota or quantity atunied state standards
114,412,51783,502,54445,042,910Current net prot or loss of the subsidiary generated from thebusiness combination under common control from the beginning ofthe period to the combination date
Prot or loss on changes in fair values of nancial assets heldfor trading and nancial liabilities held for trading and investmentincome obtained from disposal of nancial assets held for trading,nancial liabilities held for trading and available-for-sale nancialassets, except for effective hedging operations associated with thecompany's normal operations
74,200,75020,563,27023,420,959Reversal of provision for impairment of receivables subject toseparate impairment test
150,327,138Other non-operating revenue and expenses except for theaforementioned items
-67,069,856-70,077,0326,435,660Affected amount of minority equit-30,908,588-14,565,022-6,708,080Amount affected by income tax-74,850,113-10,351,890-14,557,550Total321,669,56422,357,85454,974,511
ItemOpening balanceClosing balanceChanges
Impact oncurrent protFinancial assets held for trading equity instrumentinvestment
8,438,2788,438,27800Financial assets held for trading derivative nancial assets044,481,80644,481,80644,481,806Available-for-sale equity instrument - Jiangxi Huawu178,952,712102,163,301-76,789,411667,732Available-for-sale equity instrument - Qingdao Port451,528,660476,713,25325,184,5930Available-for-sale equity instrument - CRSC629,554,373591,773,048-37,781,32518,459,450Available-for-sale equity instrument - Shenwan Hongyuan1,174,000889,792-284,20817,465Total1,269,648,0231,224,459,478-45,188,54563,626,453
□Applicable √Not applicable
I. Main business, business model of the Company and the industrial prole during the reporting period
The Company is a famous heavy-duty equipment manufacturer, and a state-owned company listed on A and B shares,with the headquarters in Shanghai and 10 production bases in Shanghai and Nantong. Since 1998, the Company has beenkeeping its industrial position in the market of global container crane with largest occupation ratio since 1998. In recent years,while continuously tamping the competitive advantages in the related business of the port machinery, it has been activelyexpanding various business such as ocean engineering, steel structure, general contracting of system, electrical equipment,shipping, integrated service and investment. The Company combines its own development with the national strategy andactively strive for a new growth space in the eld of intelligent industry, civil-military integration, livelihood consumption anddigitalized industry.
The business scope of the Company covers: design, construction, installation and contracting of large port loading andunloading system and equipment, offshore heavy equipment, engineering machinery, engineering vessels and large metalstructural parts and their parts and components; ship repair; leasing of self-produced crane; sales of the products made bythe Company; international sea transportation by special purpose vessels that can be transported with the whole equipment;specialized contracting of steel structure engineering; construction of electric construction engineering; and construction ofelectromechanical installation and construction engineering. (In case of quota, license management, special regulations,quality inspection, safety inspection and construction qualication requirements involved, it shall not carry out the businessactivities before obtaining the corresponding qualications or licenses in accordance with the relevant national regulations).II. Explanation for major changes in prime assets of the Company during the reporting period
□Applicable √Not applicableIII. Analysis of the core competitiveness during the reporting period
√Applicable □Not applicable
There was no material difference in the core competitiveness of the Company during the reporting period.
Section III
Business Profile
I. Discussion and analysis of the performance
In 2018, confronted with the challenges from many adverse factors such as slowdown of the global economic growthspeed and increase in trade friction among the regions and areas, guided with the development strategy of “One Entity andTwo Wings”, the Board of Directors and management team of the Company led all of the employees to persist in the overallworking keynote of “making progress while remaining stable” and the new development concept, adhere to accelerating thehigh quality development, facilitate the new layout for the business development, devote themselves to the new reform inproduction and management, deepen the scientic and technological innovation to strengthen the advantage, excite the newdriving force for operation and management, coordinate the internal and external forces to achieve the joint development andsuccessfully achieved the moderate development of the Company.
During the reporting period, the business sectors had grown in order, the business of port machinery had had powerfulstrength, the products had successfully entered the 101
st
country and region and the value of the newly concludedcontracts had stably increased. The order receiving capability for the ocean engineering had remarkably upgraded and newachievements had been made in R &D and market expansion of the core parts and components for the ocean engineering.The investment had been stably accelerated. The shipping business had made a breakthrough and obtained the generalcontracting for the construction of the rst offshore wind farm. The electrical business had made great achievements in manyaspects and the brand of photovoltaic industry was granted “The First Brand of Distributed Photovoltaic System Integration”.The integrated business paid attention to the development and accomplished the heightening and modication works ofabout 100 shore bridges, the general contracting was in good condition and the general contracting for electromechanicalengineering was launched at the international dock for the rst time.II. Performance during the reporting period
During the reporting period, the Company realized the operating income of RMB 21.812 billion Yuan, which kept balancebasically year on year; the total prot was RMB 0.537 billion Yuan, with a year-on-year increase by 27.34%; the net protattributable to the owner of the parent company was RMB 0.443 billion Yuan, with a year-on-year increase by 47.57%.1.Analysis of the performance
1. Analysis table of changes in the related items in prot statement and cash ow statement
Unit: Yuan Currency: RMB
Section IV
Discussion and Analysis of the Performance
Item
Amount incurrent period
Amount in thesame period of
the last year
Change (%)Operating revenue21,812,389,64421,858,814,000-0.21Operating cost18,082,285,75218,019,075,2990.35Selling and distribution expenses115,541,161121,457,892-4.87General and administrative expenses1,142,337,3481,039,774,7879.86Financial expenses1,522,264,813758,201,305100.77Net cash ow from operating activities553,943,9791,332,209,274-58.42Net cash ow from investing activities-2,779,460,550-1,681,611,03065.29Net cash ow from nancing activities-408,453,7902,576,865,754-115.85
2. Analysis of income and cost√Applicable □Not applicableThe increase in the management expenses was mainly caused by the increase in the salary of the employees in thisCompany.
The increase in the nancial cost was mainly caused by the interest exchange of the Company and the increase in theexchange loss caused by the uctuation in exchange of CNY: USD.
The change in net cash flows from operating activities was mainly caused by the increase in the payment for thecommodities purchased and the labor services.
The change in net cash ows from investing activities was mainly caused by the increase in the cash paid for purchaseand construction of xed assets of the Company.
The change in the net cash ow from nancing activities was mainly caused by the increase in the repayment of loansfrom bank by the Company.
(1) Main businesses by sectors, products and regions
Unit: Yuan Currency: RMBMain business by productsProduct
Operating
income
Operating cost
Gross prot
rate (%)
Year-on-year changein operatingincome (%)
Year-on-year
change inoperating cost
(%)
Year-on-year change in
gross prot rate (%)Port machinery 14,983,974,89811,405,896,70723.881.68-0.75+1.87Heavy-dutyequipment
2,746,107,4062,608,895,6535.00-18.87-15.41-3.89Steel structure andrelated income
1,558,778,5861,656,155,935-6.252.5411.34-8.39Building-transferprojects
1,221,194,7991,226,872,864-0.46-21.20-20.77-0.54Marine transportand others
1,071,458,3971,042,254,3422.73137.53270.12-34.84
Main business by regionsRegion
Operating
income
Operating cost
Gross prot
rate (%)
Year-on-yearchange in operating
income (%)
Year-on-yearchange in operating
cost (%)
Year-on-yearchange in gross
prot rate (%)Chinese Mainland10,042,507,05910,015,152,4410.27-0.986.18-6.73Asia (excludingChinese Mainland)
4,204,353,5522,516,316,27140.15-22.29-38.28+15.51North America2,029,837,4411,695,912,26016.4519.1826.27-4.70South America1,040,540,883608,903,11041.4823.0717.76+2.64Europe1,560,574,8421,277,580,56218.13237.34533.94-38.30Mainland China(export sales)
664,121,407285,134,59457.07-51.62-75.05+40.32Africa1,508,172,2391,119,387,33525.788.9021.56-7.73Oceania531,406,663421,688,92820.6565.7262.72+1.46
Notes to the main business by sectors, products and regions√Applicable □Not applicableNote 1: The amount listed in “Chinese Mainland (export sales)” in “Main business by regions” was the main operationincome from the export sales of this Company to the overseas subsidiaries or the related parties of the Company and thensales to the related projects of the domestic customers.
Note 2: The Company expanded the business in Europe in this year, resulting in the corresponding rise in income andcost.
(2) Analysis table of cost-volume-prot relationship
□Applicable √Not applicable
The Company mainly manufactures and sells the large-sized port equipment, heavy-duty equipment and fabricatedsteel structure and the “Accounting Standards- Construction Contract” is applicable to recognize the income as per thepercentage-of-completion method. So this table is not applicable.
(3) Cost analysis table
Unit: Yuan
By products
ProductItems of cost structure
Amount incurrent period
Proportionin total cost
in currentperiod (%)
Amount in thesame period of
the last year
Proportion of the onein the same period ofthe last year in total
cost (%)
Year-on-yearchange (%)
NotesPort machinery
Raw material cost, laborcost and production cost
11,405,896,70763.5811,492,182,90864.23-0.75NoneHeavy-dutyequipment
Raw material cost, laborcost and production cost
2,608,895,65314.543,084,117,71217.24-15.41NoneBuilding-transferprojects
Raw material cost, laborcost and production cost
1,226,872,8646.841,548,520,6388.65-20.77NoneSteel structure
Raw material cost, laborcost and production cost
1,656,155,9359.231,487,522,6148.3111.34NoneMarine transportand others
Raw material cost, laborcost and production cost
1,042,254,3425.81281,599,0021.57270.12NoneTotal17,940,075,501100.0017,893,942,874100.000.26
Other information about cost analysis□Applicable √Not applicable(4) Particulars about main customers and suppliers√Applicable □Not applicableThe sales volume of Top 5 customers was RMB 2.71961 billion Yuan, accounting for 12% of total annual sales volume;the sales volume of the related parties in that of Top 5 customers was RMB 0.50296 billion Yuan, accounting for 2% of totalannual sales volume.
The purchase amount of Top 5 suppliers was RMB 2.85966 billion Yuan, accounting for 12% of total annual purchaseamount; the purchase of the related parties in that of Top 5 suppliers was RMB 0.43549 billion Yuan, accounting for 2% oftotal annual purchase amount.
3. Expenses
√Applicable □Not applicable
The nancial cost of the Company in 2018 was RMB 1,522,264,813 Yuan, with a year-on-year increase by 100.77%,which was mainly caused by the increase in the interest expenditure and exchange loss caused by the fluctuation inexchange of CNY: USD.
4. Investment in R&D
Detail table of investment in R&D
√Applicable □Not applicable
Unit: YuanCurrent expensed investment in R&D672,614,073Current capitalized investment in R&D 39,298,740Total investment in R&D711,912,813Proportion of total investment in R&D in operating income (%)3.26Number of R&D employees in the Company1,600Proportion of number of R&D employees in the totalemployees of the Company (%)
18.19Proportion of capitalized investment in R&D (%)5.52
Explanation□Applicable √Not applicable5.Cash ow√Applicable □Not applicableThe net cash ow from operating activities was RMB 0.554 billion Yuan, mainly caused by the increase in paymentfor goods and the labor services purchased. The net cash ow from the investment activities was RMB -2.779 billion Yuan,mainly caused by the increase in cash payment for purchase and construction of xed assets of the Company. The net cashow from the nancing activities was RMB -0.408 billion Yuan, mainly caused by the increase in the repayment of bank loansby the Company.
Item
Closing balanceof current period
Proportion
in totalassets (%)
Closing balance
of last period
Proportion of theclosing balancein the total assets
Year-on-yearchange (%)
NotesMonetary funds3,697,338,7085.245,770,227,3698.55-35.92Financial assets measured at fairvalue through current prot orloss
52,920,0840.078,438,2780.01527.14Advances to suppliers1,681,187,7152.381,036,783,1701.5462.15Non-current assets maturingwithin one year
894,638,4241.271,896,475,4722.81-52.83Other current assets1,152,476,4391.63591,311,8530.8894.90Construction in progress3,050,468,2924.321,889,146,0092.8061.47Short-term borrowings16,554,687,48723.4525,468,980,40137.72-35.00Non-current liabilities maturingwithin one year
4,209,532,5105.962,198,931,2193.2691.44Long-term borrowings15,097,725,25921.396,664,914,3839.87126.53Other non-current liabilities288,474,6960.41152,954,0980.2388.60
2.Explanation for the signicant changes in prots due to non-main business
□Applicable √Not applicable3.Analysis of assets and liabilities
√Applicable □Not applicable
1.Assets and liabilities
Unit: Yuan
Other information
The decrease in the monetary fund was mainly caused by the increase in the disbursement of the monetary fund forproduction and manufacture of the newly-commenced projects, payment for materials and repayment for the loans from thebanks.
The increase in the nancial assets measured at fair value with changes included in the current prots and losses wasmainly attributed to the increase in the fair value of the contracts on forward exchange futures purchased by the Company.
The increase in the prepayment was mainly caused by the increase in the payment for purchase and production of theproductive goods for the newly-commenced projects of the Company.
The decrease in non-current assets due within one year was mainly caused by the decrease in long-term receivablesdue within one year of the “building-transfer” project.
The increase in other current assets was mainly caused by the increase in input tax of the deductible value-added tax ofthe Company.
The increase in the projects under construction was mainly caused by the increase in the large-sized mechanicalequipment and engineering equipment under construction of the Company.
The decrease in the Short-term borrowings was mainly caused by the increase in the repayment of the Short-termborrowings from the banks by the Company.
The increase in the non-current liabilities due within one year was mainly caused by the increase in the Long-termborrowings from the banks due within one year.
ItemFinal book valueReason of restrictionMonetary fund548,351,336
Special fund, letter of guarantee from the bank and guarantee fundfor L/C collected from the overseas projects and deposited in theoverseas supervision accountFixed assets5,270,355,777Collateral for loanLong-term receivables3,850,867,673Hypothecation for loanTotal9,669,574,786/
3. Other information□Applicable √Not applicable4.Analysis of operational information of the industry
√Applicable □Not applicableDuring the reporting period, the value of newly concluded contracts by the Company on the port machinery was USD2.652 billion, with a year-on-year increase by 5.24%. The one on marine engineering products and steel structure was USD903 million, with a year-on-year increase by 26.47%, among which the one on steel structure was USD 320 million. As to theinvestment, affected by the changes in policy for PPP project, the value of the newly concluded contracts was RMB 1.935billion Yuan, with a year-on-year decrease by 88.33%.
The increase in demand for the new equipment of traditional port machinery slowed down, however, the demand forconstruction of the automated dock from the mass ow port both at home and abroad increased step by step. Meanwhile,the demand for the services such as repair and maintenance and reconstruction of the port machinery rose remarkably dueto the upgrade and reconstruction of the port and the renewal of the equipment. These factors provided powerful supportfor the upgrade of the mass of the port machinery business, in particular, it laid the solid foundation for the expansion of theintegrated services.
The ocean engineering industry was slightly recovered, however, no obvious back-turn or improvement happened yet.Due to the development of the new energy such as the shale gas, the rise in the oil price slowed down, however, the risk inocean engineering projects still existed in a large scale and the market outlook of the newly-built vessel was not so good andno remarkable driving force for improvement was brought for this industry.
The investment will pay attention to the high quality development. In this stage, the potential of investment demandin China is still great, however, the key role of the investment shall be brought into full play. The investment field is notconfronted with the integration and reorganization and PPP project with high risk and low income is gradually suspended andreadjusted. In 2019, the investment in the capital construction is still the important driving force for the economic growth, theurban rail transit, AI and industrial internet will be the core of the capital construction and will bring new opportunity for thehigh quality development of the Company.
The increase in the Long-term borrowings was mainly caused by the increase in the Long-term borrowings from thebanks by the Company.
The increase in other non-current liabilities was mainly caused by the increase in the payable VAT of the Company.
2. Particulars about main restricted assets by the end of the reporting period
√Applicable □Not applicable
5.Analysis of investment
1.Overall analysis of external equity investment√Applicable □Not applicable
Investment amount by the end of reporting period 3,990,335,314Changes in investment amount (Yuan)365,660,888Investment amount in the same period of the last year (Yuan)3,624,674,426Change in investment amount (%)10.09
(1) Signicant equity investment√Applicable □Not applicableOn June 4, 2018, the 32
nd
meeting of the 6
th
Board of Directors of the Company deliberated and approved Proposal forIncorporating a Wholly-owned Subsidiary in Xiongan New District by the Company. The Company invested RMB 2.0 billionYuan to establish Xiongan Zhenhua Intelligent Industry Holding Co., Ltd (a provisional name, subject to the industrial andcommercial registration) to carry out the local related business. At present, the preparations for the incorporation are activelybeing made and accelerated.
(2) Signicant non-equity investment□Applicable √Not applicable(3) Financial assets measured at fair value√Applicable □Not applicableStock equity held in other listed companies
Stock code
Stockabbreviation
Initialinvestment
cost
Initialshareholding
ratio
Finalshareholding
ratio
Final book
value
Prot orloss inreporting
period
Changes inowner’s equity
during thereporting period
Accounting
subject
Source of
shares300095Huawu Stock11,071,6065.95.9102,163,301667,732-76,789,411
Available-for-sale nancial
assets
Contribution03969(H-share)
CRSC617,854,0001.41.4591,773,04818,459,450-37,781,325
Available-for-sale nancial
assets
Purchase on
market06198(H-share)
Qingdao Port308,515,5881.711.71476,713,253025,184,593
Available-for-sale nancial
assets
Purchase on
market
Stock equity held in nancial enterprises
Objectname
Initialinvestment
cost
Initialshareholding
ratio
Finalshareholding
ratio
Final book
value
Prot or lossin reporting
period
Changes inowner’s equity
during thereporting period
Accounting
subject
Source of
sharesShenwanHongyuan
200,000﹤0.01﹤0.01889,79217,465-284,208
Available-for-sale
nancial assets
Subscription
6.Sales of signicant assets and equities
□Applicable √Not applicable
7.Analysis of the primary holding companies and the joint-stock companies
√Applicable □Not applicable
Company nameMain product or service
Registered
capital
Assets size
Net prot /
(loss)Shanghai Zhenhua Shipping Co.,Ltd
Operation of international offshore sea transportation; ordinarycargo liner trafc in the middle and lower reaches of Yangtze River;transportation of port machinery.
120,000,0002,715,546,3621,397,537Shanghai Zhenhua PortMachinery (Hong Kong) Co., Ltd.
Design, manufacturing and sales of port machinery, engineeringvessel, steel structure and other parts
50,000,000HKD11,966,123,135-232,481,229Shanghai Zhenhua HeavyIndustries Port MachineryGeneral Equipment Co., Ltd.
Sales of port loading and unloading machine, bulk cargo andcontainer machine, port engineering vessels (including oatingengineering crane), material handling mechanical products andparts, sales and technical services, installation and maintenance,technical consultation of all types of machine and equipment, keyparts of the raw materials and accessories equipment.
2,184,730,0002,373,155,162-119,304,520
Shanghai Zhenhua HeavyIndustries Group (Nantong)Transmitter Co., Ltd
Construction and installation of large-scale port equipment,engineering vessels, offshore heavy equipment, mechanicalequipment, gear box for wind power generation equipment; large-sized reverse branch, transmission mechanism, dynamic positioning,large-sized anchor windlass, offshore oil platform lifting device andcomponents; design and manufacturing of the accessories.
300,000,0002,999,196,93811,501,551Nantong Zhenghua HeavyEquipment Manufacturing Co.,Ltd
Installation of heavy port equipment, engineering vessels, heavymetal structure and its parts; manufacturing and installation of gearbox, container yard crane, super heavy-duty bridge steel structure,heavy marine machinery equipment; leasing of cranes; specializedcontracting of steel structures etc
854,936,9002,635,845,0177,400,673
Tianhe Mechanical EquipmentManufacturing Co., Ltd of CCCC
System integration design, R&D and manufacturing of tunnel boringmachine with the diameter of over 6m; system integration design,R&D and manufacturing of tunnel boring machine (TBM) with thediameter of over 5m; design, R&D and manufacturing of marinemachinery and parts, cranes and parts, bridges and high dampingbracket for buildings; sales of self-produced products. Whole salesand import & export business of marine machinery and parts, cranesand parts, bridges and high damping bracket for buildings (if nocommodity controlled by the national trade, designed quota andlicense is involved, the related national rules will prevail); installation,maintenance, leasing, consulting, technical services for its self-produced products.(foreign capital proportion is less than 25%) (asfor the items requiring the approval, carry out the business activitiesafter obtaining the approval from the authorities)
681,627,1004,394,476,73858,624,548
Shanghai Zhenhua HeavyIndustries Qidong MarineEngineering Co., Ltd
Machinery manufacturing303,000,0001,970,656,133-138,478,499Shanghai Zhenhua OceanEngineering Service Co., Ltd
Agency of international land transport, air transport, ocean
shipping and domestic freight; sales of large-scale port equipment,
engineering vessel equipment and marine materials at home
and abroad; construction of ocean engineering and leasing of
engineering vessels; import and export of goods and technologies,
transit trade, trade between enterprises and trade agency within the
free trade zone.
100,000,000752,902,8443,144,709Nanjing Ninggao New ChannelConstruction Co., Ltd
Engaged in the construction, investment and management ofNanjing-Gaochun new channel project.
100,000,000652,553,95474,107,859Zhenhua Pufeng Wind Energy(HongKong) Co., Ltd
Installation of offshore wind turbine16,326,531USD5,516,448-71,902,331CCCC Financial Leasing Co., LtdFinancing lease5,000,000,00031,206,826,556351,695,926China CommunicationsConstruction USA Inc.
Construction of port, waterway, highway and bridge.50,000,000USD257,589,119-35,569,034CCCC Estate Yixing Co., Ltd.Real estate development900,000,0001,525,930,90712,764,832
Company nameMain product or service
Registered
capital
Assets size
Net prot /
(loss)Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd
Fabrication and installation of steel structure; construction ofthe foundation for offshore wind power facilities, installation andmaintenance of equipment; construction and maintenance ofsubmarine cable system, construction of marine engineering;installation and maintenance of equipment and leasing of equipment..
26,000,0002,391,840,71625,246,738Greenland Heavylift(Hongkong)Limited
Marine transport 91,975,158USD1,496,412,229-60,006,966
8.Particulars about structured entities controlled by the Company
□Applicable √Not applicableIII. Discussion and analysis of the future development of the Company1.Industrial structure and trend
√Applicable □Not applicable
The market competition of the container port machinery is fierce and a large batch of container shore bridges areconfronted with the replacement in batches. Affected by the large-scale trend of the ship, the heightening and the remoteupgrade and reconstruction of the traditional docks is becoming a new market. The dock handling technique is rapidlychanging and the automation and intelligentization of the dock is the development mainstream in the future. The demandin the global market for the bulk cargo machinery is not ourishing, the domestic market takes on the trend of low pricecompetition and the automation development of the bulk cargo machinery and the service market expansion are the maindirection. The price of oil and gas in the world uctuates frequently, the uncertainty of procurement of oil/gas productionequipment is not fundamentally improved. The main development direction of the ocean engineering equipment in the futureis to persist in destocking, high-end different positioning and whole industrial chain development; the low-end capacity inthe steel structure market is excess and the competition is erce. It is urgent for the offshore wind power market to rebuildthe competitive advantages of the Company through the industrial integration and active layout of the operation andmaintenance market. In the electric industry, the international famous electric brands occupy large market shares and high-quality state-owned brands in intelligentization are still in cultivation. PPP project was stopped in 2018 and it is expected toenter the standardized development channel.2.Development strategy of the Company
√Applicable □Not applicable
With “equipment manufacture” as the entity, “capital operation” and “Internet” as two wings, it aims to build “Flag +Flagship” of Chinese national industry. “One Entity and Two Wings” strategy is a new strategy for transformation and upgradeof the Company after objectively analyzing the development stage and orientation of the Company, based on national andindustrial development trend at present and in future, around “Industry 4.0”, “Made in China 2025” and pilot reform of thestate-owned capital investment, in combination with the development features of equipment manufacturing industry. “Capitaloperation” will help the Company to extend the industrial chain of the port machine business and create the whole industrialchain of marine heavy industry and offshore wind power; help the Company and the customers as well as the partners toform a community of a shared future with the capital as the tie. The digitized transformation and upgrade of the Companyunder “Internet” can accelerate the upgrade of the information system in an all-round way and create the cloud platformthrough the top information-oriented design of the Company to offer more convenient, efcient, intelligent and integratedservice to the global customers and greatly improve the management level and operation efciency of the Company.3.Operation plan
√Applicable □Not applicable
The overall working main-thread of the Company in 2019: guided by Xi Jinping’s Though on Socialist with ChineseCharacteristics for a New Era, implementing the spirits of the 19
th
National Congress of the Communist Party of China andthe second and third plenary session of the 19
th
Communist Party of China Central Committee in an all-round way, persistingin the overall keynote of making progress while remaining stable, persisting in the new development concept, adhering toaccelerating the high quality development, abiding by the supply-side structural reform as the main-thread, sticking to theguidance of “One Entity and Two Wings” Strategy of the Company, driven by innovation, accelerating the new layout for the
business development of the Company and deepening the reform in an all-round way and fully coordinating the internal andexternal forces to make efforts to build a world excellent company with the international competitiveness.
As to the port machinery sector, while the Company tamps the competitive advantages of the traditional business, itadheres to the combination of the traditional business with the new business and persists in the unity of scale and benetand the double acceleration of manufacturing and service to achieve the transformation from the manufacturer to theintegrated service provider step by step. As to the ocean engineering sector, while the Company dissolves the risks ofthe stocking projects, it will further sort out and optimize the development concept of the ocean engineering, optimize themanagement and control mode of the ocean engineering projects and explore the building of the whole industrial chainof the ocean engineering. As to the steel structure sector, the Company will pay great attention to the construction of thedemonstration projects and raise the benet through optimizing the operation and management model of the project. Asto the investment business, it will rely on the good situation of the investment in capital construction in 2019, aim at theopportunity of the regional construction in China including Xiongan, Hainan and Fuzhou, bring into play of the capital aroundthe main business and carry out the investment projects helpful to make up the short plate of the business or expand theindustrial chain in good time. As to the shipping business, it will seize the opportunity of the construction of offshore windfarm at home and abroad, integrate the industrial resources, vigorously expand the business of the high-end transportationand installation, installation of the offshore wind power facilities and the platform disassembly. As to the electrical business,it will concentrate the forces, adopt the targeted steps to continually accumulate the experience in the projects and quickenthe independent development of its own brand EZ. As to the integrated service, it will further explore the actual demands ofthe existing and potential customers, enhance the relationships with the major customers, improve the service quality andaccelerate the joint-win of both parties. As to the general contracting of the system, it will optimize the project managementmodel and accelerate the implementation of more subsequent projects based on the existing advantages.4.Potential risks
√Applicable □Not applicable
Market risk: the growth force of the world economy is weakened, the increase in the international trade slows down,the price of the bulk commodities drops much, the trade friction between China and USA and the challenges from thedeglobalization trend on the global economy impose some uncertainties upon the development of the Company. The marketcompetition of the container port machinery is still erce, the ocean engineering industry is slightly resuscitative, but the signof reverse turnaround and upgrade is not so remarkable. Other new businesses are still in the infant stage.
Countermeasures: the Company will study and determine the current political and economic situation in depth, highlyconcern the market change and carry out the benchmarking management like the high quality companies in the sameindustry, deepen the reform, tamp the basic management, enhance the risk resistivity, optimize and adjust the market andbusiness structure, seek for increment from the strategic opportunity, business expansion, internal and external cooperation,investment, acquisition and overseas projects, accelerate the structural readjustment and resources integration andaccelerate the sustainable development of the enterprise through the transformation and upgrade.
Financial risk: it mainly includes credit risk and exchange rate risk, especially the large scale of interest-bearingliabilities. CNY bears a certain depreciation press and imposes some risks upon the overseas operation.
Countermeasures: Lock in the forward exchange rate through rational planning, control exchange rate risks, graduallyreduce the foreign exchange liabilities, pay attention to the research on policies and strategies of foreign exchange riskmanagement, closely concern the changes in exchange rates, regularly analyze the trend of exchange rate, strictly conductthe approval procedure related to the transaction of the nancial derivatives, do well in statistics of the products, currenciesand exchange rates, further tamp the basic work of the foreign exchange management and reduce the Company’s exchangerate risk. By arranging favorable settlement terms in the contract (for example, concluding with a RMB exchange ratelinkage, and the increase in the proportion of prepayments and settlement of exchange as early as possible), or control andlock in the exchange rate risks with proper nancial instruments or means.
As to credit risk, reduce raw material reserves, cut down the capital expenditure, adjust the Company’s debt structurein many ways (such as medium-term notes, short-term nancing bond, perpetual bond), strengthen the collection of theaccount receivable, reduce the amount of bank debt step by step and reduce the business risks of the enterprise.5.Others
□Applicable √Not applicableIV. Explanation for non-disclosure in accordance with the accounting standard due to being not applicable to theprovisions of the standard or state secret and business secrete and other special reasons
□Applicable √Not applicable
Note: it was proposed by the board of directors of the Company that the cash dividends in 2018 adopted the continuousand stable prot distribution policy. Based on the total capital shares of 5,268,353,501 shares as the basic number by Dec.31, 2018, RMB 0.5 Yuan (including tax) per 10 shares as the cash dividend from the undistributed prot by Dec. 31, 2018 isdistributed to all of the shareholders, with the total of the cash dividend to be distributed of RMB 263,417,675.05 Yuan. TheCompany will not distribute the bonus share or convert the capital reserves to the bonus shares. The annual prot distributionplan for 2018 is just a proposal and the opinions have been released by the independent directors of the Company and theplan is subject to the approval of the general meeting of shareholders in 2018.3.Shares repurchased by offer in cash and included in cash dividends
□Applicable √Not applicable4.If the prot is positive in the reporting period and the prot of the parent company available for distribution to theordinary shareholders is positive but the Company does not represent the plan or proposal for prot distributionof ordinary shares in cash, the Company shall disclose in detail the reasons and the purpose and use plan of theundistributed prot
□Applicable √Not applicable
Section VImportant Events
I. Proposal for prot distribution of ordinary shares or converting capital reserve to bonus shares1.Formulation, implementation or adjustment of cash dividend distribution policies
√Applicable □Not applicable
According to the requirements of CSRC Notification on Further Implementation of Relevant Matters ConcerningCash Dividend Distribution of Listed Companies (ZJF [2012] No. 37), as proposed by the 10th meeting of the Company’sfifth session of Board held on August 21, 2012, amendments were made to the Articles of Association of the Companyconcerning prot distribution and cash dividends policy, and as a result, the dividend distribution standard and proportionbecame clearer, related decision making process and mechanism were compete, and the minority shareholders’ legal rightsand interests were fully protected, giving them the opportunity to fully express their views and demands.2.The Company’s plan or proposal for prot distribution of ordinary shares, plan or proposal for converting capitalreserve to bonus shares in recent 3 years (including the reporting period)
Unit: Yuan Currency: RMB
Year fordividenddistribution
Bonussharesfor every10 shares
(share)
Dividend forevery 10 shares
(Y uan) (taxincluded)
Sharesconverted forevery 10 shares
(share)
Amount ofcash dividend(tax included)
Net prot attributable
to the ordinaryshareholders of thelisted company in theconsolidated statementin the year for dividend
distribution
Ratio of the net prot
attributable to theordinary shareholdersof the listed Company
in the consolidated
statements (%)201800.50263,417,675443,005,09259.46201700.52219,514,729300,195,42273.122016010439,029,458212,419,946206.68
II.Fulllment of commitments1.Commitments of the actual controller, shareholders, related parties, acquirer, the Company and other commitmentmakers in the reporting period or ongoing at the period-end
□Applicable √Not applicable2.If there is earnings forecast for the assets or projects of the Company and the reporting period is still in theearnings forecast period, the Company shall explain whether the assets or project reaches the original earningsforecast and give the reasons
□Reached □Failing to reach √Not applicable3.Fulllment of commitments on the performance and its impacts on goodwill impairment test
□Applicable √Not applicableIII. Fund occupation and progress in returning scheme during the reporting period
□Applicable √Not applicableIV. Explanation of the Company for Accounting Firm’s “audit report with nonstandard opinions”
□Applicable √Not applicableV. Analysis and explanation of the Company of the causes and the impacts of the major changes in accountingpolicies and accounting estimates or correction of signicant accounting errors1.Analysis and explanation of the Company on the causes and the impacts of the changes in accounting policiesand accounting estimates
√Applicable □Not applicable
1. Changes in the presentation of nancial statement
In accordance with the requirements of Notice on Revising and Issuing the Format of Financial Statements for GeneralEnterprises in 2018 (No. CK[2018] 15), in the balance sheet, “notes receivable” and “accounts receivable” were consolidatedinto the newly increased item of “notes and accounts receivable”; “interests receivable” and “dividends receivables” wereconsolidated into the item of “other receivables”; “liquidation of xed assets” was consolidated into the item of “xed assets”;“notes payable” and “accounts payable” were consolidated into and listed in “notes and accounts payable”; “interestspayable” and “dividends payable” were consolidated into the item of “other payables”. In the profit statement, the newlyincreased item of “expenses for R&D” was included the expensed expenditure in the process of R&D, the item of “nancialcost” was split into the item of “interest charges” and “interest income”; this group correspondingly backdated and adjustedthe comparative data including: interest expenses” and “interest income” were newly added under the item of Financial costin income statement. The comparative data were adjusted accordingly. The change in the accounting policy had no impacton the net prot of the Company and the stockholder's equity.2.Analysis and explanation of the cause of correction of significant accounting errors and their impacts by theCompany
□Applicable √Not applicable3.Communication with former CPA rm
□Applicable √Not applicable4.Other information
□Applicable √Not applicable
VI. Engagement and dismissal of the public accounting rm
Unit: Yuan Currency: RMBNow engagingName of the domestic accounting rmErnst & Young LLP. (Special General Partnership)Remuneration of domestic accounting rm4,500,000Audit term of the domestic accounting rm3
NameRemunerationAccounting rm performing internal control auditErnst & Young LLP. (Special General Partnership)400,000
Particulars about the engagement and dismissal of the accounting rm□Applicable √Not applicableParticulars about reappointment of the accounting rm in the auditing period□Applicable √Not applicableVII. Risk of suspension of the listing1.Cause for shares suspended from listing
□Applicable √Not applicable2.Countermeasures to be taken by the Company
□Applicable √Not applicableVIII. Termination of the listing and its reasons
□Applicable √Not applicableIX. Events related to bankruptcy and reorganization
□Applicable √Not applicableX. Major lawsuit and arbitration issues
□Existence major lawsuit and arbitration in the year √No major lawsuit or arbitration in this year1.Lawsuit and arbitration already disclosed in provisional announcement, without follow-up progress
□Applicable √Not applicable
In the reporting period:
Plaintiff(applicant)
Defendant(respondent)
Partybearing
jointliabilities
Type oflawsuit andarbitration
Background of the lawsuit (arbitration)
Amountinvolvedin lawsuit(arbitration)
Expectedliabilitiesand amount
causedby lawsuit(arbitration)
or not
Progress in lawsuit
(arbitration)
Results ofthe lawsuit(arbitration) and
impacts
Execution ofadjudication oflawsuit (arbitration)
FluorCorporation
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
NoneLawsuit
In 2008, the Company and Fluor Limited (hereinafterreferred to as “Fluor”) signed an agreement onsales and installation of steel pipe pile products forthe wind power generation of British Wind PowerProject. In the process of the project construction,based on the cooperative spirits of friendlynegotiation, the Company and Fluor maintainedthe normal dispute settlement and communicationmechanism. In 2010, as for the issues in contractexecution process, after reviewed by the board ofdirectors of the Company, the Company signed amutual exemption letter with Fluor, and settled theremaining payment in 2011. Afterwards, Fluor lodgeda quality claim against the Company, and requestedthe payment of the demand quality guarantee issuedby the Company, while the Company rejected theclaim. On March 20, 2014, Fluor cashed the aboveletter of guarantee with the amount of 23,409,750EUR in the bank opening the letter of guarantee.In September 2014, Fluor initiated proceedings forthe breach attributed to the problems related to theproduct quality to High Court of Justice, Queen’sBench Division, the Technology and ConstructionCourt (hereinafter referred to as “TCC Court ofBritain Queen’s Bench”) and asked the Companyfor the total compensation of 250 million poundsfor additional test and repair cost, constructionduration delay and other related loss (including thecashed letter of guarantee amount of 23,409,750EUR). The Company didn’t acknowledge the claimfor the compensation from Fluor. Since then, theCompany prepared the evidence disclosure, witnesstestimony, exchange work and other preparatorywork before the court session was opened. InFebruary, March, April, June of 2016, British HighCourt TCC court was in trial for rst instance onobligation part. In May 2017, the trial of quantizedpart of this case was conducted. In July 2017, bothparties exchanged the written nal address. In Aug.2017, the proceeding at law for the quantized part ofthis case was settled.
About 250 millionpounds
0The case had been settled.
On Jan. 11,2018, the courtmade quantizedpartial judgmenton this caseand made thewritten judgmenton the interestand the legalexpenses in Mar.and Apr. 2018respectively.Both partiessigned thereconciliationagreement inMay 2018 andthis case wassettled.
On Jan. 11, 2018,the court madequantized partialjudgment on thiscase and adjudicatedthis Company topay 5,893,591 U.S.dollars, 15,033,681pounds, 7,165,740Eurodollars, 7,259Canadian dollars andRMB 485,346 Yuanto Fluor. On Mar.16, 2018, the courtmade the judgmenton the interest andadjudicated thisCompany to pay3,518,549 poundsto Fluor. On Mar. 26and Apr. 11, 2018,the court made thejudgment on thelegal expenses andadjudicated thisCompany to pay6,000,000 poundsand 1,500,000pounds to Fluor.On May 9, 2018,both parties signedthe reconciliationagreement andthis Companypaid 523219.24pounds to Fluor asthe reconciliationexpenses.
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
Petrofac(ship-owner)
NoneArbitration
In 2013, the Company had signed the contracton construction and sales of a 6000 t pipe-layingvessel with Petrofac Limited (hereinafter referred toas Petrofac). On Oct. 9, 2015, in the constructionprocess of the project, Petrofac issued ContractTermination Letter due to the delay in the project.Petrofac asked the Company to terminate thecontract and requested the Company to returnthe prepaid payment and interest. The Companyrejected the claim. Petrofac honored the demandguarantee from the opening bank in December2015, with total amount of 44,720,000 USD. Thus,the Company employed the professional lawyer andexpert team both at home and abroad to apply forarbitration to the London International ArbitrationCourt in January 2016 and asked Petrofac toreturn the payment of Letter of Guarantee andcompensated for the corresponding loss of200 million USD. After receiving the arbitrationapplication from the Company, Petrofac led acounterclaim application, and asked the Companyto compensate about 182 million USD or 213 millionUSD under the requirements of continuing or notcontinuing to construct the vessel.
This Companystood for about200 millionUSD; Petrofac'scounterclaim was182 million USDor 213 millionUSD in twodifferent ways.
It was planned to open the courtsession in Mar. 2019. In order tosettle the disputes and reducethe losses, both parties keptthe communication and madeefforts to seek for the acceptabledispute settlement methods.Through rounds of negotiation,both parties concluded thereconciliation scheme regardingthe joint shipbuilding and reachedan agreement on the details.Approved by the resolution of the30th meeting of the 6th session ofBoard of Directors of the Company,the Company has signed anagreement with Petrofac and it willpurchase the related project assetsat the contract price such as theequipment such as J-Lay Tower(OFE equipment) purchased byPetrofac, technical documents andthe patents so as to continue theconstruction of the vessel. Petrofacwill provide the technical supportin the process of construction andpossess 10% of the stock equity ofthe single-vessel company after thevessel is put into operation. Bothparties will bring into play their ownadvantages to jointly expand themarket of the vessel. Both partiesagree to cancel the arbitration.The transaction consideration wasabout 190,000,000 USD. Aftercounterbalance of the amountof the letter of guarantee paidby the Company (44,720,000USD) and part of the amountcarried in the shipbuilding contract(21,720,000 USD), the transactionconsideration to be paid by theCompany was 167,000,000 USD.This transaction has no signicantimpact on the prot in this period orafter the period.
Both partiesapplied forterminatingthe arbitrationand receivedthe notice ofarbitrationtermination onMay 29, 2018.
Not applicable
2.Lawsuit and arbitration not disclosed in provisional announcement, or with follow-up progress
√Applicable □Not applicable
Unit: Yuan Currency: RMB
In the reporting period:
Plaintiff(applicant)
Defendant(respondent)
Partybearing
jointliabilities
Type oflawsuit andarbitration
Background of the lawsuit (arbitration)
Amountinvolvedin lawsuit(arbitration)
Expectedliabilitiesand amount
causedby lawsuit(arbitration)
or not
Progress in lawsuit
(arbitration)
Results ofthe lawsuit(arbitration) and
impacts
Execution ofadjudication oflawsuit (arbitration)ShanghaiZhenhuaHeavyIndusries(Group)Co., Ltd,ShanghaiZhenhuaHeavyIndustriesQidongMarineEngineeringCo., Ltd.
NantongHuafu PortCo., Ltd,Li Aidong,Zhao Xiaohua
NoneLawsuit
At the end of February 2014, the Companycompleted the acquisition of the former JiangsuDaoda Ocean Engineering Co., Ltd through capitalincrease and held 67% of the shares. At the sametime, it was agreed that the losses of the company,was borne by the former shareholders includingNantong Huafu Port Co., Ltd, Li Aidong and ZhaoXiaohua before February 28, 2014. During thesubsequent business process, it was found that theformer Daoda Company untruthfully disclosed somematters of lawsuit or debts, resulting in a series oflosses of the Company. Through the related auditand readjustment etc, it was deemed that the lossof RMB 368.7222 million Yuan should be in bornein the former shareholders and the lawsuit wasprosecuted again after an inconclusive press forpayment.
RMB 368.722million Yuan
0The case is still pending.
Notyet judged
Not yet judged
LovandaOffshore Ltd
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
NoneArbitration
In 2014, Lovanda signed a construction contract(ZP14-2125) on one JU2000E offshore drillingplatform with this Company, which was designed,built, commissioned and delivered by this Company.In the construction process, some disputes arosebetween Lovanda and this Company regardingthe construction schedule of this platform, theextension of delivery time and other aspects.Lovanda submitted to arbitration to London MaritimeArbitrators Association against this Company onMar. 6, 2017 and proposed to terminate the platformconstruction contract and required this Company torepay USD 13800000 dollars including the advancecost of construction, related expenses and interest.This Company established a special working groupand employed the professional domestic and foreignlawyers and experts to actively respond to action tomaintain the legitimate right of this Company. Afterreceiving the request for arbitration, this Companytook a cross bill application against Lovanda andclaimed: 1) the other party should pay the last sumof money payable under the contract and its interestarising herefrom, totaling USD 186,200,000 dollarsto this party; 2) the income of this party from thesale of the platform minus the cost of sale should beused for deducting the account payable of the otherparty; 3) Other losses, interest and other expensesthat may occur in the future.
The claim ofLovanda wasabout USD13,800,000dollars. Thecross bill claimof this Company:
1) the otherparty shouldpay the lastsum of moneypayable underthe contractand its interestarising herefrom,totaling186,200,000USD to this party;2) the income ofthis party fromthe sale of theplatform minusthe cost of saleshould be usedfor deducting theaccount payableof the other party;3) Other losses,interest andother expensesthat may occur inthe future.
The arbitral tribunal signed theconsent award according to theapplication of both parties and thenthe case was settled.
Both partieshad concludedthe umbrellareconciliationagreement withLovansing andXinyuda andthen applied forwithdrawal of thecase.
The arbitral tribunalsigned the consentaward and the casewas settled.
LovansingOffshore Ltd
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
NoneArbitration
In 2014, Lovanda signed a construction contract(ZP14-2126) on one JU2000E offshore drillingplatform with this Company, which was designed,built, commissioned and delivered by this Company.In the construction process, some disputes arosebetween Lovanda and this Company regardingthe construction schedule of this platform, theextension of delivery time and other aspects.Lovanda submitted to arbitration to London MaritimeArbitrators Association against this Company onMar. 6, 2017 and proposed to terminate the platformconstruction contract and required this Company torepay USD 13,800,000 dollars including the advancecost of construction, related expenses and interest.This Company established a special working groupand employed the professional domestic and foreignlawyers and experts to actively respond to action tomaintain the legitimate right of this Company. Afterreceiving the request for arbitration, this Companytook a cross bill application against Lovanda andclaimed: 1) the other party should pay the last sumof money payable under the contract and its interestarising herefrom, totaling USD 186,200,000 dollarsto this party; 2) the income of this party from thesale of the platform minus the cost of sale should beused for deducting the account payable of the otherparty; 3) Other losses, interest and other expensesthat may occur in the future.
The claim ofLovanda wasabout USD13,800,000dollars. Thecross bill claimof this Company:
1) the otherparty shouldpay the lastsum of moneypayable underthe contractand its interestarising herefrom,totaling USD186,200,000dollars to thisparty; 2) theincome of thisparty from thesale of theplatform minusthe cost of saleshould be usedfor deducting theaccount payableof the other party;3) Other losses,interest andother expensesthat may occur inthe future.
The arbitral tribunal signed theconsent award according to theapplication of both parties and thenthe case was settled.
Both partieshad concludedthe umbrellareconciliationagreements withLovansing andXinyuda andthen applied forwithdrawal of thecase.
The arbitral tribunalsigned the consentaward and the casewas settled.
In the reporting period:
Plaintiff(applicant)
Defendant(respondent)
Partybearing
jointliabilities
Type oflawsuit andarbitration
Background of the lawsuit (arbitration)
Amountinvolvedin lawsuit(arbitration)
Expectedliabilitiesand amount
causedby lawsuit(arbitration)
or not
Progress in lawsuit
(arbitration)
Results ofthe lawsuit(arbitration) and
impacts
Execution ofadjudication oflawsuit (arbitration)
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
XinyudaOceanEngineering(Hong Kong)Co., Ltd
NoneArbitration
On Jan. 28, 2014, this Company signedProcurement Contract on Main Chord of Spud Legfor F&G-JU2000E Self-elevating Drilling Platformwith Xinyuda Ocean Engineering (Hong Kong) Co.,Ltd (hereinafter referred to as “Xinyuda Company”)(Contract No.: ZP14-2125-0030, based on whichXinyuda Company provided one set of main chordequipment for the Zhenhai No. 5 Drilling Platform.The product provided by Xinyuda Company hadthe quality defects and was in breach of therequirements of the contract, as a result, theconstruction schedule of Zhenhai No. 5 DrillingPlatform of this Company was seriously affected.This Company had sent many letters to requestXinyuda Company to settle the quality defects, butXinyuda Company had not effectively responded tothem and dealt with these defects. therefore, basedon the dispute settlement mode stipulated by thecontract, this Company took a arbitration againstXinyuda Company to Hong Kong InternationalArbitration Center on May 9, 2017 and requestedXinyuda Company to compensate this Companyfor the expenses for replacement, repair, removal,reconstruction and reinstallation of main chord,about USD 35,250,000 dollars, and reserved therights of compensation for the losses caused bythe quality of the main chord under the platformconstruction contract and other losses arisingherefrom.
About35,250,000 USD
Hong Kong International ArbitrationCentre agreed to issue the consentaward and settle the case afterreceiving the supplementary cashdeposit for the costs of arbitrationpaid by both parties.
Both partieshad concludedthe umbrellareconciliationagreementswith Lovandaand Lovansingand Xinyuda andthen applied forwithdrawal of thecase and issuedthe consentaward.
Hong KongInternationalArbitration Centrewill issue the consentaward and settle thecase after receivingthe supplementarycash deposit for thecosts of arbitrationpaid by thisCompany.
ShanghaiZhenhuaHeavyIndustries(Group) Co.,Ltd
XinyudaOceanEngineering(Hong Kong)Co., Ltd
NoneArbitration
On Jan. 28, 2014, this Company signedProcurement Contract on Main Chord of Spud Legfor F&G-JU2000E Self-elevating Drilling Platformwith Xinyuda Ocean Engineering (Hong Kong) Co.,Ltd (hereinafter referred to as “Xinyuda Company”)(Contract No.: ZP14-2126-0030, based on whichXinyuda Company provided one set of main chordequipment for the Zhenhai No. 6 Drilling Platform.The product provided by Xinyuda Company hadthe quality defects and was in breach of therequirements of the contract, as a result, theconstruction schedule of Zhenhai No. 6 DrillingPlatform of this Company was seriously affected.This Company had sent many letters to requestXinyuda Company to settle the quality defects, butXinyuda Company had not effectively responded tothem and dealt with these defects. therefore, basedon the dispute settlement mode stipulated by thecontract, this Company took a arbitration againstXinyuda Company to Hong Kong InternationalArbitration Center on May 9, 2017 and requestedXinyuda Company to compensate this Companyfor the expenses for replacement, repair, removal,reconstruction and reinstallation of main chord,about USD 35,250,000 dollars, and reserved therights of compensation for the losses caused bythe quality of the main chord under the platformconstruction contract and other losses arisingherefrom.
About35,250,000 USD
Hong Kong International ArbitrationCentre agreed to issue the consentaward and settle the case afterreceiving the supplementary cashdeposit for the costs of arbitrationpaid by both parties.
Both partieshad concludedthe umbrellareconciliationagreementswith Lovandaand Lovansingand Xinyuda andthen applied forwithdrawal of thecase and issuedthe consentaward.
Hong KongInternationalArbitration Centrewill issue the consentaward and settle thecase after receivingthe supplementarycash deposit for thecosts of arbitrationpaid by thisCompany.
3.Other information
□Applicable √Not applicableXI. Punishment to the listed Company and its directors, supervisors, senior executives, controlling shareholder,actual controller and acquirer and the rectication
□Applicable √Not applicableXII. Particulars about the credit conditions of the Company and its controlling shareholder and the actual controllerduring the reporting period
□Applicable √Not applicable
XIII. The Company’s equity incentive plan, employee stock ownership plan or other incentives to the employees andtheir impacts1.Related incentives disclosed in provisional announcement, without progress or change in follow-upimplementation
□Applicable √Not applicable2.Incentives not disclosed in provisional announcement or with follow-up progress
Equity incentive
□Applicable √Not applicable
Other information
□Applicable √Not applicable
Information about employee stock ownership plan
□Applicable √Not applicable
Other incentive measures
□Applicable √Not applicableXIV. Material associated transactions1.Associated transactions related to normal business
1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation
√Applicable □Not applicable
Summary of eventQuery indexThe rst meeting of 7
th
session of Board of Directors deliberated and approvedProposal for Joint Incorporation of Overseas Port Service Platform Company by theCompany and the Related Parties on Aug. 22, 2018.
Shanghai Stock Exchange website: www.sse.com.cn, Shanghai Securities News and HongKong Wen Wei Po on Aug. 23, 2018.
Summary of eventQuery indexThe 29
th
meeting of the 6
th
session of Board of Directors deliberated and approvedProposal for Participation in PPP Project at the Section from Yongjia Xunzhai toQiaoxia of Anji-Dongtou Highway on Feb. 2, 2018.
Shanghai Stock Exchange website: www.sse.com.cn and the Shanghai Securities News andHong Kong Wen Wei Po on Feb. 3, 2018.The 1
st
meeting of the 7
th
session of Board of Directors deliberated and approvedProposal for Joint Investment in CCCC-Zhenhua Lvjian Technology (Ningbo) Co.,Ltd by the Company and the Related Parties, Proposal for Capital Increase in SouthAmerica Company of CCCC and Proposal for Joint Investment in Yancheng UrbanExpressway by the Company and the Related Parties on Aug. 22, 2018.
Shanghai Stock Exchange website: www.sse.com.cn and the Shanghai Securities News andHong Kong Wen Wei Po on Aug. 23, 2018.
2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation√Applicable □Not applicable
3. Events not disclosed in provisional announcements√Applicable □Not applicable
Unit: Yuan Currency: RMB
Related partyRelationship
Type ofassociatedtransaction
Content ofassociatedtransaction
Pricingprinciple ofassociatedtransaction
Price ofassociatedtransaction
Amount ofassociatedtransaction
Proportion
in theamountof similartransactions
(%)
Settlement
mode ofassociatedtransaction
Market price
Reasonfor greatdifferences
betweenthe bargainprice andmarketpriceCCCC Financial Leasing Co.,Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
502,962,177.00502,962,177.002.31
Monetary
fund
502,962,177.00/China Road & BridgeCorporation
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
358,243,636358,243,636.001.64
Monetary
fund
358,243,636.00/China CommunicationsConstruction Company Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
248,519,083.00248,519,083.001.14
Monetary
fund
248,519,083.00/CCCC Electrical andMechanical Engineering Co.,Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
187,488,462.00187,488,462.000.86
Monetary
fund
187,488,462.00/CCCC Tianjin Dredging Co.,Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
137,098,857.00137,098,857.000.63
Monetary
fund
137,098,857.00/China Communications SecondNavigational Bureau ThirdEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
117,230,621.00117,230,621.000.54
Monetary
fund
117,230,621.00/Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd
Joint ventureSelling goodsProject income
Pricing basedon market price
110,250,126.00110,250,126.000.51
Monetary
fund
110,250,126.00/Road & Bridge InternationalCo., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
105,144,086.00105,144,086.000.48
Monetary
fund
105,144,086.00/CCCC Second HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
101,372,715.00101,372,715.000.46
Monetary
fund
101,372,715.00/CCCC Third HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
100,341,951.00100,341,951.000.46
Monetary
fund
100,341,951.00/CCCC First Harbor EngineeringCo., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
70,466,403.0070,466,403.000.32
Monetary
fund
70,466,403.00/China CommunicationsConstruction Company Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
70,216,049.0070,216,049.000.32
Monetary
fund
70,216,049.00/CCCC Second HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
63,557,612.0063,557,612.000.29
Monetary
fund
63,557,612.00/CCCC Tunnel Engineering Co.,Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
57,261,136.0057,261,136.000.26
Monetary
fund
57,261,136.00/Shanghai CommunicationsConstruction Contracting Co.,Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
34,589,744.0034,589,744.000.16
Monetary
fund
34,589,744.00/ZPMC-OTL MARINECONTRACTOR LIMITED
Joint venture
Rendering oflabor service
Project income
Pricing basedon market price
30,377,284.0030,377,284.000.14
Monetary
fund
30,377,284.00/CCCC First HighwayEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
30,000,000.0030,000,000.000.14
Monetary
fund
30,000,000.00/CCCC Third HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
24,710,083.0024,710,083.000.11
Monetary
fund
24,710,083.00/No.4 Engineering Co., Ltd.of CCCC Second HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
24,459,644.0024,459,644.000.11
Monetary
fund
24,459,644.00/Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd
Joint venture
Rendering oflabor service
Project income
Pricing basedon market price
24,438,318.0024,438,318.000.11
Monetary
fund
24,438,318.00/China Harbor Engineering Co.,Ltd
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
22,231,105.0022,231,105.000.10
Monetary
fund
22,231,105.00/No.1 Engineering Co., Ltd.of CCCC Second HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
19,181,054.0019,181,054.000.09
Monetary
fund
19,181,054.00/Road & Bridge South ChinaEngineering Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
16,524,972.0016,524,972.000.08
Monetary
fund
16,524,972.00/CCCC Fourth HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
13,801,887.0013,801,887.000.06
Monetary
fund
13,801,887.00/CCCC Second HighwayConsultants Co., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
12,905,660.0012,905,660.000.06
Monetary
fund
12,905,660.00/
Related partyRelationship
Type ofassociatedtransaction
Content ofassociatedtransaction
Pricingprinciple ofassociatedtransaction
Price ofassociatedtransaction
Amount ofassociatedtransaction
Proportion
in theamountof similartransactions
(%)
Settlement
mode ofassociatedtransaction
Market price
Reasonfor greatdifferences
betweenthe bargainprice andmarketpriceCCCC First Harbor ConsultantsCo., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
9,654,872.009,654,872.000.04
Monetary
fund
9,654,872.00/CCCC First Highway FifthEngineering Co., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
7,500,000.007,500,000.000.03
Monetary
fund
7,500,000.00/The Third Engineering Co.,Ltd. of The First HighwayEngineering Bureau of CCCC
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
6,550,315.006,550,315.000.03
Monetary
fund
6,550,315.00/No.1 Engineering Co., Ltd. ofCCCC First Harbor EngineeringCo., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
5,264,957.005,264,957.000.02
Monetary
fund
5,264,957.00/CCCC Third Harbor ConsultantsCo., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
5,018,319.005,018,319.000.02
Monetary
fund
5,018,319.00/CCCC Guangzhou DredgingCo. Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
4,664,101.004,664,101.000.02
Monetary
fund
4,664,101.00/ZPMC Mediterranean LimanMakinalari Ticaret AnonimSirketi
Joint ventureSelling goodsProject income
Pricing basedon market price
4,262,198.004,262,198.000.02
Monetary
fund
4,262,198.00/CCCC First HighwayEngineering Co., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
4,000,000.004,000,000.000.02
Monetary
fund
4,000,000.00/Friede &Goldman, Llc
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
2,673,016.002,673,016.000.01
Monetary
fund
2,673,016.00/Chuwa Bussan Co. Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
2,023,654.002,023,654.000.01
Monetary
fund
2,023,654.00/ZPMC Changzhou CoatingsCo., Ltd.
Associated company
Rendering oflabor service
Project income
Pricing basedon market price
1,396,226.001,396,226.000.01
Monetary
fund
1,396,226.00/CCCC - SHEC Third HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
1,057,048.001,057,048.000.00
Monetary
fund
1,057,048.00/CCCC Tianjin Industry andTrade Co., Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
674,414.00674,414.000.00
Monetary
fund
674,414.00/CCCC (Tianjin) Eco-environmental ProtectionDesign & Research InstituteCo., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
207,547.00207,547.000.00
Monetary
fund
207,547.00/CCCC Highway ConsultantsCo. Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
65,517.0065,517.000.00
Monetary
fund
65,517.00/CCCC Guangzhou LogisticsCo., Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
56,604.0056,604.000.00
Monetary
fund
56,604.00/Hainan CCCC Fourth HarborConstruction Co., Ltd
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
13,248.0013,248.000.00
Monetary
fund
13,248.00/CCCC - SHEC SecondEngineering Co. Ltd.
Holding subsidiary ofparent company
Selling goodsProject income
Pricing basedon market price
7,727.007,727.000.00
Monetary
fund
7,727.00/CCCC Second HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Rendering oflabor service
Project income
Pricing basedon market price
7,547.007,547.000.00
Monetary
fund
7,547.00/No.2 Engineering Co., Ltd.of CCCC Third HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
435,493,711.00435,493,711.002.41
Monetary
fund
435,493,711.00/CCCC Second HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
319,635,901.00319,635,901.001.77
Monetary
fund
319,635,901.00/CCCC Electrical andMechanical Engineering Co.,Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
183,813,849.00183,813,849.001.02
Monetary
fund
183,813,849.00/CCCC Fourth HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
180,145,846.00180,145,846.001.00
Monetary
fund
180,145,846.00/CCCC Third HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
171,166,061.00171,166,061.000.95
Monetary
fund
171,166,061.00/CCCC Tianjin Dredging Co.,Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
119,241,651.00119,241,651.000.66
Monetary
fund
119,241,651.00/No.2 Engineering Co., Ltd.of CCCC Fourth HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
58,238,659.0058,238,659.000.32
Monetary
fund
58,238,659.00/CCCC - SHEC SecondEngineering Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
51,067,364.0051,067,364.000.28
Monetary
fund
51,067,364.00/
Related partyRelationship
Type ofassociatedtransaction
Content ofassociatedtransaction
Pricingprinciple ofassociatedtransaction
Price ofassociatedtransaction
Amount ofassociatedtransaction
Proportion
in theamountof similartransactions
(%)
Settlement
mode ofassociatedtransaction
Market price
Reasonfor greatdifferences
betweenthe bargainprice andmarketpriceCCCC Shanghai Dredging Co.,Ltd
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
44,255,071.0044,255,071.000.24
Monetary
fund
44,255,071.00/CCCC Shanghai EquipmentEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
31,619,960.0031,619,960.000.17
Monetary
fund
31,619,960.00/CCCC Third HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
26,704,324.0026,704,324.000.15
Monetary
fund
26,704,324.00/CCCC First Harbor ConsultantsCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
26,259,626.0026,259,626.000.15
Monetary
fund
26,259,626.00/CCCC First Harbor EngineeringCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
24,659,835.0024,659,835.000.14
Monetary
fund
24,659,835.00/CCCC Second HighwayConsultants Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
22,139,413.0022,139,413.000.12
Monetary
fund
22,139,413.00/CCCC Leasing No.2 Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
17,399,943.0017,399,943.000.10
Monetary
fund
17,399,943.00/No.1 Engineering Co., Ltd. ofCCCC First Harbor EngineeringCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
16,698,341.0016,698,341.000.09
Monetary
fund
16,698,341.00/China Communications SecondNavigational Bureau ThirdEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
13,181,025.0013,181,025.000.07
Monetary
fund
13,181,025.00/CCCC - SHEC Third HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
12,990,744.0012,990,744.000.07
Monetary
fund
12,990,744.00/No.3 Engineering Co., Ltd.of CCCC Third HarborEngineering Co., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
10,326,479.0010,326,479.000.06
Monetary
fund
10,326,479.00/CCCC Water TransportationPlanning and Design InstituteCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
9,564,649.009,564,649.000.05
Monetary
fund
9,564,649.00/ZPMCMediterraneanLimanMakinalariTicaretAnonimSirketi
Joint venture
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
8,502,537.008,502,537.000.05
Monetary
fund
8,502,537.00/Chuwa Bussan Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
7,063,023.007,063,023.000.04
Monetary
fund
7,063,023.00/Installation Engineering Co.,Ltd. of CCCC First HarborEngineering Co. Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
5,974,138.005,974,138.000.03
Monetary
fund
5,974,138.00/CCCC Tunnel Engineering Co.,Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
4,536,422.004,536,422.000.03
Monetary
fund
4,536,422.00/China CommunicationsConstruction Company Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
3,701,020.003,701,020.000.02
Monetary
fund
3,701,020.00/CCCC Marine Engineering &Technology Research CenterCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
3,425,753.003,425,753.000.02
Monetary
fund
3,425,753.00/Shanghai Jiangtian IndustrialCo., Ltd
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
2,594,773.002,594,773.000.01
Monetary
fund
2,594,773.00/Shanghai CommunicationsConstruction Contracting Co.,Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
1,254,523.001,254,523.000.01
Monetary
fund
1,254,523.00/China CommunicationsMaterials & Equipment Co., Ltd
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
318,966.00318,966.000.00
Monetary
fund
318,966.00/CCCC Third Harbor ConsultantsCo., Ltd.
Holding subsidiary ofparent company
Receivinglabor service
Consignedprocessing for the
Company
Pricing basedon market price
85,470.0085,470.000.00
Monetary
fund
85,470.00/Chuwa Bussan Co. Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
19,663,204.0019,663,204.000.11
Monetary
fund
19,663,204.00/CCCC Shanghai EquipmentEngineering Co., Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
210,238,846.00 210,238,846.001.16
Monetary
fund
210,238,846.00/
Related partyRelationship
Type ofassociatedtransaction
Content ofassociatedtransaction
Pricingprinciple ofassociatedtransaction
Price ofassociatedtransaction
Amount ofassociatedtransaction
Proportion
in theamountof similartransactions
(%)
Settlement
mode ofassociatedtransaction
Market price
Reasonfor greatdifferences
betweenthe bargainprice andmarketpriceZPMC Changzhou CoatingsCo., Ltd.
Associated company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
108,484,161.00 108,484,161.000.60
Monetary
fund
108,484,161.00/Shanghai Jiangtian IndustrialCo., Ltd
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
65,858,536.00 65,858,536.000.36
Monetary
fund
65,858,536.00/CCCC National EngineeringResearch Center of DredgingTechnology and Equipment
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
1,245,211.001,245,211.000.01
Monetary
fund
1,245,211.00/China CommunicationsConstruction Company Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
258,621.00258,621.000.00
Monetary
fund
258,621.00/CCCC Water TransportationPlanning and Design InstituteCo., Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
237,931.00237,931.000.00
Monetary
fund
237,931.00/China CommunicationsMaterials & Equipment Co., Ltd
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
209,106.00209,106.000.00
Monetary
fund
209,106.00/Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd
Joint venture
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
10,643,590.0010,643,590.000.06
Monetary
fund
10,643,590.00/CNPC & CCCC PetroleumSales Co., Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
1,487,613.001,487,613.000.01
Monetary
fund
1,487,613.00CCCC Shanghai ChannelEquipment Industry Co., Ltd.
Holding subsidiary ofparent company
Purchase of
goods
Providing materialsfor the Company
Pricing basedon market price
302,564.00302,564.000.00
Monetary
fund
302,564.00/CCCC Tunnel Engineering Co.,Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
34,392,257.0034,392,257.000.16
Monetary
fund
34,392,257.00/CCCC Second HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
26,075,675.0026,075,675.000.12
Monetary
fund
26,075,675.00/CCCC First HighwayEngineering Co., Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
17,393,504.0017,393,504.000.08
Monetary
fund
17,393,504.00/Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd
Joint ventureOther inowsVessel leasing
Pricing basedon market price
17,133,962.0017,133,962.000.08
Monetary
fund
17,133,962.00/Binhai Environmental ProtectionDredging Co., ltd. of CCCCTianjin Dredging Co., Ltd.
Holding subsidiary ofparent company
Other inowsVessel leasing
Pricing basedon market price
16,810,345.0016,810,345.000.08
Monetary
fund
16,810,345.00/China Communications SecondNavigational Bureau ThirdEngineering Co., Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
15,756,410.0015,756,410.000.07
Monetary
fund
15,756,410.00/China Communications SecondNavigational Bureau ThirdEngineering Co., Ltd.
Holding subsidiary ofparent company
Other inowsVessel leasing
Pricing basedon market price
8,909,0918,909,0910.04
Monetary
fund
8,909,091/CCCC First Harbor EngineeringCo., Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
12,181,009.0012,181,009.000.06
Monetary
fund
12,181,009.00/CCCC - SHEC First HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
7,304,022.007,304,022.000.03
Monetary
fund
7,304,022.00/CCCC Third HighwayEngineering Co. Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
5,617,718.005,617,718.000.03
Monetary
fund
5,617,718.00/Road & Bridge InternationalCo., Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
4,909,838.004,909,838.000.02
Monetary
fund
4,909,838.00/The Fourth Engineering Co.,Ltd. of CCCC Second HighwayEngineering Co., Ltd.
Holding subsidiary ofparent company
Other inows
Leasing of tunnelboring machine
Pricing basedon market price
2,949,470.002,949,470.000.01
Monetary
fund
2,949,470.00/China CommunicationsConstruction Company Ltd.
Holding subsidiary ofparent company
Other inowsVessel leasing
Pricing basedon market price
358,225.00358,225.000.00
Monetary
fund
358,225.00/Total//4,938,949,961.0012.38///Details of large amount of sales returnsNoneExplanation for associated transactions
On May 9, 2016, the annual general meeting of the Company in 2015 approved Proposal for Signing FrameworkAgreement on Associated Transaction between the Company and CHINA COMMUNICATIONS CONSTRUCTION CO.,LTD. In 2018, the amount of the annual associated transaction in the normal business between the Company and itssubsidiaries and China Communications Construction Co., Ltd and its subsidiaries did not exceed RMB 11 billion Yuan.The Annual General Meeting had authorized the Company’s management to handle the relevant specic matters.
2.Associated transactions arising from acquisition or offering of assets or stock equity
1. Events disclosed in the provisional announcement, without progress or changes in follow-up implementation□Applicable √Not applicable
2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation□Applicable √Not applicable3. Events not disclosed in provisional announcements□Applicable √Not applicable4. Where agreed performance is involved, the performance achievement during the reporting period should be disclosed□Applicable √Not applicable3.Material associated transactions with joint external investments
1. Events disclosed in the provisional announcement, without progress or changes in follow-up implementation□Applicable √Not applicable2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation□Applicable √Not applicable3. Events not disclosed in provisional announcements□Applicable √Not applicable4.Current associated rights of credit and liabilities
1. Events disclosed in the provisional announcement, without progress or changes in follow-up implementation□Applicable √Not applicable2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation□Applicable √Not applicable3. Events not disclosed in provisional announcements□Applicable √Not applicable5.Others□Applicable √Not applicableXV. Material contracts and their performance1.Trusteeship, contracting and leasing matters
1. Trusteeship□Applicable √Not applicable2. Contracting□Applicable √Not applicable3. Leasing√Applicable □Not applicable
Unit: Yuan Currency: RMB
Name of
lessor
Name of lessee
Leasedassets
Amountinvolved inleased assets
Startingdate ofleasing
Termination
date ofleasing
Income from
leasing
Basis fordeterminingincome from
leasing
Impacts ofincome fromleasing on the
Company
Associatedtransaction
or not
RelationshipTheCompany
ShanghaiZhenlong AssetManagement Co.,Ltd, and othercompanies
Lease ofhouses
264,709,805.71
Aug. 10,
2012
July 9, 202545,037,758.64Agreed45,037,758.64NoOther
External guarantee of the Company (excluding guarantee to the subsidiaries)Guarantor
Relationbetween theguarantorand thelistedcompany
Guaranteed
party
Amount ofguarantee
Date ofguarantee(signing date of
agreement)
Startingdate ofguarantee
Duedate ofguarantee
Type ofguarantee
Fulllment ofthe guarantee
or not
Overdue
or not
Amount ofoverdueguarantee
Counterguarantee
or not
Guarantee
by therelatedparty or not
RelationshipTotal amount of guarantee incurred during the reporting period (excludingguarantee to the subsidiaries)
-10,790,000Total balance of guarantee at the end of the reporting period (A) (excludingguarantee to the subsidiaries)
-Guarantee of the Company and its subsidiaries to the subsidiariesTotal amount of guarantee to the subsidiaries incurred during the reportingperiod
943,700,800Total balance of guarantee to the subsidiaries at the end of the reportingperiod (B)
3,099,986,800
(II) Guarantee√Applicable □Not applicable
Unit: Yuan Currency: RMB
Total amount of guarantee of the Company (including guarantee to the subsidiaries)Total amount of guarantee (A+B)3,099,986,800Proportion of total amount of guarantee in the net assets of the Company (%)17.6Including:
Amount of guarantee to the shareholders, the actual controller and relatedparties (C)Amount of debt guarantee directly or indirectly provided to the guaranteedparty with the asset-liability ratio over 70% (D)
2,315,882,800Amount of guarantee exceeding 50% of net assets (E)Total guarantee amount of the above three items (C+D+E)2,315,882,800Explanation for the joint and several repayment liabilities if the undueguaranteeDescription of guarantee
The 1
st
provisional general meeting for 2008 held in Sept. 22, 2008 deliberated and approved Proposal for ProvidingFinancing Guarantee to the Subsidiary Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd by the Company andagreed to provide the nancial support to the subsidiary in Hong Kong and provided the guarantee for the loan it appliedfor through the bank and other guarantee matters were deliberated and approved on the 30
th
meeting of the 5
th
session ofBoard of Directors.
3.Consigned cash assets management
1. Consigned nancing(1) General of consigned nancing□Applicable √Not applicableOther information□Applicable √Not applicable(2) Information on individual consigned nancing□Applicable √Not applicableOther information□Applicable √Not applicable(3) Provision for impairment of consigned nancing□Applicable √Not applicable2. Consigned loans(1) General of consigned loans□Applicable √Not applicableOther information□Applicable √Not applicable
(2) Individual consigned loan□Applicable √Not applicableOther information□Applicable √Not applicable(3) Provision for impairment of consigned loan□Applicable √Not applicable3. Other information
□Applicable √Not applicable4.Other material contracts
□Applicable √Not applicableXVI. Particulars about other important events
□Applicable √Not applicableXVII. Particulars about actively performing social responsibilities1.Poverty reduction of the listed company
□Applicable √Not applicable2.Fulllment of social responsibility
√Applicable □Not applicable
The Company actively bears the social responsibilities of the state-owned enterprise, enhances the responsibilitymanagement to create the benet for the shareholders, upgrades the operation quality to create the high quality products forthe users, effectively readjust the industrial structure and the business layout, responds to the “Belt and Road” initiative and“Made in China 2025 Strategy” with the actual action, implements the development strategy with equipment manufacturingas the center and capital operation and Internet+ as two wings, continuously increases the investment in innovation,accelerates the layout of the overseas regional center, builds Terminexus digitalized intelligent platform and provides fasterand more efcient services to the global customers.
The Company is always keeping “human oriented”, actively builds the occupational development platform for theemployees and earnestly maintains the rights and interests of the employees with many measures. The Company payshigh attention to the communication with the stakeholders including the customers, the communities, schools and the socialpublic and continually adjusts the overall operation of the Company according to the expectations of the related parties. Asa manufacturing enterprise, Shanghai Zhenhua Heavy Industries Co., Ltd advocates the green development and integratesthe sustainable development concept in every aspect of production and operation.
The Company relies on the large-scale charity sale activities and actively raises the “Fund for Schooling and DreamBuilding of Shanghai Zhenhua Heavy Industries Co., Ltd”, continually carries out the help and support activities in thetargeted poverty alleviation unit of the Company, Tu’e Town, Lanping County Nujiang City, Yunnan Province in the aspectof education improvement and so on. During the reporting period, it organized to carry out the poverty alleviation activity of“Being Grateful to You and Schooling and Dreaming Building” and raised RMB 59,653.66 Yuan for the “Fund for Schoolingand Dream Building of Shanghai Zhenhua Heavy Industries Co., Ltd” to contribute 4 computers, 110 bed clothes for thestudents and 110 sets of schoolbags and stationeries to two primary schools in Tu’e Town, Lanping County, Nujiang City,Yunnan Province and denote the school gifts to 19 newly enrolled poor students in Majimi Village Maji Town Fugong County.The Youth League Committee of the Company led to purchase the schoolbags, pencil bags, Xinhua Directory, English-Chinese Directory, copybooks, diaries, vacuum cups and so on, with the total value of RMB 130,000 Yuan for contributionto schooling. In addition, it denoted over 900 new clothes to the front line of the poverty alleviation workers in two schoolsin Xihe County, Longnan City, Gansu Province and Ninglang County, Linjiang City, Yunnan Province and Fugong County,Nujiang City, Yunnan Province.
3.Environmental information
1. Information about environmental protection of the Company and its subsidiaries as the key pollutantdischarge units published by environmental protection administration
√Applicable □Not applicable
(1) Pollutant discharge
√Applicable □Not applicable
The main type of the pollutant discharge by Longxing Subsidiary Company and Nantong Subsidiary Branch of theCompany: in accordance with the requirements of the local government, it installed online monitoring equipment andachieved the networking of the monitoring data about the discharged wastewater and waste gas into the network of thegovernment.
Discharge mode: it newly increased the domestic sewage treatment facilities and installed the online monitoring system;the domestic sewage was discharged up to the standard after treatment; it reconstructed the steel plate pre-treatment owline and coating ow line, reconstructed VOCs end treatment unit, newly increased the weld fume adsorption and treatmentunit; the atmospheric pollutants such as the waste gas, fume and VOCs were discharged up to the standard after treatment;the solid wastes and the hazardous wastes were handed over to the qualied units for treatment.
(2) Construction and operation of pollution control facilities
√Applicable □Not applicable
Changxing Subsidiary Company of Shanghai Zhenhua Heavy Industries Co., Ltd accomplished the reconstruction ofpretreatment and coating ow line and VOCs end treatment unit, installed the sound-proof cotton in the workshops withrelatively high noise and the construction and the operation of the pollution prevention facilities were in good condition.
(3) Environmental impact assessment of construction project and other administrative licenses for environmentalprotection
√Applicable □Not applicable
It accomplished the environmental impact assessment for the reconstruction of 4# hazardous goods dock of ChangxingSubsidiary Company.
(4) Emergency proposal for environmental accident
√Applicable □Not applicable
Changxing Subsidiary Company, Jiangyin Subsidiary Company, Nantong Company, Nantong Transmitter Co., Ltd,Ocean Engineering Platform Division, Shanghai Zhenhua Port Machinery Heavy Industries Co., Ltd, Port Machinery GeneralEquipment Co., Ltd and Qidong Ocean Engineering Co., Ltd established comprehensive and special emergency preplanfor typhoon prevention, ood prevention, sunstroke prevention, cooling, special equipment and ship. Up to now, ShanghaiZhenhua Heavy Industries Co., Ltd has released 129 kinds of emergency preplans.
(5) Self-monitoring scheme for environmental protection
√Applicable □Not applicable
The self-monitoring scheme of Changxing Subsidiary Company of Shanghai Zhenhua Heavy Industries Co., Ltdwas: 1. Online wastewater monitoring; 2. Environmental monitoring by the entrusted third party; 3. Boundary noise self-measurement.
(6) Other environmental information to be disclosed
□Applicable √Not applicable
2. Particulars about the environmental protection of the companies other than those dened as key pollutant-discharge unit
√Applicable □Not applicable
The types of the main pollutants discharged from Qidong Ocean Engineering Co., Ltd, Shanghai Port Machinery HeavyIndustries Co., Ltd and Nantong Transmitter Co., Ltd included wastewater, waste gas, fume, volatile organic substances,general industrial solid wastes and hazardous wastes.
Discharge mode: Shanghai Port Machinery Heavy Industries Co., Ltd and Qidong Ocean Engineering Co., Ltdreconstructed the wastewater treatment units and the wastewater was discharged up to the standard after treatment;Nantong Transmitter Co., Ltd reformed the environmental protection equipment, the atmospheric pollutants such as thewaste gas, fume and VOCs were discharged in the manner of organized discharge; the solid wastes and the hazardouswastes were handed over to the qualied units for treatment.
3. Description of the reasons for failing to disclose the environmental information by the companies other thanthe key pollutant discharge unit
□Applicable √Not applicable
4. Description of the follow-up progress and changes in the contents of environmental information disclosedduring the reporting period
□Applicable √Not applicable4.Other information
□Applicable √Not applicableXVIII. Convertible bonds1.Issuance of convertible bonds
□Applicable √Not applicable2.Information about the convertible bond holder and guarantor during the reporting period
□Applicable √Not applicable3.Changes in convertible bonds during the reporting period
□Applicable √Not applicable
Accumulated conversion of convertible bonds during the reporting period
□Applicable √Not applicable4.Previous adjustments of conversion price
□Applicable √Not applicable5.Particulars about the liabilities, credit changes and cash arrangement for debt repayment in future years
□Applicable √Not applicable6.Other information about convertible bonds
□Applicable √Not applicable
Section VIChanges in Ordinary Shares and Information about Shareholders
I.Changes in ordinary shares capital1.Table of changes in ordinary shares
1.Table of changes in ordinary shares
Unit: share
Before this change Change (+, -)After this changeNumber Ratio (%)Stock issue
Dividend
stock
ContributedCapital Surplus
OthersSubtotalNumber
Ratio
(%)I. Floating shares with tradinglimited conditions1. Shared held by the state2. Shares held by state legal entity3. Other shares held by the domesticinvestorsThereinto: shares held by the domesticnon-state legal entityShare held by domestic natural person4. Shares held by foreign investorsThereinto: shares held by overseaslegal entityShares held by the overseas naturalpersonII. Floating shares without tradinglimited conditions
4,390,294,584100.00878,058,917878,058,9175,268,353,501100.001. Common stock (RMB denominated)2,768,331,38463.06553,666,277553,666,2773,321,997,66163.06Domestically-Listed Shares Held ByForeign Investors-Dividend Stock
1,621,963,20036.94324,392,640324,392,6401,946,355,84036.943. Overseas-Listed Shares Held ByForeign Investors-Dividend Stock4. OthersIII. Total of ordinary shares 4,390,294,584100.00878,058,917878,058,9175,268,353,501100.00
2. Description of the changes in ordinary shares√Applicable □Not applicableThis year, The Company adopted the prot distribution plan for 2017. Based on the total shares of the Company by Dec.31, 2017 as the basic number, 2 bonus shares per 10 shares were distributed to all shareholder of the Company and thetotal shares after conversion were 5,268,353,501 shares.
3. Impact of changes in ordinary shares on the earnings per share and net asset value per share in the latest one yearand the latest one period (if any)
√Applicable □Not applicable
Before change in sharesAfter change in sharesEPS (Yuan)0.1010.084Net assets per share (Yuan)3.462.88
2.Table of the shares held by Top 10 shareholders, Top 10 holders of marketable shares (or shareholders withouttrading limited conditions) by the end of reporting period
Unit: share
4. Other contents that the Company deems necessary or is required by the securities regulatory authorities todisclose
□Applicable √Not applicable2.Changes in restricted shares
□Applicable √Not applicableII. Issuance and listing of securities1.Securities issuance by the reporting period
□Applicable √Not applicable
Particulars about the issuance of securities during the reporting period (for bonds of different interest rates within theduration, please state them respectively):
□Applicable √Not applicable2.Changes in total ordinary shares of the Company and the shareholder structure, as well as the assets andliabilities
□Applicable √Not applicable3.Existing internal employee ownership
□Applicable √Not applicableIII. Shareholders and actual controller1.Total number of shareholders
Total of ordinary shareholders by the end of the reporting period246,260Total of ordinary shareholders by the end of the month previous to the disclosuredate of annual report
235,940
Shares held by Top 10 shareholdersName of shareholder (in full)
Changes inthe reporting
period
Shares heldat end of the
reporting
period
Proportion
(%)
Number ofshares withtrading limitedconditions held
Pledged or frozen
status
Nature ofshareholderSharestatus
Numberof sharesCCCG (HK) Holding Limited152,792,640916,755,84017.4010None0
Overseaslegal personChina Communications ConstructionCompany Ltd.
142,590,341855,542,04416.2390None0
State-ownedlegal personChina Communications Construction GroupCo., Ltd.
110,537,229663,223,37512.5890None0
State-ownedlegal personCentral Huijin Asset Management Co., Ltd14,896,44089,378,6401.70UnknownUnknownChina Securities Finance Co., Ltd25,481,39482,269,8681.56UnknownUnknownSecurities investment fund for StructuralAdjustment ETF by CMBChina-BoseraCentral Securities Enterprises
21,860,48921,860,4890.41UnknownUnknown
Shares held by Top 10 shareholdersName of shareholder (in full)
Changes inthe reporting
period
Shares heldat end of the
reporting
period
Proportion
(%)
Number ofshares withtrading limitedconditions held
Pledged or frozen
statusNature ofshareholderSharestatus
Numberof sharesBOSERA FUNDS - Agricultural Bank of China- BOSARE China Securities Financial AssetsManagement Plan
3,309,32019,855,9200.38UnknownUnknownE FUND Management - Agricultural Bankof China - E FUND Management ChinaSecurities Financial Assets Management Plan
3,309,32019,855,9200.38UnknownUnknownDACHENG FUND - Agricultural Bank ofChina - DACHENG China Securities FinancialAssets Management Plan
3,309,32019,855,9200.38UnknownUnknownHarvest Fund - Agricultural Bank of China -Harvest China Securities Financial AssetsManagement Plan
3,309,32019,855,9200.38UnknownUnknownGF Fund - Agricultural Bank of China -GF China Securities Financial AssetsManagement Plan
3,309,32019,855,9200.38UnknownUnknownLombarda China Fund - Agricultural Bankof China - Lombarda China Fund ChinaSecurities Financial Assets Management Plan
3,309,32019,855,9200.38UnknownUnknownChina Asset Management - Agricultural Bankof China - China Asset Management ChinaSecurities Financial Assets Management Plan
3,309,32019,855,9200.38UnknownUnknownYinhua Fund - Agricultural Bank of China -Yinhua China Securities Financial AssetsManagement Plan
3,309,32019,855,9200.38UnknownUnknownChina Southern Asset Management -Agricultural Bank of China - CSAM ChinaSecurities Financial Assets Management Plan
3,309,32019,855,9200.38UnknownUnknownICBC Credit Suisse Fund - AgriculturalBank of China - ICBC Credit Suisse ChinaSecurities Financial Assets Management Plan
3,309,32019,855,9200.38UnknownUnknownShareholdings of Top 10 shareholders without trading limited conditionsName of shareholder
Number of marketableshares without trading
limited conditions
held
Type & number of shares
TypeNumberCCCG (HK) Holding Limited916,755,840
Foreign-oriented
stocksChina Communications Construction Company Ltd.855,542,044A-shareChina Communications Construction Group Co., Ltd.663,223,375A-shareCentral Huijin Asset Management Co., Ltd89,378,640A-shareChina Securities Finance Co., Ltd82,269,868A-shareSecurities investment fund for Structural Adjustment ETF by CMB China-Bosera Central Securities Enterprises
21,860,489A-shareFUNDS - Agricultural Bank of China - BOSARE China Securities FinancialAssets Management Plan
19,855,920A-shareE FUND Management - Agricultural Bank of China - E FUNDManagement China Securities Financial Assets Management Plan
19,855,920A-shareDACHENG FUND - Agricultural Bank of China - DACHENG ChinaSecurities Financial Assets Management Plan
19,855,920A-share
Shareholdings of Top 10 shareholders without trading limited conditionsName of shareholder
Number of marketableshares without trading
limited conditions
held
Type & number of shares
TypeNumberHarvest Fund - Agricultural Bank of China - Harvest China SecuritiesFinancial Assets Management Plan
19,855,920A-shareGF Fund - Agricultural Bank of China - GF China Securities FinancialAssets Management Plan
19,855,920A-shareLombarda China Fund - Agricultural Bank of China - Lombarda ChinaFund China Securities Financial Assets Management Plan
19,855,920A-shareChina Asset Management - Agricultural Bank of China - China AssetManagement China Securities Financial Assets Management Plan
19,855,920A-shareYinhua Fund - Agricultural Bank of China - Yinhua China SecuritiesFinancial Assets Management Plan
19,855,920A-shareChina Southern Asset Management - Agricultural Bank of China - CSAMChina Securities Financial Assets Management Plan
19,855,920A-shareICBC Credit Suisse Fund - Agricultural Bank of China - ICBC CreditSuisse China Securities Financial Assets Management Plan
19,855,920A-shareNotes to the related relation or consistent actions of the above-mentionedshareholders
Among the above top 10 shareholders, CCCG (HK) HoldingLimited, China Communications Construction Group Co.,Ltd. and China Communications Construction CompanyLtd. are related companies. It was unknown to theCompany whether there was related relation or concertedactor specied in the Management Method on InformationDisclosure for Shareholding Change of the Shareholders ofListed Companies.
Number of shares held by Top 10 shareholders with trading limited conditions and the trading limited conditions□Applicable √Not applicable3.Strategic investor or ordinary corporations as Top 10 shareholders for rights issue
□Applicable √Not applicableIV. Particulars about the controlling shareholder and the actual controller1.Controlling shareholder
1. Legal person
√Applicable □Not applicable
NameChina Communications Construction Group Co., Ltd.Company principal or legalrepresentative
Liu QitaoDate of establishmentDec. 8, 2005
Main business
Construction of overseas projects and international bidding projects at home; general
contracting for construction of various special ships, leasing and maintenance of special
ship and construction machines; offshore towage and professional services related to the
ocean engineering; technical consultant services regarding the ship and the supporting port
equipment; engaging in the general contracting of construction projects for ports, channels,
highways and bridges both home and abroad (including technical and economic consultation
of engineering, feasibility study, survey, design, construction, supervision, procurement
and supply for related complete set of equipment or materials, and equipment installation);
undertaking the general contracting of the construction of industrial and civil works, railway,
metallurgy, petrochemical, tunnel, power, mine, water conservancy, and municipal works;
import and export business; real estate development and property management; investment
and management of transportation, hotel and tourist industries.
2.Actual controller
1.Legal person□Applicable √Not applicable2.Natural person□Applicable √Not applicable3.Particulars about no actual controller in the Company□Applicable √Not applicable4.Index and date of change in the actual controller during the reporting period□Applicable √Not applicable
Shareholdings in other controlled ornon-controlled listed companies athome or abroad during the reportingperiod
CCCG holds 59.91% of the stock equity of CCCC (601800.SH) and it is the controllingshareholder.CCCG holds 100% of the stock equity of CCCG Real Estate Group Co., Ltd. CCCG RealEstate Group Co., Ltd holds 100% of the stock equity of Zhongzhu Real Estate DevelopmentCo., Ltd. Zhongzhu Real Estate Development Co., Ltd holds 53.32% of the stock equityof CCCG Real Estate Co., Ltd (name used before: Chongqing Industries, Zhongfang RealEstate) (000726.SZ) and it is the controlling shareholder.CCCG and its controlling subsidiaries totally hold 28.91% of the stock equity of GreentownHolding Co., Ltd (03900.HK) and are the controlling shareholder.CCCG and its subsidiaries hold 29.99% of the stock equity of Shanghai Zhenhua HeavyIndustries Co., Ltd (600320.SH) and are the controlling shareholder.Other information
2. Natural person□Applicable √Not applicable3. Particulars about no controlling shareholder in the Company□Applicable √Not applicable4. Index and date of change in the controlling shareholder during the reporting period□Applicable √Not applicable5. Block diagram of ownership and control relation between the Company and the controlling shareholder√Applicable □Not applicable
CCCCShareholding 100%Shareholding 17.4012%Shareholding 12.5888%Shareholding 16.2393%
Shareholding 59.91%
Shanghai Zhenhua Heavy Industries, Co., Ltd.
CCCGCCCC Hong Kong
5.Block diagram of ownership and control relation between the Company and the actual controller√Applicable □Not applicable
Shanghai Zhenhua Heavy Industries, Co., Ltd.
CCCGSASAC
Shareholding100%
Shareholding100%
Shareholding 17.4012%Shareholding 12.5888%Shareholding 16.2393%
Shareholding 59.91%CCCCCCCC Hong Kong
6. Control over the Company by the actual controller via trust or other ways of assets management□Applicable √Not applicable3.Other information about the controlling shareholder and the actual controller
□Applicable √Not applicableV. Other corporate shareholders holding over 10% shares
□Applicable √Not applicableVI. Particulars about restriction on reduction in shares held
□Applicable √Not applicable
Section VII
Preference Shares
□Applicable √Not applicable
Section VIIIDirectors, Supervisors, Senior Management and Employees
I. Changes in shares held and remunerations
(I) Changes in shares held by current and resigned directors, supervisors and senior executives during thereporting period and their remunerations
√Applicable □Not applicable
Unit: share
NameTitle (note)SexAge
Startingdate oftenure
Expirydate oftenure
Shares
heldat thebeginning
of year
Sharesheld atthe endof year
Amount
ofchangein shares
in theyear
Reason of
change
Totalremunerationbefore tax from
the Company
during thereportingperiod (RMB
10000)
Remuneration
from therelatedparty of theCompany or
notSong Lianyu
Chairman ofthe Board,Party secretary
Male49
June 26,
2018
June 25,
2021
0427,200427,200
Buying onsecondary
marketand protdistribution
73.67NoHuangQingfeng
Director,President,Deputy party
secretary
Male44
June 26,
2018
June 25,
2021
00073.67NoZhangHongwen
DirectorMale59
June 26,
2018
June 25,
2021
0000YesYan Yunfu
Director, chief
engineer
Male60
June 26,
2018
June 25,
2021
00058.94NoLiu Qizhong
Director, vice
president
Male55
June 26,
2018
June 25,
2021
00058.94NoDai Wenkai
Director, vice
president
Male52
June 26,
2018
June 25,
2021
00058.94NoZhuXiaohuai
Director, CFOMale50
June 26,
2018
June 25,
2021
00044.02NoZhaoZhanbo
Independent
director
Male43
June 26,
2018
June 25,
2021
0006NoJi Linhong
Independent
director
Male57
June 26,
2018
June 25,
2021
0006NoLing He
Independent
director
Male67
June 26,
2018
June 25,
2021
00012.32NoYang Jun
Independent
director
Male62
June 26,
2018
June 25,
2021
00012.32NoBai Yunxia
Independent
director
Female46
June 26,
2018
June 25,
2021
00011.83No
Wang Cheng
Supervisor,deputy party
secretary,Secretary ofCommitteefor Discipline
Inspection,chairman oflabour union
Male46
June 26,
2018
June 25,
2021
00051.53No
ZhangMinghai
SupervisorMale57
June 26,
2018
June 25,
2021
20,25924,3114,052
Protdistribution
83.47No
NameTitle (note)SexAge
Startingdate oftenure
Expirydate oftenure
Shares
heldat thebeginning
of year
Sharesheld atthe endof year
Amount
ofchangein shares
in theyear
Reason of
change
Totalremunerationbefore tax from
the Company
during thereportingperiod (RMB
10000)
Remuneration
from therelatedparty of theCompany or
notXiangXudong
SupervisorMale43
June 26,
2018
June 25,
2021
00072.27NoLiu JianboVice presidentMale56
Aug. 22,
2018
June 25,
2021
00058.94NoZhou QiVice presidentMale47
Aug. 22,
2018
June 25,
2021
00058.94NoChen BinVice presidentMale45
Aug. 22,
2018
June 25,
2021
89,440107,32817,888
Protdistribution
58.94NoShanJianguo
Vice presidentMale55
Aug. 22,
2018
June 25,
2021
00058.94NoZhang JianVice presidentMale50
Aug. 22,
2018
June 25,
2021
00058.94NoFei GuoChief engineerMale57
Aug. 22,
2018
June 25,
2021
00058.94NoLi Ruixiang
Chiefeconomist
Male44
Aug. 22,
2018
June 25,
2021
00058.94NoSun Li
Generalcounsel andsecretary of the
board
Male47
Aug. 22,
2018
June 25,
2021
00058.94NoShe Lian
Formerindependent
director
Male60
Apr. 21,
2015
June 26,
2018
0006NoGu Wei
Formerindependent
director
Male62
Apr. 21,
2015
June 26,
2018
0006NoTotal/////109,699558,839449,140/1,107.44/NameMain working experiencesSong Lianyu
Born in 1970, male, Ph.D., professor-level senior engineer. He began his career in September 1992 and successively served as the engineer,equipment leader of overseas projects, vice chief of Marine Machine Department, manager of Enterprise Development Department of CCCCFirst Harbor Engineering Co., Ltd; the general manager of CCCC International Shipping Co., Ltd and the deputy general manager of theEquipment Manufacturing Marine Heavy Industry Department of China Communications Construction Co., Ltd. Now, her is the Chairman ofthe Board and Party secretary of the Company.HuangQingfeng
Born in 1975, male, EMBA, senior engineer. He began his career in August 1996 and successively served as the quality project chief, directorof eld bridge ofce of quality management department; deputy general manager of after-sales department, general manager of QualityInspection Company; vice director of off-shore ofce, director of Quality Safety Department, director of Product Service Center and assistantpresident of the Company; vice president of the Company from Jan. 2005 and the executive vice president and director of Production andProject Management Center since 2014. Now, he is the director, president, deputy party secretary of the Company.ZhangHongwen
Born in 1960, male, bachelor, senior engineer; engaged in work in August, 1983. He successively served as the deputy general managerof Overseas Division and manager of Integrated Department of Zhonggung Group, deputy general manager of Engineering ManagementDepartment and Operation & Management Department of China Communications Construction Co., Ltd, deputy general manager andgeneral manager of Capital Construction Department (Dredging Department) and the executive general manger and general manager of PortDredging Business Department of CCCC, as well as the director, executive general manager, temporary member of the Party committee andnon-executive director of CCCC Dredging (Group) Co., Ltd. Now, he is the general manager of CCCC Equipment Manufacturing & MarineHeavy Industry Department and the director of the Company.Yan Yunfu
Born in 1959, male, EMBA, professor-level senior engineer. He successively served as the Vice Chief of Technical Department, managerof Mechanical Design Department, deputy chief engineer, chief engineer and vice president of the Company, and President of Land HeavyIndustry Equipment Design Institute, director of the Company since 2004. Now, he is the director and chief engineer of the Company.Liu Qizhong
Born in 1964, male, bachelor degree, senior economist. He successively served as the vice manager and manager of Operating Departmentand the director of the Company since 1997. Now, he is the director and vice president of the Company.
NameMain working experiencesDai Wenkai
Born in 1967, male, master of physics, EMBA, senior engineer. He began his career in 1993 and served as the Vice Manger and Manager ofOperating Department, vice chief economist and chief economist of the Company. Now, his is the director and vice president of the Company.Zhu Xiaohuai
Born in 1969, male, master of MBA, senior accountant. He began his career in 1991 and successively served as the deputy section managerof Financial Division of CCCC Shanghai Dredging Co., Ltd, deputy director of Budget and Finance Department, deputy manager, managerand member of commission for disciplinary inspection of Finance Department of CCCC Shanghai Dredging Co., Ltd, and the director, chiefaccount and standing committee member of CCCC Shanghai Dredging Co. Ltd. Now, he served as the director and CFO of the Company.
Zhao
Zhanbo
Born in 1976, Male, Ph. D. He had served as a teacher in School of Software, Peking University since 2005 and now he is a professor. He ismainly engaged in the research in Internet business model innovation and corporate development strategy. Now he acts as the independentdirector of the Company.Ji Linhong
Born in 1962, Male, Ph. D. He successively acted as the assistant and the lecturer of Department of Precision Instrument of TsinghuaUniversity; assistant professor of Department of Precision Engineering of Faculty of Engineering of the University of Tokyo, the PostdoctoralResearcher in Ministry of Education, Culture, Sports, Science and Technology of Japan. He had acted as deputy director of Department ofPrecision Instrument of Tsinghua University, deputy director of Department of Mechanical Engineering of Tsinghua University, director ofDesign Engineering Research Institute of Tsinghua University, director of Experiment & Teaching Center of Mechanical Engineering, deputydirector of State Key Lab of Tribology , Tsinghua University and so on. Now he serves as a professor and a doctoral tutor in Department ofMechanical Engineering, Tsinghua University. He is mainly engaged in digitalized design and system optimization of complicated mechanicalsystem and the intelligent and biological mechanical design. Now he acts as the independent director of the Company.
Ling He
Born in 1952, male, professor, senior editor (Senior professional title) of Liberation Daily, director of Shanghai Journalists Association,director of Shanghai Institute of Essays. He successively served as the member, assistant chief editor, director of Editing Department of thedemocratic and legal magazine agency, vice director and director of Comment Department of Liberation Daily, main editor of Liberation Daily,chief editor of Liberty Forum; with honor of the rst National 100 Journalists, China News rst prize for three times, Shanghai News rst prizefor 15 times. Now, he is the independent director of the Company.Yang Jun
Born in 1957, male, master degree. He successively served as intermediate and Senior court judge of Shanghai Court, president andmembers of the judicial committee member, Property Trade Operation Director of Shanghai United Property Rights Exchange. Now he is theassistant president of Shanghai United Property Rights Exchange, general manager of Beijing HQ, director of Financial Property Rights TradeCenter, arbitrator of China International Economic and Trade Arbitration Commission, Shanghai International Economic and Trade ArbitrationCommission, arbitrator of Shanghai Arbitration Commission, Shanghai Financial Arbitration Court, expert of China domain name disputeresolution center, director of Intellectual Property Association of China Law Society, director of Company Law Research Society of ShanghaiLaw Society, director of Shanghai Patent/Trademark/Copyright Association, and the independent director of the Company.Bai Yunxia
Born in Oct. 1973, female, Ph. D from Xiamen University, post-doctor in accounting of Guanggua School of Management, Peking University,professor of accounting, doctoral tutor, engaged in work in 1995. She successively acted as the assistant engineer of Kaiyuan Group underXi’an Jiaotong University, lecturer of School of Economics and Management of Tongji University, research scholar of CKGSB. Now, she actsas the director of Department of Accounting, School of Economics and Management, Tongji University and the research scholar of InvestmentCenter of CKGSB, and the independent director of the Company.Wang Cheng
Born in 1973, male, undergraduate, senior political worker. Successively serving as the secretary of Committee of the Communist YouthLeague and secretary of Party Branch of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; deputy director and directorof Organization Department of CCCC Third Harbor Engineering Co., Ltd; Secretary of the Party Committee and vice general manager ofNo. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; chairman of board of supervisors and Vice Secretary of the PartyCommittee of CCCC Third Harbor Engineering Co., Ltd. Now serving as the Vice Secretary of the Party Committee, Secretary of Commissionfor Disciplinary Inspection, chairman of labor union and supervisor of the Company.
Zhang
Minghai
Born in1962, male, EMBA, professor-level senior engineer; he formerly served as the engineer of Technology Division of Shanghai PortMachinery Plant; deputy manager of mechanical office, deputy chief engineer, general manager of Shore Bridge No. 1 Company ofMechanical Ofce, and general manager of Land-based Heavy Industry Co., Ltd. Of Shanghai Zhenhua Heavy Industries Co., Ltd. Currently,he is the supervisor, chief designer and deputy dean of Land-based Heavy Industry Research & Design Institute of the Company.
Xiang
Xudong
Born in 1976, male, bachelor degree, senior engineer. He successively served as the vice director and vice manager of Quality Department,general manager of ZPMC Inspection Co., Ltd. Currently, he is the staff representative supervisor of the board of supervisors, Vice GeneralManager of ZPMC Port Machinery subsidiary, and the secretary of the party committee and executive deputy general manger of ChangxingBranch.Liu Jianbo
Born in 1963, male, master degree，senior engineer. He successively served as the engineer at technological office of Shanghai PortMachinery Plant; assistant director in engineering with Technology Ofce of Shanghai Container Dock Co. Ltd., deputy general manager andgeneral manager of ZPMC Changxing Base. Currently, he is the vice president of the Company and chairman of board of Shanghai ZhenhuaMarine Engineering Service Co., Ltd.Zhou Qi
Born in 1972, male, EMBA, senior engineer. He successively served as the manager and deputy general engineer, general manager andchief engineer of the Electric Appliance Ofce of the Company. Currently, he is the vice president of the Company and chairman of ElectricGroup of the Company.
NameMain working experiencesChen Bin
Born in 1974, male, EMBA, senior engineer; he formerly served as the project quality leader of Quality Control Division, deputy managerof tire crane ofce of quality control division, manager of quality control division, deputy general manager and general manager of qualityinspection company, vice director of quality and safety office, manager of Quality Safety Division, supervisor of the Company, generalmanager of Shanghai Zhenhua Shipment Co., Ltd, president assistant of the Company. Current: vice president of the Company and generalmanager of Shanghai Zhenhua Marine Engineering Service Co., Ltd.
Shan
Jianguo
Born in 1964, male, bachelor degree. He formerly worked in Shanghai Port Machinery Manufacturing Plant and started to work in ShanghaiZhenhua Port Machinery Co., Ltd since 1992, served as the engineer, chief engineer of Machinery Office, general manager of designcompany, deputy director and director of Machinery Ofce, manager of budget assessment department. He is now the vice presidnet of theCompany and the dean of Land-based Heavy Industry Research & Design Institute.Zhang Jian
Born in 1969, male, MBA. He successively served as the technician, production planner and assistant of director of No. 2 Panel beater ofShanghai Port Machinery Manufacturing Plant, chief of Changzhou Plant of Shanghai Port Machinery Manufacturing Plant, vice generalmanager of Shanghai Port Machinery Co., Ltd, vice general manager of Shanghai Port Machinery Heavy Industry Co., Ltd, general managerand assistant of president of Port Machinery Co., Ltd. Currently, he is the vice president of the Company.Fei Guo
Born in 1962, male, EMBA, professor level senior engineer. He successively served as the engineer of Shanghai Port Machinery Plant,director of No. 5 electrical ofce, vice chief engineer, chief engineer, director of Development Ofce of Shanghai Zhenhua Port MachineryCo., Ltd, VP and executive director of Shanghai Zhenhua Heavy Industry Electric Co., Ltd; and is now the chief engineer of the Company.Li Ruixiang
Born in 1975, male, bachelor degree. He successively served as the vice manager of Manufacturing Department and manger of QualityAssurance Department of Zhangjiagang Base of Shanghai Machinery Plant; manager of Quality Inspection Ofce, vice director of Quality andSafety Ofce, vice general manager and general manager of machinery supporting base, Party branch secretary and president assistant ofthe Company; and is now the chief economist of the Company and general manager of Marine Engineering Group.
Sun Li
Born in 1972, male, EMBA, senior engineer. He successively served as the project supervisor vice manager and assistant of GeneralManager of Operating Department, and Vice President and director of the Company. He is now the Chief Legal Counsel of and secretary ofthe boar of the Company.She Lian
Born in 1959, male, professor and doctoral tutor. He enjoyed the State-Council Allowance in 1995. He successively acted as the deputydirector and secretary of the Department of Business Administration of Wuhan Transportation University, chief director of TransportationEnterprise Management sponsored by the Ministry of Transport, the director of Research Center for Emergency Management and theprofessor and doctoral supervisor of Management of Wuhan University of Technology, and the director of Public Safety Early WarningResearch Center and the professor and doctoral supervisor of Huazhong University of Science and Technology. He is now serving asthe professor and doctoral supervisor of Sino-European Emergency Management Institute of National Academy of Governance. Formalindependent director of the Company.
Gu Wei
Born in 1957, male, Ph.D., professor and doctoral tutor; since 1982, he has been teaching at Shanghai Maritime University; since the year2000, enjoys special government allowances from the State Council, and the IEEE Society member, MTS Society member and the BritishRoyal Physical Society member, senior member of China Electro technical Society, senior member of Chinese Society of Naval Architects,senior member of Chinese Mechanical Engineering Society. He is now the director of the Key Laboratory of the Ministry of Transportation'sShipping Technology and Control Engineering; member of the Vessel Electrical Committee of China Electro-technical Society; member of theCommittee of Experts of Shanghai Transportation Electronics Association. Former independent director of the Company.
Other information□Applicable √Not applicable2.Equity incentives awarded to the directors and senior executives during the reporting period
□Applicable √Not applicableII. Incumbency of current and resigned directors, supervisors and senior executives during the reporting period1.Positions held in shareholding entities
√Applicable □Not applicable
NameShareholding entityPosition
Starting date
of tenure
Expiration date
of tenureZhang Hongwen
China Communications Construction
Company Ltd.
General manger of equipmentmanufacturing and marine heavy
industry division
Jan. 4, 2018Statement of the position held in shareholding entity
2.Positions held in other entities
√Applicable □Not applicable
NameOther entityPosition
Startingdate oftenure
Expiration
date oftenureZhao ZhanboSchool of Software, Peking UniversityProfessor
Ji LinhongDepartment of Mechanical Engineering, Tsinghua University
Professor and doctoral
supervisorLing He
Jiefang Daily, Shanghai Journalists Association, Shanghai EssaysSociety.
Senior editor (Seniorprofessional title), directorYang Jun
Shanghai United Assets and Equity Exchange, Financial AssetsExchange, Shanghai International Economic and Trade ArbitrationCommission, Shanghai Arbitration Commission, Shanghai Court ofFinancial Arbitration, Chinese Domain Name Dispute SettlementCenter, Intellectual Property Association of China Law Society,Company Law Association of Shanghai Law Society, ShanghaiPatent/Trademark/Copyright Association.
Assistant president,general manager, director,arbitrator, expert, directorBai Yunxia
School of Economics and Management of Tongji University,Investment Centre of Cheung Kong Graduate School of Business
Director of AccountingDepartment, research
scholarShe Lian
Sino-European Emergency Management Institute of NationalAcademy of Governance
Professor and doctoral
supervisor, etc.Gu Wei
Shipping Technology and Engineering key Lab of Ministry ofTransportation, Vessel Electrical Committee of China ElectricalAssociation, Committee of Experts of Shanghai TransportationElectronics Association, etc.
Director,professor,doctoral
tutor, council member,
committee memberStatement of the position held in other entities
III.Remuneration of directors, supervisors and senior executives
√Applicable □Not applicable
Decision-making process for the remuneration ofdirectors, supervisors and senior executives
In accordance with the regulations of Articles of Association, the remuneration ofdirectors and supervisors are subject to the general meeting of shareholders and theremuneration of the senior executives are assessed and approved by the President.Basis for deciding the remuneration of thedirectors, supervisors and senior executives
Basic salary plus performance bonus, combined with assessment utilizing quantizingindex of production and operation.Actual payout of remuneration for directors,supervisors and senior executives
All in-service and resigned director, supervisor and senior executives are paid by theCompanyTotal remuneration actually obtained by alldirectors, supervisors and senior executives atthe end of reporting period
RMB11,074,400 Yuan
IV. Changes of directors, supervisors and senior executives of the Company
√Applicable □Not applicable
NamePositionChangeReason of changeZhang HongwenDirectorElectedJob demand
Zhu XiaohuaiDirector, CFOElectedJob demandZhao ZhanboIndependent directorElectedJob demand
Ji LinhongIndependent directorElectedJob demandShe LianIndependent directorResignedExpiration of term of ofce
Gu WeiIndependent directorResignedExpiration of term of ofce
V. Punishments by securities regulatory authority in recent three years
□Applicable √Not applicableVI. Particulars about the employees in the parent company and the main subsidiaries1.Particulars about employees
Number of in-service employees of the parent company3,002Number of in-service employees of the main subsidiaries5,794Total of in-service employees8,796Number of retired employees to whom the parent company and main subsidiaries need to pay retirement pension
SpecialtiesCategoryNumber of staffProduction staff3,189Sales staff230Technical staff4,520Financial staff137Administrative staff720Total8,796
Education backgroundEducation levelNumber (person)Doctor23Master609Bachelor3,735Junior college2,115Technical secondary school2,314Total8,796
2.Remuneration policies
√Applicable □Not applicableIn line with the Company’s development strategy, it continuously perfected the distribution incentive system, perfectedthe performance assessment system and established and improved the performance assessment system based on thedifferent properties and characteristics of each entity and division; promoted the salary incentive system closely liking theperformance distribution with the unit or division performance, value contribution, industrial characteristics, growth phase andsimilar factors, and comprehensively liking the staff performance with position duty and value contribution, and thus initiallyestablished the distribution mode integrating with the market.3.Training plan
√Applicable □Not applicableIn line with the Company’s development strategy, the Company gradually established a rigid staff training systemwith systematic, directional and continuous features. At the beginning of each year, the Company sets up all-staff annualeducational and training plan and implements according to the plan to improve the competence level and professional qualityof staff at various levels.4.Labor outsourcing
√Applicable □Not applicable
Labor outsourcing hours7,633,728 hoursTotal Labor outsourcing remunerationRMB 310,070,000 Yuan
VII.Others
□Applicable √Not applicable
Section IXCorporate Governance
I. Related information about corporate governance
√Applicable □Not applicableDuring the reporting period, the Company strictly followed the regulations specied in Company law, Securities Law,Stock Listing Rules, Articles of Association and the legal requirements of China Securities Regulatory Commission tostandardize the Company’s daily operation, further established and improved the internal control system, improved theinternal control management and corporate governance structure, strengthened the insider information management,strengthened the information disclosure, continuously improved the company governance, made efforts to improve theconstruction of legal person governance structure, and gradually established a modern enterprise system, earnestlyprotected the legal rights and interests of the Company and all the shareholders, ensuring the sustainable and stabledevelopment.
After self-inspection, the staffs who know the insider information didn’t trade the stocks of the company before majorprice information is disclosed. There is no difference between the company governance and the regulations of ChinaSecurities Regulatory Commission.
Whether there is important difference between corporate governance and the requirements of relevant regulations ofChina Securities Regulatory Commission; if any, please give the reason
□Applicable √Not applicableII. Brief introduction to the general meeting of shareholders
Session of the meetingOpening date
Index of the website specied for
publishing resolutions
Date of disclosure forpublishing resolutionsThe rst interim general meeting ofstockholders held in 2018
2018-03-07
www.sse.com.cnEnter the stock code to search
2018-03-082017 General Meeting ofShareholders
2018-06-26
www.sse.com.cnEnter the stock code to search
2018-06-27
Particulars about the general meeting of shareholders□Applicable √Not applicableIII. Duty fulllment of directors1.Attendance of the directors at the board meetings and the general meeting of shareholders
Name ofdirector
Independent
director or
not
Attendance at Board Meetings
Attendance at thegeneral meeting of
shareholdersExpectedtimes ofpresence in
this year
Times ofpersonalpresence
Times ofpresence bytelecommunication
Times ofpresencethrough a
proxy
Times ofabsence
Personalabsence for two
consecutive
times
Times of presence
in the general
meeting ofshareholdersSong LianyuNo88700No2Huang QingfengNo88700No1
Yan YunfuNo88700No1Liu QizhongNo88700No1Dai WenkaiNo88700No1Zhu XiaohuaiNo77600No0
Name ofdirector
Independent
director or
not
Attendance at Board Meetings
Attendance at thegeneral meeting of
shareholdersExpectedtimes ofpresence in
this year
Times ofpersonalpresence
Times ofpresence bytelecommunication
Times ofpresencethrough a
proxy
Times ofabsence
Personalabsence for two
consecutive
times
Times of presence
in the general
meeting ofshareholdersZhang HongwenNo77600No0
She LianYes55400No2Gu WeiYes55400No1Ling HeYes88700No1Yang JunYes88700No1Bai YunxiaYes88700No2Zhao ZhanboYes33300No1
Ji LinhongYes33300No1
Explanations for personal absence from the meeting for two consecutive times□Applicable √Not applicable
Times of the board meetings convened in current year8Incl.: times of on-site meetings0Times of meetings convened through telecommunication7Times of meetings convened on-site and through telecommunication1
2.Objections from independent directors against related issues of the Company
□Applicable √Not applicable3.Others
□Applicable √Not applicableIV. As for the important suggestions and advices raised by the special interest committees under the Board ofDirectors while performing their duties in the reporting period, where there is any objection, the details shall bedisclosed
□Applicable √Not applicableV. Description of the risks found by the board of supervisors
□Applicable √Not applicableVI. Particulars about the inability of the Company and its controlling shareholders to guarantee the independenceand keep independent operation capacity with regard to business, personnel, assets, institution, nance, etc.
□Applicable √Not applicable
Where there is horizontal competition, the corresponding solutions, job schedule and follow-up wok plan of the Company
□Applicable √Not applicable
VII. Establishment and implementation of the assessment mechanism and incentive mechanism for seniorexecutives during the reporting period
√Applicable □Not applicableThe Company appoints the directors, supervisors and senior executives in accordance with the provisions of CompanyLaw and the Articles of Association, has built up a preliminary cultivation, selection, supervision, assessment, rewardand punishment, constraint system for the Company’s senior executives suitable for the actual situation. The Companyformulated corresponding administrative methods for senior executives. According to the production and development needof the Company, the senior executives are appointed, resigned and assessed following the principles of “being from top tobottom integrating the virtue and talent”, and are subject to annual appraisal by the Company according to the due diligenceand job performance. The Company will gradually improve the existing performance evaluation system and salary system,promote medium and long term incentive system for all senior executives and the core technical personnel of the Company,to continue to stimulate the enthusiasm of the senior executives, to create new achievements, and to ensure the benetmaximization and standard operation of the Company.VIII. Disclosure of self-evaluation report on internal control or not
√Applicable □Not applicableErnst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internalcontrol of the financial statement as of December 31, 2018 and issued a standard internal control audit report withoutqualied opinion (see the attachment to the announcement for details).
Description of the important deciencies in internal control during the reporting period□Applicable √Not applicableIX. Particulars about the audit report on internal control
√Applicable □Not applicableErnst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internalcontrol of the financial statement as of December 31, 2018 and issued a standard internal control audit report withoutqualied opinion (see the attachment to the announcement for details).
Audit report on internal control disclosed or not: YesX. Others
□Applicable √Not applicable
Section XCorporate Bonds
□Applicable √Not applicable
Section XIFinancial Statement
I. Auditors' report√Applicable □Not applicable
Auditors' Report
Ernst & Young (2019) SZ No.61249778_B01Shanghai Zhenhua Heavy Industries Co., Ltd.
To all shareholders of Shanghai Zhenhua Heavy Industries Co., Ltd.,I. Audit Opinion
We have audited the nancial statements of Shanghai Zhenhua Heavy Industries Co., Ltd., including the consolidatedbalance sheet and the Company’s balance sheet as of December 31, 2018, the consolidated income statement and theCompany’s income statement, the statement of changes in shareholders' equity, statement of cash ows for the year thenended and notes to the nancial statements.
In our opinion, the accompanying financial statements of Shanghai Zhenhua Heavy Industries Co., Ltd. have beenprepared in accordance with the provisions of the enterprise accounting standard in all major aspects, and have fairlypresented the consolidated and the Company’s nancial performance.as of Dec. 31, 2018 and the consolidated and theCompany’s operating results and cash ow in 2018 of Shanghai Zhenhua Heavy Industries Co., Ltd.II. Basis for Audit Opinion
We conducted our audits in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for Audit of Financial Statements section of our report. Weare independent of the Company in accordance with the China Code of Ethics for Certied Public Accountants, and we havefullled our other ethical responsibilities in accordance with the said Code of Ethics. We believe that the audit evidence wehave obtained is sufcient and appropriate to provide a basis for our opinion.III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe nancial statements for the current period. These matters were addressed in the context of our audit of the nancialstatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Thefollowing description of how our audit addressed the key audit matter is also against this background.
We have fullled the responsibilities stated in “Responsibilities of Certied Public Accountant for Auditing of FinancialStatement” in this report, including the responsibilities related to these key auditing matters. Correspondingly, our auditingwork includes the implementation of the auditing procedure designed for dealing with the great misstatement risks of thefinancial statement to be evaluated. The results from the implementation of the auditing procedure by us, including theprocedure to be implemented for the following key auditing matters, offers a foundation for releasing the auditing opinions ofthe nancial statements.
Key Audit MattersHow our audit addressed the key audit matter:
1. Inventory depreciation reservesShanghai Zhenhua Heavy Industries Co., Ltd. and its subsidiaries(“Group”) are mainly engaged in manufacturing the port container crane;in addition, they are also engaged in the manufacture of bulk handlingmachine, offshore heavy-duty machine and large-sized steel structure. Itsinventories mainly include engineering raw materials, outsourcing partsand components, products in the process and inventory goods. Since theproduction cycle of the products of this group is relatively long, the netrealizable value of the related inventory may uctuate with the change inthe market demand, resulting in the inventory depreciation risks. The Groupsets aside the inventory depreciation reserves according to the balance ofthe inventory cost and the net realizable value. The net realizable value isdetermined as per the estimated selling price of the inventory minus thecost, the estimated selling expenses and the related taxes that may occurin the completion on the assumption that the management layer adopts acertain estimate and hypothesis in determining the net realizable value. Incase of difference between the actual gure and the originally estimatedgure, the related balance will affect the book value of the inventory and thedepreciation loss in the estimated uctuation.As of Dec. 31, 2018, in the consolidated nancial statements, the balanceof inventories was EMB 9.98 billion Yuan and the reserve for inventorydepreciation was RMB 1.18 billion Yuan; in the nancial statements of theCompany, the balance of inventory was RMB 8.87 billion Yuan and thereserve for inventory depreciation was RMB 1.21 billion Yuan.The accounting policy and other disclosures regarding the inventory arestated in Note (V) (12), Note (V) (33) and Note (VII) (7) of the nancialstatement.
Our procedure mainly included knowing and testing thevalidity of the control related to the provision of inventorydepreciation reserves and the method of calculating thenet realizable value of the Group. We also implementedthe related auditing procedures over the inventory such assupervision of inventory to verify whether the Group hadmarked the inventory with slow turnover and defectivesand taken into full account in provision of inventorydepreciation reserves. In addition, we obtained thecomputation sheet of provision of inventory depreciationreserves on Dec. 31, 2018 from the Group, recheckedthe calculation method. As to the key elements takeninto consideration by the Group in calculating the netrealizable value, including the estimated selling price,the cost that may occur till completion, the estimatedselling expenses and the related taxes, we evaluatedthe hypothesis and the estimates through analyzing therelated historical data and comparing the after-date data.We also tested the calculation of the provision amount ofthe inventory depreciation reserves.
2. Bad-debt reserves for accounts receivableThe accounts receivable of the Group is mainly from the business contracton port machine and ocean engineering manufacturing. Since it involveslarge contracted value, long construction period, relatively complicatedtechnical parameters, the implementation of the contract may be affected bythe periodicity of the economic environment. The accounts receivable of theGroup has certain risk in the recovery in case of any dispute in contract orthe stagnant industry. As to the bad-debt reserves for accounts receivable,the management of the Group shall evaluate the guarantee obtained for theaccounts receivable, age of accounts receivable, credit rating and historicalrepayment record of the counterparty based on the nancial status ofthe counterparty. The provision of bad-debt reserves shall adopt the keyaccounting estimate, including the consideration of the credit risk, historicalrepayment record and the existing disputes of the customer.As of Dec. 31, 2018, in the consolidated nancial statements, the balanceof accounts receivable was RMB 6.56 billion Yuan and the bad-debtreserves for accounts receivable was RMB 1.53 billion Yuan; in the nancialstatements of the Company, the balance of accounts receivable was RMB8.63 billion and the bad-debt reserves for accounts receivable was RMB 1.50billion Yuan.The accounting policy and other disclosures regarding the inventory arestated in Note (V) (11), Note (V) (33), Note (VII) (4) and Note (XVII) (1) ofthe nancial statement.
We evaluated the accounting estimate relating to thedepreciation reserves, such as the nancial status andcredit rating of the counterpart; checked the account ageof accounts receivable and historical repayment recordand evaluated whether the nancial problems of thecounterparty had effects on the recovery of the accountsreceivable; we checked the related supporting documentsfor the selected samples and the account age of theaccounts receivable; reviewed the after-date recoveryof the accounts receivable and rechecked the relatedevidences of the accounts receivable that could not berecovered and was written off.
Key Audit MattersHow our audit report addressed this key audit matter:
3. Recognition of the income from construction contractMost of the income of the Group comes from the one of the constructioncontracts on the large-sized port equipment, heavy equipment, steelstructure and construction projects customized by the customer. The Groupadopts the percentage of completion method to calculate the income of theconstruction contracts. As to the large-sized port equipment, its completionschedule is determined according to the corresponding percentageof completion of the conrmation node of the income achieved by theconstruction contract at the end of period. As to the heavy equipment andconstruction period, its completion schedule is determined according to thepercentage of the accumulative contract cost in the expected total contractcost. As to the fabrication of the steel structure, its completion schedule isdetermined according to the percentage of the accumulatively completedprocessing tonnage in the expected total processing tonnage. The above-mentioned methods involve the use of the major judgment and estimate ofthe management, including the achieved node, expected total contract cost,total contract income and expected contract loss. In addition, the income,cost and realizable gross prot of the contract may change with the actualconditions, resulting in important differences in the initial estimate of theGroup.The accounting policy and other disclosures regarding the inventories arestated in Note (V) (33), Note (VII) (7), Note (VII) (52) and Note (XVII) (4) ofthe nancial statement.
We evaluated and tested the internal control foraccounting the contract cost, contract income, achievednode and recognition and for calculating the ow ofcompletion schedule. We got the important contracts toverify the total contract income and review the importantcontract clauses. Through selecting the samples, weveried whether the contract cost that occurred conformedto the certication. We implemented the cutoff checkprocedure to validate the cost was conrmed in the properaccounting period; as to the large-sized port equipment,through sampling, we got the certication for the achievednode and made the sampling for eld observation. Weevaluated the judgment and estimate of the total contractcost made by the management. We made samplingto calculate and check the income determined by theoccurred contract cost and the expected total contractcost again. In addition, we implemented the analysis-oriented recheck procedure against the gross prot of thekey construction contract of the Group.
IV. Other Information
The management of Shanghai Zhenhua Heavy Industries Co., Ltd. is responsible for other information. The otherinformation comprises all of the information included in the annual report other than the nancial statements and our auditor’sreport thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the nancial statements, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the nancial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of other information, we arerequired to report that fact. We have nothing to report in this regard.V. Responsibility of the Management and Those Charged with Governance for the Financial Statements
The management is responsible for the preparation of these financial statements in accordance with AccountingStandards for Business Enterprises to make them a fair presentation, and designing, implementing and maintainingnecessary internal control, to ensure that the nancial statements are free from material misstatement, whether due to fraudor error.
In preparing the nancial statements, the management is responsible for assessing the ability of Shanghai ZhenhuaHeavy Industries Co., Ltd. to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the management either intends to liquidate or to cease operations, orhas no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the nancial statementing process of Shanghai ZhenhuaHeavy Industries Co., Ltd.
VI. CPA’s Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standardswill always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of userstaken on the basis of these nancial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufcient and appropriateto provide a basis for our opinion. The risk of not detecting a material misstatement arising from fraud is higher than forone arising from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.
(2) Obtain an understanding of the internal control related to audit in order to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicantdoubt on the ability of Shanghai Zhenhua Heavy Industries Co., Ltd. to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the nancialstatements, or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However, future events or conditions may cause Shanghai Zhenhua HeavyIndustries Co., Ltd. to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content (including disclosures) of the financial statements,and whether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
(6) Obtain sufcient appropriate audit evidence regarding the nancial information of the entities or business activitieswithin Shanghai Zhenhua Heavy Industries Co., Ltd. to express an opinion on the nancial statements. We are responsiblefor the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicated with those charged with governance regarding, among other matters, the planned scope and timingof the audit and important audit ndings, including any important deciency in internal control that we identied during ouraudit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that may reasonablybe thought to bear on our independence and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of mostsignicance in the audit of the nancial statements of the current period and are therefore the key audit matters. We describethese matters in our auditor’s report unless the law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interest benets of such communication.
Ernst & Young LLP. (Special general
partnership)
Beijing, China
Chinese CPA: Yang Lei(Engagement partner)Chinese CPA: Liu WeiMar. 29, 2019
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.
Consolidated Balance Sheet and the Company's Balance Sheet as at 31 December 2018
Unity: Yuan Currency: RMBAssets
As at Dec. 31, 2018
Consolidated
As at Dec. 31, 2017
Consolidated
As at Dec. 31, 2018Parent Company
As at Dec. 31, 2017Parent CompanyCurrent assets
Monetary funds 3,697,338,708 5,770,227,369 2,459,295,919 3,392,595,294Financial assets measured at fairvalue through current prot or loss
52,920,084 8,438,278 44,481,806 -Notes receivable and accountsreceivable
5,221,919,846 4,400,803,623 7,212,568,840 6,961,643,776Including: notes receivable 189,371,105 420,786,012 75,801,953 413,779,017
Accounts receivable 5,032,548,741 3,980,017,611 7,136,766,887 6,547,864,759Advances to suppliers 1,681,187,715 1,036,783,170 2,268,577,972 1,173,384,482Other receivables 1,149,035,349 996,826,712 13,955,146,640 13,666,515,962Including: interest receivable - - - -
Dividends receivable - 665,346 - 665,346Inventories 8,803,035,942 7,071,266,879 7,658,200,294 5,786,210,236Outstanding payments forconstruction completed
12,054,580,392 13,453,980,326 7,476,738,206 9,021,852,353Non-current assets maturing withinone year
894,638,424 1,896,475,472 16,068,800Other current assets 1,152,476,439 591,311,853 683,547,950 261,325,439Total current assets 34,707,132,899 35,226,113,682 41,774,626,427 40,263,527,542Non-current assets
Available-for-sale nancial assets 1,214,533,554 1,304,203,905 145,157,462 221,946,872Held-to-maturity investments - - - -Long-term receivables 5,188,341,089 4,238,704,827 368,585,118 417,914,193Long-term equity investment 2,775,801,760 2,320,470,521 8,636,018,724 8,922,200,826Investment properties 436,760,631 455,063,723 436,760,631 455,063,723Fixed assets 18,654,732,030 17,335,351,611 4,819,571,556 5,231,211,582Construction in progress 3,050,468,292 1,889,146,009 308,737,034 660,662,593Intangible assets 3,588,412,732 3,683,165,608 1,571,347,557 1,618,835,106Goodwill 266,591,462 265,188,465 - -Deferred income tax assets 539,684,925 618,054,364 510,532,925 563,785,515Long-term deferred expenses 5,112,664 7,764,501Other non-current assets 170,792,589 176,726,613Total non-current assets 35,891,231,728 32,293,840,147 16,796,711,007 18,091,620,410Total assets 70,598,364,627 67,519,953,829 58,571,337,434 58,355,147,952
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Consolidated Balance Sheet and the Company's Balance Sheet (Continued) as at 31 December 2018
Liabilities and shareholders’ equity
As at Dec. 31, 2018
Consolidated
As at Dec. 31, 2017
Consolidated
As at Dec. 31, 2018
Parent Company
As at Dec. 31, 2017
Parent CompanyCurrent liabilities
Short-term borrowings 16,554,687,487 25,468,980,401 12,958,295,349 22,855,801,381Financial liabilities measured at fair valuethrough the current prot or loss
- - - -Notes payable and accounts payable 9,769,273,923 8,780,825,653 8,860,350,035 7,627,346,050Including: notes payable 2,732,404,222 1,893,227,482 2,533,542,476 1,657,137,654
Accounts payable 7,036,869,701 6,887,598,171 6,326,807,559 5,970,208,396Advance from customers 494,744,374 591,727,255 370,660,873 393,410,039Outstanding payments for constructioncompleted
1,989,560,887 2,508,598,913 2,390,332,471 2,922,827,192Employee compensation payable 310,112,327 273,733,207 294,662,685 258,990,282Taxes and surcharges payable 164,964,681 194,948,927 22,636,402 50,220,742Other payables 1,098,580,447 843,207,676 1,508,889,581 1,644,923,271Including: interest payable 114,397,903 118,825,582 90,106,459 102,690,137
Dividends payable 31,701,965 31,701,965 352,598 352,598Non-current liabilities maturing within oneyear
4,209,532,510 2,198,931,219 2,820,655,037 1,367,901,030Other current liabilities - - - -Total current liabilities 34,591,456,636 40,860,953,251 29,226,482,433 37,121,419,987Non-current liabilities
Long-term borrowings 15,097,725,259 6,664,914,383 12,922,319,986 4,897,199,999Bonds payableLong-term payables 1,967,461,119 1,884,986,333 182,174,839 556,387,041Estimated liabilities 439,052,683 464,888,663 422,869,949 451,128,341Deferred income 469,296,220 479,174,120 336,941,770 348,455,388Deferred income tax liabilities 132,401,282 183,462,320 - -Other non-current liabilities 288,474,696 152,954,098 9,783,043 3,456,670Total non-current liabilities 18,394,411,259 9,830,379,917 13,874,089,587 6,256,627,439
Total liabilities 52,985,867,895 50,691,333,168 43,100,572,020 43,378,047,426Shareholders’ equityShare capital 5,268,353,501 4,390,294,584 5,268,353,501 4,390,294,584Capital reserves 4,648,919,658 5,526,978,575 4,914,468,683 5,792,527,600Other comprehensive income 223,853,860 273,892,978 71,258,509 140,264,717Surplus reserves 1,696,762,554 1,618,543,971 1,696,254,281 1,618,035,698Specic reserves 3,019,173 1,914,832 - -Undistributed prots 3,344,953,206 3,199,681,426 3,520,430,440 3,035,977,927Total shareholders’ equity attributable toparent company
15,185,861,952 15,011,306,366 15,470,765,414 14,977,100,526Minority equity 2,426,634,780 1,817,314,295Total shareholders’ equity 17,612,496,732 16,828,620,661 15,470,765,414 14,977,100,526Total liabilities and shareholders’ equity 70,598,364,627 67,519,953,829 58,571,337,434 58,355,147,952
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Item
2,018Consolidated
2,017Consolidated
2,018Parent Company
2,017Parent CompanyI. Operating revenue 21,812,389,644 21,858,814,000 19,386,688,004 18,982,284,728
Less: Operating cost 18,082,285,752 18,019,075,299 16,282,345,726 16,062,361,939
Taxes and surcharges 116,279,994 114,240,644 49,472,269 44,763,858Selling and distribution expenses 115,541,161 121,457,892 84,713,588 83,481,628General and administrative expenses 1,142,337,348 1,039,774,787 523,147,247 512,402,152Research and development expenditures 672,614,073 702,392,513 557,762,997 578,309,233Financial expenses 1,522,264,813 758,201,305 1,259,434,698 1,060,351,306Including: interest expenses 1,603,062,758 1,156,849,978 1,282,879,956 983,633,800
Interest-income 332,607,896 293,152,359 32,752,024 49,458,268Impairment loss on assets -12,576,222 824,836,448 -25,476,619 619,199,093Plus: Other income 112,065,705 76,198,207 71,471,982 47,634,541
Investment income ("-" for losses) 116,030,979 123,368,931 101,099,249 156,502,074Gains from the changes in fair value ("-" for losses) 44,481,806 -4,615,775 44,481,806 -4,615,775Gains from assets disposal ("-" for losses) 155,557,716 10,749,056 69,575,485 1,303,038II. Operating prots ("-" for losses) 601,778,931 484,535,531 941,916,620 222,239,397
Plus: Non-operating revenue 12,102,280 29,343,558 4,014,476 3,753,311Less: Non-operating expenses 76,825,324 92,116,253 72,568,075 86,711,533III. Total prots (“-” for total losses) 537,055,887 421,762,836 873,363,021 139,281,175
Less: Income tax expenses 143,213,448 92,319,416 91,177,196 -14,928,712IV. Net prots (“-” for net losses) 393,842,439 329,443,420 782,185,825 154,209,887
(I) Classied by operating sustainability
1. Net prot from continued operations (“-” for net losses) 393,842,439 329,443,420 782,185,825 154,209,887
2. Net prot from discontinued operations (“-” for net losses)
(II) Classied by ownership
1. Net prot attributable to the shareholders of parent company 443,005,092 300,195,422 782,185,825 154,209,887
2. Minority interest income -49,162,653 29,247,998V. Other comprehensive income, net of tax -30,764,830 -66,677,526 -69,006,208 -123,810,476
Other comprehensive income, net of tax attributable to owners of the
parent company
-50,039,118 -48,510,693 -69,006,208 -123,810,476
(I) Other comprehensive income that cannot be reclassied into prot or
loss
1. Changes in re-measurement of the dened benet plan
2.Other comprehensive income that cannot be transferred to prot or loss
under the equity method
(II) Other comprehensive income that will be reclassied into prot or loss -50,039,118 -48,510,693 -69,006,208 -123,810,476
1. Other comprehensive income that can be transferred to prot or loss
under the equity method
-4,655,831 -8,449,542 -4,655,831 -8,449,542
2. Prot or loss from changes in fair value of available-for-sale nancial
assets
-76,002,428 -9,826,324 -65,270,999 -114,460,736
3. Translation differences of foreign currency nancial statements 30,619,141 -30,234,827 920,622 -900,198
Other comprehensive income, net of tax attributable to minority
shareholders
19,274,288 -18,166,833VI. Total comprehensive income 363,077,609 262,765,894 713,179,617 30,399,411
Total comprehensive income attributable to owners of the parent company 392,965,974 251,684,729 713,179,617 30,399,411Total comprehensive income attributable to minority shareholders -29,888,365 11,081,165 - -VII. Earnings per share
(I) Basic earnings per share 0.084 0.057 NA NA(II) Diluted earnings per share 0.084 0.057 NA NA
Consolidated Income Statement and the Company's Income Statement For the Year Ended December 31, 2018
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Consolidated Statement of Cash Flows and the Company's Statement of Cash Flows For the Year Ended December 31, 2018
Item
2018Consolidated
2017Consolidated
2018Parent company
2017Parent companyI. Cash ows from operating activities
Cash received from sales of goods and rendering of service20,116,019,149 16,640,760,111 19,289,270,419 15,763,239,504Refund of tax received327,889,433 889,705,824 291,302,010 831,198,628Cash received from other operating activities380,058,325 382,299,156 377,616,135 292,626,816Subtotal of cash inows from operating activities20,823,966,907 17,912,765,091 19,958,188,564 16,887,064,948Cash paid for purchase of goods and labor received17,045,009,084 13,683,031,255 17,744,386,344 15,196,972,901Cash paid to and on behalf of employees2,128,181,027 1,897,864,942 1,035,785,352 991,857,309Cash paid for taxes and surcharges399,974,649 477,730,293 100,888,209 162,924,111Cash paid for other operating activities696,858,168 521,929,327 438,838,219 494,142,751Subtotal of cash outows from operating activities20,270,022,928 16,580,555,817 19,319,898,124 16,845,897,072Net cash ow from operating activities553,943,979 1,332,209,274 638,290,440 41,167,876II. Cash ows from investing activities
Cash received from disposal of investment998,000,000Cash received from returns on investment65,672,231 23,201,157 47,195,316 1,160,353Net cash received from the disposal of xed assets, intangibleassets and other long-term assets
367,198,136 98,401,263 179,932,134 3,487,103Cash received from other investing activities302,041,173 50,163,105 34,930,409Subtotal of cash inows from investing activities734,911,540 171,765,525 1,260,057,859 4,647,456Cash paid for acquisition of xed assets, intangible assets andother long-term assets
3,105,409,114 1,333,961,486 135,206,982 99,333,396Cash paid for investments408,962,976 286,000,000 661,904,450 509,898,290Net cash paid for the acquisition of subsidiaries60,338,410Cash paid for other investing activities173,076,659Subtotal of cash outows from investing activities3,514,372,090 1,853,376,555 797,111,432 609,231,686Net cash ows from investing activities-2,779,460,550 -1,681,611,030 462,946,427 -604,584,230III. Cash ows from nancing activities:
Cash from absorption of investments194,345,310 206,029,110Including: cash received by subsidiaries from investments byminority shareholders
194,345,310 206,029,110Cash received from borrowings34,277,959,026 33,077,608,125 29,304,939,364 28,289,415,519Cash received from bonds issueCash received from other nancing activities1,284,314,355 1,360,930,000Subtotal of cash inows from nancing activities35,756,618,691 34,644,567,235 29,304,939,364 28,289,415,519Cash paid for debts repayments33,134,286,292 29,020,665,806 29,914,416,598 24,398,943,306Cash paid for distribution of dividends, prots or interest expenses1,828,486,604 1,623,289,546 1,501,107,415 1,466,838,827Cash paid for other nancing activities1,202,299,585 1,423,746,129 407,455,030 407,455,030Subtotal of cash outows from nancing activities36,165,072,481 32,067,701,481 31,822,979,043 26,273,237,163Net cash ow from nancing activities-408,453,790 2,576,865,754 -2,518,039,679 2,016,178,356IV. Effect of foreign exchange rate changes on cash and cashequivalents
109,110,732 -50,822,183 45,951,367 -23,870,002V. Net increase in cash and cash equivalents-2,524,859,629 2,176,641,815 -1,370,851,445 1,428,892,000
Plus: Beginning balance of cash and cash equivalents5,673,847,001 3,497,205,186 3,301,302,585 1,872,410,585VI. Ending balance of cash and cash equivalents3,148,987,372 5,673,847,001 1,930,451,140 3,301,302,585
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Item
Shareholders’ equity attributable to parent company
Minority equity
Totalshareholders'
equityShare capital Capital reserves
Less:
Treasury
stock
Othercomprehensive
income
Surplusreserves
Specialreserves
Undistributed
protsBalance as at Jan.1, 2017 4,390,294,584 5,526,978,575 322,403,671 1,603,122,982 - 3,353,936,451 1,290,413,687 16,487,149,950Changes in 2017 -Total comprehensive income -48,510,693 300,195,422 11,081,165 262,765,894Capital contributed or reduced byshareholders
-Capital contributed by shareholders 513,802,736 513,802,736Amounts of share-based paymentsrecognized in shareholder's equity
-Others -Prot distribution -Withdrawal of surplus reserves 15,420,989 -15,420,989 -Distribution to shareholders -439,029,458 -545,570 -439,575,028Others -Special reserves -Amount withdrawn in this year 45,958,231 5,006,115 50,964,346Amount used in this year -44,043,399 -2,443,838 -46,487,237Internal carry-forward ofshareholder's equity
-Conversion of capital reserves intoshare capital
-Conversion of surplus reserves intoshare capital
-Surplus reserves offsetting losses -Others -Balance as Dec. 31, 2017 4,390,294,584 5,526,978,575 273,892,978 1,618,543,971 1,914,832 3,199,681,426 1,817,314,295 16,828,620,661Balance as Jan.1, 2018 4,390,294,584 5,526,978,575 273,892,978 1,618,543,971 1,914,832 3,199,681,426 1,817,314,295 16,828,620,661Changes in 2018 -Total comprehensive income -50,039,118 443,005,092 -29,888,365 363,077,609Capital contributed or reduced byshareholders
-Capital contributed by shareholders 640,453,310 640,453,310Amounts of share-based paymentsrecognized in shareholder's equity
-Others -Prot distribution -Withdrawal of surplus reserves 78,218,583 -78,218,583 -Distribution to shareholders -219,514,729 -1,481,438 -220,996,167Others -Specic reserves -Amount withdrawn in this year 40,081,847 4,422,690 44,504,537Amount used in this year -38,977,506 -4,185,712 -43,163,218Internal carry-forward shareholder'sequity
-Conversion of capital reserves intoshare capital
878,058,917 -878,058,917 -Conversion of surplus reserves intoshare capital
-Surplus reserves offsetting losses -Others -Balance as at Dec. 31, 2018 5,268,353,501 4,648,919,658 223,853,860 1,696,762,554 3,019,173 3,344,953,206 2,426,634,780 17,612,496,732
Consolidated Statement of Changes in Shareholders' Equity for the Year Ended December 31, 2018
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Statement of Changes in Shareholders' Equity of the Company For the Year Ended December 31, 2018
Item Share capital
Capitalreserves
Less:
Treasury
stock
Othercomprehensive
income
Surplusreserves
Specialreserves
Undistributed
prots
Totalshareholders'
equityBalance as at Jan.1, 20174,390,294,584 5,792,527,600 264,075,193 1,602,614,709 - 3,336,218,487 15,385,730,573Changes in 2017Total comprehensive income -123,810,476 154,209,887 30,399,411Capital contributed or reduced by shareholders -Capital contributed by shareholders -Amounts of share-based payments recognizedin shareholder's equity
-Others -Prot distribution -Withdrawal of surplus reserves 15,420,989 -15,420,989 -Distribution to shareholders -439,029,458 -439,029,458Others -Special reserves -Amount withdrawn in this year 25,340,978 25,340,978Amount used in this year -25,340,978 -25,340,978Internal carry-forward of shareholder's equity -Conversion of capital reserves into sharecapital
-Conversion of surplus reserves into sharecapital
-Surplus reserves offsetting losses -Others -Balance as at Dec. 31, 2017 4,390,294,584 5,792,527,600 - 140,264,717 1,618,035,698 - 3,035,977,927 14,977,100,526Balance as at Jan.1, 2018 4,390,294,584 5,792,527,600 140,264,717 1,618,035,698 - 3,035,977,927 14,977,100,526Changes in 2018Total comprehensive income -69,006,208 782,185,825 713,179,617Capital contributed or reduced by shareholdersCapital contributed by shareholders -Amounts of share-based payments recognizedin shareholder's equity
-Others -Prot distributionWithdrawal of surplus reserves 78,218,583 -78,218,583 -Distribution to shareholders -219,514,729 -219,514,729Others -Special reserves -Amount withdrawn in this year 15,614,116 15,614,116Amount used in this year -15,614,116 -15,614,116Internal carry-forward of shareholder's equity -Conversion of capital reserves into sharecapital
878,058,917 -878,058,917 -Conversion of surplus reserves into sharecapital
-Surplus reserves offsetting losses -Others -Balance as at Dec. 31, 2018 5,268,353,501 4,914,468,683 71,258,509 1,696,254,281 - 3,520,430,440 15,470,765,414
Legal Representative:Accounting principal:Head of the Accounting
Department:
The accompanying notes to the nancial statementsare integral parts of the nancial statements.
From January to December 2018
III. Basic Information of the Company1. Company prole
√Applicable □Not applicableShanghai Zhenhua Heavy Industries Co., Ltd. (hereinafter referred to as “the Company”) is a joint-stock companylimited established on September 8, 1997 through restructuring Shanghai Zhenhua Port Machinery Company Limited(hereafter referred to as “Zhenhua Company”). Both the place of registration place and the address of the headquarters arein Shanghai City, P. R. China.
As approved by ZWFZ (1997) No.42 Document issued by the Securities Commission under the State Council, theCompany issued 100 million domestically-listed shares held by the foreign investors (B-share) from July 15, 1997 till July 17,1997. The B-shares were listed for trading at Shanghai Stock Exchange on Aug. 5, 1997.
As approved by ZJFXZ (2000) No. 200 Document of China Securities Regulatory Commission, the Companyadditionally issued of 88 million common shares (RMB denominated)(A-share) held by the domestic investors in Dec. 2000.The A-shares were listed for trading at Shanghai Stock Exchange on Dec 21, 2000.
As approved by ZJFXZ (2004) No.165 Document of China Securities Regulatory Commission, the Company additionallyissued 114,280,000 A-shares held by the domestic investors on Dec. 23, 2004. The additionally issued A-shares were listedat Shanghai Stock Exchange respectively for trading on Dec. 31, 2004 and Jan 31, 2005.
As approved by ZJFXZ (2007) No. 346 Document of China Securities Regulatory Commission, the Companyadditionally issued 125,515,000 A-shares held by the domestic investors on October 15, 2007. The additionally issuedA-shares were listed at Shanghai Stock Exchange for trading on October 23, 2007 and January 23, 2008 respectively.
As approved by ZJXKZ (2009) No.71 Document of China Securities Regulatory Commission, the Company privatelyplaced 169,794,680 A-shares on Sep. 22, 2008 to its controller China Communications Construction Co., Ltd. (hereafterreferred to as “China Communications Corporation”). A-shares privately placed were the oating shares with trading limitedconditions. From Mar. 20, 2012 on, the term of trading limitation expired for above-mentioned A-shares which were listed atShanghai Stock Exchange for trading.
By Dec. 31, 2018, after all previous issuances of the shares and bonus shares distributed in the past year, the total ofthe shares of the Company were 5,268,353,501 shares, par value per share was RMB 1.00 Yuan and the capital stock wasRMB 5,268,353,501 Yuan.
On Dec. 18, 2005, China Road and Bridge Construction Group General Company and the company’s former controllingshareholder China Harbor Construction (Group) General Company were consolidated into China CommunicationsConstruction (Group) Co. Ltd after restructuring (hereafter referred to as “China Communications Group”). In accordancewith Written Reply to Overall Reorganization and Overseas-listed and Domestically-listed Share of China CommunicationsConstruction Co. Ltd. (GZGG [2006] No.1063 Document) by State-owned Assets Supervision and AdministrationCommission of the State Council on Aug. 16, 2006, the reorganization proposal of China Communications Construction(Group) Co., Ltd approved in Written Reply to the Issues Concerning Management of State-owned Stock Equity of ChinaCommunications Construction Co. Ltd. (GZCQ [2006] No.1072 Document) on Sep. 30, 2006 and Written Reply to Approval ofChina Communications Construction Co. Ltd.’s Announcement of Purchase Report of Road and Bridge Construction Co. Ltd.and Shanghai Zhenhua Port Machinery (Group) Co. Ltd. and Exemption of Their Obligations for Purchase by Offer (ZJGSZ[2006] No. 227 Document), China Communications Construction solely initiated the incorporation of China CommunicationsConstruction Co. Ltd. and invested the stock equity of the Company held into the newly incorporated China CommunicationsCo., Ltd. With the completion of reorganization, China Communications Co., Ltd thus became the controlling shareholder ofthe Company.
In 2016, the Company was granted Uniform Social Credit Code 91310000607206953D.
On July 18, 2017, the board of directors of China Communications Construction Co., Ltd. discussed and approvedProposal for Transfer of Some Shares of Shanghai Zhenhua Heavy Industries (Group) Co., Ltd by Agreement andAssociated Transaction and agreed to transfer totally 1,316,649,346 shares of this Company held by it to CCCG andCCCG (Hong Kong) Holdings Co., Ltd. (hereinafter referred to as “CCCG Hong Kong”), accounting for 29.990% of the totalshares of this Company, after that, China Communications Construction Co., Ltd. held 16.239% of the stock equity of thisCompany. The transfer and registration of shares was accomplished on Dec. 27, 2017. On the date of the transfer of shares,CCCG directly held 552,686,146 A-shares of this Company (accounting for 12.589% of the total shares of this Company),indirectly held 763,963,200 B-shares of this Company through CCCG (Hong Kong) (accounting for 17.401% of the totalshares of this Company) and held 712,951,703 A-shares of this Company through China Communications ConstructionCo., Ltd. (accounting for 16.239% of the total shares of this Company), as a result, it became the holding shareholder of thisCompany.
The Company and its subsidiaries (hereinafter collectively referred to as “the Group”) was mainly engaged in design,construction, installation and contracting of large-sized port handling system and equipment, offshore heavy-duty equipment,engineering machinery, engineering vessel and large-sized metal structural members and their parts and components; repairof vessel; leasing of self-produced crane, sales of the self-produced products; international shipment by available specialtransportation vessel and specialized contracting for steel structure engineering.
The nancial statements were approved by the resolution of the Company’s board of directors on Mar. 29, 2019.2. Scope of consolidated nancial statements
√Applicable □Not applicable
The scope of the consolidated nancial statements is conrmed based on the control. Please refer to Notes IX.1 for theannual changes in this year and the main subsidiaries included in the scope of consolidation.IV. Preparation basis of nancial statements1. Preparation basis
The nancial statements are prepared on the basis of Accounting Standards for Business Enterprise– Basic Standardsissued by the Ministry of Finance and the subsequently issued and revised specific accounting principles, guidelines,explanations and other related regulations (hereinafter collectively referred to as “Accounting Standards for BusinessEnterprise”).2. Sustainable operation
√Applicable □Not applicable
The nancial statements are presented based on sustainable business.
The preparation of the financial statements, in addition to certain financial instruments, is based on the principle ofhistorical cost valuation. If the assets are impaired, the corresponding impairment provision shall be made in accordancewith the relevant provisions.V. Signicant accounting policies and accounting estimates
√Applicable □Not applicable
The Company determines the specic accounting policies and accounting estimates based on actual production andoperation characteristics, which are mainly reected in the provision for bad debts receivable, inventory valuation methods,business accounting of construction contracts, depreciation of xed assets, amortization of intangible assets, measurementmodel of investment properties and income recognition and measurement and so on.1. Statement of compliance with the Accounting Standards for Business Enterprise
The financial statements conform to the requirements of Accounting Standards for Business Enterprise, whichauthentically and completely reect the nancial status as of Dec. 31, 2018 and the nancial performance and cash ow ofthe Company and the Group for the year 2018.2. Accounting period
The accounting year of the Company starts from January 1 to December 31.3. Operating cycle
□Applicable √Not applicable4. Recording currency
RMB is the recording currency of the Group and also the currency used in the nancial statements. Unless otherwisespecied, the nancial statements are shown in RMB.
The subsidiaries, joint ventures and associated enterprises under the Group shall, on the basis of the main economicenvironment in which they operate, decide their own recording currency, and convert them into RMB when preparingnancial statements.
5. Accounting treatment of the business combination under common control and not under common control
√Applicable □Not applicableThe business combinations are divided into the one under common control and the one not under common control.Business combination under common controlThe business combination under common control is a business combination in which all of the combining enterprisesare ultimately controlled by the same party or the same parties both before and after the business combination and on whichthe control is not temporary. In a business combination under common control, the party which obtains control of othercombining enterprise on the combining date is the absorbing party, the other combining enterprise is the combined party. Thecombining date refers to the date on which the combining party actually obtains control on the combined party.
The assets and liabilities that the combining party obtains in a business combination under common control(including thegoodwill formed by the acquisition of the combined party by the ultimate controlling party), are subject to the correspondingaccounting treatment in accordance with the carrying amount in the nancial statements of the ultimate controlling partyon the combining date. The difference between the carrying amount of the net assets obtained from the combination andthe carrying amount of the consideration paid (or total par value of the shares issued) for the combination is treated as anadjustment to capital premium in the capital reserves and the capital reserves carried out under the former system.If thecapital premium is not sufcient to absorb the difference, the remaining balance is adjusted against retained earnings.
Business combination not under common control
The business combination not under common control is a business combination in which all of the combining enterprisesare not controlled by the same party or the same parties before and after the combination. As for the business combinationnot under the same control, the party which obtains the control of other combining enterprises on the combining date is theacquirer, and the other combining enterprises is the acquiree. The combination date refers to the date on which the acquireractually obtains the control of the acquiree.
The identifiable assets, liabilities and contingent liabilities obtained of the acquiree in the business combination notunder common control shall be measured at fair value on the acquisition day.
The positive balance between the sum of the fair value of the combined consideration paid (or fair value of the issuedequity securities) and the fair value of the held stock equity of the acquiree before the acquisition date and the fair valueof the identifiable net assets obtained in the combination from the acquiree is confirmed as goodwill, and shall be forsubsequent measurement after subtracting the accumulated impairment losses from the cost. If the sum of the fair value ofthe combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stock equity ofthe acquiree before the acquisition date is smaller than the fair value of the identiable net assets of the acquiree obtainedin the combination, firstly recheck the measurement of the fair value of the identifiable assets, liabilities and contingentliabilities obtained from the acquiree, and the fair value of the combined consideration paid (or fair value of the issued equitysecurities), and the fair value of the held stock equity of the acquiree before the acquisition date, after that, if the sum thefair value of the combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stockequity of the acquiree before the acquisition date is still smaller than the fair value of the identiable net assets obtained incombination from the acquiree, the balance shall be recorded in the current prot or loss.6. Preparation method of consolidated nancial statements
√Applicable □Not applicable
The scope of the consolidated nancial statements is determined based on control, including the nancial statements ofthe Company and its subsidiaries. A subsidiary is a subject which is controlled by the Company (including the enterprise, theseparable part of the invested entity, and the structural entity controlled by the Company).
When preparing the consolidated nancial statements, the subsidiary adopts the accounting period and the accountingpolicies consistent with the Company. Assets, liabilities, equity, income, expenses and cash ows arising from all transactionsbetween the Group’s internal companies are fully offset at the time of combination.
If the current losses borne by the minority shareholders of the subsidiary exceed the shares held by the minorityshareholders in the initial shareholders’ equity of the subsidiary, the balance still offsets the minority’s equity.
For the subsidiaries acquired in business combination not under common control, the operating results and the cashows of the acquiree shall be included in the consolidated nancial statements on the date of acquisition of control till thetermination of control. When preparing the consolidated financial statements, the financial statements shall be adjustedbased on the fair value of various identiable assets, liabilities and contingent liability conrmed on the acquisition date.
For the subsidiaries acquired in business combination under common control, the operating results and the cash owsof the acquiree shall be included in the consolidated nancial statements at the beginning of the combination period. Whenpreparing the consolidated nancial statements, relevant items of the previous nancial statements shall be adjusted andthe reporting entity formed after the consolidation is regarded as having been in existence since the ultimate controlling partybegins to implement control.
If changes in the relevant facts and circumstances lead to changes in one or more control elements, the Group willreevaluate whether or not the investee is controlled.7. Classication of joint venture arrangements and accounting treatment methods of joint operation
□Applicable √Not applicable8. Cash and cash equivalents
Cash is the Group’s cash on hand and the deposits that can be readily drawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group that are readily convertible to known account of cash and which are subjectto an insignicant risk of changes in value.9. Foreign currency transactions and transaction of nancial statements denominated in foreign currency
√Applicable □Not applicable
In the case of a foreign currency transaction, the Group translates the amount of foreign currency into the amount of therecording currency.
At the time of initial conrmation, the amount of foreign currency transaction shall be translated into the amount of therecording currency at the spot rate of the transaction date. On the date of balance sheet, the currency exchange rate ofthe currency denominated items shall be translated at the spot rate on the date of balance sheet. The resulting transactiondifference of settlement and monetary items, in addition to the difference arising from foreign currency special borrowingrelating to the assets of which the purchase and construction conform to the capitalized conditions, which shall be handledin accordance with the principle of capitalization of borrowing costs, shall be included in the current prot or loss. The foreigncurrency non-currency items calculated on historical cost basis are still translated at spot rate on the date of transaction,not changing the amount of its recording currency. The foreign currency non-monetary items measured at fair value shallbe translated at the spot rate on fair value determination date, and the resulting difference shall be recorded in the currentprots and losses or other comprehensive income according to the nature of the non-monetary items.
In the case of overseas business, the Group translates its recording currency into RMB in preparing the financialstatements: for assets/liabilities in the balance sheet, spot exchange rate on the date of balance sheet is used for translation.As for the items under the shareholders’ equity, except for those under “undistributed prots”, other items are translated usingthe spot exchange rate at the time of incurrence; the income and expense items in the income statement shall be translatedat the spot exchange rate of the transaction. The conversion difference of foreign currency statements arising from abovetranslation shall be recognized as other comprehensive income. When disposing overseas operations, other comprehensiveincome related to the overseas operation shall be transferred into the current prots and losses, partial disposal shall becalculated according to the proportion of disposal.
Foreign currency cash ows shall be translated at the spot exchange rate on the day of incurrence of the cash ow.Cash ow from overseas subsidiaries is translated at the spot exchange rate on the day of incurrence of the cash ow. Effectof changes in exchange rate on cash amount is shown separately in the cash ow statements as an adjustment item.10. Financial instruments
√Applicable □Not applicable
Financial instrument is the contract that forms the nancial assets of one party and forms nancial liabilities or equityinstruments of the other party.
Recognition and termination of nancial instruments
The Group identies a nancial asset or nancial liability when becoming a party of a nancial instrument contract.
Once the following conditions are satised, terminate the conrmation of nancial assets (or part of nancial assets or ofa group of similar nancial assets), that is to say, write off from its account and balance sheet:
(1) The right to receive cash ows from nancial assets expires;
(2) The right to receive the cash ow from nancial asset has been transferred, or have assumed the obligation in the“pass-through agreement” to pay the collected cash ow timely to the third party in full; and (a) has transferred substantiallyalmost all the risks and rewards of ownership of the nancial asset, or (b) although does not transfer or retain substantiallynearly all of the risks and rewards of ownership of the nancial asset, but has given up the control over the nancial asset.
In the event that the liability of a nancial liability has been fullled, cancelled or expired, the determination of nancialliabilities shall be terminated. If the existing nancial liability is replaced by the same creditor with another nancial liabilitiesof virtually entirely different terms, or the terms of the existing liabilities are almost entirely modified substantially, suchsubstitutions or modications shall be handled as the termination of the original liability and the recognition of new liabilities,and the difference shall be included in current prots and losses.
In case of trading nancial assets in the conventional way, conrm and terminate on the basis of trade-date accounting.Trading financial assets in the conventional way refers to collecting or delivering financial assets within the time limitprescribed in the law or the prevailing practice in accordance with the terms and conditions of the contract. Trading day is thedate on which the Group commits to buy or sell nancial assets.
Classication and measurement of nancial assets
During initial recognition, the nancial assets of the Group are classied into: nancial assets measured at fair valuewith the changes included into current prots and losses, loans and receivables, and available-for-sale nancial assets . Thenancial assets are measured at fair value at the time of initial recognition. As for the nancial assets measured at fair valuewith the changes included into current prots or losses, related transaction costs shall be included directly in current prot orloss, while the related transaction costs of other nancial assets are included in the initially recognized amount.
Subsequent measurement of nancial assets is subject to its classication:
Financial assets measured at fair value with the changes included into current prots or losses
Financial assets measured at fair value through current prot or losses shall include the trading nancial assets and thenancial assets designated at the time of initial recognition, which are measured at fair value through current prot or loss.Trading nancial assets are nancial assets that meet one of the following conditions: getting the nancial assets for thepurpose of selling in the short term; belonging to part of a combination of identiable nancial for centralized management,and there is objective evidence showing that the company has recently adopted a short-term prot approach to manage theportfolio; belonging to derivatives, but excepting for the derivatives that are designated and are effective hedging tools, thederivatives belongings to nancial guarantee contracts and the derivatives that are linked to equity instrument investmentwhich has no offer in the active market and its fair value cannot be measured reliably and must be settled through thedelivery of the equity instrument. For such nancial assets, use fair value for subsequent measurement, all realized andunrealized gains and losses are included in the current profits and losses. Dividends or interest income related to thenancial assets measured at fair value through the current prot or loss shall be recorded in current prots and losses.
Only when one of the following conditions is met, can the financial assets be designated as the financial assetsmeasured at the fair value through the current prot or loss at the initial measurement:
(1) The designation can eliminate or obviously reduce the discrepancies in recognition and measurement of the relatedgains or losses arisen from the difference in measurement basis.
(2) The ofcial written document on risk management or investment strategy has stated that the nancial instrument willbe managed and evaluated on the basis of fair value and be reported to the key management personnel.
(3) The hybrid instrument including one or more embedded derivative instruments unless the embedded derivativeinstruments do not greatly change the cash ow of the hybrid instrument or the embedded derivative instruments shall not besplit from the related hybrid instruments obviously;
(4) The hybrid instruments containing embedded derivative instruments that shall be split but cannot individuallymeasured at the time of acquisition or the follow-up date of balance sheet.
The equity instrument investment that has no offer in the active market and whose fair value cannot be measuredreliably shall not be designated as the nancial assets measured at fair value through the current prot or loss.
The nancial assets classied as the nancial assets measured at fair value through the current prot or loss by theenterprise during initial recognition shall not be reclassied as any other type of nancial assets; while other types of nancialassets shall not be reclassied as the nancial assets measured at fair value through the current prot or loss.
In accordance with the above conditions, such nancial assets of the Group mainly include forward foreign exchangecontracts.
Loans and account receivables
Loans and receivables refer to the non-derivative financial assets with no quotation on active market and fixedor identifiable recoverable amount. For such financial assets, adopt the actual interest rate method for subsequentmeasurement based on amortized cost, and the gains or losses arising from its amortization or impairment shall be includedin current prots or losses.
Available-for-sale nancial assets
The available-for-sale nancial assets refer to the non-derivative nancial assets that are designated as available forsale during initial recognition, and the financial assets other than those listed above. For such financial assets, use fairvalue for subsequent measurement. The discount or premium shall be amortized using the effective interest method andbe recognized as interest income or expense. In addition to recognizing the impairment loss and the balance of exchangeof foreign currency monetary nancial assets as the current prots or losses, the changes in fair value of available-for-salenancial assets shall be recognized as other comprehensive income, and the cumulative gains or losses shall be transferredto the current prots or losses until the nancial asset has been derecognized or impaired. Dividends or interest incomerelated to the available-for-sale nancial assets shall be included in the current prots or losses.
The equity instrument investments that are not quoted in an active market and whose fair value cannot be reliablymeasured shall be measured at cost.
Classication and measurement of nancial liabilities
The nancial liabilities of the Group are classied as other nancial liabilities at the time of initial recognition. The relatedtransaction costs of other nancial liabilities shall be included in the initial recognized amount; actual interest rate methodshall be used for subsequent measurement based on amortized cost.
Offset of nancial instruments
When meeting the following conditions simultaneously, the net amount after financial assets and financial liabilitiesoffsetting shall be listed in the balance sheet: having the legal right to offset the recognized amount, and that legal rights arecurrently enforceable; the plan is to be settled in net, or at the same time, realize the nancial assets and pay off the nancialliabilities.
Financial guarantee contract
A nancial guarantee contract is a contract signed between the guarantor and the creditor, when the debtor fails toperform the obligations, the guarantor shall perform the obligation or bear the liability in accordance with the contract.The nancial guarantee contract is measured at fair value at the time of initial recognition, does not belong to the nancialguarantee contract designated as the nancial liabilities measured at fair value with changes included in the current protsand losses, after initial recognition, in accordance with the amount conrmed by the current best estimate of the expenditurerequired to perform relevant obligations at the date of balance sheet and the balance after deducting the accumulativeamortization determined in accordance with the revenue recognition principle from the initial recognized amount, the higherof the two shall be for subsequent measurement.
Derivative nancial instruments
The Group uses derivative financial instruments, such as forward foreign exchange contracts, to hedge againstexchange rate risk. Derivative nancial instruments are initially measured at the fair value on the date of derivative tradingcontract signing, with subsequent measurement at fair value. The derivative nancial instrument with positive fair value isrecognized as an asset, and the one with negative fair value is recognized as a liability. However, the derivative nancialinstruments, which are linked to the equity instrument which has no offer in the active market and its fair value cannot bemeasured reliably and shall be settled through the delivery of the equity instrument, shall be measured at cost.
In addition to the part of an effective hedge in a cash ow hedge included in other comprehensive income, and rolled outfrom the current prots or losses in the event that the hedged item affects the prot or loss, the gains or losses arising fromchanges in fair value of derivative instruments are directly included into the current prots or losses.
Impairment of nancial assets
The Group checks the book value of the nancial assets on date of balance sheet. If there is objective evidence showingthat nancial assets are impaired, the provision for impairment shall be made. The objective evidence for nancial assetsimpairment refers to the items which actually happened after initial recognition of nancial assets, inuenced the estimatedfuture cash ows of the nancial assets, and its impact can be reliably measured by the enterprise. The objective evidencesfor impairment of nancial assets include: serious nancial difculties occurred to the issuer or debtor, violating the terms ofthe contract (such as default or overdue payment of interest or principal) by the debtor, likely bankruptcy or other nancialrestructuring of the debtor, and reduction in and measurable expected future cash ows shown by public data.
Financial assets measured at amortized cost
In the event of impairment, the book value of the nancial asset shall be written down through the allowance for projectvalue to the present value of estimated future cash ow (excluding the future credit losses that have not yet occurred), theamount of write downs shall be recorded in the current prots or losses. The present value of the expected future cash owis determined by discounting based on the original effective interest rate (the actual interest rate calculated and determinedat the time of initial recognition) of the nancial asset, and the value of collateral shall also be taken into account. The interestincome after impairment shall be calculated and determined using the discount rate used to discount future cash ows in thelight of the determination of impairment losses as the interest rate. For loans and receivables, if there is no real expectationfor future recovery and all collaterals have been realized or transferred to the Group, the loans and receivables and relatedimpairment provisions shall be written off.
If the amount of individual financial assets is significant, individual impairment test shall be conducted. If there isobjective evidence to prove that the impairment has occurred, the impairment loss shall be recognized and included incurrent prot or loss. As for individual nancial asset with no signicant amount, the impairment test shall be conducted in theportfolio of nancial assets with similar credit risk features or conducted separately. As for the nancial assets (including thenancial assets with or without signicant amount) with no impairment in separate test, impairment test shall be conductedagain in the portfolio of nancial assets with similar credit risk features. The nancial assets which have suffered from animpairment loss in any single amount shall not be included in any portfolio of nancial assets with similar risk features for anyimpairment test.
When the Group have conrmed the impairment losses on nancial assets measured at amortized cost, if there is anyobjective evidence showing that the nancial assets value has been restored, and it is objectively related with the eventsincurred after the conrmation of the loss, the previously recognized impairment loss shall be reversed into current prot orloss. However, the book value after the reversal shall not exceed the amortized cost of the nancial asset at the reversaldate, assuming that the impairment provision is not included.
Available-for-sale nancial assets
If there is objective evidence for financial asset impairment, the cumulative losses originally included in othercomprehensive income due to the decline in the fair value, shall be transferred out and included in the current prots andlosses. The transferred cumulative loss refers to the balance after deducting the recovered principal and the amortizedamount, current fair value and the impairment loss originally included in the prots or losses from the initial acquisition costof the available-for-sale nancial assets.
The objective evidences for proving impairment of available-for-sale equity instruments investments includes seriousor non-temporary decline in fair value. “Serious” shall be judged according to the extent of fair value the cost, and “non-temporary” shall be judged according to the duration of fair value below the cost. If there is any objective evidence ofimpairment, the transferred aggregate losses shall be the balance after deducting the current fair value and the impairmentloss originally included in the profits or losses from the acquisition cost. The impairment losses of equity instrumentinvestment available for sale shall not be carried back through prot or loss, and the increase in fair value after impairmentshall be recognized directly in other comprehensive income.
It needs to judge when determining what is “serious” or “non-temporary”. The Group shall judge according to the degreeor duration of the fair value below cost as well as other factors.
For the debt instruments investment available for sale, the impairment shall be assessed in the same manner as thenancial assets measured at amortized cost. However, the transferred aggregate losses shall be the balance after deductingthe current fair value and the impairment loss originally included in the prots or losses from the acquisition cost. The interestincome after impairment shall be calculated and recognized in accordance with the discount rate used to discount futurecash ows during the determination of impairment losses.
As for the debt instruments available for sale of which impairment losses have been recognized, if, in the subsequentaccounting period, the fair value rises and is objectively related to events that occur after the impairment losses wererecognized, the previously recognized impairment losses shall be reversed and included in the current prots or losses.
Financial assets measured at cost
If there is objective evidence showing the impairment of financial assets, the difference between the book value ofnancial assets and the present value determined by discounting the future cash ows according to the market return ofsimilar nancial assets at that time shall be recognized as impairment loss and included in current prots or losses. Oncerecognized, the impairment loss shall not be carried back.
Transfer of nancial assets
If the Group has transferred almost all risks and rewards of the ownership of the nancial assets to the transferee, therecognition of such financial assets shall be terminated. If almost all risks and rewards of the ownership of the financialassets are retained, the recognition of such nancial assets shall not be terminated.
When the Group has neither transferred nor retained almost all risks and rewards of the ownership of nancial assets,handle respectively in the following manners: if the control over the nancial asset is given up, stop recognizing the nancialassets and recognize assets and liabilities arising; if the control is not given up, recognize related financial assets andliabilities accordingly according to the extent of its continued involvement in the transferred nancial assets.
In case of continued involvement in the manner of providing financial security for the transferred financial assets,recognize the assets formed by the continued involvement in accordance with the lower of the book value of the nancialasset and the amount of nancial guarantee. The amount of nancial guarantee refers to the maximum amount to be repaidin the considerations received.11. Receivables
(1) Receivables with individually signicant amount and individual provision for bad debts
√Applicable □Not applicable
Basis or monetary criteria for determining an individuallysignicant receivable
Top 5 of the receivables from non-related partyMethod of determining provision for receivables withindividually signicant amount and individual provision for baddebts
Based on the balance of the present value of the expected future cash
ow of the account receivable less than its book value
(2) Receivables with provision for bad debts made by portfolio with credit risk characteristics√Applicable □Not applicable
Method of provision for the bad debt on the basis of portfolio of credit risk features (aging analysis method, balance percentage methodand other method)The basis for conrming the credit risk portfolio is as follows:
Portfolio 1 Accounts receivables of related party
Portfolio 2 Accounts receivables of non-related partyMethod of provision for bad debts on the basis of credit riskportfolio:
Portfolio 1 The provision for bad debts shall not be made for the
accounts receivable from related party except that there is objective
evidence showing that the Group is unable to recover the money
according to the original provisions of account receivables
Portfolio 2 Aging analysis method
In the portfolio, the provision for bad debts made by aging analysis method√Applicable □Not applicable
Aging
Provision proportion of
receivables (%)
Provision proportion of
other receivables (%)
Within 1 year (including 1 year)Thereinto: as to the sub-items within 1 year, the lines can be addedWithin 6 months007~12 months111~2 years15152~3 years3030Over 3 years3~4 years50504~5 years7575Over 5 years100100
In the portfolio, the provision for bad debts made by balance percentage method□Applicable √Not applicableIn the portfolio, the provision for bad debts made by other methods□Applicable √Not applicable(3) Receivables with individually signicant amount and individual provision for bad debts√Applicable □Not applicable
Criteria of individualprovision for bad debts
Objective evidence shows that the Group is unable to recover the money according to the original provisions ofother receivables.Method of provisionfor bad debts
According to the difference of the present value of the expected future cash ow of other receivable less than itsbook value
12. Inventories
√Applicable □Not applicableInventories includes raw materials, purchased spare parts, goods in process and merchandise inventory, etc.Inventories are initially measured at cost. Inventory costs include purchase costs, processing costs and other costs.The actual cost is determined by the weighted average method when the inventory is sent out. Turn-over materials includelow-value consumption goods and the packing, etc.; the low-value consumption goods are amortized by installment whilepacking is amortized at one time.
The inventory system shall be perpetual inventory system.On the date of the balance sheet, inventories are measured at the lower of the cost and net realizable value, for the costthat is higher than the net realizable value, the provision for depreciation of inventories shall be included in the current protsor losses. If the inuence factors of the provision for depreciation of inventories before have disappeared, making the netrealizable value of inventories higher than the book value, in the amount of original provision for depreciation of inventories,the previously reduced amount shall be recovered and the reversed amount shall be recorded in the current prots or losses.
Net realizable value is the amount that the estimated selling price of the inventory minus the cost that would incur at thetime of completion, the estimated cost of sales and relevant taxes and fees in daily activities. For the provision for decline invalue of inventories, the raw materials shall be by category while the nished goods shall be by individual inventory item.13. Held-for-sale assets
□Applicable √Not applicable
14. Long-term equity investment
√Applicable □Not applicableLong-term equity investment includes the equity investment in subsidiaries, joint ventures and associates.Long-term equity investment is initially measured by the initial investment cost on acquisition. Long term equityinvestment obtained by business combination under the same control takes the share of the book value in the consolidatedfinancial statements of the ultimate controlling party acquired from the acquiree on the combination date as the initialinvestment cost; the difference between the initial investment cost and the book value of the combined consideration isadjusted to the capital reserves (when sufcient for offset, write down the retained earnings); as for other comprehensiveincome prior to the date of combination, when handling the investment, it shall carry out the accounting treatment on thesame basis of the relevant assets or liabilities directly disposed by the investee, as for the shareholders’ equity recognizeddue to the changes in other shareholders’ equity except for net profit or loss, other comprehensive income and profitdistribution in the investee, it shall be transferred to current prots or losses during disposal of the investment. In which, if it isstill long-term equity investment after disposal, carry forward in proportion, if it is converted to the nancial instruments, thencarry forward fully.
Long-term equity investments obtained by business combination not under the same control shall take the combinedcost as the initial investment cost (if the business combination not under the same control is realized by two or moretransactions in steps, take the sum of the book value of equity investments held by acquiree prior to purchase date andnewly increased investment cost on purchase date as the initial investment cost), and the combined cost includes the sum ofthe assets paid by the purchaser, the liabilities incurred or assumed, the fair value of the equity securities issued; as for othercomprehensive income prior to the purchasing date recognized by the equity method accounting, such investment shall behandled by using the same basis as the investee for handling relevant assets or liabilities directly. As for the shareholders’equity recognized due to the changes in other shareholders’ equity except for net prot or loss, other comprehensive incomeand prot distribution in the investee, it shall be transferred to current prots or losses during disposal of the investment.In which, if it is still long term equity investment after the disposal, carry forward in proportion, and if it is converted tothe nancial instruments, then carry forward fully. When equity investments held prior to the purchasing date as nancialinstrument included in the cumulative changes in fair value of other comprehensive income is counted according to the costmethod, it shall be transferred fully into the current prot or loss. As for the long term equity investments acquired other thanlong term equity investments formed by the business combination, the initial investment cost shall be determined accordingto the following methods: obtained by making payment in cash, it shall take the actual purchase price paid and the directlyrelated costs and taxes with the acquisition of long term equity investment and other necessary expenses as the initialinvestment; obtained by issue of equity securities, the fair value of the issue of equity securities shall be taken as the initialinvestment cost.
The Company can measure the long-term equity investments controlled by the investment enterprises with cost methodin individual nancial statement of the Company. Control means having the power over the investee and enjoying variablegains through participating in related activities of the investee, and having the ability to utilize the power over the investee toinuence the return amount.
When the cost method is used, the long-term equity investment is priced at the initial investment cost. The cost of thelong-term equity investment shall be adjusted if the investment is added or withdrawn. The cash dividends or prots declaredby the investee shall be recognized as the current gain on investment.
If the Group has a joint control or material inuence on the investee, the long-term equity investment shall be accountedby the equity method. Joint control means enjoying control over certain arrangement according to contract, and sucharranged activities must be decided upon agreement of the Group and the other participants that share the control rights.Material inuence means that the company possesses the right of decision-making participation in the nancial and operatingpolicies of the investee but is not able to control or jointly control with other parties the making of such policies.
When the equity method is adopted, if the initial cost of a long-term equity investment larger than the share of fair valueof identifiable net assets of the invested enterprise, it shall be included in the initial investment cost of long-term equityinvestment; if the initial cost of a long-term equity investment less than the share of fair value of identiable net assets theinvested enterprise, the difference shall be included in the current profits or losses and the cost of the long-term equityinvestment shall also be adjusted.
When the equity method is adopted, after obtaining a long-term equity investment, in accordance with the share of othercomprehensive income and net income achieved by the investee which should be enjoyed or shared, respectively conrmthe investment prot or loss and other comprehensive income, and adjust the book value of the long-term equity investment.
In conrmation of the share of the net prot or loss of the investee, based on the fair value of the identiable assets of theinvestee when obtaining the investment, in accordance with the Group's accounting policies and accounting periods, offsetthe internal transaction gains and losses between afliated enterprises and joint ventures and attribute to the investing partyin accordance with the enjoyed proportion (but the loss of internal transactions is an impairment loss of assets, which shouldbe fully recognized), conrm the net prot of the investee after adjustment, except for the assets that are invested or soldto form a business. In accordance with the portion of the prots or cash dividends declared by the investee entity, the bookvalue of the long-term equity investment shall be reduced accordingly. The Group conrms the net losses of the investedenterprise, the book value of the long-term equity investment and other long-term interests in the net investment of theinvestee is reduced to zero, except for which the Group bears extra liability for loss. For the other changes in the equity ofthe investee other than net gains/losses, other comprehensive income and prot distribution, the book value of the long-termequity investment shall be adjusted and included in the shareholders’ equity.
For the disposal of long term equity investment, the difference between the book value and the actual purchase priceshall be included in current prots or losses. Accounting treatment shall be carried out for the long-term equity investmentsaccounted for using the equity method, terminating the equity method, and relevant other comprehensive incomeaccounted for using original equity on the same basis of direct disposal of relevant assets or liabilities by the investee. Theshareholders’ equity recognized by the changes in other shareholder’s equity of the investee other than net prot or loss,other comprehensive income and prot distribution shall be transferred fully into the current prots or losses; in case of stillusing the equity method, carry out the accounting treatment for other comprehensive income related to the original equityaccounting shall on the same basis of direct disposal of relevant assets or liabilities by the investee and transfer into thecurrent prots or losses in proportion, and the shareholders’ equity recognized by the changes in other shareholder’s equityof the investee other than net prot or loss, other comprehensive income and prot distribution shall be transferred into thecurrent prots or losses in proportion.15. Investment properties
(1) Cost measurement:
Depreciation or amortization method
Cost measurement model for all investment properties is adopted by the Group to undertake follow-up measurementof the investment properties. Depreciation and amortization are made for buildings and land use rights according to theirestimated service life and residual value rate. The estimated useful lives, net residual value rate and annual depreciation(amortization) rate of the investment properties are listed below:
Estimated useful lives Estimated net residual value rate Annual depreciation (amortization) rateBuilding30 years0%3.3%Land use rightLand use years0%
Calculated and determined based on the estimated
residual value rate and land use years
The estimated useful lives, estimated net residual values and depreciation (amortization) method of the investmentproperties shall be reviewed and adjusted appropriately by the Group at the end of each year.
When the purpose of the investment properties is changed to self-use, from the date of change, convert the real estatefor investment to xed assets or intangible assets. When the purpose of self-use property is changed to earning rentals orfor capital appreciation, from the date of change, convert the xed assets or intangible assets to investment properties. Uponconversion, the book value before the conversion shall be recorded as the entry value after conversion.16. Fixed assets
(1) Recognition conditions
√Applicable □Not applicable
Fixed assets shall be recognized only when the related economic interests are likely to ow to the Group and their costscan be reliably measured. In case of meeting the recognition condition, the subsequent expenditure relating to xed assetsshall be included in the cost of xed assets, and stop recognizing the book value of the replaced part; otherwise, it shall beincluded in current prots or losses at the time of incurrence.
The initial measurement of the xed assets shall be made at its cost. The cost of purchasing a xed asset consists ofthe purchase price, relevant taxes, and other expenditures incurred before making the xed asset reaching the expectedconditions for use and attributable directly to such asset.
(2) Depreciation method
√Applicable □Not applicable
Category Depreciation method
Depreciation period
(year)
Residual rateAnnual depreciation rateHousing and buildings Straight line method20-40 years0%2.5%-5%Machinery and equipmentStraight line method3-20 years
based on the price
of scrap steel
Conrmed based on theestimated residual value rate
and expected service lifeOfce and electronic equipmentStraight line method3-5 years0%20-33.3%Transportation facilities(excluding vessels)
Straight line method5 years0%20%VesselsStraight line method10-30 years5%/10%3-9.5%
(3) Recognition and measurement depreciation of xed assets under nancing lease√Applicable □Not applicableDepreciation for xed assets under nancing lease is calculated in accordance with the same policy as xed assets. Ifthe acquisition of ownership of the leased asset at the expiration of the lease period can be conrmed rationally, depreciationshall be accrued within the service life of the leased asset. If not, depreciation shall be accrued within lease term or theservice life of the leased asset, whichever is shorter.
The Group shall check the estimated service life, estimated net residual value and method of depreciation at the end ofeach report year at least and make necessary adjustments.17. Construction in process
√Applicable □Not applicable
The cost of construction in process is determined based on actual project expenditure, including necessary projectexpenditures occurred in construction period, capitalized loan expenses before making the construction in progress reachexpected status of use and other relevant expenses.
When the construction in progress reaches the expected condition for use, it shall be transferred into xed assets.18. Borrowing cost
√Applicable □Not applicable
Borrowing cost refers to the interest and other relevant costs arising from the borrowing by the Group, including theinterest on borrowings, the amortization of the discount or premium, auxiliary expenses and the exchange difference arisingfrom the foreign currency borrowings.
The borrowing cost directly attributable to the purchase, construction or production of assets eligible for capitalizationshall be capitalized, while other borrowing costs shall be included in current profits or losses. The assets eligible forcapitalization refers to assets such as fixed assets and investment properties which take a rather long period of time topurchase, construct or manufacture in order to reach their expected state of use or sale.
When the following conditions are also met, the borrowing cost can be capitalized:
(1) Asset expenditures have incurred;
(2) Borrowing costs have incurred;
(3) Purchasing, constructing or production activities necessity to make that asset reach expected usable or salablecondition has started.
When the purchased, built or produced xed asset reached expected usable or salable condition, stop capitalization.The subsequent borrowing costs shall be included in current prots or losses.
The amount of interest capitalization in each accounting period during the capitalization period is determined by thefollowing method:
(1) The special borrowings shall be determined based on the amount that the interest expense actually incurred in thecurrent period less the temporary deposit interest income or the investment income.
(2) The general borrowing occupied is determined by multiplying the weighted average of accumulated assetsexpenditures expenses exceeding that of special borrowings by the weighted average interest rate of the general borrowingsoccupied.
In case that purchasing, building or production activities of assets cease accidentally for reasons other than reachingexpected usable or salable status and the term of cease exceeds 3 months on end, capitalization of borrowing cost shall bestopped. The borrowing costs occurring during the term of cease shall be recognized as cost and included in current protsor losses until purchasing, building or production activities resume.19. Biological assets
□Applicable √Not applicable20. Oil and gas assets
□Applicable √Not applicable21. Intangible assets
(1) Valuation method, service life and impairment test
√Applicable □Not applicable
Intangible assets are recognized only when the related nancial benets will probably ow into the Group and theircosts can be reliably valued, and initial measurement is taken at cost. However, intangible assets acquired in businesscombination under the same control can be measured reliably, that is, intangible assets are recognized as intangible assetsseparately and measured at fair value. The evaluation value conrmed by the state-owned authority shall be the book valuefor the intangible assets invested by the state-owned shareholders at the re-structuring of the Company.
Service life of intangible assets shall be conrmed based on the term in which they can bring benets to the Company.If the term in which intangible assets bring benets to the Company cannot be expected, such assets shall be conrmed asintangible assets with uncertain service life.
The service life of intangible assets is shown as follows:
Service lifeLand use rightLand service lifeSoftware use cost5 yearsProprietary technology10 years
Land use right obtained by the Group is usually accounted for as intangible assets. For self-developed and self-constructed buildings, relevant land use right and the buildings shall be regarded as intangible assets and fixed assetsrespectively. If the price paid for outsourced land and building is difcult to distribute in a reasonable way between the landuse rights and the building, they are all regarded as xed assets.
Intangible assets with limited service life are amortized in straight line method in the service life. Double check is madeby the Group at the end of each year to expected life in use and amortization method of intangible assets with limited use oflife and necessary adjustment is thus made.
(2) Accounting policy for expenses for internal research and development
√Applicable □Not applicable
The Group classifies the expenses of the internal R & D project into expenses in research phase and expenses indevelopment phase. Expenditure in research phase shall be included in the current prots or losses at the time of incurrence.Expenses in development stage are capitalized when simultaneously satisfying the following conditions: It is technicallyfeasible to complete the intangible assets to make them usable and marketable; the management has the intention tocomplete the intangible assets and to use them or to sell them; the ways intangible assets yield financial benefits. It’s
able to prove the products manufacturing by intangible assets exist in the market, or intangible assets are in the market,or intangible intended to be used for interior; there are enough technology and financial resources and other resourcessupports to complete the development of the intangible assets, with the ability to use and sell; the expenses attributable tosuch development stage of intangible assets can be reliably measured. The development expenditures not satisfying theabove conditions are included in current prots or losses when incurred.22. Long-term assets impairment
√Applicable □Not applicableThe assets impairment, except for inventories, deferred income tax and nancial assets, shall be determined as follows:
The Group will determine whether there is sign of impairment for assets on the date of balance sheet. If there is signof impairment, the Group will estimate recoverable amount and conduct impairment test. An impairment test shall beconducted at the end of the year at least for the goodwill formed due to the business combination no matter whether there isany sign of impairment. Impairment test shall also be made at least once each year for the intangible assets not reaching theusable state.
The recoverable amount is the higher between net amount of asset’s fair value deducting disposal expenses andthe present value of expected future cash flow. Recoverable amount is estimated by individual piece of asset. In caserecoverable amount of individual asset is difcult to value, recoverable amount of asset group to which they said individualasset belongs is conrmed. An asset group can be recognized on the basis that its main cash in-ow is independent of thatof other assets or asset groups.
When the recoverable amount of the asset or asset group is lower than its book value, the Group shall reduce its bookvalue to the recoverable amount, the amount written down is included in the current prots or losses, and the correspondingasset impairment provision shall be withdrawn.
In terms of goodwill impairment test, the book value of goodwill formed by the business combination shall be amortizedto the relevant asset group by reasonable means from the date of purchase; it shall be amortized to relevant combinationof asset groups when it is difcult to amortize to relevant asset group. The relevant asset group or combination of assetgroups is the one that can benet from the synergy effect of the business combination, and is not larger than the reportingsubsection determined by the Group.
For impairment test of relevant asset groups or combination of asset groups that contain goodwill, if there is a sign ofimpairment, the impairment test on the asset group or the asset group that does not include goodwill is performed rst. Thencalculate the recoverable amount and conrm corresponding impairment loss. Next, impairment test is made to relevantasset groups or combination of asset groups that contain goodwill. If the recoverable amount is lower than the book valueof the asset. The impairment loss is rstly to compensate the book value of the goodwill amortized in the asset group orportfolio, and then to compensate the book value of other assets in the proportion of the book value of other assets exceptfor the goodwill in the asset group or portfolio.
The above assets impairment loss is not reversed in the future accounting period once recognized.23. Long-term deferred expenses
√Applicable □Not applicable
Long-term deferred expenses shall be amortized by straight-line method, and the amortization period is as follows:
Amortization periodImprovement of leased xed asset for operation Expected benet period
24. Employee compensation
(1) Accounting treatment of short-term compensation√Applicable □Not applicableDuring the accounting period when the employees have rendered services, the actual short-term compensation shall berecognized as liability and included in current prot or loss or related assets cost.
(2) Accounting treatment of post-employment benets√Applicable □Not applicable
The Group shall buy endowment insurance and unemployment insurance managed by the local government and openthe enterprise annuity for the employees. The corresponding expenditure shall be included in related asset cost or currentprots or losses at the time of incurrence.
(3) Accounting treatment of dismissal benets
□Applicable √Not applicable
(4) Accounting treatment of other long-term employee compensation
□Applicable √Not applicable25. Expected liabilities
In addition to the contingent consideration or contingent liabilities of business combination not under the same control,when a contingency-related liability meets the following conditions synchronously, the Group recognizes it as an estimatedliability:
(1) This liability is the current liability of the Group;
(2) The fulllment of the liability may cause outow of economic interests;
(3) The amount of the liability can be reliably measured.
Expected liabilities are initially valued by the best estimates to be spent on fulfillment of related present obligation,combining risks and uncertainty with probabilities and time value of currency. The book value of expected liabilities is double-checked and thus adjusted on Date of balance sheet to reect present best estimates. Where there is conclusive evidencethat the book value does not reect the current best estimate, the book value is adjusted in accordance with the current bestestimate.26. Share-based payment
□Applicable √Not applicable27. Other nancial instruments such as preferred shares and perpetual bonds
□Applicable √Not applicable28. Revenues
√Applicable □Not applicable
Revenue shall be recognized when related benefits are likely to flow into the Group, the amount can be reliablycalculated, and the following conditions are met synchronously.
(a) Revenue from sales of large-scale port equipment, ocean heavy equipment, product of steel structure andconstruction project is recognized by the percentage-of-completion method. Please refer to Note III. 11.
(b) Income from ship transportation is recognized at the completion of the voyage.
(c) Income is recognized at the time of delivery for the sale of spare goods or parts.
(d) Interest income is recognized by term for using monetary fund of the Group by others and real interest rate.
(e) Operating leasing income is recognized in leasing period with straight line method.
(f) Activities under the construction and transfer of contracts usually include construction and transfer. As for constructingitem the Group responsible for, in the construction phase, in accordance with the construction contract standards, whenthe results can be estimated reliably, the construction contract revenue should be valued by the fair value of considerationchargeable, at the same time to confirm the “Long term receivables”, to be written off when payment received from theowners.29. Government subsidies
√Applicable □Not applicable
Government subsidies are recognized when they are able to meet the conditions attached and can be received. Wheregovernment subsidies are monetary assets, they are measured in amounts received or receivable. Where the governmentsubsidies are non-monetary assets, they shall be measured at fair value; if the fair value cannot be reliably obtained, it shallbe measured in nominal amount.
According to government documents, for long-term assets for the purposes of purchasing and constructing or formed inother ways, relevant subsidy shall be recognized as government subsidy related to assets; if it is not clear in the governmentdocuments, judgment shall be based on the basic conditions necessary to obtain the subsidy. If the basic condition is thatlong-term assets are for the purposes of purchasing and constructing or formed in other ways, the subsidy is recognized asgovernment subsidy related to assets. Otherwise, it shall be recognized as government subsidy related to income.
Government subsidy related to the income when used to compensate related cost expenses or losses in future periodsis recognized as deferred income and is booked into current P&L in the period when related expenses are recognized. Thatused to compensate paid expenses or losses is booked directly into current P&L.
Government subsidy related to the income when used to compensate related cost expenses or losses in future periodsis recognized as deferred income and is booked into current P&L in the period when related expenses are recognized. Thatused to compensate paid expenses or losses is booked directly into current P&L.
Asset-related government subsidy shall write down the book value of relevant asset or recognized as deferred income,and shall be included in the prots or losses by installments in reasonable and systemic way within the service life of theasset (but the government subsidy measured based on nominal amount shall be directly included in current prots or losses);of relevant assets are sold, transferred, retired or damaged before the end of service life, the balance of undistributeddeferred income shall be transferred to prots or losses in the period of assets disposal.30. Deferred income tax assets /deferred income tax liabilities
√Applicable □Not applicable
According to the temporary difference between the book value and tax base of assets and liabilities on date of balancesheet, the temporary differences arising from the difference between the book value and tax base of the item that is notrecognized as the asset and liability but which tax base can be determined according to tax law, the Group shall withdrawthe deferred income tax using the balance sheet liability method.
The deferred income tax liabilities are recognized on the basis of various taxable temporary differences, unless:
(1) Taxable temporary differences arise from the following transaction: The initial recognition of goodwill or the initialrecognition of assets or liabilities arising from transactions with the following characteristics: the transaction is not anenterprise merger, and the accounting prots, taxable income and deductible loss are not affected when the transactionoccurs.
(2) For investment-related taxable temporary differences of subsidiaries, associates and joint ventures, the time ofthe temporary difference reversal can be controlled and the temporary difference will not likely be transferred back in theforeseeable future.
For deductible temporary differences, deductible losses and tax credits to be carried forward to subsequent year, andthe Group will conrm the deferred income tax assets arising therefrom to the extent that it is likely to obtain the amount offuture taxable income that is used to offset temporary differences, deductible losses and tax credits, unless:
(1) Deductable temporary differences arise from the following transaction: the transaction is not business combination,and the accounting prots, taxable income and deductible loss are not affected when the transaction occurs.
(2) Deferred income tax assets generated from investment-related provisional difference of subsidiaries, associates andjoint ventures are conrmed as deferred income tax assets, when the temporary difference is able to be transferred backin the foreseeable future and when possible taxable income which is used to compensate the provisional difference can bepossibly obtained in future.
On the date of balance sheet, deferred income tax assets and deferred income tax liabilities are calculated by tax rateapplicable to the period of term the assets or liabilities are expected to be collected back in accordance with regulations oftax law, and reect income tax effect from the way that assets or liabilities are expected to be collected back.
On the date of balance sheet, the Group reviews the book value of the deferred income tax assets, and if it is likelythat taxable income obtained in future periods is not enough to deduct the benets from book value of the deferred incometax assets, the carry value of deferred income tax assets shall be written down. On the date of balance sheet, the Groupreevaluates unrecognized deferred income tax assets and recognizes the deferred income tax assets to the extent thatsufcient taxable income is likely to be transferred back to all or part of the deferred income tax assets.
When all of the following conditions are met, the net amount deferred income tax assets and deferred income taxliabilities after offset shall be listed: the Company is legally authorized to settle the income tax assets and liabilities of thecurrent period at net amounts; the deferred income tax assets and liabilities are related to the income tax levied by the sametax authority on the same tax payer, or such on different tax payers but in the future period of the reversal of each important
deferred income tax assets and liabilities, the involved tax payers intend to settle the income tax assets and liabilities of thecurrent period at net amounts or obtain assets and repay debts at the same time.31. Leases
(1) Accounting treatment for operating leases√Applicable □Not applicableA lease substantially transferring all risks and remuneration related to the ownership of the assets is a nancing lease.Others are operating leases.
As the lessee of operating leasesThe rental expenses of operating leases are included in the asset cost or the current P&L based on straight-line methodin the lease period.
As the lessor of operating leasesThe rental income of the operating lease is included in the asset cost or the current P&L based on straight-line methodin the lease period.
(2) Accounting treatment of nancing leases√Applicable □Not applicableAs the lessee of nance leasesAs for the assets from nance leases, on the beginning date of lease term, the lower one of the fair value of the leasedasset and the minimum rental payment the present value is accounted in the book as the leased assets; the minimum leasepayment shall be the entry value of long-term payables; the difference shall be the unrecognized nancing charges, whichshall be amortized in each period within the leasing term based on actual interest rate method. Contingent rental is includedin the current prots or losses statements at the time of incurrence.
LeasebackLeaseback for nancing purposes will be treated as a whole, which is accounted by mortgage loan, on the condition thatasset sale is related to lease transaction and can be repurchased when the lease term expires, that is to say, the accountingtreatment shall be conducted as per mortgage loan.32. Other signicant accounting policies and accounting estimates
√Applicable □Not applicable32.1 Construction contractFor customized production of large port equipment, heavy equipment, steel structure product and construction project,because the commencement and completion dates usually in different scal years, the Group shall use construction contractcalculate the revenue and cost.
If the result of individual construction contract can be reliably estimated, the revenue and cost of the construction projectcan be recognized on date of balance sheet with completeness construction method according to the schedule of contract.Reliable estimation of the result of construction contract means that the economic benet related to the contract is likely toow into the group, and the actual contract cost can be clearly distinguished and measured reliably. In the case of a xedcost contract, the following conditions should be satisfied: the total contract revenue can be measured reliably, and thecontract completion progress and the cost to be taken for the completion of the contract can be reliably determined. Theamount of total contract revenue includes the initial revenue stipulated in the contract and income resulting from contractchange, claim, and award, etc. The Group determines the contract completion progress by the following methods:
(i) As for large port equipment, the completion rate shall be determined according to the completion percentagecorresponding to the revenue recognition node of the construction contract reached at the end of the term. The Group hasestablished the following three revenue recognition nodes:
First node: the main steel structure completed and erected;
Second node: manufacturing, installation and initial commissioning completed, product ex-factory qualication certicateissued, shipping documents acquired, product ready for shipping;
Third node: the product is delivered after nal inspection by the buyer and the nal delivery certicate issued by thebuyer is obtained.
The Group will analyze the construction contracts completed in prior year by product category, and will calculate anddetermine the completion percentage that should be recognized when reaching the revenue recognition node, and take it asthe completion percentage to be recognized at various stages in current period.
(ii) For heavy equipment and construction project, the progress of completion shall be determined by the proportionof accumulated contract cost incurred in total expected contract cost. The accumulated contract cost does not include thatrelated to future activities of the contract.
(iii) The completion progress of steel structure manufacturing shall be determined by the proportion of cumulativeprocessing tonnage completed in total processing tonnage.
(b) If reliable estimation of the results of individual construction contract is unavailable, the following shall be used:
(i) If the contract cost can be recovered, the contract revenue shall be recognized according to the actual contract costthat can be recovered, and the contract cost is recognized as contract expense in the period when cost incurs.
(ii) When contract cost cannot be recovered, it shall be recognized as contract expense immediately when it incurs otherthan contract revenue.
(c) When expected total contract cost exceeds total revenue, the expected losses should be immediately recognized ascurrent prots or losses.
(d) When contract value is settled in installments, the settled installment is recognized as settled value, which will betransferred and set off with related accumulated costs and conrmed margin after the settlement of construction contract. Onthe date of balance sheet, when the sum of accumulated costs and conrmed margin is greater than the accumulated settledvalue, the difference shall be listed as the amount due from customer for completed work in current assets. Otherwise, itshall be listed in the amount due from customer for contract work in current liabilities.
32.2 Prot distribution
The cash dividends of the Company are recognized as liabilities after approval by the general meeting of shareholders.
32.3 Work safety expenses
The work safety expenses extracted in accordance with the regulations shall be included into the cost of relevantproducts or current profit or loss, and shall also be included in the special reserves; it shall be processed separatelywhen used by distinguishing whether to form xed asset or not: in case of belonging to expense expenditure, write downthe special reserves directly; in case of forming fixed assets, collect the expenditures incurred and recognize the fixedassets when reaching expected usable status, and write down the equivalent special reserves and recognize equivalentaccumulated depreciation at the same time.
32.4 Measurement at fair value
The Group measures the derivative nancial instruments and listed equity instruments investments at fair value on eachdate of balance sheet. Fair value refers to the price that a market participant gains or pay for sale of an asset or transferof a liability in an orderly transaction occurring on the measurement date. For relevant assets or liabilities measured by fairvalue, the orderly transaction for sale of an asset or transfer of a liability is assumed to be conducted in the main market. Ifit relevant assets or liability measured by fair value do not exist in the market, the transaction is assumed to be conducted inthe most advantageous market for relevant assets or liabilities. The main market (or the most advantageous market) is thetrading market in which the Group is able to enter on the measurement date. The Group assumes that market participantsintend to realize their maximum economic benets when pricing the assets or liabilities.
For non-financial assets measured by fair value, the ability of market participants to put the assets in best use foreconomic benet or to sell the assets to other market participants that can put the assets in best use for economic benets.
Estimation technique that is applicable and supported by sufficient available data and other information is adopted.Priority is given to the observed input value, and the unobservable input value is used only if the observable input valuecannot be obtained or is not practicable.
For assets and liabilities measured or disclosed at fair value in the financial statements, fair value level shall bedetermined by the input value of lowest level, which is important for the fair value measurement as a whole: the input valueof the rst level is the unadjusted quotation on the active market of the same assets or liabilities that can be obtained on the
measurement date; the input value of the second level is the input value that may be observed directly or indirectly by therelevant assets or liabilities except the rst level input value; the input value of the third level is the unobservable input valueof the relevant assets or liabilities.
On each date of balance sheet, the Group reevaluates the assets and liabilities that continue to be measured at fairvalue as recognized in the nancial statements to determine whether a conversion has occurred at the fair value level.
32.5 Major accounting judgments and estimates
For the preparation of nancial statements, the management is required to make judgments, estimates and assumptionsthat will affect the presentation amount of income, costs, assets and liabilities and disclosure thereof, as well as disclosureof contingent liabilities on Date of balance sheet. However, the results of these assumptions and uncertainties may result inmajor adjustments to the carrying amount of future affected assets or liabilities.
Uncertainty of estimates
The following key assumptions about the future on the date of balance sheet and other key sources of estimateuncertainty may lead to major adjustments in the carrying amount of assets and liabilities during future accounting periods.
Construction contract
Construction contract is adopted to calculate its revenue and cost for large port equipment and construction projects.During the course of the project, the group shall continuously review and revise the expected total cost of the constructioncontract based on the situation of actual cost of the construction contract and the actual cost of the similar products in thereference, so that the expected total cost of the contract is approximate to its nal actual cost. If there is a discrepancybetween the expected total cost and the actual total cost of contracts in the future, the discrepancy will affect the costconrmed by the Group this year.
At the same time, the Group management regularly performs impairment testing on construction contracts. If theexpected total cost of the construction contract exceeds the total contract income, the contract expected loss shall becalculated and withdrawn. Changes of the expected total cost due to continuous review and revision may affect the carryingvalue of the construction completed amount not closed/construction uncompleted amount closed and impairment lossesduring the estimated changes.
Impairment of account receivables
The management of the Group continues to pay attention to the recoverable extent of the receivables, and estimates thebad debt reserves of the accounts receivable based on the analysis of the actual conditions (including but not limited to theadvances to suppliers capacity of the debtor, the age of the accounts receivable, the collection after the period). In case ofany event or change, if the estimate adopted is changed, the estimate shall be adjusted accordingly, and the appropriate baddebt reserve for receivables shall be accrued. If the expected amount is different from the original estimate, the differencewill affect the book value of the receivable and the impairment loss during the estimated change.
Inventory impairments
The management shall estimate the net realizable value of inventories in time so as to estimate inventory falling pricereserves. If any event or circumstance changes, it is necessary to use the estimate to prepare the inventory falling priceif the inventory is not likely to realize the relevant value. If the expected amount is different from the original estimate, thedifference will affect the book value of the inventories and the impairment loss during the estimated change.
Service life and the net residual value of xed assets
Expected service life and the net residual value of xed assets are estimated by the Group. These estimates are basedon the actual service life and net residual value of xed assets similar in nature and function. Technological innovation andthe actions taken by competitors due to severe industry cycles may cause major changes to such estimates; changes in theeconomic environment, technical environment and other environmental changes in service life of xed assets may also leadto material differences in the expected implementation of the economic benets associated with xed assets.
Impairment of non-current assets except for nancial assets (except for goodwill)
The Group determines whether there is any indication of possible impairment of non-current assets other than nancialassets on the date of balance sheet. For non-current assets except financial assets, when there are indications that itscarrying amount is not recoverable, an impairment test is conducted. Impairment is indicated when the book value of the
asset or asset group is higher than the recoverable amount, that is, the higher one between the net amount of the fair valueless the disposal expenses and the present value of the expected future cash ows.Net amount gained by fair value lessdisposal expenses shall be determined by the price in sale agreement of similar assets in fair transaction or market priceobserved less the incremental cost attributable to the assets. The management must estimate the expected future cash owof the asset or asset group and select the appropriate discount rate to determine the present value of the future cash owwhen estimating the present value of future cash ow.
Goodwill impairmentImpairment test for goodwill shall be conducted at least annually. This requires estimate of the present value of thefuture cash flows of the asset group or the asset group to which goodwill is distributed. The Group shall estimate theexpected future cash ow of asset or asset group and select the appropriate discount rate to determine the present value ofthe future cash ow when estimating present value of future cash ow. For details, please refer to clause 23 in Note VII. 23.
Income tax and deferred income taxThe Company was recognized as a high-tech enterprise in 2014, with a three-year period of validity. The companycalculated and paid the enterprise income tax at the rate of 15% according to the relevant income tax laws. According to therelevant regulations, one condition for the qualication of high-tech enterprises is that the proportion of R & D expenditure insales income must not be lower than the specied proportion, in which the proportion is 3% for enterprise with annual salesincome more than 200 million Yuan. If the nal determination result given by tax authority in charge is different from that ofthe company, the difference will affect the income tax expenses of the year.
In addition, the Group calculates enterprise income tax and deferred income tax in accordance with current tax laws andtakes into consideration applicable income tax provisions and tax preferences. There is uncertainty in the nal tax treatmentfor some of the transactions and events involved in normal operations. The Group needs to make major judgments whenthe income tax is calculated and withdrawn. The Group shall estimate whether additional taxes need to be paid in respect offuture tax adjustments for tax purposes so as to conrm corresponding income tax liabilities. If the nal determination resultof these tax matters is different from the originally entered amount, the difference will affect the amount of income tax anddeferred income tax for the period of nal recognition.
When evaluating temporary differences, the Group also considers the possibility that deferred income tax assets canbe recovered. The temporary differences mainly include the impacts of deductible losses, asset impairment provision,unrealized prots of internal transactions, expected liabilities that have not been approved before tax, interest not yet paid,wages and salaries, nancial assets measured at fair value through the current prot or loss, and changes in the fair valueof liabilities. The conrmation of the deferred income tax assets is based on the estimation of the Group and assumes thatthe deferred income tax assets are reversed through the Group’s continuous operation in the foreseeable future. At the sametime, the Group also takes into account the deferred tax assets and the tax rate at which the deferred income tax liabilitiesare reversed. Based on the experience gained by the Company for many years, as well as the continuous input into theresearch and development projects, the Company is expected to obtain the qualication of high-tech enterprises the yearand beyond, and hereby calculate and recognize the deferred income tax assets and deferred income tax liabilities at thepreferential tax rate.
The Group has calculated and withdrawn income tax liabilities and deferred income tax items of this year based oncurrent tax laws and current best estimates and assumptions. In the future, tax liabilities and deferred income tax items mayneed to be adjusted due to changes of tax laws or related circumstances.
33. Changes in signicant accounting policies and accounting estimates
(1) Changes in signicant accounting policies√Applicable □Not applicable
Contents and reasons
of the changes inaccounting policies
Approval procedure
Remarks (name and accountof the signicantly affected
items in the statements)
Change in presentationmode of the nancialstatements
In accordance with requirements of Notice on Revising and Issuing Format ofFinancial Statement of General Enterprise for 2018 (CK [2018] No. 15), in thebalance sheet, “notes receivable” and “accounts receivable” are consolidatedinto the newly increased item of “Notes receivable and accounts receivable”,“interest receivable” and “dividend on shares receivable” are consolidatedinto “other accounts receivable”, “clearance of xed assets” is consolidatedinto the item of “xed assets”, “notes payable” and “accounts payable” areconsolidated into the newly increased item of “notes and accounts payable”,“interest payable” and “dividend on shares payable” are consolidated into“other accounts payable”; in the prot statement, “expenses for R&D” isadded to present the expensed expenditures in the process of research anddevelopment, the item of “nancial expenses” is split into the specic item of“interest expenses” and “interest income”.
The changes in thisaccounting policy had noeffect on the consolidationand the net prot as well asthe shareholders’ equity ofthe Company.
(2) Changes in signicant accounting estimates□Applicable √Not applicable34. Others
□Applicable √Not applicableVI. Taxation1. Main taxes and tax rates
Main taxes and tax rates
√Applicable □Not applicable
Tax Taxation basis Tax rate
VAT
VAT is applicableto the sales of theGroup’s products.
VAT is applicable to the sales of the Group’s products, among which the taxable income fromthe sales of the products in domestic market is subject to the output tax as per 17% beforeMay 1, 2018 and 16% from May 1, 2018 on; The products for export adopt the method of“tax exemption, tax deduction and tax reimbursement” and the applicable tax rates include16%, 15% and 13% (17%, 15% and 13% of the tax reimbursement before May 1, 2018).The Group’s income from the marine transport is applicable to VAT, and the taxable incomeis subject to 11% for tax payment before May 1, 2018 and 10% from May 1, 2018 on;the income from leasing of the equipment is applicable to VAT and is subject 17% for taxpayment before May 1, 2018 and 16% from May 1, 2018 on; the income from the sales of theequipment is applicable to the simple collection measures of VAT and the tax rate is halved to2%; the Group’s income from the leasing of the housing is applicable to the simple collectionmeasures of VAT as per 5%; “B-T” project is applicable to VAT and the output tax on thetaxable income is collected as per 11% before May 1, 2018 and 10% from May 1, 2018 on.The above output tax shall calculate and pay VAT after deducting the amount of input taxdeductible, except for the applicable VAT’s simple collection method.Consumption tax//Business tax//Urbanmaintenance andconstruction tax
Amount of paid VAT
The Group calculates and pays by 7% and 3% of the actual payment of turnover taxrespectively.
Tax Taxation basis Tax rate
Enterpriseincome tax
Enterprise income taxis calculated and paidin accordance withEnterprise IncomeTax Law of P.R. China(hereinafter referred toas “Income Tax Law”).
Enterprise income tax is calculated and paid in accordance with Enterprise Income TaxLaw of P.R. China (“Income Tax Law”). In accordance with relevant regulations in High-tech Enterprise Recognition Management Approaches (GKFH [2016] No. 32) and the High-tech Enterprise Recognition Management Work Guidelines (GKFH [2016] No. 195) and theNotication on Announcing List of Second Batch of Shanghai Municipality 2017 High-techEnterprises Recognition, the Company replied and passed the reexamination in 2017, andwas awarded the High-tech Enterprise Certicate (certicate number: GR201731002345).The certicate shall be valid for 3 years. The Company actually applied the enterprise incometax rate of 15% this year (2017: 15%).
Explanation for disclosure in case of the taxation subjects with different enterprise income tax rates:
√Applicable □Not applicable
Name of taxation subject Income tax rate (%)The Company15%Shanghai Zhenhua Port Machinery Heavy Industries Co., Ltd.25%Shanghai Zhenhua Port Machinery (Hongkong) Co., Ltd. (Note 1)16.5%Shanghai Zhenhua Shipping Co., Ltd.25%Nantong Zhenhua Heavy Industries Equipment Manufacturing Co., Ltd.25%ZPMC (Nantong) Transmission Machinery Co., Ltd. (Note 2)15%ZPMC Electric Co., Ltd. (Note 2)15%Jiangyin Zhenhua Port Machinery Steel Structure Manufacturing Co., Ltd.25%ZPMC Steel Structure Co., Ltd. (Note 2)25%Shanghai Zhenhua Marine Engineering Service Co., Ltd.25%ZPMC Machinery Equipment Services Co., Ltd. (former: ZPMC Inspection Technology Consulting Co., Ltd.)25%ZPMC Port Machinery General Equipment Co., Ltd25%Shanghai Port Machinery Heavy Industries Co., Ltd.25%ZPMC Zhangjiagang Port Machinery Co., Ltd.25%ZPMC Qidong Marine Engineering Co., Ltd. (Note 2)25%Jiahua Shipping Co., Ltd. (Note 1)16.5%Zhenhua Pufeng Wind Power (Hong Kong) Co., Ltd 16.5%CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd. (Note 2)15%Fujian CCCC Qianda Heavy Industries Co., Ltd. (Note 6)25%Najing Ninggao New Channel Construction Co., Ltd.25%CCCC Investment & Development Qidong Co., Ltd.25%CCCC Liyang Urban Investment and Construction Co., Ltd.25%CCCC (Huaian) Construction Development Co., Ltd.25%CCCC Zhenjiang Investment Construction Management Development Co., Ltd25%CCCC Rudong Construction Development Co., Ltd.25%ZPMC Netherlands Co?peratie U.A. (Note 3)20%ZPMC Netherlands B.V. (Note 3)20%Verspannen B.V (Note 3)20%ZPMC Espana S.L. (Note 4)28%ZPMC GmbH Hamburg32.28%ZPMC Lanka Company (Private) Limited17.5%ZPMC North Amercia Inc. (Note 5)15%ZPMC Korea Co., Ltd.20%ZPMC Engineering Africa (Pty) Ltd.28%ZPMC Engineering (India) Private Limited30%ZPMC Southeast Asia Holding Pte. Ltd.17%
Name of taxation subject Income tax rate (%)ZPMC Engineering (Malaysia) Sdn. Bhd.20%ZPMC Australia Company (Pty) Ltd.30%ZPMC Brazil Servi?o Portuários LTDA25%ZPMC Limited Liability Company20%ZPMC NA East Coast Inc. (Note 5)15%ZPMC NA Huston Inc. (Note 5)15%ZPMC Middle East FZE0%ZPMC UK LTD20%Greenland Heavylift (Hong Kong) Limited16.5%GPO Grace Limited0%GPO Amethyst Limited0%GPO Sapphire Limited0%GPO Emerald Limited0%GPO Heavylift Limited0%GPO Heavylift AS0%ZPMC Latin America Holding Corporation25%Terminexus Co., Ltd.16.5%CCCC Yongjia Construction Development Co., Ltd.25%CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd.25%ZPMC Hotel Co., Ltd.25%
Note 1: Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd. and Jiahua Shipping Co., Ltd. are the limited liabilitycompanies registered in Hong Kong, China. Based on Hong Kong’s taxation regulations, the actual prots tax rate applicableto such companies is 16.5% (2017: 16.5%).
Note 2: Shanghai Zhenhua Heavy Industries Group (Nantong) Heavy Gear Reducer Co., Ltd won Hi-tech EnterpriseCertificate (No. GR201732001352) in 2017, with the valid term of 3 years. Shanghai Zhenhua Heavy Industries ElectricCo., Ltd was recognized as the hi-tech enterprise in November, 2017 and won Hi-tech Enterprise Certificate (No.:
GR201831003143) with the valid term of 3 years. CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd. wasrecognized as hi-tech enterprise in August, 2015 and won Hi-tech Enterprise Certificate (No. GR201832001451) afterreexamination in 2018, with the valid term of 3 years. In accordance with relevant provisions in Article 28 of Income TaxLaw, the actually applicable enterprise income tax rate for these companies in this year was 15% (2017: 15%). ZMPCQidong Ocean Engineering Company was recognized as hi-tech enterprise in November, 2015 and won Hi-tech EnterpriseCertificate (No.GF201532000832) with the valid term of 3 years, and the certificate expired in November, 2018, so theapplicable Enterprise income tax rate in this year is 25% (2017: 15%).
Note 3: ZPMC Netherlands Co?peratie U.A., ZPMC Netherlands B.V. and Verspannen B.V. are the private limitedliability companies incorporated in Netherlands and the actually applicable enterprise income tax of the companies in thisyear is 20% (2017: 20%) according to related provisions on the income tax in Netherlands.
Note 4: ZPMC Espana S.L. is a limited liability company registered in Spain. According to related provisions of theincome tax in Spain, the actually applicable income tax rate is 28% in this year. (2017: 28%).
Note 5: ZPMC North American Inc., ZPMC NA East Coast Inc. and ZPMC NA Huston Inc. are the limited liabilitycompanies registered in USA; according to the related income tax provisions of USA, the applicable income tax rate is 15%in this year (2017: 15%).
Note 6: Fujian CCCC Qianda Heavy Industries Co., Ltd. and Shanghai ZPMC Steel Structure Co., Ltd. had beencancelled in this year and the applicable income tax rate was 25% (2017: 25%) before cancellation.2. Tax preference
□Applicable √Not applicable3. Others
□Applicable √Not applicable
VII. Notes to Items of Consolidated Financial Statements1. Monetary funds
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceCash on hand1,569,4551,365,865Bank deposit3,147,417,9175,672,481,136Other monetary funds548,351,33696,380,368Total3,697,338,7085,770,227,369Including: total amounts deposited abroad998,711,134637,201,842
Other informationOn Dec. 31, 2018, the other monetary funds, including the restricted deposit of RMB 548,351,336 Yuan (Dec. 31, 2017:
RMB 96,380,368 Yuan), were the money appropriated that was collected form the overseas projects and deposited in theoverseas regulatory accounts and the cash deposit deposited for application to the bank for the letter of credit and letter ofguarantee.
On Dec. 31, 2018, the overseas monetary fund deposited by the Group was RMB 998,711,134 Yuan (Dec, 31, 2017:
RMB 637,201,842 Yuan).
On Dec. 31, 2018, the bank deposits were the current deposits. The current deposits obtained the interest income asper the interest rate of the current deposit.2. Financial assets measured at fair value with changes included in current prots or losses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem Ending BalanceBeginning BalanceFinancial assets held for trading52,920,0848,438,278Including: Debt instrument investment--
Equity instrument investment8,438,2788,438,278Derivative nancial assets44,481,806-Others--Financial assets measured at fair value withchanges included in current prots or losses
--Including: Debt instrument investment--
Equity instrument investment--Others--Total 52,920,0848,438,278
Other information:
(1) On Dec. 31, 2018, the nancial assets held for trading - equity instrument investment held by the Company wasacquired at the acquisition of Greenland Heavylift (Hong Kong) Limited. The faire value of purchase right corresponding to 1%stock rights could be purchased with 1 USD at any time in the future.
(2) On Dec. 31, 2018, the nancial assets held for trading-derivative nancial assets held by the Company were the
forward exchange contracts, which was signed by and between the Company and the banks, was not due and could changeUSD with Ruble. The contract will fall due from Jan. 15, 2019 to Oct. 15, 2019. The evaluation of the fair value of the above-mentioned forward foreign exchange contracts at the end of the year was the amount conrmed by the trading banks.3. Derivative nancial assets
□Applicable √Not applicable4. Notes receivable and accounts receivable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceNotes receivable189,371,105420,786,012Accounts receivable5,032,548,7413,980,017,611Total5,221,919,8464,400,803,623
Other information:
□Applicable √Not applicableNotes receivable(2) Presentation of notes receivable by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceBank acceptance bill162,148,105395,649,259Commercial acceptance bill27,223,00025,136,753Total189,371,105420,786,012
(3) Notes receivable pledged by the Company at the end of the period√Applicable □Not applicable
Unit: Yuan Currency: RMBItemAmount pledged at the end of the periodBank acceptance bill31,522,267Commercial acceptance billTotal31,522,267
(4) Notes receivable endorsed or discounted by the Company at the end of the period but not yet due on date of balancesheet
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending amount of recognition
terminated
Ending amount of recognition not terminatedBank acceptance bill364,908,608-Commercial acceptance bill--Total364,908,608-
(5) Notes transferred to accounts receivable by the Company due to non-performance of the drawer at the end of period□Applicable √Not applicableOther information□Applicable √Not applicableAccounts receivable(1) Disclosure of accounts receivable by category√Applicable □Not applicable
Unit: Yuan Currency: RMB
Category
Ending BalanceBeginning BalanceBook balanceProvision for bad debts
Book value
Book balanceProvision for bad debts
Book valueAmount
Proportion
(%)
Amount
Provisionproportion
(%)
Amount
Proportion
(%)
Amount
Provisionproportion
(%)Accounts receivable withindividually signicantamounts and individualprovision for bad debts
588,585,8319440,054,33175148,531,500182,649,8923182,649,892100-Accounts receivable withprovision for bad debtsmade by portfolio withcredit risk characteristics
5,848,023,73089964,006,489164,884,017,2414,916,647,96593936,630,354193,980,017,611Accounts receivable withindividually insignicantamount and individualprovision for bad debts
125,247,4012125,247,401100-216,121,5344216,121,534100-Total6,561,856,9621001,529,308,221235,032,548,7415,315,419,3911001,335,401,780253,980,017,611
Accounts receivable with individually signicant amounts and individual provision for bad debts at the end of period√Applicable □Not applicable
Unit: Yuan Currency: RMBAccounts receivable
(by unit)
Ending BalanceAccounts receivableProvision for bad debtsProvision proportion (%)ReasonAccounts receivable 1297,063,000148,531,50050Contract disputesAccounts receivable 2183,703,331183,703,331100Contract disputesAccounts receivable 3107,819,500107,819,500100
Counter-party in capital
shortageTotal 588,585,831440,054,331//
In the portfolio, the accounts receivable for which provision for bad debts is assessed with the aging method√Applicable □Not applicable
Unit: Yuan Currency: RMBAge
Ending BalanceAccounts receivableProvision for bad debtsProvision proportion (%)Within 1 yearIncluding: sub-items within 1 yearWithin 6 months1,801,135,202--7~12 months879,500,9728,795,0101Subtotal of those within 1 year2,680,636,1748,795,010
Age
Ending BalanceAccounts receivableProvision for bad debtsProvision proportion (%)1~2 years547,403,66082,110,549152~3 years333,225,10199,967,53030Over 3 years3~4 years188,508,45194,254,225504~5 years76,862,21757,646,66275Over 5 years621,232,513621,232,513100Total4,447,868,116964,006,489
In the portfolio, the accounts receivable for which provision for bad debts is assessed with the balance percentage method□Applicable √Not applicableIn the portfolio, accounts receivable for which provision for bad debts is assessed with other methods√Applicable □Not applicableOn Dec. 31, 2018, the accounts receivable with that are individually insignicant and for which provision for bad debts isindividually assessed are as follows:
Book balanceProvision for bad debtsProvision proportion (%) ReasonAccounts receivable 150,365,00050,365,000100Counter-party in capital shortageAccounts receivable 227,452,86827,452,868100Contract disputesAccounts receivable 314,854,46714,854,467100Contract disputesAccounts receivable 410,792,60510,792,605100Contract disputesAccounts receivable 57,847,3007,847,300100Contract disputesAccounts receivable 67,342,2867,342,286100Contract disputesAccounts receivable 73,524,1123,524,112100Contract disputesAccounts receivable 82,187,9882,187,988100Contract disputesAccounts receivable 9880,775880,775100Contract disputes
125,247,401125,247,401100
(2) Particulars about the provision for bad debts made, recovered and carried back for reporting period:
The amount of provision for bad debts made in current period was RMB 395,007,065 Yuan; the provision for bad debtsrecovered or carried back for reporting period was RMB 201,100,624 Yuan.
Thereinto, the amount of provision for bad debts recovered or carried back for the reporting period is important
□Applicable √Not applicable
(3) Particulars about the actual accounts receivable written off for the reporting period
□Applicable √Not applicable
(4) Particulars about the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower
√Applicable □Not applicable
On Dec. 31, 2018, the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower issummarized and analyzed as follows:
Balance
Amount of provision for bad
debts
Proportion in total balance of accounts
receivable %Total accounts receivable of Top 5balances
1,214,312,641450,959,59 18
On Dec. 31, 2017, the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower issummarized and analyzed as follows:
BalanceAmount of provision for bad debts
Proportion in total balance of
accounts receivable %Total accounts receivable of Top 5balances
777,865,552279,069,69515
(5) Accounts receivable derecognized due to the transfer of nancial assets□Applicable √Not applicable(6) The amount of assets or liabilities arising from accounts receivable transferred with continuing involvement□Applicable √Not applicableOther information:
□Applicable √Not applicable5. Advances to suppliers
(1) Presentation of advances to suppliers by age
√Applicable □Not applicable
Unit: Yuan Currency: RMBAge
Ending BalanceBeginning BalanceAmountProportion (%)AmountProportion (%)Within 1 year1,438,324,53086819,125,581791~2 years165,247,64510108,191,230102~3 years36,491,651228,266,9653Over 3 years41,123,889281,199,3948Total1,681,187,7151001,036,783,170100
Notes to the reasons for failure to timely settle the advances to suppliers aged over 1 year with important amount:
On Dec. 31, 2018, the advances to suppliers of the Company with the age over one year was RMB 242,863,185 Yuan(Dec. 31, 2017: RMB 217,657,589 Yuan), mainly the advances to suppliers for the procurement of imported parts, which hasnot been yet settled because the purchased imported parts have not yet received.
(2) Particulars about the advances to suppliers whose ending balance ranks Top 5 on the basis of totals by object ofadvances to suppliers
√Applicable □Not applicable
On Dec. 31, 2018, the advances to suppliers whose ending balance ranks Top 5 on the basis of totals by object ofadvances to suppliers is summarized and analyzed as follows:
AmountProportion in total advances to suppliers %Total advances to suppliers whose endingbalance ranks Top 5
784,431,87447
On Dec. 31, 2017, the advances to suppliers whose ending balance ranks Top 5 on the basis of totals by object ofadvances to suppliers is summarized and analyzed as follows:
AmountProportion in total advances to suppliers %Total advances to suppliers whose endingbalance ranks Top 5
210,805,030 20
Other information□Applicable √Not applicable6. Other receivables
Particulars about summary statement(1) Presentation by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceInterest receivable--Dividends receivable-665,346Other receivables1,149,035,349996,161,366Total1,149,035,349996,826,712
Other information:
□Applicable √Not applicableInterest receivable(2) Classication of interest receivable□Applicable √Not applicable(3) Signicant overdue interest□Applicable √Not applicableOther information:
□Applicable √Not applicable
(4) Dividends receivable
√Applicable □Not applicable
Unit: Yuan Currency: RMBProject (investee)Ending BalanceBeginning BalanceJiangxi Huawu Brake Co., Ltd.-665,346Total-665,346
(5) Signicant dividends receivable with an age over 1 year□Applicable √Not applicableOther information:
□Applicable √Not applicableOther receivables(6) Disclosure of other receivables by category√Applicable □Not applicable
Unit: Yuan Currency: RMB
Category
Ending BalanceBeginning BalanceBook balanceProvision for bad debts
Book value
Book balanceProvision for bad debts
Book valueAmount
Proportion
(%)
Amount
Provisionproportion
(%)
Amount
Proportion
(%)
Amount
Provisionproportion
(%)Other receivables withindividually signicantamount and individualprovision for bad debts
218,557,89316209,985,645968,572,248366,281,03126354,460,0719711,820,960
Category
Ending BalanceBeginning BalanceBook balanceProvision for bad debts
Book value
Book balanceProvision for bad debts
Book valueAmount
Proportion
(%)
Amount
Provisionproportion
(%)
Amount
Proportion
(%)
Amount
Provisionproportion
(%)Other receivables withprovision for bad debtsmade by portfolio withcredit risk characteristics
1,148,563,695838,100,5940.71,140,463,101991,689,894737,349,4880.7984,340,406Other receivables withindividually insignicantamount and individualprovision for bad debts
16,029,282116,029,282100-16,029,282116,029,282100-Total1,383,150,870100234,115,521171,149,035,3491,374,000,207100377,838,84127996,161,366
Other receivables with individually significant amount and individual provision for bad debts provision is individuallyassessed debt at the end of reporting period
√Applicable □Not applicable
Unit: Yuan Currency: RMBOther receivables (by
unit)
Ending BalanceOther receivablesProvision for bad debtsProvision proportion (%)ReasonOther receivables 1164,124,678164,124,678100Counter-party in capital shortageOther receivables 254,433,21545,860,96784Contract disputesTotal218,557,893209,985,645/
In the portfolio, other receivables with the provision for bad debts by aging analysis method√Applicable □Not applicable
Unit: Yuan Currency: RMBAging
Ending BalanceOther receivablesProvision for bad debtsProvision proportion (%)Within 1 yearIncluding: sub-items within 1 yearWithin 6 months592,643,053--7~12 months1,630,49716,3061Subtotal of those within 1 year594,273,55016,30611~2 years790,426118,564152~3 years110,59233,17830Over 3 years3~4 years348,735174,367504~5 years150,304112,72975Over 5 years7,645,4507,645,450100Total603,319,0578,100,594
In the portfolio, other receivable with the provision for bad debts by balance percentage method□Applicable √Not applicableIn the portfolio, other receivables with the provision for bad debts by other methods√Applicable □Not applicable
On Dec. 31, 2018, the other receivables that are individually insignificant and for which provision for bad debts isindividually assessed are as follows:
Book balanceProvision for bad debts Provision proportion (%) ReasonOther receivables 14,214,6424,214,642100Counter-party bankruptcyOther receivables 23,037,0423,037,042100Contract cancellationOther receivables 31,692,7651,692,765100Contract cancellationOther receivables 41,539,6001,539,600100Contract cancellationOther receivables 51,170,2821,170,282100Contract cancellationOthers4,374,9514,374,951100Contract cancellation16,029,28216,029,282100
(7) Classication of other receivables by nature√Applicable □Not applicable
Unit: Yuan Currency: RMBNatureEnding book balanceBeginning book balanceBid and performance bond389,218,822509,244,563Unpaid taxes receivable361,289,603359,755,913Secured repayment (i)164,124,678164,124,678Advance payment receivable on behalf of the third party108,068,25426,010,084Customs deposit63,341,5364,269,756Money on call for product eld service58,832,43283,673,256Export rebates43,627,8384,258,496Lease payment receivable33,434,66833,434,668Staff borrowings receivable28,506,26234,257,357Deposit receivable5,345,58545,458,548Others127,361,192109,512,888Total1,383,150,8701,374,000,207
(8) Particulars about the provision for bad debts made, recovered and carried back in current periodThe provision for bad debts made for the reporting period was RMB 6,603,888; and the provision for bad debtsrecovered or carried back was RMB 150,327,208 Yuan.
Thereinto, the amount of provision for bad debts recovered or carried back for the reporting period is important:
□Applicable √Not applicable(9) Particulars about other actual receivables written off for the reporting period□Applicable √Not applicable(10) Particulars about other receivable whose ending balance ranks Top 5 on the basis of totals by borrower√Applicable □Not applicable
Unit: Yuan Currency: RMBName of entityNatureEnding BalanceAging
Proportion in totalending balance ofother receivables (%)
Ending balance ofprovision for bad
debtsOther receivables 1Performance bond176,800,000 1-2 years13-Other receivables 2Secured repayment164,124,678 1-2 years12164,124,678Other receivables 3Performance bond75,500,000
With in 1year/1-2 years
5-
Name of entityNatureEnding BalanceAging
Proportion in totalending balance ofother receivables (%)
Ending balance ofprovision for bad
debtsOther receivables 4Customs deposit63,341,536 Within 1 year5-Other receivables 5
Advance money for
another
54,433,215 2-3 years445,860,967Total/534,199,429/39209,985,645
(11) Receivables involving government subsidies□Applicable √Not applicable(12) Receivables derecognized due to the transfer of nancial assets□Applicable √Not applicable(13) The amount of assets or liabilities arising from other receivables transferred with continuing involvement□Applicable √Not applicableOther information:
□Applicable √Not applicable7. Inventories
(1) Classication of inventories
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending BalanceBeginning BalanceBook balance
Falling price
reserves
Book valueBook balance
Falling price
reserves
Book valueRaw material2,834,989,50798,418,5592,736,570,9482,160,945,98878,519,2142,082,426,774Goods in process7,141,481,8611,082,734,6876,058,747,1746,492,603,4601,516,893,8694,975,709,591Merchandise inventory7,717,820-7,717,82024,284,49911,153,98513,130,514Turnover materials ------Consumptive biological assets ------Unsettled assets for theincompletion formed by theconstruction contract
------Total9,984,189,1881,181,153,2468,803,035,9428,677,833,9471,606,567,0687,071,266,879
(2) Falling price reserves of inventories√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Beginning
Balance
Amount increased in current
period
Amount decreased in current
period
EndingBalanceProvisionOthers Reversal or write-offOthersRaw material78,519,21455,128,65435,229,30998,418,559Goods in process1,516,893,86942,157,991476,317,1731,082,734,687Merchandise inventory11,153,985-11,153,985-Turnover materials ------
Item
Beginning
Balance
Amount increased in current
period
Amount decreased in current
period
EndingBalanceProvisionOthers Reversal or write-offOthersConsumptive biologicalassets
------Unsettled assets for theincompletion formed by theconstruction contract
------Total1,606,567,06897,286,645522,700,4671,181,153,246
(3) Explanation for the capitalized amount of the closing balance of the inventories including borrowing cost□Applicable √Not applicable(4) Assets completed but not settled, formed by the construction contract at the end of the period√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBalanceAccumulated costs incurred52,716,364,109Accumulated gross prot recognized4,645,085,079Less: expected loss202,565,726
Settled amount 45,104,303,070Assets completed but not settled, formed by the construction contract12,054,580,392
Other information√Applicable □Not applicableExpected contract loss
2018Beginning balanceIncrease in this yearReduction in this yearEnding balanceCompleted but not settled167,373,950211,730,653(176,538,877)202,565,726Settled but not completed122,353,72466,003,010(122,975,328)65,381,406289,727,674277,733,663(299,514,205)267,947,132
2017Beginning balanceIncrease in this yearReduction in this yearEnding balanceCompleted but not settled426,807,687114,395,849(373,829,586)167,373,950Settled but not completed25,011,087103,234,343(5,891,706)122,353,724451,818,774217,630,192(379,721,292)289,727,674
On Dec. 31, 2018, the total contracted value of the construction contract still in construction (VAT not included) wasabout RMB 31,234,014,562 Yuan (Dec. 31, 2017: RMB 32,334,004,931 Yuan).
Total amount of possible penalties for failure to fulll the obligations as contracted
20182017Valid letter of guarantee signed by the bank12,425,695,77415,315,071,475Letter of guarantee not signed by the bank5,601,715,3844,101,363,50018,027,411,15819,416,434,975
8. Held-for-sale assets
□Applicable √Not applicable9. Non-current assets due within one year
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceLong-term receivables due within one year894,638,4241,896,475,472Total894,638,4241,896,475,472
10. Other current assets
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceInput VAT to be deducted1,145,606,901591,311,853Advance payment of income tax6,869,538-Total1,152,476,439591,311,853
11. Available-for-sale nancial assets
(1) Particulars about available-for-sale nancial assets√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending BalanceBeginning BalanceBook balance
Depreciation
reserves
Book valueBook balance
Depreciation
reserves
Book valueAvailable-for-sale debtinstruments:
Available-for-sale equityinstruments:
1,244,533,55430,000,0001,214,533,5541,334,203,90530,000,0001,304,203,905Measured at fair value1,171,539,394-1,171,539,3941,261,209,745-1,261,209,745Measured at cost72,994,16030,000,00042,994,16072,994,16030,000,00042,994,160Total1,244,533,55430,000,0001,214,533,5541,334,203,90530,000,0001,304,203,905
(2) Available-for-sale nancial assets measured at fair value by the end of the period√Applicable □Not applicable
Unit: Yuan Currency: RMBClassication of available-for-sale nancial
assets
Available-for-sale equity
instruments
Available-for-sale debt
instruments
TotalAmortized cost of cost/debt instruments ofequity instruments
937,641,194-937,641,194Fair value 1,171,539,394-1,171,539,394Amount of change in fair value accumulativelyincluded into other comprehensive gains
233,898,200-233,898,200Amount of impairment accrued -- -
(3) Available-for-sale nancial assets measures at cost by the end of the period√Applicable □Not applicable
Unit: Yuan Currency: RMB
Investee
Book balanceDepreciation reserves
Shareholding
ratio ininvestee (%)
Current
cashdividendBeginning
Increasein current
period
Decreasein current
period
EndingBeginning
Increasein current
period
Decreasein current
period
Ending21st Century Science andTechnology Investment Co., Ltd.
30,000,000--30,000,00030,000,000--30,000,0008.96-CCCC Highway BridgesNational EngineeringResearch Centre Co., Ltd.
13,000,000--13,000,000----10-National EngineeringResearch Centre of DredgingTechnology and Equipment
6,400,000--6,400,000----3.2-ZPMC Longchang LiftingEquipment Co., Ltd.
800,000--800,000----10-ZPMC Shenyang ElevatorCo., Ltd
1,500,000--1,500,000----10-ZMPC Ningbo TransmissionMachinery Co., Ltd
1,296,000--1,296,000----10-Hunan Fengri Power &Electric Co., Ltd.
19,998,160--19,998,160----6.38-Total 72,994,160--72,994,16030,000,000--30,000,000/-
(4) Changes in depreciation of the available-for-sale nancial assets in the reporting period√Applicable □Not applicable
Unit: Yuan Currency: RMBClassication of available-for-sale
nancial assets
Available-for-sale equity
instruments
Available-for-sale debt
instruments
TotalAmount of impairment accrued at thebeginning of the period
30,000,000-30,000,000Provision in this period---Including: carry-forward from othercomprehensive gains
---Reduction in this period ---Including: reversal due to recovery of fairvalue as at the end of the period
/--Balance of the amount of impairmentaccrued at the end of the period
30,000,000-30,000,000
(5) Related explanation for fair value of the available-for-sale equity instruments with serious drop or non-provisionaldrop, without provision for impairment accrued
□Applicable √Not applicable
Other information
√Applicable □Not applicable
The available-for-sale equity instruments measured at fair value include:
(i) The Group held 5.9% of the stock equity of Jiangxi Huawu Brake Co., Ltd (Dec 31, 2017: 5.9%) and the investmentcost was RMB 11,071,606 Yuan.
The fair value of the available-for-sales equity instruments was conrmed by the closing price on the last trading day of
Shenzhen Stock Exchange. By Dec 31, 2018, the Company had conrmed the accumulated revenue of RMB 91,091,695Yuan for available-for-sales equity instruments, which was included in other comprehensive income.
The Group received the cash dividends of RMB 667,732 Yuan from Jiangxi Huawu Brake Co., Ltd, which was includedin the gain on investment.
(ii)The Group held 1.71% of the stock equity (Dec 31, 2017: 1.71%) of Qingdao Port International Co., Ltd and theinvestment cost was RMB 308,515,588 Yuan.
The fair value of the available-for-sales equity instruments was conrmed by the closing price on the last trading day ofHong Kong Stock Exchange. By Dec 31, 2018, the Company had conrmed the revenue of RMB 168,197,665 Yuan for theavailable-for-sale equity instruments, which was included in other comprehensive income.
(iii)The Group held 1.40% of the stock equity (Dec 31, 2017: 1.40%) CRSC and the investment cost was RMB617,854,000 Yuan.
he fair value of the available-for-sale equity instruments was conrmed by the closing price on the last trading day ofHong Kong Stock Exchange. By Dec 31, 2018, the Company had recognized the loss of RMB 26,080,952 Yuan for theavailable-for-sale equity instruments, which was included in other comprehensive income.
The Group received the cash dividends of RMB 18,459,450 Yuan from CRSC, which was included in investmentincome.
(iv) The Group held less than 0.01% of the stock equity of Shenwan Hongyuan Group and the investment cost wasRMB 200,000 Yuan, with the shareholding ratio less than 0.01%.
The fair value of the available-for-sales equity instruments was conrmed by the closing price on the last trading dayof Shenzhen Stock Exchange. By Dec 31, 2018, the Company had recognized the revenue of RMB 689,792 Yuan for theavailable-for-sale equity instruments, which was included other comprehensive income.
The Group received the cash dividend of RMB 17,465 Yuan from Shenwan Hongyuan Group, which was included ininvestment income.12. Held-to-maturity investment
(1) Held-to-maturity investment
□Applicable √Not applicable
(2) Important held-to-maturity investment by the end of the period
□Applicable √Not applicable
(3) Held-to-maturity investment reclassied in this period
□Applicable √Not applicable
Other information:
□Applicable √Not applicable13. Long-term receivables
(1) Particulars about long-term receivables
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item
Ending BalanceBeginning Balance
Interval ofdiscount rateBook balance
Provision for
bad debts
Book valueBook balance
Provision for
bad debts
Book valueLeasing payment from nancing-------Including: unrealized nancing gain -------Merchandising goods for collection of payment by installment-------Labor for collection of payment by installment -------Account receivable of B-T project
Item
Ending BalanceBeginning Balance
Interval ofdiscount rateBook balance
Provision for
bad debts
Book valueBook balance
Provision for
bad debts
Book value-Principal 5,742,499,069-5,742,499,0695,893,243,470-5,893,243,470-Interest receivable 273,527,110-273,527,110241,936,829-241,936,829Accounts receivable from the projects of collection ofpayment by installment
66,953,334-66,953,334---Less: long-term accounts receivable due within one year-894,638,424--894,638,424-1,896,475,472--1,896,475,472Total5,188,341,089-5,188,341,0894,238,704,827-4,238,704,827/
(2) Long-term receivables derecognized due to the transfer of nancial assets□Applicable √Not applicable(3) The amount of assets or liabilities arising from long-term receivables transferred with continuing involvement□Applicable √Not applicableOther information√Applicable □Not applicableOn Dec. 31, 2018, the account receivable from “Building – Transfer” project was the principal invested in above “Building– Transfer” project by the Group, and the amount of interest receivable was the nancing return recognized based on thecontract.
On Dec. 31, 2018, the long-term accounts receivable were RMB 3,850,867,673 Yuan (Dec. 31, 2017: RMB2,571,908,986 Yuan), which had been pledged to the bank as the guarantee for the Long-term borrowings of RMB1,549,240,000 Yuan (Dec. 31, 2017: Long-term borrowings of RMB 1,066,150,000Yuan). Please refer to 37(ii) in Note VII.
The aging analysis of long-term receivables is as follows:
20182017Within 1 year1,660,580,8132,274,432,7391~2 years2,057,388,7381,935,013,5302~3 years1,829,854,335518,450,490Over 3 years535,155,6271,407,283,540
6,082,979,5136,135,180,299Less: Long-term receivables due within one year894,638,4241,896,475,4725,188,341,0894,238,704,827
14. Long-term equity investment
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Investee
Beginningbalance
Change in current period
Ending balance
Ending balanceof provision for
impairmentAdditionalinvestment
Reducedinvestment
Prot or losson investmentrecognized under
equity method
Adjustment
of othercomprehensive
income
Otherchanges in
equity
Cash dividends
or protsdeclared to be
paid
Provision forimpairment
OthersI. Joint ventureJiangsu LongYuanZhenhua MarineEngineering Co., Ltd
231,309,282-12,955,931-----244,265,213-CCCC TianheXi’an EquipmentManufacturing Co.,Ltd (iii)
29,820,34710,000,000--1,914,865-----37,905,482-ZPMC MediterraneanLiman MakinalariTicaret AnonimSirketi
3,775,146--999,397-----4,774,543-
Investee
Beginningbalance
Change in current period
Ending balance
Ending balanceof provision for
impairmentAdditionalinvestment
Reducedinvestment
Prot or losson investmentrecognized under
equity method
Adjustment
of othercomprehensive
income
Otherchanges in
equity
Cash dividends
or protsdeclared to be
paid
Provision forimpairment
OthersZPMC-OTL MARINECONTRACTORLIMITED (iv)
2,976,740---2,976,740-------Zhenhua MarineEnergy (Hong Kong)Co., Ltd. (i)
-----------Cranetech GlobalSdn. Bnd. (ii)
629,241--117,459-----746,700-Subtotal268,510,75610,000,000-9,181,182-----287,691,938-II. Associated enterpriseCCCC FinancialLeasing Co., Ltd. (i)
1,678,550,583--87,246,932647,839--45,000,000--1,721,445,354-CCCC Real EstateYixing Co., Ltd.
178,099,707--2,552,966-----180,652,673-CCCC SouthAmerican RegionalCompany SARL (ii)
96,195,38799,912,976-3,288,529-8,331,909----191,064,983-ChinaCommunicationsConstruction USAInc. (iii)
67,230,450---8,536,5683,028,239----61,722,121-CCCC MarineEngineering &Technology ResearchCenter Co., Ltd.
15,849,544--402,730-----16,252,274-ZPMC ChangzhouCoatings Co., Ltd.
15,786,438--1,191,077---862,238--16,115,277-ZPMC Southeast AsiaPte. Ltd
247,656--1,153,983-----1,401,639-CCCC YanchengConstruction andDevelopment Co.,Ltd. (iv)
-289,050,000-330,523-----289,380,523-Suzhou ChuanglianElectric Drive Co.,Ltd. (v)
-10,000,000-74,978-----10,074,978-Subtotal2,051,959,765398,962,976-87,705,150-4,655,831--45,862,238--2,488,109,822-Total 2,320,470,521408,962,976-96,886,332-4,655,831--45,862,238--2,775,801,760-
Other informationJoint venture:
(i) On May 5, 2014, the subsidiary of the Company and the partner invested to establish Zhenhua Marine Energy(Hong Kong) Co., Ltd (Zhenhua Marine Energy).The registered capital is 5,969,998 USD, the subsidiary of the Companycontributed 3,044,699 USD, holding 51% of the shares. The company focused on the vessel transportation business. Basedon the regulations of the shareholder agreement, the important events of the Company shall be agreed by at least 75%shareholders via voting. The Group has no control right but jointly controls the company together with the partner.
(ii) On July 30, 2015, the subsidiary of the Company and the partner jointly invested to establish Cranetech Global Sdn.Bhd. The registered capital is 1,000,000 MYR; the subsidiary of the Company contributed 499,999 MYR, holding 49.99%of the shares. The company focused on the spare parts sales. Based on the regulations of the shareholder agreement, theimportant events of the Company shall be agreed by both parties. Therefore, the Group controls the company together withthe partner.
(iii) On May 5, 2017, the subsidiary of the Company and the partner jointly established CCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd. The registered capital of the company is RMB 300 million Yuan, of which, the contribution itssubsidiary is RMB 3,000,000 Yuan, with the shareholding ratio of 50%. The company is mainly engaged in shield machinemachinery manufacturing business. Based on the regulations of the shareholder agreement, the important events of theCompany shall be agreed by both parties. Therefore, the Group controls the company together with the partner.
(iv) On Nov. 22, 2017, the Company sold 20% stock right of its original subsidiary ZPMC-OTL MARINE CONTRACTORLIMITED at the price of 400,000 USD. After alternation, the registered capital of the company became 2,000,000 USD
for the shareholding ratio of 50%. The company is mainly engaged in shipping business. Based on the regulations of theshareholder agreement, the important events of the Company shall be agreed by both parties. Therefore, the Group controlsthe company together with the partner.
Associated enterprise(i) By May 31, 2016, the Company increased the capital to CCCC Financial Leasing Co., Ltd. of RMB 420,000,000Yuan. After the capital increase, the Group’s investment costs to CCCC Financial Leasing Co., Ltd. increased to RMB1,500,000,000 Yuan. The holding proportion remained unchanged at 30%.
(ii) On Dec. 15, 2016, the Company invested 16,480,000 USD (equivalent to RMB 114,321,760 Yuan) to purchase theshares of CCCC South American Regional Company SARL. The registered capital was 103,000,000 USD, the Companyheld16% of the shares. The company was mainly engaged in port construction business. Based on the related regulations ofthe Articles of Association, the Company had the right to designate one director to that company and implement signicantimpact to that company. On Oct. 31, 2018, the Company increased the investment in CCCC South American RegionalCompany SARL by 14,489,171 USD, converted into RMB 99,912,976 Yuan. After the increase in the investment, theinvestment in CCCC South American Regional Company SARL by the Company increased to RMB 214,234,736 Yuan andthe Company held 17% of the shares.
(iii) On Oct. 8, 2015, the Company participated and invested to establish China Communications Construction USAInc. The registered capital is 50,000,000 USD, of which, the Company’s contribution is 12,000,000 USD, equivalent to RMB76,206,000 Yuan, holding 24% of the share. The company focuses on port construction business.
(iv) On Oct. 16, 2018, the Company invested in CCCC Yancheng Construction & Development Co., Ltd to purchaseit shares. The registered capital of the company was RMB 1,156,200,000 Yuan, among which the capital contributed bythe Company was RMB 289,050,000 Yuan, with the shareholding ratio of 25%. The company was mainly engaged in theengineering construction.
(v) On Sept. 13, 2018, the Company invested to incorporate Suzhou Chuanglian Electric Drive Co., Ltd. to purchaseits shares. The registered capital of the company was RMB 50,000,000 Yuan, among which the capital contributed by theCompany was RMB 10,000,000 Yuan, with the shareholding ratio of 20%. The company was mainly engaged in the electricalengineering business.15. Investment properties
Measurement mode of investment properties
(1) Investment properties measured by cost
Unit: Yuan Currency: RMBItemHousing & buildingsLand use right
Construction in
progress
TotalI. Original book value1.Beginning Balance397,820,689209,845,794-607,666,4832. Amount increased in current period----
(1) Purchase----
(2) Inventories/xed assets/construction inprogress transferred in
----(3) Increase from business combination----3. Amount decreased in current period----
(1) Disposal----
(2) Other transfers----
4. Ending Balance397,820,689209,845,794-607,666,483
ItemHousing & buildingsLand use right
Construction in
progress
TotalII. Accumulated depreciation andamortization1.Beginning Balance97,115,18455,487,576-152,602,7602.Amount increased in current period12,978,4285,324,664-18,303,092(1) Provision or amortization12,978,4285,324,664-18,303,0923.Amount decreased in current period----
(1) Disposal----
(2) Other transfers----
4.Ending Balance110,093,61260,812,240170,905,852III. Depreciation reserves1.Beginning Balance----2.Amount increased in current period----
(1) Provision----
3. Amount decreased in current period----
(1) Disposal----
(2) Other transfers----
4. Ending Balance----IV. Book value1. Ending book value287,727,077149,033,554-436,760,6312.Begining book value300,705,505-455,063,723
(2) Investment properties not completing the certicate of title□Applicable √Not applicableOther information□Applicable √Not applicable16. Fixed assets
Particulars about summary statement(1) Presentation by category□Applicable √Not applicableOther information:
□Applicable √Not applicableFixed assets(2) Particulars about xed assets√Applicable □Not applicable
Unit: Yuan Currency: RMB
ItemHousing & buildings
Machineryequipment
Ofce and electronic
equipment
Means of transport(except for vessels)
VesselsTotalI. Original book value:
1.Beginning Balance11,675,835,7417,061,236,685248,048,072274,791,26310,251,529,28629,511,441,0472.Amount increased in current period103,371,7741,227,236,59915,461,3667,843,1841,379,612,2162,733,525,139(1) Purchase3,081,12332,097,06914,560,5767,843,184698,371,763755,953,715(2) Transfer-in of construction inprogress
100,290,6511,195,139,530756,662-637,802,1411,933,988,984(3) Increase from business combination--144,128--144,128
ItemHousing & buildings
Machineryequipment
Ofce and electronic
equipment
Means of transport(except for vessels)
VesselsTotal(4) Change in exchange rate----43,438,31243,438,3123.Amount decreased in current period113,094,077154,043,9196,016,48317,062,770507,983,782798,201,031(1) Disposal or rejection113,094,077154,043,9196,016,48317,062,770507,983,782798,201,0314.Ending Balance11,666,113,4388,134,429,365257,492,955265,571,67711,123,157,72031,446,765,155II. Accumulated depreciation1.Beginning Balance3,487,513,5405,152,968,939184,766,115186,449,3203,164,391,52212,176,089,4362.Amount increased in current period375,689,195402,382,99518,622,51913,590,086462,097,1611,272,381,956(1) Provision375,689,195402,382,99518,622,51913,590,086467,117,2121,277,402,007(2) Change in exchange rate-----5,020,051-5,020,0513.Amount decreased in current period75,809,173145,103,6465,200,89517,062,770413,261,783656,438,267(1) Disposal or rejection75,809,173145,103,6465,200,89517,062,770413,261,783656,438,2674.EndingBalance3,787,393,5625,410,248,288198,187,739182,976,6363,213,226,90012,792,033,125III. Depreciation reserves1. Beginning Balance-- ----2. Amount increased in current period------
(1) Provision------
3.Amount decreased in current period------(1) Disposal or rejection------4. Ending Balance------IV. Book value1. Ending book value7,878,719,8762,724,181,07759,305,21682,595,0417,909,930,82018,654,732,0302. Beginning book value8,188,322,2011,908,267,74663,281,95788,341,9437,087,137,76417,335,351,611
(3) Temporarily idle xed assets□Applicable √Not applicable(4) Fixed assets held under nance leases√Applicable □Not applicable
Unit: Yuan Currency: RMBItemOriginal book valueAccumulated depreciationDepreciation reservesBook valueMachinery equipment1,398,297,6811,068,501,492-329,796,189Vessel5,847,522,360906,962,772-4,940,559,588
(5) Fixed assets leased out under operating leases√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding book valueShield machine734,607,031Vessel1,695,800,485
(6) Fixed assets not completing the certicate of title√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBook valueReason for not completing the certicate of titleHousing and buildings1,989,409,330Relevant formalities are undergoing
Other information:
√Applicable □Not applicableOn Dec. 31, 2018, the following xed assets were taken as loan mortgage:
Original costBook value
LoanNatureAmountMachinery equipment1,398,297,681329,796,189 Long-term payables258,565,211Vessel5,847,522,3604,940,559,588 Long-term payables2,420,668,9187,245,820,0415,270,355,7772,679,234,129
On Dec. 31, 2017, the following xed assets were taken as loan mortgage:
Original costBook value
LoanNatureAmountMachinery equipment1,403,907,681437,072,634 Long-term payables447,048,030Vessel4,455,152,8473,687,007,865 Long-term payables2,103,131,945
5,859,060,5284,124,080,4992,550,179,975
On Dec. 31, 2018 and Dec. 31, 2017, the book values of xed assets for operating lease were as follows:
20182017Shield machine734,607,031246,133,053Vessel1,695,800,4851,733,818,283
2,430,407,5161,979,951,336
On Dec. 31, 2018, the xed assets not completing the certicate of title were as follows:
Book valueReason for not completing the certicate of titleHousing and buildings1,989,409,330Relevant formalities are undergoing
Liquidation of xed assets□Applicable √Not applicable17. Construction in process
Particulars about summary statement(1) Presentation by category□Applicable √Not applicableOther information:
□Applicable √Not applicableConstruction in process(2)
Particulars about construction in process√Applicable □Not applicable
Unit: Yuan Currency: RMBProject
Ending BalanceBeginning BalanceBook balance
Depreciation
reserves
Book valueBook balance
Depreciation
reserves
Book valueInfrastructure constructionof Nantong Base
97,628,960-97,628,96053,508,755-53,508,755Infrastructure constructionof Changxing Base
45,615,124-45,615,12430,242,212-30,242,212
Project
Ending BalanceBeginning BalanceBook balance
Depreciation
reserves
Book valueBook balance
Depreciation
reserves
Book valueLarge machinery andengineering equipment ofthe base under construction
2,815,026,280-2,815,026,2801,123,208,028-1,123,208,028Ofce building and ancillaryfacilities
16,131,833-16,131,833Shield machine parts project10,284,487-10,284,48774,507,300-74,507,300Infrastructure constructionof Nanhui Base
3,893,442-3,893,4423,893,442-3,893,442Large mechanicalreconstruction andupgrading project
61,888,166-61,888,166603,786,272-603,786,272Total3,050,468,292-3,050,468,2921,889,146,009-1,889,146,009
(3) Changes of major construction in process in current period√Applicable □Not applicable
Unit: Yuan Currency: RMB
Project nameBudget
Beginningbalance
Amountincreased incurrent period
Transfer-in xedassets in current
year
Otherreductions
Endingbalance
Proportion ofaccumulatedinput in thebudget (%)
Construction
progress
Accumulatedcapitalized
interest
Including:
capitalizedinterest incurrent period
Capitalization
rate (%)
Source of
fundInfrastructureconstruction of NantongBase
7,745,549,47153,508,75562,113,17717,992,972-97,628,9608484---Own fundsInfrastructureconstruction ofChangxing Base
8,645,540,00030,242,21235,225,69718,888,804963,98145,615,124838323,531,836--
Own fundsand bank loanLarge machinery andengineering equipmentof the base underconstruction
9,086,660,6311,123,208,0282,955,472,0321,263,653,780-2,815,026,2807878115,286,82718,794,1223.82
Own fundsand bank loanOfce building andancillary facilities
23,500,000-16,131,833--16,131,8339090---Own fundsShield machine partsproject
130,587,50074,507,3008,494,85672,717,669-10,284,48779795,762,616--
Own fundsand bank loanInfrastructureconstruction of NanhuiBase
504,500,0003,893,442443,966443,966-3,893,4429191---Own fundsLarge mechanicalreconstruction andupgrading project
830,025,368603,786,27218,393,687560,291,793-61,888,1668787---Own fundsTotal26,966,362,9701,889,146,0093,096,275,2481,933,988,984963,9813,050,468,292//144,581,27918,794,122//
(4) Provision for impairment of construction in progress for current period□Applicable √Not applicableOther information□Applicable √Not applicableConstruction materials(5) Particulars about construction materials□Applicable √Not applicable18. Productive biological assets
(1) Productive biological assets measured by cost□Applicable √Not applicable
(2) Productive biological assets measured by fair value□Applicable √Not applicableOther information□Applicable √Not applicable19. Oil and gas assets
□Applicable √Not applicable20. Intangible assets
(1) Particulars about intangible assets
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemLand use right
Patent
right
Nonproprietary
technology
Softwareusage fee
Proprietarytechnology
TotalI. Original book value1.Beginning Balance4,297,078,828--55,046,83465,201,8104,417,327,4722.Amount increased in currentperiod
2,932,8572,932,857(1) Purchase---1,968,876-1,968,876
(2) Internal R&D------
(3) Increase from business
combination
------(4) Transfer-in of constructionin progress
---963,981-963,9813.Amount decreased in currentperiod
------
(1) Disposal------
4.Ending Balance4,297,078,828--57,979,69165,201,8104,420,260,329II. Accumulated amortization1.Beginning Balance642,231,145--42,451,67249,479,047734,161,8642.Amount increased in currentperiod
87,504,235--3,320,4066,861,09297,685,733(1) Provision87,504,235--3,320,4066,861,09297,685,7333.Amount decreased in currentperiod
-----
(1) Disposal------
4.Ending Balance729,735,380--45,772,07856,340,139831,847,597III. Depreciation reserves1.Beginning Balance------2.Amount increased in currentperiod
------
(1) Provision------
3.Amount decreased incurrent period
------
(1) Disposal------
4.Ending Balance------IV. Book value1.Ending book value3,567,343,448--12,207,6138,861,6713,588,412,7322.Begining book value3,654,847,683--12,595,16215,722,7633,683,165,608
At the end of reporting period, the proportion of intangible assets formed through internal research and development inthe balance of intangible assets was 0%
(2) Land use right not completing the certicate of title
□Applicable √Not applicable
Other information:
√Applicable □Not applicable
In 2018, the Group totally expended RMB 672,614,073 Yuan on R&D (2017: RMB 702,392,513Yuan).The expenseswere not capitalized. The intangible assets on Dec. 31, 2018 and Dec. 31, 2017 excluded any capitalized expenditure onR&D21. Development expenditure
□Applicable √Not applicable22. Goodwill
(1) Original book value of goodwill
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Name of investee ormatters forming goodwill
Beginning
Balance
Increase in current periodDecrease in current period
EndingBalanceBusinesscombination
DisposalZPMC Qidong MarineEngineering Co., Ltd.
149,212,956----149,212,956Verspannen B.V.5,412,807----5,412,807Greenland Heavylift (HongKong) Limited
110,562,7021,402,997---111,965,699Total265,188,4651,402,997---266,591,462
(2) Provision for goodwill impairment□Applicable √Not applicable(3) Information about the assets group and the combination of assets groups containing goodwill□Applicable √Not applicable(4) Specify the process and key parameters (such as the growth rate in forecast period, growth rate in stable period,prot rate, discount rate and forecast period for forecasting the present value of future cash ow, if applicable) of goodwillimpairment test and the method for recognizing the goodwill impairment loss
□Applicable √Not applicable(5) Impact of goodwill impairment test□Applicable √Not applicableOther information√Applicable □Not applicableOn Dec, 31, 2018, the Group had not accrued the goodwill depreciation reserves. In impairment testing, the book valueof the goodwill was allocated to asset group portfolio beneting from synergistic effect of expected business combination.
The goodwill acquired from business combination has been distributed to the following asset groups for impairmenttesting:
?Heavy equipment asset group
?Semi-submerged ship transport assets group of Greenland Heavylift (Hongkong) Limited (GHHL)Heavy equipmentasset group
The recoverable amount of heavy equipment asset group is measured based on the ve-year budget approved by themanagement and shall be measured with cash ow forecast method. Cash ow over 5-year period shall be calculated basedon the estimated growth rate.
Main assumptions based on future cash ow discount method:
Growth rate in forecast perio12.12%-15.20%Perpetual growth rate3%Gross prot rate17.26%-17.80%Discount rate11%
GHHL semi-submerged ship transport assets group
The recoverable amount of GHHL semi-submerged ship transport assets group combination is determined based onthe expected future cash ow of the asset group, and the expected future cash ow is determined according to the cash owforecast based on the transport service contract revenue expected to be obtained within the service life of vessel.
Main assumptions based on future cash ow discount method:
Number of customized short-distance and long-distance transportservice contracts expected to be obtained
3 /year/vesselVessel utilization rate of general charter party65%Charter rate of general charter party65,000 USD/dayDiscount rate11%
The distributions of the book value of goodwill to asset groups are as follows:
Heavy equipment asset group
GHHL semi-submerged ship
transport assets group
Total201820172018201720182017Book amount ofgoodwill
154,625,763154,625,763111,965,699110,562,702266,591,462265,188,465
The perpetual growth rate adopted by the management is consistent with the forecast data contained in the industryreport, and shall not exceed the long-term average growth rate of the industry. Based on the historical experience and theforecasts of market development, the management determines the budget gross prot rate and adopts the pretax interestrate which can reect the specic risk of relevant asset group portfolio as the discount rate. The above assumptions are usedto analyze the recoverable amount of the asset group portfolio.
23. Long-term deferred expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Beginning
Balance
Amount increased
in current period
Amortization in
current year
Other reductionsEnding BalanceImprovement expenditure of xedassets under operating lease
7,764,5011,654,0704,305,907-5,112,664Total7,764,5011,654,0704,305,907-5,112,664
24. Deferred income tax assets/liabilities
(1) Deferred income tax assets before offsetting√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending BalanceBeginning BalanceDeductibletemporary difference
Deferred income tax
assets
Deductibletemporary difference
Deferred income tax
assetsAssets depreciation reserves3,164,854,396477,266,8653,492,989,876526,410,350Unrealized prot of internal transaction110,927,56017,314,14393,487,82514,515,523Deductible losses--8,441,4061,266,211Expected liabilities424,901,99463,735,299451,642,80267,746,420Unpaid wages and salaries27,975,2074,196,28127,824,7814,173,717Unpaid interests90,106,45913,515,968102,690,13715,403,520Deferred income73,819,77611,072,96690,237,67613,535,651Special reserves--1,234,252185,138Total3,892,585,392587,101,5224,268,548,755643,236,530
(2)Deferred income tax liabilities after offsetting√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending BalanceBeginning BalanceTaxable temporary
differences
Deferred income tax
liabilities
Taxable temporary
differences
Deferred income tax
liabilitiesAssets evaluation appreciation of businesscombination not under the common control
143,843,95921,576,594154,879,70623,231,959Changes in fair value of the available-for-sale nancial assets
233,898,20037,285,461323,568,55150,953,384Depreciation of xed assets692,627,602114,283,553814,903,900134,459,143Changes in fair value of the nancialassets measured at fair value with changesincluded in current prots or losses
44,481,8066,672,271--Total1,114,851,567179,817,8791,293,352,157208,644,486
(3) Deferred income tax assets or liabilities disclosed as net amount after offsetting√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Offsetting amountbetween deferred
income tax andliabilities at the endof reporting period
Ending balance of
deferred incometax and liabilities
after offsetting
Offsetting amountof deferred income
tax and liabilitiesat the beginning of
the period
Ending balance of
deferred incometax and liabilities
after offsettingDeferred income tax assets47,416,597539,684,92525,182,166618,054,364Deferred income tax liabilities47,416,597132,401,28225,182,166183,462,320
(4) Items not recognized deferred income tax assets√Applicable □Not applicable
Unit: Yuan Currency: RMBItem Ending BalanceBeginning BalanceDeductible temporary difference203,797,399 154,900,393Deductible losses1,627,279,4851,336,383,846Total1,831,076,8841,491,284,239
(5) Expiry years of deductible losses not yet recognized deferred income tax assets are as follows√Applicable □Not applicable
Unit: Yuan Currency: RMBYearEnding amountBeginning amountRemarks2018-257,678,6342019304,056,031320,476,0052020368,426,916373,462,7152021105,576,931111,737,6532022272,388,360273,028,8392023576,831,247-Total1,627,279,4851,336,383,846/
Other information:
□Applicable √Not applicable25. Other non-current assets
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceAdvance payment for vessels142,126,354148,060,378Advance payment for ofce buildings28,666,23528,666,235Total170,792,589176,726,613
26. Short-term borrowings
(1) Classication of Short-term borrowings√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalancePledge loans--Collateral loans--Guaranteed loans1,259,397,2003,254,299,000Credit loans15,295,290,28722,214,681,401Total16,554,687,48725,468,980,401
Description of Short-term borrowings by category:
On Dec. 31, 2018, the annual interest rate of above loans was 0.9%~5.87% (Dec. 31, 2017: 1.1%~4.79%).(i) On Dec. 31, 2018, the bank guarantee loan of 163,500,000 USD, equivalent to RMB 1,122,133,200 Yuan (Dec. 31,2017: 265,000,000 USD, equivalent to RMB 1,731,563,000 Yuan) was the bank loans borrowed by the subsidiary of theCompany, which was guaranteed by the letter of guarantee issued by the bank for the Company within the scope of credit.
On Dec. 31, 2018, the Company had no bank guarantee loan (Dec. 31, 2017: RMB 1,000,000,000 Yuan) with joint andseveral liability repayment guarantee provided by its subsidiaries.
On Dec. 31, 2018, the bank guarantee loan of 20,000,000 USD, equivalent to RMB 137,264,000 Yuan (Dec. 31, 2017:
80,000,000 USD, equivalent to RMB 522,736,000 Yuan) was the bank loan borrowed by the Company, and the subsidiariesof Company provided joint and several liability repayment guarantee.
(2) Overdue Short-term borrowings
□Applicable √Not applicable
The signicant overdue Short-term borrowings are as follows:
□Applicable √Not applicable
Other information
□Applicable √Not applicable27. Financial liabilities measured at fair value with changes included in current prots or losses
□Applicable √Not applicable28. Derivative nancial liabilities
□Applicable √Not applicable29. Notes and accounts payable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceNotes payable2,732,404,2221,893,227,482Accounts payable7,036,869,7016,887,598,171Total9,769,273,9238,780,825,653
Other information:
□Applicable √Not applicableNotes payable(2) Presentation of notes payable√Applicable □Not applicable
Unit: Yuan Currency: RMBCategoryEnding BalanceBeginning BalanceCommercial acceptance bill--Bank acceptance bill2,732,404,2221,893,227,482Total2,732,404,2221,893,227,482
The total amount of accounts payable due and unpaid at the end of the period was RMB 0Yuan.Accounts payable(3) Presentation of accounts payable√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceMaterial purchase and product manufacturing payables6,556,698,9426,189,910,557Equipment and vessel purchase payables132,468,294303,044,496Infrastructure payables77,821,23881,145,537Quality guarantee deposit payable265,219,012309,201,127Port charge payable4,662,2154,296,454Total7,036,869,7016,887,598,171
(4) Important accounts payable aged over 1 year□Applicable √Not applicableOther information√Applicable □Not applicableThe aging analysis of accounts payable is as follows:
20182017Amount
Proportion in total
amount %
Amount
Proportion in total
amount %Within 1 year5,178,586,023745,301,236,72977Over 1 year1,858,283,678261,586,361,44223
7,036,869,7011006,887,598,171100
On Dec. 31, 2018, the accounts payable aged over 1 year were mainly the payables for imported parts, which had notbeen fro nal settlement.30. Advances from customers
(1) Presentation of advances from customers
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceAdvances for product sales received447,761,752535,922,102Advances for lease payment46,982,62255,805,153Total494,744,374591,727,255
(2) Signicant advances from customers aged over one year□Applicable √Not applicable(3) Settled but uncompleted projects accounted for by construction contracts□Applicable √Not applicableOther information√Applicable □Not applicableThe aging analysis of advances from customers is as follows:
Amount
Proportion in total
amount %
Amount
Proportion in total
amount %Within 1 year436,464,76488474,250,19680Over 1 year58,279,61012117,477,05920494,744,374100591,727,255100
On Dec. 31, 2018, the advances from customers aged over 1 year mainly included the unsettled sales fund of spareparts for products.31. Employee compensation payable
(1) Presentation of employee compensation payable
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding BalanceI. Short-term compensation272,766,8601,853,262,7521,816,899,768309,129,844II. Post-employment welfare (denedcontribution plans)
966,347308,301,593308,285,457982,483III. Dismissal benets ----IV. Other benets due within one year----Total273,733,2072,161,564,3452,125,185,225310,112,327
(2) Short-term compensation
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding BalanceI. Wage, bonus, allowance and subsidy237,081,6311,504,565,0341,468,544,068273,102,597II. Employee welfare expense-60,344,34260,309,35434,988III. Social insurance charges554,452121,121,387121,126,142549,697Including: medical insurance premiums445,494103,465,704103,458,238452,960
Work injury insurance69,3387,133,6517,146,55956,430Maternity insurance premiums39,62010,522,03210,521,34540,307IV. Housing provident fund479,386124,837,764124,828,363488,787V. Labor union fund and employee education fee34,541,03331,831,52631,418,78434,953,775VI. Short-term compensated absences----VII. Short-term prot sharing plan----VIII. Other short-term compensation110,35810,562,69910,673,057-Total272,766,8601,853,262,7521,816,899,768309,129,844
(3) Presentation of dened contribution plan√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding Balance1. Basic endowment insurance premium941,529221,794,310221,778,550957,2892. Unemployment insurance expense24,8185,258,5215,258,14525,1943. Enterprise annuity payment----Supplementary endowment insurance premium-81,248,76281,248,762-Total966,347308,301,593308,285,457982,483
Other information:
□Applicable √Not applicable32. Taxes and surcharges payable
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceVAT43,724,52858,341,748Consumption tax--Business tax--Enterprise income tax81,219,65298,206,405Individual income tax9,390,75612,386,558Urban maintenance and construction tax1,912,7151,758,287Educational surtax1,624,9912,018,432Others27,092,03922,237,497Total164,964,681194,948,927
33. Other payables
Particulars about summary statement(1) Presentation by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceInterest payable114,397,903118,825,582Dividend payable31,701,96531,701,965Other payables952,480,579692,680,129Total1,098,580,447843,207,676
Other information:
□Applicable √Not applicable
Interest payable(2) Presentation by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceLong-term borrowings with interest paid by installmentsand with principal paid at maturity
--Interest on corporate bonds--Interest payable for short-term borrowings 114,397,903118,825,582Interest of preferred shares/perpetual bonds classied asnancial liabilities
--Total114,397,903118,825,582
Signicant overdue and unpaid interests:
□Applicable √Not applicableOther information:
□Applicable √Not applicableDividends payable(3) Presentation by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceDividend for common shares--Dividends for preferred shares/perpetual bonds classiedas equity instruments
--CCCC Tianjin Dredging Co., Ltd.25,079,49425,079,494Chuwa Bussan Co. Ltd.6,269,8736,269,873Hong Kong Zhenhua Engineering Co., Ltd.346,005346,005Macau Zhenhua Harbour Construction Co., Ltd.6,5936,593Total31,701,96531,701,965
Other information, including the important unpaid dividends payable for more than one years, please disclose the reasonfor non-payment:
On Dec. 31, 2018, the dividend payable aged over 1 year of RMB 31,701,965 Yuan (Dec. 31, 2017: RMB 31,701,965Yuan) was because the shareholders of the Company had not requested for actual payment by the Group.
Other payables
(1) Other payable presented by nature
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceEngineering deposit and quality guarantee deposit206,589,722225,779,472Payables to related party184,440,322133,772,685Investment section payable to CCCC (i)100,971,833100,971,833
ItemEnding BalanceBeginning BalanceBorrowings from related party-38,700,000Special payables146,470,013-Contract advance payment to be returned129,540,880-Others184,467,809193,456,139Total952,480,579692,680,129
(2) Other important payables aged over 1 year□Applicable √Not applicableOther information:
√Applicable □Not applicable(i) The Group completed the cancellation of a subsidiary in the year 2011. RMB 25,971,833 Yuan in the balance was theinvestment liquidation fund payable by the Group and attributable to China Communications Construction Company Ltd. whowas another shareholder of the subsidiary; meanwhile, the Group completed the merger and acquisition of the subsidiary ofCCCC under the common control in 2015, and RMB 75,000,000 Yuan in the balance was the purchase fund payable by theGroup to China Communications Construction Company Ltd.
The aging analysis of other payables is as follows:
Dec. 31, 2018Dec. 31, 2017AmountProportion%AmountProportion%Within 1 year703,845,81374355,748,93251Over 1 year248,634,76626336,931,19749
952,480,579100692,680,129100
On Dec. 31, 2018, the other payables aged over 1 year were mainly the investment section payable to ChinaCommunications Construction Company Ltd., payable deposit and quality guarantee deposited collected from outsourcingengineering team and payables to related party.
Special payables
2018Beginning balanceIncrease in current year
Decrease in current
year
Ending balanceRelocation compensation forJiangyin Base
-262,535,000(116,064,987)146,470,013
2017Beginning balanceIncrease in current year
Decrease in current
year
Ending balanceRelocation compensation forJiangyin Base
----
34. Held-for-sale liabilities
□Applicable √Not applicable
35. Non-current liabilities due within one year
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceLong-term borrowings due within one year3,258,154,3921,343,956,000Bonds payable due within 1 year--Long-term payables due within one year951,378,118854,975,219Total4,209,532,5102,198,931,219
36. Other current liabilities
Particulars about current liabilities□Applicable √Not applicableChanges in short-term bonds payable:
□Applicable √Not applicableOther information:
□Applicable √Not applicable37. Long-term borrowings
(1) Classication of Long-term borrowings
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalancePledge loan1,549,240,0001,066,150,000Collateral loan--Guaranteed loan2,532,225,280326,710,000Credit loan14,274,414,3716,616,010,383Less: Long-term borrowings matured withinone yearCredit loan-2,833,064,392-971,446,000Guaranteed loan--326,710,000Pledge loan-425,090,000-45,800,000Total15,097,725,2596,664,914,383
Other information, including the interest rate interval:
√Applicable □Not applicableOn Dec. 31, 2018, the annual interest rate of the above loans was 1.20% - 5.13% (Dec. 31, 2017: 1.20% -5.13%).(i) On Dec. 31, 2018, the bank guarantee loan of 50,400,000 USD, equivalent to RMB 345,905,280 Yuan (Dec. 31,2017: 50,000,000 USD, equivalent to RMB 326,710,000 Yuan), was the bank loan borrowed by the Company's subsidiaryShanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd. and the guarantee was provided by the Company. The interestshall be paid quarterly and the principal shall be paid at maturity on Aug. 13, 2020.
On Dec. 31, 2018, the bank guarantee loan of 100,000,000 USD, equivalent to RMB 686,320,000 Yuan was thebank loan borrowed by the Company, and the Company's subsidiary ZPMC Port Machinery General Equipment Co., Ltd.,provided the joint and several liability repayment guarantee. The interest shall be paid quarterly and the principal shall bepaid at maturity on Nov. 12, 2020.
On Dec. 31, 2018, the bank guarantee loan of RMB 1,500,000,000 Yuan was the bank loan borrowed by the Company,and ZPMC Port Machinery General Equipment Co., Ltd., the subsidiary of the Company provided the joint and severalliability repayment guarantee. The interest shall be paid quarterly and the principal shall be paid at maturity on Sept. 18,2020.
(ii) On Dec. 31, 2018, the total amount of multiple pledged loans of RMB 1,549,240,000Yuan (Dec. 31, 2017: RMB1,066,150,000 Yuan) took the long-term accounts receivable of the “building-transfer” project of the Group as pledge. Theinterest shall be paid quarterly, and the principal shall be paid at maturity between June 30, 2019 and Dec. 23, 2029 (Dec 31,2017: the principal shall be paid respectively between June 30, 2019 and Dec. 31, 2026).38. Bonds payable
(1) Bonds payable
□Applicable √Not applicable
(2) Changes in bonds payable: (excluding other nancial instruments classied as nancial liabilities, such as preferredshares and perpetual bond)
□Applicable √Not applicable
(3) Notes to the conversion conditions and time of convertible bonds
□Applicable √Not applicable
(4) Other nancial instruments classied as nancial liabilities
Basic information of other outstanding nancial instruments at the end of reporting period, such as preferred shares andperpetual bond
□Applicable √Not applicable
Changes in the outstanding nancial instruments at the end of reporting period, such as preferred shares and perpetualbond
□Applicable √Not applicable
Notes to the basis for classifying other nancial instruments to nancial liabilities:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable39. Long-term payables
Particulars about summary statement
(1) Presentation by category
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Long-term payables
(2) Presentation of long-term payables by nature
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceEnding BalanceSale-leaseback nancing fund (i)2,550,179,9752,679,234,129"Building - transfer” project fund (ii)108,466,881131,402,483Project quality guarantee deposit81,314,696108,202,625Less: sale-leaseback nancing fund matured within one year(Note V. 28)-854,975,219-951,378,118
1,884,986,3331,967,461,119
Other information:
(i) On Dec. 31, 2018, the long-term payables of RMB 2,679,234,129 Yuan (Dec. 31, 2017: 2,550,179,975 Yuan) wereobtained from the vessel with the book value of RMB 4,940,559,588 Yuan (Dec. 31, 2017: RMB 3,687,007,865 Yuan) andthe mechanical equipment with the book value of RMB 329,796,189 Yuan (Dec. 31, 2017: RMB 437,072,634 Yuan) (Note V,14) in sale and leaseback transaction way from the nancial leasing company, with the maturity date from Apr. 11, 2020 toFeb. 24, 2028 (Dec. 31, 2017: from Apr. 11, 2020 to Dec. 5, 2021). The Group will pay the sale and leaseback nancing fundon schedule each year in accordance with the contract terms. The Group takes the above series of transactions as mortgageloans for accounting treatment.
(ii) The Group and the Construction Party of “building-transfer” project agreed that part of the project payments would bepaid to the Construction Party after the nal acceptance of the “building-transfer” project within a certain term.
Special payables
(3) Special payable presented by nature
□Applicable √Not applicable40. Long-term employee compensation payable
□Applicable √Not applicable41. Estimated liabilities
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceEnding BalanceReasonExternal guaranteePending lawsuitWarranties for product quality514,4622,032,046Reconstructing obligationsLoss contract to be executedOthers2,658,1502,658,150Estimated after-sale service cost376,515,711434,362,487Lawsuit compensation 85,200,340-Total464,888,663439,052,683/
42. Deferred income
Particulars about deferred income√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding BalanceReasonGovernment subsidy376,238,26896,133,365103,576,272368,795,361Land compensation102,935,852-2,434,993100,500,859Total479,174,12096,133,365106,011,265469,296,220/
Items involving government subsidy:
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Liability
Beginning
Balance
Increase incurrent period
Amount included innon-operating income
for current period
Amount includedin other incomesfor current period
Otherchanges
EndingBalance
Related toassets/incomeHoisting and pipe laying ship R&D project92,500,000----92,500,000Submarine pipeline laying R&D project41,300,500---41,300,500--Automated dock R&D project24,820,0003,430,000---200,00028,050,000Floating crane R&D project18,139,800---2,740,400-15,399,400Comprehensive standardization of intelligentmanufacturing of marine engineering equipment
17,000,000----17,000,000Deep sea drilling ship and auxiliary equipmentresearch project
14,860,000----14,860,000Drilling package R&D project14,410,000---8,000,000-6,410,000Intelligent manufacturing workshop for crane box ofautomated terminal
14,171,796----14,171,79610,000t semi-submerged ship R&D project13,626,667---560,000-13,066,667Transportation emplacement system R&D project10,000,000----10,000,000Drilling platform R&D project9,390,000----9,390,000Research and development of large-scaleunderwater robot work-system
8,533,000----8,533,000Manufacturing process optimization R&D project inmarine engineering eld
8,000,000----8,000,000Marine engineering positioning system R&D project7,697,321---1,612,218-6,085,103Intelligent transportation system of AutomaticGuided Vehicle (AGV)
6,000,00010,800,000---16,800,000Development and industrialization of large deepwater crane piping ship
5,572,000----5,572,000CCCC DCM ship achievement transformationproject
4,031,250---3,223,288-807,962Self-elevating platform central control system3,810,0002,380,000---6,190,000Finishing intelligent production line of special gearshaft for port machinery
2,560,000----2,560,000Retractable boarding trestle system R&D project2,160,3002,288,000---4,448,300Intelligent equipment for container yard1,445,000---200,000-1,245,000Intelligent electric differential traction bridge crane1,122,900---1,122,900--Collaborative innovation in the industrial chain ofcore components for high-end marine engineeringequipment
-18,900,000--16,800,000-2,100,000Key technology research project of bottom-supported offshore wind power installation platform
-16,000,000--3,600,000-12,400,000R&D and application demonstration project for theintelligent coating system of the main structure oflarge port machinery
-8,000,000---8,000,000Others55,087,73434,335,365--16,741,963-7,475,00365,206,133Total 376,238,26896,133,365--95,901,269-7,675,003368,795,361
Other information:
√Applicable □Not applicableThe above government subsidy are related to income.Other changes in current year are the R&D subsidies allocated to the partner in accordance with the research anddevelopment agreement.
Land compensation refers to the land compensation acquired by the subsidiary of the Company, which shall beamortized over the 50 years’ land use term.
43. Other non-current liabilities
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceStay-recognition VAT Output tax to be carried forward288,474,696152,954,098Total288,474,696152,954,098
Other information:
On balance sheet date, the income of some construction contracts and interest income of “building-transfer” projects ofthe Company had not reached the time point of the VAT liability. In accordance with the requirements of the Provisions onAccounting Treatment of VAT (CK 2016 No. [22]), the Group reclassied the ending credit balance of the item “Taxes andsurcharges payable - Output tax to be carried forward” from “Taxes and surcharges payable” to “Other non-current liabilities”and listed in the balance sheet.44. Share capital
√Applicable □Not applicable
Unit: Yuan Currency: RMBBeginning
Balance
Changes (+, -)
EndingBalanceNew issue of
shares
Issue of bonus
share
Converted fromaccumulation fund
OthersSubtotalTotal shares4,390,294,584--878,058,917-878,058,9175,268,353,501
Other information:
The increase in capital for current year was caused by the implementation of capital increase and allotment schemeby the Company. Based on the total share capital on Dec. 31, 2017, 2 shares per 10 shares were transferred to all of theshareholders with the capital reserves.45. Other equity instruments
(1) Basic information of other outstanding nancial instruments at the end of reporting period, such as preferred stockand perpetual bond
□Applicable √Not applicable
(2) Changes in the outstanding financial instruments at the end of reporting period, including preferred stock andperpetual bond
□Applicable √Not applicable
Description of the changes in other equity instruments and the reasons as well as the basis for relevant accountingtreatment:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable46. Capital reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemsBeginning BalanceIncreaseDecreaseEnding BalanceCapital premium (premium on share capital)5,415,833,470878,058,9174,537,774,553Other capital reserves111,145,105111,145,105Total5,526,978,575878,058,9174,648,919,658
47. Treasury stock
□Applicable √Not applicable48. Other comprehensive income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item
Beginning
balance
Current amount
EndingbalanceAmountbeforeincome tax
Less: Othercomprehensiveincome in priorperiod transferredto prots and losses
for current period
Less: incometax expenses
Attributable
to parentcompany,after tax
Attributableto minorityshareholders,
after taxI. Other comprehensive income which willnot be subsequently reclassied to protor loss
------Including: Changes in remeasurement ofdened benet plan
------Other comprehensive income which willnot be transferred to prot or loss underequity method
------II. Other comprehensive income whichwill be subsequently reclassied to protor loss
273,892,978-44,432,753--13,667,923-50,039,11819,274,288223,853,860Including: Other comprehensive incomewhich will be transferred to prot or lossunder equity method
-2,391,155-4,655,831---4,655,831--7,046,986Prot or loss from changes in fair value ofavailable-for-sale nancial assets
272,615,163-89,670,351--13,667,923-76,002,428-196,612,735Prot or loss from the reclassication ofheld-to-maturity assets to available-for-sale nancial assets
------Effective hedging portion of prot or lossfrom cash ow hedging
------Translation balance of foreign currencynancial statements
3,668,97049,893,429--30,619,14119,274,28834,288,111Total other comprehensive income273,892,978-44,432,753--13,667,923-50,039,11819,274,288223,853,860
49. Specic reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding BalanceWork safety expenses1,914,83240,081,84738,977,5063,019,173Total 1,914,83240,081,84738,977,5063,019,173
Other information, including the changes in current period and the reason of changes:
According to the relevant requirements of the Administrative Measures for the Appropriation and Use of Work SafetyExpenses, the enterprises engaged in large - scale machinery manufacture, engineering construction, etc. shall retain thework safety expenses according to the standards. The increase and decrease in current year was the work safety expensesretained and used by the Group for the reporting year in accordance with relevant requirements.
50. Surplus reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemBeginning BalanceIncreaseDecreaseEnding BalanceStatutory surplus reserves1,326,165,30378,218,583-1,404,383,886Discretionary surplus reserves292,378,668--292,378,668Reserve fund----Enterprise expansion fund----Others----Total1,618,543,97178,218,583-1,696,762,554
Statement of surplus reserves, including the changes in current period and the reason of changes:
In accordance with P. R. China Company Law, the Company’s Article of Association and board meeting resolutions,the Company retains 10% of its net prot as statutory surplus reserves. When the accumulated amount of statutory surplusreserves reaches 50% or more of the share capital, the Company can stop accruing.
The statutory surplus reserves can be used to compensate loss upon approval, or to increase capital stock. TheCompany’s statutory surplus reserves were RMB 78,218,583 Yuan in 2018 (2017: RMB 15,420,989 Yuan).51. Undistributed prots
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent periodPrior periodUndistributed prot at the end of prior period before adjustment3,199,681,4263,353,936,451Total adjustment of undistributed prot at the beginning of the period (increase +,decrease -)
--Undistributed prots at the beginning of the period after adjustment3,199,681,4263,353,936,451Plus: Net prot attributable to the shareholders of parent company in current period443,005,092300,195,422Less: Withdrawal of statutory surplus reserves78,218,58315,420,989Withdrawal of discretionary surplus reserves--Withdrawal of general risk reserves--Common share dividends payable219,514,729439,029,458Common share dividends converted to share capital--Undistributed prots at the end of the period3,344,953,2063,199,681,426
Details of the undistributed prot at the beginning of the period to be adjusted:
1. The impact of retroactive adjustment by Accounting Standards for Business Enterprises and other new regulations,the affected beginning undistributed prot was RMB 0 Yuan.
2. The impact of changes in accounting policies on the beginning undistributed prot was RMB 0 Yuan.
3. The impact of correction of signicant accounting errors on the beginning undistributed prot was RMB 0 Yuan.
4. The impact of changes in consolidation scope caused by the common control on the beginning undistributed protwas RMB 0 Yuan.
5. The total impact of other adjustments on the beginning undistributed prot was RMB 0 Yuan.
52. Operating revenue and operating cost
(1) Particulars about operating revenue and operating cost√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Current amountPrevious amountRevenueCostRevenueCostMain business21,581,514,08617,940,075,50121,642,271,17917,893,942,874Other business230,875,558142,210,251216,542,821125,132,425Total21,812,389,64418,082,285,75221,858,814,00018,019,075,299
The main business revenue and cost are listed below:
20182017Main business revenueMain business costMain business revenueMain business costPort machinery14,983,974,89811,405,896,70714,736,363,74711,492,182,908Heavy equipment2,746,107,4062,608,895,6533,384,886,4193,084,117,712Steel structures and related revenue1,558,778,5861,656,155,9351,520,119,0321,487,522,614"Building-transfer" project1,221,194,7991,226,872,8641,549,820,4891,548,520,638Vessel shipping and others1,071,458,3971,042,254,342451,081,492281,599,002
21,581,514,08617,940,075,50121,642,271,17917,893,942,874
Other business revenue and cost are listed below:
20182017Other business revenueOther business costOther business revenueOther business costSales of materials64,386,03062,947,53458,465,01058,551,465Equipment leasing and others166,489,52879,262,717158,077,81166,580,960
230,875,558142,210,251216,542,821125,132,425
53. Taxes and surcharges
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountConsumption tax--Business tax--Urban maintenance and construction tax9,113,5729,591,497Educational surtax8,062,5148,764,726Resource tax--Housing property tax54,701,49152,506,650Land use tax24,648,39327,395,297Vehicle and vessel usage tax--Stamp tax14,526,27414,088,249Others5,227,7501,894,225Total116,279,994114,240,644
54. Selling and distribution expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountEmployee benets64,666,35258,860,634Travel expenses23,270,05428,710,299Exhibition fees8,541,4122,038,404Advertising and publicity costs3,966,1244,332,045Sales service expenses3,448,8596,616,534Ofce expenses2,186,2705,997,281Bidding and tendering expenses2,087,2762,394,084Others7,374,81412,508,611Total115,541,161121,457,892
55. General and administrative expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountEmployee benets569,997,151480,979,047Intangible assets amortization97,685,73398,814,843Ofce expenses75,138,58847,525,626Depreciation of xed assets72,047,39174,485,191Expenses on employing intermediary62,799,747143,878,907Travel expenses54,893,67426,332,516Informatization expense28,395,80517,283,659Consulting fees27,249,85126,877,773Management and security fees21,796,84422,892,275Business entertainment expenses15,774,51714,644,990Management and cleaning fee15,449,05914,560,712Insurance expense16,063,8737,083,929Maintenance charge5,696,9245,019,467Others79,348,19159,395,852Total1,142,337,3481,039,774,787
56. Research and development expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountEmployee benets393,654,871373,884,771Depreciation of R&D xed assets128,117,342131,807,450Materials expenses87,551,34598,810,177Processing cost30,312,01173,401,282Product design expenses2,553,9791,898,208Others30,424,52522,590,625Total672,614,073702,392,513
57. Financial expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountInterest expenditure1,621,856,8801,162,344,297Less: interest income-332,607,896-293,152,359Less: Amount of interest capitalization-18,794,122-5,494,319Exchange (losses)/ gains195,218,216-180,764,448Amortization of discount on issue cost-3,974,665Others56,591,73571,293,469Total1,522,264,813758,201,305
Other information:
The capitalized amount of borrowing cost has been included in the construction in progress.58. Impairment loss on assets
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountI. Loss on bad debts50,183,121335,689,296II. Loss on inventories valuation-317,328,816414,898,419III. Impairment loss on available-for-sale nancial assets--IV. Impairment loss on held-to-maturity investment--V. Impairment loss on long-term equity investment--VI. Impairment loss on investment properties--VII. Impairment loss on xed assets--VIII. Impairment loss on construction materials--IX. Impairment loss on construction in progress--X. Impairment loss on productive biological assets--XI. Impairment loss on oil and gas assets--XII. Impairment loss on intangible assets--XIII. Impairment loss on goodwill--XIV. Others254,569,47374,248,733Total -12,576,222824,836,448
59. Other income
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountFinancial appropriations92,341,14471,702,575Technological subsidy17,289,5682,145,783Land compensation2,434,9932,349,849Total112,065,70576,198,207
60. Investment income
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountIncome from long-term equity investment under equity method96,886,33294,274,214Investment income from the disposal of long-term equityinvestment
-2,536,928Investment income from nancial assets measured at fair valuethrough the current prot or loss in the current prot or loss
--Investment income from the disposal of nancial assetsmeasured at fair value through the current prot or loss
--Income from held-to-maturity investment during holding period--Income from the disposal of held-to-maturity investment--Investment income for available-for-sale nancial assets19,144,64726,557,789Investment income for the disposal of available-for-salenancial assets
--Gains from the remeasurement of remaining equity at fair valueafter the loss of control
--Investment income from the available-for-sale nancial assetsunder cost method
--Total116,030,979123,368,931
61. Gains from the changes in fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMBSources of the gains from changes in fair valueCurrent amountPrior amountFinancial assets measured at fair value through the currentprot or loss
44,481,806-4,615,775Including: income from changes in fair value of derivativenancial instruments
--Financial liabilities measured at fair value through the currentprot or loss
--Investment properties measured at fair value--Total44,481,806-4,615,775
62. Gains from assets disposal
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountGains from assets disposal155,557,71610,749,056Total155,557,71610,749,056
63. Non-operating revenue
Particulars about non-operating revenue√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amount
Amount included in non-recurringprot or loss in the current periodTotal gains from the disposal ofnon-current assets
---Including: Total gains from thedisposal of xed assets
---Total gains from the disposal ofintangible assets
---Gains from debt restructuring---Gains from non-monetaryassets exchange
---Accepting donations---Government subsidy2,346,8127,304,3372,346,812Insurance indemnity income290,94112,383,293290,941Others9,464,5279,655,9289,464,527Total12,102,28029,343,55812,102,280
Government subsidies included in the current prot or loss√Applicable □Not applicable
Unit: Yuan Currency: RMBSubsidy itemCurrent amountPrior amountAssets/income relatedFinancial appropriationsunrelated to daily activities/nancial appropriations
2,346,8127,304,337Income relatedTechnological subsidies--Income relatedLand compensation--Assets relatedTotal2,346,8127,304,337/
Other information:
□Applicable √Not applicable64. Non-operating expensese
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amount
Amount included in non-recurringprot or loss in the current periodLoss from the disposal of non-current assets---Including: Loss from the disposal of xed assets---
ItemCurrent amountPrior amount
Amount included in non-recurringprot or loss in the current periodLoss from the disposal of intangible assets---Loss from debt restructuring---Loss from non-monetary assets exchange---External donations330,000225,279330,000Lawsuit compensation70,449,29985,200,34070,449,299Overdue ne payment1,471,2892,402,1741,471,289Others4,574,7364,288,4604,574,736Total76,825,32492,116,25376,825,324
65. Income tax expenses
(1) Income tax expenses statement√Applicable □Not applicable
Unit: Yuan Currency: RMBItem Current amountPrior amountCurrent income tax expenses102,237,124126,087,069Deferred income tax expenses40,976,324-33,767,653Total143,213,44892,319,416
(2) Reconciliation between accounting prot and income tax expenses√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountTotal prot537,055,887Income tax expense calculated at statutory/applicable tax rate80,558,383Impact of different tax rates in subsidiaries23,403,438Impact of adjustment for income tax in prior period7,088,780Impact of income not subject to income tax-11,249Impact of cost, expenses and loss non-deductible for tax purposes4,068,352Impact of utilization of deductible tax losses which haven’t been recognized deferred tax assets in priorperiod
-4,034,159Impact of unrecognized deductible temporary differences and deductible losses that haven’t beenrecognized as deferred tax assets in current period
88,991,848Prots and losses attributable to the joint venture and associated enterprise-17,404,647Weighted deduction of technical development fee-39,447,304Income tax expenses143,213,448
Other information:
□Applicable √Not applicable
66. Other comprehensive income
√Applicable □Not applicableRefer to VII. 48 for details67. Items in statement of cash ows
(1) Cash received from other operating activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountCustoms guarantee deposit recovered134,438,167185,539,292Cash received from government subsidy and grants210,466,281124,377,444Employee loan recovered5,751,0959,296,606Cash received from penalty incomes5,842,4637,234,130Others23,560,31955,851,684Total380,058,325382,299,156
(2) Cash paid for other operating activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountCustoms guarantee deposit paid193,509,947118,660,849Sales, management and R&D expenditures321,991,460240,550,811Financial cost commission36,673,87828,677,981R&D subsidy paid to cooperation units7,675,00312,736,804Others137,007,880121,302,882Total696,858,168521,929,327
(3) Cash received from other investing activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountInterest income301,254,85650,163,105Others786,317Total302,041,17350,163,105
(4) Cash paid for other investing activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountRepayment on behalf due to obligation of guarantee-173,076,659Total-173,076,659
(5) Cash received from other nancing activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountRestricted bank deposits received323,466,355326,925,000Related party borrowings received-1,034,005,000Third party borrowings received960,848,000-Total1,284,314,3551,360,930,000
(6) Cash paid for other nancing activities√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountBank deposits restricted for saving out311,887,883323,466,355Overseas loan expenditure under domestic guarantee19,917,85742,615,488Repayment of related party borrowings803,092,3901,057,664,286Repayment of third party borrowings67,401,455-Total1,202,299,5851,423,746,129
68. Supplementary information to the statement of cash ows
(1) Supplementary information to the statement of cash ows√Applicable □Not applicable
Unit: Yuan Currency: RMBSupplementary information
Currentamount
Prior amount1. Net prot adjusted to cash ows from operating activities:
Net prot393,842,439329,443,420Plus: Provision for asset impairment reserves-12,576,222824,836,448Depreciation of xed assets, depreciation and depletion of oil and gas assets and depreciation ofproductive biological assets
1,295,705,0991,240,838,899Amortization of intangible assets101,991,640101,931,605Amortization of long-term deferred expenses--
Supplementary information
Currentamount
Prior amountLosses from disposal of xed assets, intangible assets and other long-term assets ( “-” for gains) -155,557,716-10,749,056Losses from write-down of xed assets (“-” for gains) --Losses from changes in fair value (“-” for gains) -44,481,8064,615,775Financial expenses (“-” for income)1,489,952,919747,304,445Investment loss (“-” for gains)-116,030,979-123,368,931Decrease in deferred income tax assets ( “-” for increase)78,369,439112,607,677Increase in deferred income tax liabilities ( “-” for decrease)-37,393,115-146,375,330Decrease in inventories ( “-” for increase)-1,532,625,209-710,079,284Decrease in operating receivables ( “-” for increase)-2,166,466,826-979,057,110Increase in operating payables ( “-” for decrease)355,967,5252,009,268,552Others903,246,791-2,069,007,836Net cash ows from operating activities553,943,9791,332,209,2742. Signicant investing and nancing activities not involving cash inow and outowConversion of debt into capital--Capital injection by minority shareholders with discounted engineering materials446,108,000-Convertible corporate bonds maturing within one year--Fixed assets acquired under nancial lease--3. Changes in cash and cash equivalents:
Ending balance of cash3,148,987,3725,673,847,001Less: Beginning balance of cash5,673,847,0013,497,205,186Plus: Ending balance of cash equivalents--Less: Beginning balance of cash equivalents--Net increase in cash and cash equivalents-2,524,859,6292,176,641,815
(2) Net cash paid for acquiring subsidiaries during the period√Applicable □Not applicable
Unit: Yuan Currency: RMB
AmountCash and cash equivalents paid during the period for business combination incurred in the period100,000Less: cash and cash equivalents held by the subsidiary at acquisition date886,316Plus: Cash and cash equivalents paid during the period for business combination incurred in prior periods-Net cash paid for acquiring subsidiaries-786,316
(3) Net cash received from disposing subsidiaries during the period□Applicable √Not applicable
(4) Composition of cash and cash equivalents√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceI. Cash3,148,987,3725,673,847,001Including: Cash on hand1,569,4551,365,865
Bank deposit available for payment at any time3,147,417,9175,672,481,136Other monetary fund available for payment at any time--Unrestricted deposit in central bank--Deposits with banks and other nancial institutions--Loans to and from banks and other nancial institutions--II. Cash equivalentsIncluding: Bonds investment maturing within three months--III. Balance of cash and cash equivalents at the end of the period3,148,987,3725,673,847,001Including: cash and cash equivalents restricted for use in parent company andsubsidiaries
--
Other information:
□Applicable √Not applicable69. Notes to the items in the statement of changes in owner’s equity
Specify the “other” items of which the ending balances were adjusted in the rst half year and the adjustment amount:
□Applicable √Not applicable70. Ownership or use right of assets subject to restriction
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding book valueRestriction reasonMonetary fund548,351,336
Special funds collected for overseas project and deposited in overseasregulatory account, bank guarantee and L/C guarantee depositsNotes receivable-Inventories-Fixed assets5,270,355,777Loan collateralIntangible assets-Long-term receivables3,850,867,673Loan collateralTotal9,669,574,786/
Other information:
On Dec. 31, 2018, other monetary funds, including the restricted monetary fund of RMB 548,351,336 Yuan (Dec, 31,2017: RMB 96,380,368Yuan), were the margin deposit saved by the Group for applying to the bank for letter of credit andbank guarantee.
On Dec. 31, 2018, the vessel with the book value of RMB 4,940,559,588 Yuan (Dec. 31, 2017: RMB 3,687,007,865Yuan) and the mechanical equipment with the book value of RMB 329,796,189 Yuan (Dec. 31, 2017: RMB 437,072,634)Yuan) had been used for sale and lease-back transaction with the nancial leasing company, with the nancing term of 3 to11 years.
On Dec. 31, 2018, the long-term accounts receivable of “building-transfer” project with the book value of RMB3,850,867,673 Yuan (Dec. 31, 2017: RMB 2,571,908,986 Yuan) had been used as the pledge for obtaining bank loans.71. Foreign currency monetary items
(1) Foreign currency monetary items
√Applicable □Not applicable
Unit: YuanItemEnding foreign currency balanceConversion exchange rateEnding equivalent RMB balanceMonetary fundIncluding: USD230,480,6436.86321,581,834,749
EUR49,058,1557.8473384,974,060HKD65,211,2740.876257,138,118SGD2,569,5645.006212,863,751AUD2,344,8484.825011,313,892OMR606,62917.424910,570,450Yen155,379,8370.06199,618,012GBP846,6778.67627,345,939INR33,893,7810.09803,321,591Ruble4,727,787,2010.0986466,159,818BRL1,119,3121.77421,985,883AED997,6051.86791,863,426KRW157,390,3670.0061960,081LKR10,851,2780.0380412,349ZAR183,0620.473586,680NZD6254.59542,872CAD2725.03811,370MYR---Accounts receivableIncluding: USD202,790,5096.86321,391,791,821
EUR50,839,9537.8473398,956,363HKD162,1130.8762142,043Ruble1,826,988,6110.0986180,141,077GBP12,015,8448.6762104,251,866SGD18,734,8485.006293,790,396QAR20,257,3901.888638,258,107MYR18,313,7281.647930,179,192
ItemEnding foreign currency balanceConversion exchange rateEnding equivalent RMB balanceCAD4,860,0245.038124,485,287ZAR29,070,6720.473513,764,963SAR6,132,9491.828711,215,324KRW1,402,775,6430.00618,556,931LKR110,102,4420.03804,183,893AUD312,7214.82501,508,879INR7,711,9990.0980755,776BRL8,7021.774215,439Long-term borrowingsIncluding: USD150,400,0006.86321,032,225,280
EUR22,770,0007.8473178,683,021HKD---Other receivables
USD 30,261,4266.8632207,690,219EUR12,115,6567.847395,075,187Ruble36,896,4710.09863,637,992LKR67,576,5590.03802,567,909SGD339,1375.00621,697,788AUD291,2784.82501,405,416HKD562,2940.8762492,682INR3,685,5470.0980361,184KRW55,130,4450.0061336,296BRL150,5901.7742267,177ZAR387,5030.4735183,483OMR5,01517.424987,386Accounts payable
USD122,986,4556.8632844,080,638EUR52,054,2247.8473408,485,112GBP1,032,9258.67628,961,864SGD1,760,7395.00628,814,612ZAR4,894,9470.47352,317,757KRW310,011,5250.00611,891,070INR13,157,4800.09801,289,433Yen16,534,5230.06191,023,487HKD1,028,2990.8762900,996AUD30,4694.8250147,013CAD22,2955.0381112,324LKR2,644,3160.0380100,484
ItemEnding foreign currency balanceConversion exchange rateEnding equivalent RMB balanceBRL27,9921.774249,663Ruble9,2020.0986907Other payables
USD25,833,6996.8632177,301,843EUR2,937,4977.847323,051,420SGD1,131,8445.00625,666,237Ruble55,371,3110.09865,459,611LKR78,956,2190.03803,000,336BRL100,2461.7742177,856KRW8,978,9220.006154,771GBP2,7768.676224,085AUD9724.82504,690Short-term borrowings
USD482,561,6126.86323,311,916,855EUR110,711,3317.8473868,785,028Yen102,474,4800.06196,343,170Long-term borrowings maturing within one year
USD---EUR---Long-term payables maturing within one year
USD79,252,1116.8632543,923,088Long-term payables
USD225,212,9006.86321,545,681,175
(2) Description of the overseas business entities, including the disclosure of its overseas main business place, reportingcurrency and selection for signicant overseas business entity, as well as the reasons for changes in reporting currency
□Applicable √Not applicable72. Hedging
□Applicable √Not applicable73. Government subsidy
(1) Basic information on government subsidy
√Applicable □Not applicable
Unit: Yuan Currency: RMBCategoryAmountItem
Amount included in the
current prot or lossFinancial appropriations unrelated to daily activities / nancial appropriations2,346,8122,346,812Technological subsidy--Land compensation--
(2) Particulars about government subsidy returned□Applicable √Not applicable74. Others
□Applicable √Not applicableVIII Changes in the scope of consolidation1. Business combination not under common control
√Applicable □Not applicable
(1) Business combination not under common control in current period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Acquiree
Equityacquisition date
Equityacquisition
cost
Proportionof equityacquired(%)
Acquisition
method
Acquisition date
Determination
basis ofacquisition
date
Acquiree’sincome fromacquisition date
to the end ofreporting period
Acquiree’s netprot acquisitiondate to the end ofreporting periodZMPC Hotel Co., Ltd.100,000100%Feb. 28, 20189,862,3701,180,939
(2) Combination cost and goodwill□Applicable √Not applicable(3) Identiable assts and liabilities of acquiree at acquisition date√Applicable □Not applicable
Unit: Yuan Currency: RMBZMPC Hotel Co., Ltd.Fair value at acquisition dateBook value at acquisition dateAssets:2,185,7442,253,464Monetary fund886,317886,317Receivables812,998812,998Other receivables13,94013,940Inventories328,361328,361Fixed assets144,128211,848Liabilities:2,085,7442,085,744Borrowings--Payables1,617,9741,617,974Deferred income tax liabilities--Employee compensationpayable
74,75974,759Taxes and surcharges payable-282,498-282,498Other payables675,509675,509Net assets100,000167,720Less: minority interests--Net assets acquired100,000167,720
Other information:
Fair value on Feb. 28, 2018Book value on Feb. 28, 2018Monetary fund886,317886,317Accounts receivable812,998812,998Other receivables13,94013,940Inventories328,361328,361Fixed assets144,128211,848Accounts payable(1,617,974)(1,617,974)Employee compensation payable(74,759)(74,759)Tax payable282,498282,498Other payables(675,509)(675,509)
100,000167,720Goodwill arising from purchase-
100,000
The business performance and cash ows of ZPMC Hotel Co., Ltd. from the date of purchase to the end of the year arelisted below:
Mar . 1, 2018 to Dec. 31, 2018Operating revenue9,862,370Net prot1,180,939Net cash ows968,704
(4) Gains or losses of the previously held equity investment remeasured at fair valueWhether there is business combination until obtaining control step by step in multiple transactions during the reportingperiod
□Applicable √Not applicable(5) Explanation for unable reasonably to ascertain combination cost or the fair value of acquiree’s identiable assets andliabilities at the acquisition date or at the ending date of current nancial period
□Applicable √Not applicable
(6) Other information
□Applicable √Not applicable2. Business combination under common control
□Applicable √Not applicable3. Reverse purchase
□Applicable √Not applicable
4. Disposal of subsidiaries
Disposing entity investment until losing control in one step
□Applicable √Not applicable
Other information:
□Applicable √Not applicableDisposing entity investment until losing control step by step in multiple transactions□Applicable √Not applicable5. Changes in consolidation scope for other reasons
Specify the changes in consolidation scope (new subsidiary, liquidation of subsidiary, etc.) for other reasons and relatedinformation:
√Applicable □Not applicable
On Mar. 13, 2018, the Company contributed RMB 4,000,000 Yuan in cash to jointly establish the controlling subsidiaryCCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd. with CCCC Real Estate Group Co., Ltd., CCCC Urban InvestmentHolding Company Limited and CCCC Highway Consultants Co. Ltd. On Dec. 31, 2018, the shareholding ratio of the Groupin that subsidiary was 40%. By signing the agreement for concerted action with CCCC Highway Consultants Co. Ltd. andCCCC Equipment Manufacturing Marine Heavy Industry Division, the Company successively obtained 50% voting powerof the shareholders meeting and 60% voting power of the board of directors of that subsidiary. In accordance with theregulations in the Articles of Association of the subsidiary, the Group had obtained its control rights, and thus the subsidiarywas in the consolidation scope of the Group.
On Mar. 22, 2018, the Company subscribed capital and established the wholly-owned subsidiary Terminexus Co., Ltdwith at 1 HKD. On Dec. 31, 2018, the shareholding ratio of the Company in the subsidiary was 100%.
ZPMC Steel Structure Co., Ltd., the former subsidiary of the Company, was cancelled in the administration for industryand commerce on Mar. 29, 2018.
The Company made capital contributions of 500,000 USD in cash and established the wholly-owned subsidiaryZPMC Latin America Holding Corporation on July 9, 2018. On Dec. 31, 2018, the shareholding ratio of the Company in thesubsidiary was 100%.
On July 18, 2018, the Company, with the capital contributions of RMB 128,000,000 in cash, and CCCC First HighwayEngineering Group Co., Ltd. jointly established the holding subsidiary CCCC Yongjia Construction Development Co., Ltd. OnDec. 31, 2018, the shareholding ratio of the Company in the subsidiary was 100%.
Fujian CCCC Qianda Heavy Industries Co., Ltd., the original subsidiary of the Company was cancelled in theadministration for industry and commerce on Sept. 25, 2018.6. Others
□Applicable √Not applicable
IX. Equity in Other Entities1. Equity in subsidiaries
(1) Composition of enterprise group√Applicable □Not applicable
Name of subsidiaryMain business placeRegistration placeBusiness nature
Shareholding (%)
Acquisition methodDirectIndirectShanghai Zhenhua Port MachineryHeavy Industry Co., Ltd.
Chongming, ShanghaiChongming, Shanghai
Machinerymanufacture
94.76-
Establishment by
investingShanghai Zhenhua Port Machinery(Hongkong) Co., Ltd. (Note 1)
Hong KongHong KongShipping99.99-
Establishment by
investingShanghai Zhenhua Shipping Co., Ltd.
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Shipping55-
Establishment by
investingNantong Zhenhua Heavy IndustryEquipment Manufacturing Co., Ltd.
Nantong City, JiangsuProvince
Nantong City, JiangsuProvince
Machinerymanufacture
100-
Establishment by
investingZPMC Transmission Machinery(Nantong) Co., Ltd.
Nantong City, JiangsuProvince
Nantong City, JiangsuProvince
Machinerymanufacture
100-
Establishment by
investingZPMC Electric Co., Ltd.
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Electric equipmentresearch anddevelopment
100-
Establishment by
investingJiangyin Zhenhua Port MachinerySteel Structure Manufacturing Co.,Ltd.
Jiangyin City, JiangsuProvince
Jiangyin City, JiangsuProvince
Machinerymanufacture
7525
Establishment by
investingShanghai Zhenhua MarineEngineering Service Co., Ltd.
Yangshan Bonded PortArea, Shanghai
Yangshan Bonded PortArea, Shanghai
Shipping100-
Establishment by
investingZPMC Machinery EquipmentServices Co., Ltd.
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Technicalconsultancy
100-
Establishment by
investingZPMC Netherlands Co?peratie U.A.Rotterdam, NetherlandsRotterdam, NetherlandsTrade sales100-
Establishment by
investingZPMC Netherlands B.V.Rotterdam, NetherlandsRotterdam, NetherlandsTrade sales100-
Establishment by
investingVerspannen B.V.Rotterdam, NetherlandsRotterdam, Netherlands
Machinerymanufacture
-100
Business combination
involving enterprises
not under common
controlZPMC Espana S.L.Los Barrios, SpainLos Barrios, SpainTrade sales-100
Establishment by
investingZPMC GmbH HamburgHamburg, GermanyHamburg, GermanyTrade sales100-
Establishment by
investingZPMC Lanka Company(Private)Limited
Colombo, Sri LankaColombo, Sri LankaTrade sales70-
Establishment by
investingZPMC North America Inc.Delaware, USADelaware, USATrade sales100-
Establishment by
investingZPMC Korea Co., Ltd.Pusan, KoreaPusan, KoreaTrade sales70-
Establishment by
investingZPMC Engineering Africa (Pty) Ltd.
Kwazulu-Natal Province,Republic of South Africa
Kwazulu-NatalProvince, Republic ofSouth Africa
Trade sales100-
Establishment by
investingZPMC Engineering (India) PrivateLimited
Maharashtra State, India
Maharashtra State,India
Trade sales100-
Establishment by
investingZPMC Southeast Asia HoldingPte. Ltd.
SingaporeSingaporeTrade sales100-
Establishment by
investingZPMC Engineering (Malaysia) Sdn.Bhd.
MalaysiaMalaysiaTrade sales-70
Establishment by
investingZPMC Australia Company (Pty) Ltd.
New South Wales,Australia
New South Wales,Australia
Trade sales100-
Establishment by
investing
Name of subsidiaryMain business placeRegistration placeBusiness nature
Shareholding (%)
Acquisition methodDirectIndirectZPMC Port Machinery GeneralEquipment Co., Ltd
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Machinerymanufacture
100-
Business combination
involving enterprises
under common
controlShanghai Port Machinery HeavyIndustries Co., Ltd.
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Machinerymanufacture
-74.02
Business combination
under the common
controlZPMC Zhangjiagang Port MachineryCo., Ltd.
Zhangjiagang City,Jiangsu Province
Zhangjiagang City,Jiangsu Province
Machinerymanufacture
90-
Business combination
involving enterprises
under common
controlNajing Ninggao New ChannelConstruction Co., Ltd.
Nanjing City, JiangsuProvince
Nanjing City, JiangsuProvince
Engineeringconstruction
100-
Establishment by
investingZPMC Qidong Marine EngineeringCo., Ltd.
Nantong City, JiangsuProvince
Nantong City, JiangsuProvince
Machinerymanufacture
67-
Business combination
involving enterprises
not under common
controlJiahua Shipping Co., Ltd. Hong KongHong KongShipping-70
Establishment by
investingZhenhua Pufeng Wind Power (HongKong) Co., Ltd
Hong KongHong KongShipping-51
Establishment by
investingZPMC Brazil Servi?o PortuáriosLTDA
Rio DE Janeiro, BrazilRio DE Janeiro, BrazilTrade sales80-
Establishment by
investingZPMC Limited Liability CompanyMoscow, RussiaMoscow, RussiaTrade sales85-
Establishment by
investingZPMC NA East Coast lnc.VirginiaDelaware, USATrade sales-100
Establishment by
investingZPMC NA Huston lnc.TexasDelaware, USATrade sales-100
Establishment by
investingCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd. (Note 1)
Changshu City, JiangsuProvince
Changshu City, JiangsuProvince
Machinerymanufacture
32.51-
Business combination
involving enterprises
under common
controlCCCC Investment & DevelopmentQidong Co., Ltd. (Note 2)
Nantong City, JiangsuProvince
Nantong City, JiangsuProvince
Engineeringconstruction
47.5-
Establishment by
investingCCCC Liyang Urban Investment andConstruction Co., Ltd.(Note 3)
Liyang City, JiangsuProvince
Liyang City, JiangsuProvince
Engineeringconstruction
48-
Establishment by
investingZPMC UK LDCardiff, UKCardiff, UKTrade sales100-
Establishment by
investingZPMC Middle East FzeDubai, UAEDubai, UAETrade sales100-
Establishment by
investingCCCC (Huaian) ConstructionDevelopment Co., Ltd.
Huaian City, JiangsuProvince
Huaian City, JiangsuProvince
Engineeringconstruction
-77.01
Establishment by
investingCCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd
Zhenjiang City, JiangsuProvince
Zhenjiang City, JiangsuProvince
Engineeringconstruction
70-
Establishment by
investingCCCC Yongjia ConstructionDevelopment Co., Ltd.
Wenzhou City, ZhejiangProvince
Wenzhou City, ZhejiangProvince
Engineeringconstruction
80-
Establishment by
investingCCCC Zhenhua Lvjian Technology(Ningbo) Co., Ltd. (Note 4)
Ningbo City, ZhejiangProvince
Ningbo City, ZhejiangProvince
Engineeringconstruction
40-
Establishment by
investingZPMC Hotel Co., Ltd.
Pudong New Area,Shanghai
Pudong New Area,Shanghai
Hotel and catering-100
Business combination
involving enterprises
not under common
controlCCCC Rudong ConstructionDevelopment Co., Ltd.
Rudong City, JiangsuProvince
Rudong City, JiangsuProvince
Engineeringconstruction
7.7355.19
Establishment by
investingZPMC Latin America HoldingCorporation
PanamaPanamaTrade sales100 -
Establishment by
investing
Name of subsidiaryMain business placeRegistration placeBusiness nature
Shareholding (%)
Acquisition methodDirectIndirectTerminexus Co.,Ltd.Hong KongHong Kong
Technicalconsultancy
-100
Establishment by
investingGreenland Heavylift (Hong Kong)Limited (Note5)
Hong KongHong KongShipping-50
Business combination
involving enterprises
not under common
controlGPO Grace LimitedMarshall IslandsMarshall IslandsShipping-100
Business combination
involving enterprises
not under common
controlGPO Amethyst LimitedMarshall IslandsMarshall IslandsShipping-100
Business combination
involving enterprises
not under common
controlGPO Sapphire LimitedMarshall IslandsMarshall IslandsShipping-100
Business combination
involving enterprises
not under common
controlGPO Emerald LimitedMarshall IslandsMarshall IslandsShipping-100
Business combination
involving enterprises
not under common
controlGPO Heavylift LimitedCayman IslandsCayman IslandsShipping-60
Business combination
involving enterprises
not under common
controlGPO Heavylift ASOslo, NorwayOslo, NorwayShipping-100
Business combination
involving enterprises
not under common
control
Other information:
Note 1: The Group obtained 55.98% of the voting power of the shareholders' meeting and 80% of the voting power ofthe board of directors from the Company via amendment of Articles of Association of CCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd., reconstruction of the board of directors and signing the agreement for concerted action with ChinaCommunications Corporation (one of the shareholders of CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd.). Inaccordance with the regulations in the Articles of Association o the company, the Group had obtained the control rights of thecompany, and thus the company was in the consolidation scope of the Group.
Note 2: By signing the agreement for concerted action with CCCC Tianjin Dredging Co., Ltd., the Group had obtained95% voting power of the shareholders meeting and 100% voting power of the board of directors. In accordance with theregulations in the Articles of Association of the company, the Group had obtained the control rights of the company, and thusthe company was in the consolidation scope of the Group.
Note 3: By signing the agreement for concerted action with CCCC Shanghai Dredging Co. Ltd. and CCCC East ChinaInvestment Co., Ltd., the Group had obtained 76% voting power of the shareholders meeting and 71% voting power of theboard of directors. In accordance with the regulations in the Articles of Association of the company, the Group had obtainedthe control rights of the company, and thus the company was in the consolidation scope of the Group.
Note 4: By signing the agreement for concerted action with CCCC Highway Consultants Co. Ltd. and CCCC EquipmentManufacturing Marine Heavy Industry Division, the Group obtained the accumulated 50% voting power of the shareholdersmeeting and 60% voting power of the board of directors of the company. In accordance with the regulations in the Articlesof Association of the company, the Group had obtained the control rights of the company, and thus the company was in theconsolidation scope of the Group.
Note 5: In accordance with the acquisition agreement, the Group held two of the four seats in the board of directors ofthe company, including chairman of the board. As stipulated in the Articles of Association of the company, the chairman ofthe board has super voting power when the voting of the board is deadlocked. In addition, Group also has the right to buy its1% stock equity at 1 USD at any time in the future. Therefore, the Group has substantial control over the company and thecompany was included in the consolidation scope of the nancial statement of the Group.
(2) Signicant non-wholly owned subsidiary√Applicable □Not applicable
Unit: Yuan Currency: RMBName of subsidiary
Shareholding
ratio ofminorityshareholder
Prot or lossattributable to
the minorityshareholder forcurrent period
Dividendsdeclared tominority interestsfor current period
Withdrawal ofspecial reserves
for minority
shareholders
Ending balanceof the minority
interestsCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.
67.4939,565,707-635,573-413642,352,963CCCC Zhenjiang Investment,Construction, Management andDevelopment Co, Ltd.
3015,949,306--335,763,428Greenland Heavylift (Hong Kong) Limited50-12,996,502--295,996,240
Notes to the shareholding different from the voting proportion of the minority shareholder of subsidiary:
□Applicable √Not applicableOther information:
√Applicable □Not applicable
2018Shareholdingratio of minorityshareholder %
Capitalinvestedby minorityshareholder
Prot or lossattributableto minorityshareholder
Dividend paid
to minorityshareholder
Withdrawal ofspecial reserves
for minorityshareholder
Accumulatedminority equity at
the end of yearCCCC Tianhe MechanicalEquipment ManufacturingCo., Ltd.
67.49-39,565,707(635,573)(413)642,352,963CCCC ZhenjiangInvestment, Construction,Management andDevelopment Co, Ltd.
30.00-15,949,306--335,763,428Greenland Heavylift (HongKong) Limited
50.00-(12,996,502)--295,996,240
2017
Shareholdingratio of minorityshareholder %
Capital invested
by minorityshareholder
Prot or lossattributableto minorityshareholder
Withdrawal ofspecial reserves
for minorityshareholder
Accumulatedminority equity at
the end of yearCCCC Tianhe MechanicalEquipment Manufacturing Co.,Ltd.
67.49-39,217,9542,562,277603,423,242CCCC Zhenjiang Investment,Construction, Management andDevelopment Co, Ltd.
30.0060,000,00016,811,568-319,814,122Greenland Heavylift (Hong Kong)Limited
50.00309,405,935(413,193)-308,992,742
(3) Main nancial information of signicant non-wholly owned subsidiary√Applicable □Not applicable
Unit: Yuan Currency: RMB
Name of subsidiary
Ending BalanceBeginning BalanceCurrent asset
Non-current
asset
T otal assets
Currentliabilities
Non-current
liabilities
T otal liabilitiesCurrent asset
Non-current
asset
T otal assets
Currentliabilities
Non-current
liabilities
T otal liabilitiesCCCC Tianhe MechanicalEquipment ManufacturingCo., Ltd.
2,683,768,5332,250,708,2054,934,476,738-3,405,276,767-577,400,904-3,982,677,6712,313,171,6381,869,127,9074,182,299,545-2,460,195,680-828,278,015-3,288,473,695CCCC ZhenjiangInvestment, Construction,Management andDevelopment Co, Ltd.
114,313,9701,045,638,4491,159,952,419-40,740,990--40,740,99013,909,5971,074,783,0591,088,692,656-22,645,579--22,645,579Greenland Heavylift (HongKong) Limited
60,153,7961,436,258,4331,496,412,229-87,059,172-818,181,971-905,241,14347,188,656790,083,887837,272,543-218,380,034--218,380,034
Name of subsidiary
Current amountPrior amountOperatingrevenue
Net prot
Totalcomprehensive
income
Cash owform operating
activities
Operatingrevenue
Net prot
Totalcomprehensive
income
Cash ow formoperating activitiesCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.
1,230,112,61758,624,54858,624,548-61,417,3391,152,898,05058,140,09758,140,09749,468,222CCCC Zhenjiang Investment,Construction, Management andDevelopment Co, Ltd.
-53,164,35353,164,353-102,681,0785,241,27856,038,56256,038,562-Greenland Heavylift (Hong Kong)Limited
106,628,409-60,006,966-49,950,762-72,567,61385,079,93417,523,291-2,977,63231,723,925
Other information:
None(4) Material limitation of using assets and paying off liabilities of the Group□Applicable √Not applicable(5) Providing nancial support or other supports for the structured entity included in the scope of consolidated nancialstatements
□Applicable √Not applicableOther information:
□Applicable √Not applicable2. Transactions that causes changes in the shares of owners’ equity in subsidiaries but still control the subsidiaries
□Applicable √Not applicable
3. Equity in joint ventures and associates
√Applicable □Not applicable(1) Important joint ventures or associates√Applicable □Not applicable
Unit: Yuan Currency: RMB
Name of joint venture or associated
enterprise
Main business
place
Registration
place
Business nature
Shareholding ratio (%)Accounting treatmentfor investment in jointventure or associated
enterpriseDirectIndirectJiangsu Longyuan Zhenhua MarineEngineering Co., Ltd.
Nantong, JiangsuNantong, Jiangsu
Marine engineering
construction
50-Equity methodZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi
Istanbul, TurkeyIstanbul, Turkey
Technical service for port
equipment
50-Equity methodZhenhua Marine Energy (Hong Kong)Co., Ltd. (Note 1)
Hong KongHong KongShipping-51Equity methodCranetech Global Sdn. Bhd.MalaysiaMalaysia
Technical service for port
equipment
-49.99Equity methodZPMC-OTL MARINE CONTRACTORLIMITED
Hong KongHong KongShipping-50Equity methodCCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd.
Xi’an ShaanxiXi’an ShaanxiMachinery manufacture-50Equity methodCCCC Marine Engineering &Technology Research Center Co., Ltd.
Pudong,
Shanghai
Pudong,Shanghai
Marine technologydevelopment and
consulting
25-Equity methodCCCC Real Estate Yinxing Co., Ltd.Wuxi,JiangsuWuxi,JiangsuReal estate development20-Equity methodZPMC Changzhou Coatings Co., Ltd.
Changzhou,Jiangsu
Changzhou,Jiangsu
Paint manufacture20-Equity methodCCCC Financial Leasing Co., Ltd.
Pudong,Shanghai
Pudong,Shanghai
Financial leasing30-Equity methodCCCC Yancheng Construction andDevelopment Co., Ltd.
Yancheng,Jiangsu
Yancheng,Jiangsu
Engineering project
construction
25-Equity methodSuzhou Chuanglian Electric Drive Co.,Ltd.
Suzhou, JiangsuSuzhou, Jiangsu
Electrical equipment
manufacturing
20-Equity methodChina Communications ConstructionUSA Inc.
USAUSA
Port, channel highway and
bridge construction
24-Equity methodCCCC South American RegionalCompany SARL(Note 2)
USAUSA
Port, channel highway and
bridge construction
17-Equity methodZPMC Southeast Asia Pte. LtdSingaporeSingaporeTrade sales-40Equity method
Note 1: On May 5, 2014, the subsidiary of the Company and the partner jointly invested to establish Zhenhua MarineEnergy (Hong Kong) Co., Ltd. The registered capital was 5,969,998 USD and the subsidiary of the Company contributed3,044,699 USD, holding 51% of the shares. The company focused on the vessel transportation business. Based onthe regulations of the shareholder agreement, the important events of the Company shall be agreed by at least 75%shareholders via voting. Therefore, the Group has no control over the company but controls jointly with the partner.
Note 2: On Dec. 15, 2016, the Company contributed 16,480,000 USD (in RMB 114,321,760 Yuan) to buy shares ofCCCC South American Regional Company SARL. On Dec. 31, 2018, the registered capital was 179,988,158 USD andthe shareholding ratio of the Company was 17%. The company is mainly engaged in port construction business. Based onthe regulations of the articles of association of that company, the Company has the right to designate one director to thatcompany and to implement signicant impact on that company.
(2) Main nancial information of important joint ventures□Applicable √Not applicable(3) Main nancial information of important associates√Applicable □Not applicable
Unit: Yuan Currency: RMBEnding Balance/ Current amountBeginning Balance/ Prior amountCCCC FinancialLeasing Co., Ltd.
CCCC FinancialLeasing Co., Ltd.
CCCC FinancialLeasing Co., Ltd.
CCCC FinancialLeasing Co., Ltd.Current assets16,819,852,50614,519,134,477Non-current assets14,386,974,05012,061,010,402Total assets31,206,826,55626,580,144,879Current liabilities14,391,112,3718,365,784,476Non-current liabilities9,282,803,91611,116,733,773Total liabilities23,673,916,28719,482,518,249Minority shareholders’ equity1,794,759,0901,502,458,020Difference in the accounting policies ofassociated enterprise (Note 1)
--Shareholders’ equity attributable to parentcompany
5,738,151,1795,595,168,610Net asset shares based on the shareholdingratio
1,721,445,3541,678,550,583Adjusting items----Goodwill----Unrealized prot of internal trading----Others--Book value of equity investment in associates1,721,445,3541,678,550,583Fair value of equity investment in associateswith quoted market price
--Operating income1,693,357,2971,173,817,052Financial expenses – interest income14,581,32011,277,025Financial expenses – interest expenditure11,983,47223,808,003Income tax expenses114,094,28589,532,048Net prot351,695,926272,052,060Net prot for discontinued operations--Other comprehensive income2,159,463-848,960Total comprehensive income353,855,387271,097,816Dividends from associates for the current year150,000,000-
(4) Summary of nancial information of insignicant joint ventures and associates√Applicable □Not applicable
Unit: Yuan Currency: RMBEnding Balance/Current amount
Beginning Balance/
Prior amountJoint venture:
Book value of total investments287,691,938268,510,756Total amount calculated by shareholding ratio-- Net prot9,181,18235,324,167-- Other comprehensive income---- Total comprehensive income9,181,18235,324,167Associate:
Book value of total investments766,664,469373,409,182Total amount calculated by shareholding ratio---- Net prot458,218-14,386,647-- Other comprehensive income-5,303,670-8,418,578-- Total comprehensive income-4,845,452-22,805,225
(5) Restriction on transferring funds to the Company from joint ventures or associates□Applicable √Not applicable(6) Excess losses of joint ventures or associates□Applicable √Not applicable(7) Unrecognized commitments related to investment in joint ventures□Applicable √Not applicable(8) Contingent liabilities related to investment in joint ventures or associates□Applicable √Not applicable4. Signicant joint operations
□Applicable √Not applicable5. Equity in the structured entities not included in the scope of consolidated nancial statements
Notes to the structured entities not included in the scope of consolidated nancial statements:
□Applicable √Not applicable6. Others
□Applicable √Not applicable
X. Risks Related to Financial Instruments
√Applicable □Not applicable1. Classication of nancial instruments
The book values of various nancial instruments on balance sheet date are as follows:
Dec. 31, 2018
Financial assets
Financial assetsmeasured at fair value
through the current
prot or loss
Loans and accounts
receivable
Other available-for-sale nancial assets
TotalMonetary fund-3,697,338,708-3,697,338,708Financial assets measured at fairvalue through the current prot or loss
52,920,084--52,920,084Notes receivables and accountsreceivables
-5,221,919,846-5,221,919,846Other receivables-680,776,372-680,776,372Non-current assets maturing withinone year
-894,638,424-894,638,424Available-for-sale nancial assets--1,214,533,5541,214,533,554Long-term receivables-5,188,341,089-5,188,341,089
52,920,08415,683,014,4391,214,533,55416,980,468,077
Financial liabilities
Other nancial liabilitiesShort-term borrowings16,554,687,487Notes payable and accounts payable9,769,273,923Other payables952,110,434Non-current liabilities maturing within one year4,209,532,510Long-term borrowings15,097,725,259Long-term payables1,967,461,119
48,550,790,732
Dec. 31, 2017Financial assets
Financial assets measured
at fair value through the
current prot or loss
Loans andaccountsreceivable
Other available-for-sale nancial
assets
TotalMonetary fund-5,770,227,369-5,770,227,369Financial assets measured at fair value throughthe current prot or loss
8,438,278--8,438,278Notes receivable and accounts receivable-4,400,803,623-4,400,803,623Other receivables-627,877,201-627,877,201Non-current assets maturing within one year-1,896,475,472-1,896,475,472Available-for-sale nancial assets-1,304,203,9051,304,203,905Long-term receivables-4,238,704,827-4,238,704,827
8,438,27816,934,088,4921,304,203,90518,246,730,675
Financial liabilities
Other nancial liabilitiesShort-term borrowings25,468,980,401Notes payable and accounts payable8,780,825,653Other payables843,207,676Non-current liabilities maturing within one year2,198,931,219Long-term borrowings6,664,914,383Long-term payables1,884,986,333
45,841,845,665
2. Transfer of nancial assets
Transferred nancial assets derecognized as a whole but involved continuouslyOn December 31, 2018, the book value of the bank acceptance bill that the Group had endorsed to the supplier forclearing the accounts payable was RMB 364,908,608 Yuan (Dec. 31, 2017: RMB 1,519,002,534 Yuan), with the maturityterm of 1~12 months. In accordance with the relevant provisions of the Negotiable Instruments Law, if the acceptance bankrefuses to pay, its holder is entitled to recourse to the Group (“continue to be involved”).The Group considers that the Grouphas transferred almost all of its risks and rewards and therefore terminates the book value of its settled accounts payable inconnection with it. The maximum losses and undiscounted cash ows that continue to be involved are equal to their bookvalue. The Group considers that continuous involvement of fair value is not important.
In 2018, the Group failed to recognize any gain or loss (2017: none) on above-mentioned transfer date of financialassets. The Group had no income or expense recognized in current year or accumulatively due to overall termination ofrecognition but continuous involvement. The endorsement of bank acceptance bill was roughly balanced in current year.3. Risks of nancial instruments
Major nancial instruments of the Group include bank loans, mortgage loan formed from sale and lease-back, otherinterest-bearing borrowings and monetary fund, and the like. The main purpose of these nancial instruments is to nancefor the operation of the Group. The Group has various other nancial assets and liabilities directly arising from operations,such as accounts receivable, long-term receivables and accounts payable, etc.
The Group’s operations face various nancial risks: credit risk, liquidity risk and market risk (mainly exchange rate riskand interest rate risk). The Group’s overall risk management plan addresses the unpredictability of nancial markets andseeks to reduce the potential adverse impact on the Group’ s nancial performance.
Credit risk
The Group manages the credit risks by category based on portfolio. Credit risks mainly originate from notes andaccounts receivable, other receivables, available-for-sale nancial assets and long-term receivables etc.
Other nancial assets of the Group include monetary fund, available-for-sale nancial assets and other receivables,whose credit risks arise from that the counterparty default and the maximum exposure is equal to the carrying amount ofthese instruments.
Since the Group is trading only with a recognized and credibility third party, the credit risks shall be managed incentralized manner according to the customer/counterparty, geographic region and industry. Since the Group’s customersof accounts receivable and long-term receivables are widely dispersed across sectors and industries, there is no signicantcredit risk concentration within the Group. The Group does not hold any collateral or other credit enhancements to thebalance of accounts receivable and long-term receivables.
Bank deposits of the Group in 2018 and 2017 were mainly saved in state-owned banks and other large or medium-sizedlisted banks. The Group held that there was no signicant credit risk and no great loss caused by the default of counterparty.
In addition, as for the notes receivable and accounts receivable, long-term receivables and other receivables, the Grouphas established related policies to control the credit risks exposure. The Group evaluates the clients’ credit qualication andsets corresponding credit terms on the basis of clients’ nancial status, possibility of obtaining guaranty from a third-party,credit record and other factors including current market status rating. The Group monitors clients’ credit record on regular
basis. When client is found with bad credit record, the Group will send out written calls, shorten credit terms or cancel creditterms, in an attempt to ensure the Group’s overall credit risks within the range of control.
On December 31, 2018, the term of financial assets without impairment individually or in portfolio was analyzed asfollows:
2018Total
Not overdueNo depreciation
OverdueWithin 1 year 1~2 years2~3 years
3 years and
aboveMonetary fund3,697,338,7083,697,338,708----Notes receivable andaccounts receivable
3,390,661,9212,888,371,190153,982,269120,227,018102,862,164125,219,280Other receivables1,137,887,6911,137,887,691----Non-current assetsmaturing within one year
894,638,424894,638,424----Long-term receivables5,188,341,0895,188,341,089----
2017Total
Not overdueNo depreciation
OverdueWithin 1 year 1~2 years2~3 years
3 years and
aboveMonetary fund5,770,227,3695,770,227,369----Notes receivable andaccounts receivable
2,944,886,1112,649,977,25217,223,670139,468,19112,056,612126,160,386Other receivables981,986,979981,986,979----Non-current assetsmaturing within one year
1,896,475,4721,896,475,472----Long-term receivables4,238,704,8274,238,704,827----
On December 31, 2018, the accounts receivable not overdue or impaired were related to a large number ofdecentralized customers who had no default record recently.
On December 31, 2018, the accounts receivable overdue but not impaired were related to a large number ofindependent customers bearing good transaction records with the Group. Based on past experiences, the Group consideredthat no provision for impairment was required since the credit quality had not changed significantly and the accountsreceivable were still considered to be recoverable in full.
Liquidity risk
Subsidiaries within the Group are responsible for their own prediction of cash ow. The nancial section of the headoffice continues to monitor the capital demand for short-term and long-term capital at the group level after collecting allpredictions of subsidiaries, to ensure sufcient cash reserve and cashable securities. Meanwhile, the nancial section of thehead ofce continues to monitor the nancial and non-nancial factors prescribed in credit agreements and loan agreements,to ensure the Group to get sufcient line of credit from key nancial institutions to satisfy the short-term and long-term capitaldemand of the subsidiaries of the Group.
On Dec. 31, 2018, the various financial liabilities of the Group are listed as follows by due dates in undiscountedcontracted cash ow (principal and interest included):
2018Within 1 year1~2 years2~5 years5 years and aboveTotalShort-term borrowings16,831,239,955---16,831,239,955Notes payable and accounts payable9,769,273,923---9,769,273,923Other payables1,098,580,447---1,098,580,447Non-current liabilities maturing withinone year
4,383,617,609---4,383,617,609Long-term borrowings7,708,456,6127,771,884,597509,025,15015,989,366,359Long-term payables1,013,791,584524,739,421505,113,0742,043,644,079
32,082,711,9348,722,248,1968,296,624,0181,014,138,22450,115,772,372
On Dec. 31, 2017, the various financial liabilities of the Group are listed as follows by due dates in undiscountedcontracted cash ow (principal and interest included):
2017Within 1 year1~2 years2~5 years5 years and aboveTotalShort-term borrowings25,899,118,580---25,899,118,580Notes payable and accounts payable8,784,041,985---8,784,041,985Other payables844,125,043---844,125,043Non-current liabilities maturing withinone year
2,607,918,346---2,607,918,346Long-term borrowings-3,068,866,9363,639,532,692410,067,1257,118,466,753Long-term payables-969,702,730962,927,475-1,932,630,205
38,135,203,9544,038,569,6664,602,460,167410,067,12547,186,300,912
Market riskInterest rate riskThe interest rate risks of the Group mainly originate from long-term interest-bearing liabilities including long-term bankloans and long-term payables. Financial liabilities with oating rate confront the Group with cash ow interest rate risks,while nancial liabilities with xed rates put the Group against fair value interest rate risks. The Group determines the relativeproportion of contracts with xed rates and those with oating rates based on corresponding market environment. On Dec.31, 2018, the Group’s long-term interest-bearing liabilities mainly included the contracts with oating rates priced in USD andcontracts with xed rates priced in RMB.
The risk of market interest rate changes which the Group faces is mainly related to the long-term liabilities bearing theinterest at oating rate.
The nancial division of the Group headquarters keeps close watch over the interest rates level of the Group. Sincethe rise in interest rates will increase the cost of newly added liabilities with interests, interest expenses on unpaid liabilitieswith interests priced in exible rates, and will signicantly and adversely impact the nancial results of the Group, so themanagement will control the rate risks via swap contracts based on the latest market status. In 2017 and 2018, the Grouphad no such swap arrangements.
The following table shows the sensitivity analysis of the interest rate risk, reecting the effect of the reasonable andpossible changes in the interest rate on net prots and losses (through the impact on loan with oating rate) and the netamount of other comprehensive income after tax based on the assumption of no change in other variables.
2018Base pointIncrease/(decrease)
Net prots and losses
Increase/(decrease)
Net amount of othercomprehensive income after tax
Increase/(decrease)
Total shareholders’ equity
Increase/(decrease)RMB100(48,269,201)-(48,269,201)RMB(100)48,269,201-48,269,201
2017Base pointIncrease/(decrease)
Net prots and losses
Increase/(decrease)
Net amount of othercomprehensive income after tax
Increase/(decrease)
Total shareholders’ equity
Increase/(decrease)RMB100(40,838,071)-(40,838,071)RMB(100)40,838,071-40,838,071
Exchange rate riskThe Group is exposed to transactional exchange rate risk. Such risks are due to sales or purchases made by theoperating entity in currencies other than its currency. The Group’s main production is located in China, but the mainbusiness is settled in USD and EUR. Therefore, the foreign currency assets and liabilities recognized by the Group and thefuture foreign currency transactions (foreign currency assets and liabilities and the pricing currency denominated in foreigncurrency transactions are mainly USD and EUR). The Financial Department of the Group’s headquarters is responsible formonitoring the size of the Group’ s foreign currency transactions and foreign currency assets and liabilities to minimize theexposure to foreign currency risks. In the reporting year, the Group adopted forward foreign exchange contract with Ruble toUSD to offset the exchange rate risk of sales transactions in Ruble.
The following table shows the sensitivity analysis of the exchange rate risk, reecting the impact of reasonable andpossible changed in USD exchange rate on net prot and loss (due to changes in the fair value of monetary assets andmonetary liabilities) and net amount of other comprehensive income after tax (due to changes in the fair value of forwardexchange contracts) based on the assumption of no change in other variables.
2018USD Exchange rateIncrease/(decrease)
Net prots and losses
Increase/(decrease)
Net amount of othercomprehensive income
after tax
Increase/(decrease)
Total shareholders’
equityIncrease/(decrease)Appreciation of RMB against USD1%35,226,305-35,226,305Depreciation of RMB against USD(1%)(35,226,305)-(35,226,305)
2017USD Exchange rateIncrease/(decrease)
Net prots and losses
Increase/(decrease)
Net amount of othercomprehensive income
after tax
Increase/(decrease)
Total shareholders’
equityIncrease/(decrease)Appreciation of RMB against USD1%32,343,556-32,343,556Depreciation of RMB against USD(1%)(32,343,556)-(32,343,556)
Capital managementThe objective of the Group’s capital management policy is to ensure that the Group is able to operate on a continuousbasis to provide returns to shareholders and to benet other shareholders while maintaining the best capital structure toreduce capital costs.
To maintain or adjust the capital structure, the Group may adjust the dividend amount paid to shareholders, returncapital to shareholders, issue new shares or sell assets to reduce debt.
The total capital of the Group is the shareholders’ equity listed in the consolidated balance sheet. The Group is notsubject to mandatory external capital requirements and utilizes debt ratio to monitor capital. This ratio is calculated by thenet debt divided by total capital.The net debt is the total borrowing (including Short-term borrowings listed in the consolidatedbalance sheet, other non-current liabilities due within one year, Long-term borrowings, other payables and interest-bearingliabilities in long-term payables) minus cash and cash equivalents. The total capital is the total shareholders’ equity plus netdebt.
The debt ratio of the Group as at Dec. 31, 2018 and Dec. 31, 2017 was listed below:
Dec. 31, 2018Dec. 31, 2017Debt ratio66%65%
XI. Disclosure of Fair Value1. Ending fair value of the assets and liabilities measured at fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending fair valueMeasurement of fair
value by Level 1
Measurement of fair
value by Level 2
Measurementof fair value by
Level 3
TotalI. Recurring fair value measurement1,171,539,39444,481,8068,438,2781,224,459,478(I) Financial assets measured at fair valuethrough the current prot or loss
-44,481,8068,438,27852,920,0841. Financial assets held for trading-44,481,8068,438,27852,920,084(1) Debt instrument investment----(2) Equity instrument investment--8,438,2788,438,278(3) Derivative nancial assets-44,481,80644,481,8062. Designated nancial assets measured at fairvalue through the current prot or loss
----(1) Debt instrument investment----(2) Equity instrument investment----(II) Available-for-sale nancial assets1,171,539,394--1,171,539,394(1) Debt instrument investment----(2) Equity instrument investment1,171,539,394--1,171,539,394
(3) Others ----
(III) Investment properties----1. Land use right leased out----2. Building leased out----3. Land use right held and ready to transfer afterappreciation
----(IV) Biological assets----1. Consumable biological assets----2. Productive biological assets----Total assets of recurring fair value measurement1,171,539,39444,481,8068,438,2781,224,459,478(V) Financial liabilities held for trading ----Including: Trading bonds issued----
Item
Ending fair valueMeasurement of fair
value by Level 1
Measurement of fair
value by Level 2
Measurementof fair value by
Level 3
TotalDerivative nancial liabilities----Others----(VI) Financial liabilities designated upon initialrecognition as measured at fair value throughthe current prot or loss
---Total liabilities of recurring fair value measurement----II. Non-recurring fair value measurement----(I) Assets held for sale----Total assets of non-recurring fair valuemeasurement
----Total liabilities of non-recurring fair valuemeasurement
----
2. Determination basis of market price for recurring and non-recurring items in Level 1 for fair value measurement
□Applicable √Not applicable3. For recurring and non-recurring items in Level 2 for fair value measurement, the adopted valuation techniquesand qualitative and quantitative information of important parameters
√Applicable □Not applicable
The Group took the event occurrence date resulting in the transfer among the levels as the time point for recognition ofthe transfer among the levels. There was no transfer among the levels in this year.
As for the nancial instrument traded on active market, the Group would determine its fair value based on the quotedprice on active market; as for the nancial instrument not traded on active market, the Group would determine its fair valuewith valuation technique. The valuation model shall be the cash ow discount model. The input values of valuation techniqueincluded the risk-free interest rate and forward exchange rate.
Information on Level 2 for fair value measurement is as follows:
Dec. 31, 2018
Fair value
Valuation technique
Observable input valueNameScopeFinancial assets measured at fair valuethrough the current prot or loss- Forward exchange contract in Ruble44,481,806
Cash ow discount
model
Ruble to USDforward exchange
64.7530~66.4903
The important unobservable input values of Level 3 for fair value measurement are as follows:
Dec. 31, 2018
Fair value
Valuation technique
Unobservable input valueNameWeighted averageFinancial assets measured at fair valuethrough the current prot or lossFinancial assets held for trading - equityinstruments investment
8,438,278
Cash ow discount
model
Weighted average
capital cost
11%
4. For recurring and non-recurring items in Level 3 for fair value measurement, the adopted valuation techniquesand qualitative and quantitative information of important parameters
□Applicable √Not applicable5. For recurring items in Level 3 for fair value measurement, the adjustment between beginning and ending bookvalue and the sensitivity analysis of unobservable parameters
□Applicable √Not applicable6. If there are transfers of recurring items for fair value measurement among levels in current period, disclose thereason for those transfers and policies for transfer timing-point determination
□Applicable √Not applicable7. Changes in evaluation technique in current period and the reasons
□Applicable √Not applicable8. Particulars about the fair value of nancial assets and liabilities not measured at fair value
√Applicable □Not applicable
The financial assets and liabilities measured at amortized cost of the Group mainly include monetary fund, notesreceivable and receivables, long-term receivables, non-current assets due within one year, Short-term borrowings, notes andaccounts payable, Long-term borrowings, and non-current liabilities due within one year, etc.
The management has evaluated the monetary fund, Notes receivable and accounts receivables, notes and accountspayable, and the fair value is equal to the book value due to short remaining term.
The long-term receivables of the Group are the receivables with oating rate, and the difference between the book valueand fair value is small.
As for the Long-term borrowings and long-term payables, the fair value shall be determined by the future cash owspecied in the contract after discounting according to the interest rate which has comparable credit rating on the market andprovides almost the same cash ow under the same conditions, and the difference between the book value and such fairvalue is small.9. Others
□Applicable √Not applicableXII. Related Parties and Related Party Transactions1. Particulars about the parent company of the Company
√Applicable □Not applicable
Unit: Yuan Currency: RMBName of parent company
Registration
place
Business nature
Registered
capital
Shareholding ratio of
parent company inthis company (%)
Voting proportion ofparent company inthis company (%)CCCCBeijing City
Port project contractingand related business
5,855,423,83046.22946.229China CommunicationsConstruction CompanyLimited
Beijing City
Port project contractingand related business
16,174,735,42516.23916.239
Other information:
On July 18, 2017, the board of directors of China Communications Construction Company Ltd. deliberated andpassed the Proposal for Transfer of Some Shares of Shanghai Zhenhua Heavy Industries Co., Ltd through Agreement and
Associated Transaction and agreed to transfer totally 1,316,649,346 shares of the Company held by it to CCCC and CCCG(HK) Holdings Co., Ltd. (hereinafter referred to as “CCCG HK”), accounting for 29.990% of the total shares of the Company,after that, China Communications Construction Company Ltd. held 16.239% of the stock equity of this Company. Thetransfer and registration of shares was accomplished on Dec. 27, 2017. On the date of the transfer of shares, CCCC directlyheld 552,686,146 A-shares of this Company (accounting for 12.589% of the total shares of this Company), indirectly held763,963,200 B-shares of this Company through CCCG (HK) (accounting for 17.401% of the total shares of this Company)and held 712,951,703 A-shares of this Company through China Communications Construction Company Ltd. (accounting for16.239% of the total shares of this Company), as a result, it became the controlling shareholder of the Company.
The final controlling party of the Company in both 2018 and 2017 was China Communications ConstructionCompany Ltd.2. Subsidiaries of the Company
Please refer to the notes for details of subsidiaries.
√Applicable □Not applicable
For details of the subsidiaries, please refer to Article 1 of Note IX.3. Joint venture and associated enterprise of the Company
Please refer to Note IX. 2 for details of joint venture and associates of the Company.
√Applicable □Not applicable
The particulars about other joint venture and associates having associated transactions with the Company in currentperiod or having associated transactions with the Company and forming balance in prior period are as follows
□Applicable √Not applicable
Other information
□Applicable √Not applicable4. Particulars about other related parties
√Applicable □Not applicable
Name of other related party
Relationship between other related party with
the enterpriseFriede & Goldman, Llc.Holding subsidiary of the parent companyChina Communications Construction Company LimitedHolding subsidiary of the parent companyZhen Hwa Harbour Construction Co., Ltd.Holding subsidiary of the parent companyHainan CCCC Fourth Harbor Construction Co., Ltd.Holding subsidiary of the parent companyRoad & Bridge International Co., Ltd.Holding subsidiary of the parent companyCCCC Nanjing Weisanlu River Tunnel Co., LtdHolding subsidiary of the parent companyShanghai Jiangtian Industrial Co., LtdHolding subsidiary of the parent companyShanghai Communications Construction Contracting Co., Ltd.Holding subsidiary of the parent companyZhenhua Engineering Co., Ltd.Holding subsidiary of the parent companyYueyang Chenglingji New Port Co., Ltd.Holding subsidiary of the parent companyChina Harbor Engineering Co., LtdHolding subsidiary of the parent companyChina Communications Materials & Equipment Co., LtdHolding subsidiary of the parent companyChina Road & Bridge CorporationHolding subsidiary of the parent companyChuwa Bussan Co. Ltd.Holding subsidiary of the parent companyCCCC Finance Company Ltd.Holding subsidiary of the parent companyCCCC Second Highway Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC Second Highway Consultants Co., Ltd.Holding subsidiary of the parent companyCCCC Second Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Third Highway Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC Third Harbor Engineering Co., Ltd.Holding subsidiary of the parent company
Name of other related party
Relationship between other related party with
the enterpriseCCCC Third Harbor Consultants Co., Ltd.Holding subsidiary of the parent companyCCCC Fourth Highway Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC Fourth Harbor Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC-FHDI Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC First Highway Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC First Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC First Harbor Consultants Co., Ltd.Holding subsidiary of the parent companyCCCC - SHEC Second Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC - SHEC Third Highway Engineering Co. Ltd.Holding subsidiary of the parent companyThe Fourth Engineering Co., Ltd. of CCCC Second Highway Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC - SHEC First Highway Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC - SHEC Railway Engineering Co. Ltd.Holding subsidiary of the parent companyNo.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyChina Communications Second Navigational Bureau Second Engineering Co., Ltd.Holding subsidiary of the parent companyChina Communications Second Navigational Bureau Third Engineering Co., Ltd.Holding subsidiary of the parent companyNo.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Highway Bridges National Engineering Research Centre CO., Ltd.Holding subsidiary of the parent companyCCCC Guangzhou Dredging Co. Ltd.Holding subsidiary of the parent companyCCCC Marine Construction and Development Co. Ltd.Holding subsidiary of the parent companyCTTIC Shanghai Co., Ltd.Holding subsidiary of the parent companyCCCC East China Investment Co., Ltd.Holding subsidiary of the parent companyCCCC Electrical and Mechanical Engineering Co., Ltd.Holding subsidiary of the parent companyRoad & Bridge South China Engineering Co., Ltd.Holding subsidiary of the parent companyRoad & Bridge International Co., Ltd.Holding subsidiary of the parent companyCCCC Nanjing Trafc Engineering Management Co., Ltd.Holding subsidiary of the parent companyNo.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyNo.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyXING AN JI Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Shanghai Dredging Co., LtdHolding subsidiary of the parent companyCCCC Shanghai Equipment Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Dredging (Group) Co., Ltd.Holding subsidiary of the parent companyCCCC Water Transportation Planning and Design Institute Co., Ltd.Holding subsidiary of the parent companyNo.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Tunnel Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Tianjin Dredging - Binhai Environmental Protection Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Tianjin Port Waterway Prospection & Design Research Institute Co., Ltd.Holding subsidiary of the parent companyCCCC Tianjin Industry and Trade Co., Ltd.Holding subsidiary of the parent companyCCCC Tianjin Dredging Co., Ltd.Holding subsidiary of the parent companyCCCC WuHan Harbour Engineering Design and Research Co. LtdHolding subsidiary of the parent companyThe Sixth Engineering Co., Ltd. of CCCC First Highway Engineering Co., Ltd.Holding subsidiary of the parent companyInstallation Engineering Co., Ltd. of CCCC First Harbor Engineering Co. Ltd.Holding subsidiary of the parent companyCCCC-FHEC Urban Trafc Engineering Co., Ltd.Holding subsidiary of the parent company
Name of other related party
Relationship between other related party with
the enterpriseNo.2 Engineering Company, Ltd. of CCCC First Harbor Engineering Company Ltd.Holding subsidiary of the parent companyNo.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Leasing Jiahua No.2 Co. Ltd.Holding subsidiary of the parent companyCCCC Leasing Jiahua No.1 Co. Ltd.Holding subsidiary of the parent companyThe Third Engineering Co., Ltd. of The First Highway Engineering Bureau of CCCCHolding subsidiary of the parent companyCCCC First Highway Fifth Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Guidu Highway Construction Co. Ltd.Holding subsidiary of the parent companyCCCC (Tianjin) Eco-environmental Protection Design & Research Institute Co., Ltd.Holding subsidiary of the parent companyCCCC Guangzhou Logistics Co., Ltd.Holding subsidiary of the parent companyCCCC SHEC Chengdu Urban Construction Engineering Co., Ltd.Holding subsidiary of the parent companyHong Kong Marine Construction Co., Ltd.Holding subsidiary of the parent companyCCCC-FHEC Bridge and Tunnel Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC Infrastructure Maintenance Group Co., Ltd.Holding subsidiary of the parent companyCCCC Yancheng Construction and Development Co., Ltd.Holding subsidiary of the parent companyCCCC Chengdu Rail Transit Investment and Construction Co., Ltd.Holding subsidiary of the parent companyCCCC Shanghai Channel Equipment Industry Co., Ltd.Holding subsidiary of the parent companyEngineering Materials Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Holding subsidiary of the parent companyCNPC & CCCC Petroleum Sales Co., Ltd.Holding subsidiary of the parent companyCCCC Tianjin Dredging Co., Ltd.Holding subsidiary of the parent companyShanghai Zhensha Longfu Machinery Co., Ltd.Holding subsidiary of the parent companyRoad & Bridge East China Engineering Co., Ltd.Holding subsidiary of the parent companyCCCC National Engineering Research Center of Dredging Technology and EquipmentHolding subsidiary of the parent companyCCCC Xi’an Road Construction Machinery Co., Ltd.Holding subsidiary of the parent companyCCCC Highway Consultants Co. Ltd.Holding subsidiary of the parent company
5. Related transactions
(1) Purchase and sales of goods, rendering of and receiving labor serviceStatement of purchase of goods/receiving labor service√Applicable □Not applicable
Unit: Yuan Currency: RMBRelated party
Contents of related
transaction
Currentamount
Prior amountCCCC Shanghai Equipment Engineering Co., Ltd.Purchase of goods210,238,846131,400,593ZPMC Changzhou Coatings Co., Ltd.Purchase of goods108,484,16188,611,099Shanghai Jiangtian Industrial Co., LtdPurchase of goods65,858,53615,435,145Chuwa Bussan Co. Ltd.Purchase of goods19,663,20442,752,896Jiangsu Longyuan Zhenhua Marine Engineering Co., LtdPurchase of goods10,643,590-CNPC & CCCC Petroleum Sales Co., Ltd.Purchase of goods1,487,613-
Related party
Contents of related
transaction
Currentamount
Prior amountCCCC National Engineering Research Center of Dredging Technology andEquipment
Purchase of goods1,245,211-CCCC Shanghai Channel Equipment Industry Co., Ltd.Purchase of goods302,564-China Communications Construction Company LimitedPurchase of goods258,621-CCCC Water Transportation Planning and Design Institute Co., Ltd.Purchase of goods237,931-China Communications Materials & Equipment Co., LtdPurchase of goods209,1065,989,665CCCC Fourth Highway Engineering Co. Ltd.Purchase of goods-4,868,840CCCC Nanjing Weisanlu River Tunnel Co., LtdPurchase of goods-418,291CCCC Tianjin Industry and Trade Co., Ltd.Purchase of goods-22,846No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Receiving labor service435,493,71110,427,350CCCC Second Harbor Engineering Co., Ltd.Receiving labor service319,635,901161,465,657CCCC Electrical and Mechanical Engineering Co., Ltd.Receiving labor service183,813,849-CCCC Fourth Highway Engineering Co. Ltd.Receiving labor service180,145,84696,055,525CCCC Third Harbor Engineering Co., Ltd.Receiving labor service171,166,061134,235,980CCCC Tianjin Dredging Co., Ltd.Receiving labor service119,241,651462,492,064No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering Co., Ltd.Receiving labor service58,238,65928,312,923CCCC - SHEC Second Engineering Co. Ltd.Receiving labor service51,067,364112,198,187CCCC Shanghai Dredging Co., LtdReceiving labor service44,255,0711,727,336CCCC Shanghai Equipment Engineering Co., Ltd.Receiving labor service31,619,960-CCCC Third Highway Engineering Co. Ltd.Receiving labor service26,704,324-CCCC First Harbor Consultants Co., Ltd.Receiving labor service26,259,6265,858,503CCCC First Harbor Engineering Co., Ltd.Receiving labor service24,659,83526,777,335CCCC Second Highway Consultants Co., Ltd.Receiving labor service22,139,41330,059,257CCCC Leasing Jiahua No.2 Co. Ltd.Receiving labor service17,399,943-No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Receiving labor service16,698,34163,578,055China Communications Second Navigational Bureau Third Engineering Co.,Ltd.
Receiving labor service13,181,025-CCCC - SHEC Third Highway Engineering Co. Ltd.Receiving labor service12,990,744-No.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Receiving labor service10,326,47917,743,903CCCC Water Transportation Planning and Design Institute Co., Ltd.Receiving labor service9,564,64912,105,094ZPMC Mediterranean Liman Makinalari Ticaret Anonim SirketiReceiving labor service8,502,5373,548,020Chuwa Bussan Co. Ltd.Receiving labor service7,063,023-Installation Engineering Co., Ltd. of CCCC First Harbor Engineering Co. Ltd.Receiving labor service5,974,1385,989,401CCCC Tunnel Engineering Co., Ltd.Receiving labor service4,536,422-China Communications Construction Company LimitedReceiving labor service3,701,020-CCCC Marine Engineering & Technology Research Center Co., Ltd.Receiving labor service3,425,753-Shanghai Jiangtian Industrial Co., LtdReceiving labor service2,594,773-
Related party
Contents of related
transaction
Currentamount
Prior amountShanghai Communications Construction Contracting Co., Ltd.Receiving labor service1,254,52361,115,756China Communications Materials & Equipment Co., LtdReceiving labor service318,966-CCCC Third Harbor Consultants Co., Ltd.Receiving labor service85,470142,383CCCC First Highway Engineering Co., Ltd.Receiving labor service-137,930,629Jiangsu Longyuan Zhenhua Marine Engineering Co., LtdReceiving labor service-21,662,715CCCC Highway Bridges National Engineering Research Centre CO., Ltd.Receiving labor service-1,777,778CTTIC Shanghai Co., Ltd.Receiving labor service-929,915
Statement of sales of goods/rendering of labor service√Applicable □Not applicable
Unit: Yuan Currency: RMBRelated party
Contents of related
transaction
Currentamount
Prior amountJiangsu Longyuan Zhenhua Marine Engineering Co., LtdRendering of service24,438,3191,619,314CCCC First Harbor Engineering Co., Ltd.Rendering of service-47,170China Communications Construction Company LimitedRendering of service70,216,04939,664,882CCCC Third Harbor Engineering Co., Ltd.Rendering of service24,710,083-CCCC Second Highway Engineering Co. Ltd.Rendering of service7,547-No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Rendering of service-14,151ZPMC Changzhou Coatings Co., Ltd.Rendering of service1,396,226-CCCC Fourth Highway Engineering Co. Ltd.Rendering of service13,801,887-CCCC Guangzhou Dredging Co. Ltd.Rendering of service4,664,1011,949,573CCCC First Highway Fifth Engineering Co., Ltd.Rendering of service7,500,000-CCCC First Highway Engineering Co., Ltd.Rendering of service4,000,000-CCCC Tunnel Engineering Co., Ltd.Rendering of service-3,301,887ZPMC-OTL MARINE CONTRACTOR LIMITEDRendering of service30,377,284-CCCC Second Highway Consultants Co., Ltd.Rendering of service12,905,660-CCCC (Tianjin) Eco-environmental Protection Design & Research InstituteCo., Ltd.
Rendering of service207,547-CCCC Guangzhou Logistics Co., Ltd.Rendering of service56,604-China Harbor Engineering Co., LtdSelling goods22,231,105232,091,723Jiangsu Longyuan Zhenhua Marine Engineering Co., LtdSelling goods110,250,125438,106,948No.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Selling goods19,181,05457,742,023CCCC Tianjin Dredging Co., Ltd.Selling goods137,098,857471,642,717Friede & Goldman, Llc.Selling goods2,673,016 -CCCC Electrical and Mechanical Engineering Co., Ltd.Selling goods187,488,46256,423,470CCCC First Harbor Engineering Co., Ltd.Selling goods70,466,403311,626,339CCCC Financial Leasing Co., Ltd.Selling goods502,962,177728,945,753
Related party
Contents of related
transaction
Currentamount
Prior amountCCCC - SHEC Second Engineering Co. Ltd.Selling goods7,7271,729,907China Communications Construction Company LimitedSelling goods248,519,083182,048,428CCCC Third Harbor Engineering Co., Ltd.Selling goods100,341,95123,994,666Hainan CCCC Fourth Harbor Construction Co., Ltd.Selling goods13,2487,710,256CCCC Second Harbor Engineering Co., Ltd.Selling goods101,372,71562,392,577Road & Bridge International Co., Ltd.Selling goods105,144,08697,734,474CCCC Fourth Harbor Engineering Co. Ltd.Selling goods-5,805,005China Road & Bridge CorporationSelling goods358,243,63623,045,665Road & Bridge South China Engineering Co., Ltd.Selling goods16,524,97244,066,592No.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Selling goods24,459,64436,707,819China Communications Second Navigational Bureau Third Engineering Co.,Ltd.
Selling goods117,230,62128,130,115CCCC - SHEC Third Highway Engineering Co. Ltd.Selling goods1,057,04815,152,103CCCC Second Highway Engineering Co. Ltd.Selling goods63,557,61251,535,600No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Selling goods5,264,957-CCCC Third Harbor Consultants Co., Ltd.Selling goods5,018,319-CCCC-FHDI Engineering Co., Ltd.Selling goods-5,058,462Shanghai Communications Construction Contracting Co., Ltd.Selling goods34,589,744 -CCCC First Harbor Consultants Co., Ltd.Selling goods9,654,87227,435,897ZPMC Mediterranean Liman Makinalari Ticaret Anonim SirketiSelling goods4,262,1984,167,390CCCC Highway Consultants Co. Ltd.Selling goods65,517-CCCC Tianjin Industry and Trade Co., Ltd.Selling goods674,414-Chuwa Bussan Co. Ltd.Selling goods2,023,65420,992,826CCCC First Highway Engineering Co., Ltd.Selling goods30,000,000-CCCC Tunnel Engineering Co., Ltd.Selling goods57,261,13693,172,932The Third Engineering Co., Ltd. of The First Highway Engineering Bureau ofCCCC
Selling goods6,550,315 -CCCC Third Highway Engineering Co. Ltd.Selling goods -2,752,482
Notes to the related transactions relating to purchase and sales of goods, and rendering of and receiving labor service□Applicable √Not applicable(2) Information for trust and contract in and out of assetsTable of the trust and contract in of assets of the Company:
□Applicable √Not applicableNotes to trust/contract in of assets□Applicable √Not applicableTable of the trust and contract out of assets of the Company□Applicable √Not applicable
Notes to associated management and contract out of assets□Applicable √Not applicable(3) Particulars about lease with related partyThe Company as the leasor:
√Applicable □Not applicable
Unit: Yuan Currency: RMBLeasee
Type of leased
asset
Rental incomerecognized forcurrent period
Rental incomerecognized for
prior periodCCCC Tunnel Engineering Co., Ltd.Shield machine34,392,257-CCCC Second Highway Engineering Co. Ltd.Shield machine26,075,6756,727,590CCCC First Highway Engineering Co., Ltd.Shield machine17,393,504-Jiangsu Longyuan Zhenhua Marine Engineering Co., LtdVessel17,133,96227,414,329CCCC Tianjin Dredging - Binhai Environmental Protection Engineering Co., Ltd. Vessel16,810,345-China Communications Second Navigational Bureau Third Engineering Co., Ltd.Shield machine15,756,410-CCCC First Harbor Engineering Co., Ltd.Shield machine12,181,009895,138China Communications Second Navigational Bureau Third Engineering Co., Ltd. Vessel8,909,091-CCCC - SHEC First Highway Engineering Co. Ltd.Shield machine7,304,0221,336,752CCCC Third Highway Engineering Co. Ltd.Shield machine5,617,7182,928,360Road & Bridge International Co., Ltd.Shield machine4,909,8383,499,733The Fourth Engineering Co., Ltd. of CCCC Second Highway Engineering Co., Ltd.Shield machine2,949,4701,841,219China Communications Construction Company Limited Vessel358,2252,162,605Zhenhua Marine Energy (HK) Co., Ltd. Vessel-158,746,932CCCC-FHEC Urban Trafc Engineering Co., Ltd.Shield machine-26,525,385
The Company as leasee:
□Applicable √Not applicableNotes to lease with related party□Applicable √Not applicable
(4) Related party guarantee
The Company as guarantor□Applicable √Not applicableThe Company as guarantee□Applicable √Not applicableNotes to related party guarantee□Applicable √Not applicable(5) Financing activities with related party□Applicable √Not applicable(6) Asset transfer and debt restructuring with related party□Applicable √Not applicable
(7) Remuneration of key management personnel√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountRemuneration of key management personnel11,074,40010,855,200
There were 25 persons as the key management of the Group in 2018 (2017: 26 persons). The remuneration of newstaff and resigned staff would be calculated according to the employment duration, while the remuneration of others werecalculated by year.
(8) Other related transactions
√Applicable □Not applicable
Dividend paid to related party
20182017China Communications Construction Company Limited63,281,892126,563,785Zhenhua Engineering Co., Ltd.37,434,19774,967,750Zhen Hwa Harbour Construction Co., Ltd.763,9631,428,570
101,480,052202,960,105
Drawing money from related party
20182017CCCC Finance Company Ltd.(479,100,507)(185,697,167)China Communications Construction Company Limited(19,058,644)20,206,089
(498,159,151)(165,491,078)
Borrowings from related party
20182017CCCC Finance Company Ltd.350,000,0001,150,000,000CCCC Leasing Jiahua No.1 Co. Ltd.-991,005,000CCCC Financial Leasing Co., Ltd.-43,000,000
350,000,0002,184,005,000
Interest collected from related party
20182017CCCC Finance Company Ltd.1,015,7321,527,782China Communications Construction Company Limited341,322143,106
1,357,0541,670,888
Interest paid to related party
20182017CCCC Leasing Jiahua No.1 Co. Ltd.61,347,01018,155,201CCCC Financial Leasing Co., Ltd.27,841,63061,295,275CCCC Finance Company Ltd.26,374,29222,784,195CCCC Leasing Jiahua No.2 Co. Ltd.19,035,74618,155,201
134,598,678120,389,872
6. Receivables from and payables to related party
(1) Receivables
√Applicable □Not applicable
Unit: Yuan Currency: RMB
ItemRelated party
Ending BalanceBeginning BalanceBook balance
Provision for
bad debts
Book balance
Provision for
bad debtsNotes receivable and accounts receivableChina Road & Bridge Corporation167,321,390---Notes receivable and accounts receivableCCCC First Harbor Engineering Co., Ltd.164,008,643-292,038,117-Notes receivable and accounts receivableCCCC Second Harbor Engineering Co., Ltd.141,951,335-55,342,226-Notes receivable and accounts receivableHong Kong Marine Construction Co., Ltd.137,133,578---Notes receivable and accounts receivableCCCC Tunnel Engineering Co., Ltd.109,822,612-62,548,820-Notes receivable and accounts receivable
Jiangsu Longyuan Zhenhua MarineEngineering Co., Ltd
101,223,377-40,731,949-Notes receivable and accounts receivable
No.1 Engineering Co., Ltd. of CCCC FirstHarbor Engineering Co., Ltd.
85,793,713---Notes receivable and accounts receivable
China Communications SecondNavigational Bureau Third Engineering Co.,Ltd.
84,077,626-36,245,810-Notes receivable and accounts receivable
CCCC Second Highway Engineering Co.Ltd.
63,391,227-11,311,717-Notes receivable and accounts receivable
ZPMC-OTL MARINE CONTRACTORLIMITED
49,354,814---Notes receivable and accounts receivableCCCC Third Harbor Engineering Co., Ltd.48,250,022-27,387,519-Notes receivable and accounts receivableRoad & Bridge International Co., Ltd.39,658,009-11,429,413-Notes receivable and accounts receivableRoad & Bridge International Co., Ltd.36,341,930-4,544,688-Notes receivable and accounts receivable
China Communications ConstructionCompany Limited
34,063,397-34,548,987-Notes receivable and accounts receivable
Road & Bridge South China EngineeringCo., Ltd.
26,581,168-11,279,627-Notes receivable and accounts receivableCCCC Third Highway Engineering Co. Ltd.22,746,125-11,901,177-Notes receivable and accounts receivable
ZPMC Mediterranean Liman MakinalariTicaret Anonim Sirketi
17,250,552-11,000,668-Notes receivable and accounts receivableFriede & Goldman, Llc.15,970,344-16,205,750-
ItemRelated party
Ending BalanceBeginning BalanceBook balance
Provision for
bad debts
Book balance
Provision for
bad debtsAccounts receivableCCCC Financial Leasing Co., Ltd.14,850,000-33,507,250-Notes receivable and accounts receivableCCCC-FHDI Engineering Co., Ltd.12,592,000-29,592,000-Notes receivable and accounts receivableCCCC Fourth Harbor Engineering Co. Ltd.12,000,000-12,000,000-Notes receivable and accounts receivableZhenhua Marine Energy (HK) Co., Ltd.11,818,430-27,901,034-Notes receivable and accounts receivableChina Harbor Engineering Co., Ltd8,779,024---Notes receivable and accounts receivable
China Communications SecondNavigational Bureau Second EngineeringCo., Ltd.
7,808,358-12,761,828-Notes receivable and accounts receivable
The Fourth Engineering Co., Ltd. of CCCCSecond Highway Engineering Co., Ltd.
7,755,561-4,384,226-Notes receivable and accounts receivable
Hainan CCCC Fourth Harbor ConstructionCo., Ltd.
6,200,000---Notes receivable and accounts receivable
The Sixth Engineering Co., Ltd. of CCCCFirst Highway Engineering Co., Ltd.
6,098,300-6,098,300-Notes receivable and accounts receivable
CCCC - SHEC Third Highway EngineeringCo. Ltd.
5,548,004-7,422,819-Notes receivable and accounts receivable
No.2 Engineering Company, Ltd. of CCCCFirst Harbor Engineering Company Ltd.
5,019,557-5,219,557-Notes receivable and accounts receivable
CCCC - SHEC Second Engineering Co.Ltd.
4,817,096-1,438,507-Notes receivable and accounts receivableCCCC First Highway Engineering Co., Ltd.4,694,962---Notes receivable and accounts receivable
CCCC-FHEC Urban Trafc EngineeringCo., Ltd.
3,415,780-15,268,940-Notes receivable and accounts receivable
No.1 Engineering Co., Ltd. of CCCCSecond Harbor Engineering Co., Ltd.
2,750,000---Notes receivable and accounts receivable
Installation Engineering Co., Ltd. of CCCCFirst Harbor Engineering Co. Ltd.
1,197,764-253,297-Notes receivable and accounts receivable
CCCC Marine Engineering & TechnologyResearch Center Co., Ltd.
1,100,000-1,100,000-Notes receivable and accounts receivable
CCCC Shanghai Equipment EngineeringCo., Ltd.
844,000-52,777-Notes receivable and accounts receivable
No.2 Engineering Co., Ltd. of CCCC FourthHarbor Engineering Co., Ltd.
564,537-24,901,085-Notes receivable and accounts receivable
XING AN JI Engineering Co., Ltd. of CCCCThird Harbor Engineering Co., Ltd.
331,860---Notes receivable and accounts receivable
CCCC SHEC Chengdu Urban ConstructionEngineering Co., Ltd.
277,527---Notes receivable and accounts receivable
CCCC Electrical and MechanicalEngineering Co., Ltd.
250,000---Notes receivable and accounts receivable
CCCC (Tianjin) Eco-environmentalProtection Design & Research Institute Co.,Ltd.
220,000---Notes receivable and accounts receivableCCCC Third Harbor Consultants Co., Ltd.150,000-150,000-
ItemRelated party
Ending BalanceBeginning BalanceBook balance
Provision for
bad debts
Book balance
Provision for
bad debtsNotes receivable and accounts receivableYueyang Chenglingji New Port Co., Ltd.84,660-44,900-Notes receivable and accounts receivable
CCCC Guidu Highway Construction Co.Ltd.
79,332---Notes receivable and accounts receivableCCCC Guangzhou Logistics Co., Ltd.60,000---Notes receivable and accounts receivable
No.4 Engineering Co., Ltd. of CCCCSecond Harbor Engineering Co., Ltd.
--61,000,000-Notes receivable and accounts receivableCCCC First Harbor Consultants Co., Ltd.--17,736,000-Notes receivable and accounts receivableCCCC Tianjin Industry and Trade Co., Ltd.--56,700-Notes receivable and accounts receivable
CCCC - SHEC Railway Engineering Co.Ltd.
--26,297-Other receivablesCCCC Financial Leasing Co., Ltd.176,800,000-176,800,000-Other receivablesZhenhua Marine Energy (HK) Co., Ltd.164,124,678164,124,678164,124,678164,124,678Other receivables
China Communications ConstructionCompany Limited
54,620,094-62,004,518-Other receivables
CCCC Nanjing Trafc EngineeringManagement Co., Ltd.
6,789,498-6,500,000-Other receivables
CCCC Second Highway Consultants Co.,Ltd.
3,180,000---Other receivablesCCCC1,350,000---Other receivables
CCCC Second Highway Engineering Co.Ltd.
1,000,000---Other receivables
Road & Bridge East China Engineering Co.,Ltd.
800,000---Other receivables
China Communications SecondNavigational Bureau Second EngineeringCo., Ltd.
800,000---Other receivables
CCCC Yancheng Construction andDevelopment Co., Ltd.
750,908---Other receivablesCCCC Third Highway Engineering Co. Ltd.732,473---Other receivables
Installation Engineering Co., Ltd. of CCCCFirst Harbor Engineering Co. Ltd.
300,000---Other receivablesCCCC Third Harbor Consultants Co., Ltd.250,000---Other receivables
CCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd.
164,787---Other receivables
CCCC Chengdu Rail Transit Investmentand Construction Co., Ltd.
164,787---Other receivables
CCCC Infrastructure Maintenance GroupCo., Ltd.
157,018---Other receivables
CCCC-FHEC Bridge and TunnelEngineering Co., Ltd.
100,000---Other receivables
Shanghai Zhensha Longfu Machinery Co.,Ltd.
21,503---
ItemRelated party
Ending BalanceBeginning BalanceBook balance
Provision for
bad debts
Book balance
Provision for
bad debtsAdvances to suppliersChuwa Bussan Co. Ltd.7,141,035-6,680,981-Advances to suppliers
China Communications ConstructionCompany Limited
1,423,515---Advances to suppliers
CCCC Shanghai Channel EquipmentIndustry Co., Ltd.
354,000---Advances to suppliersCCCC First Harbor Engineering Co., Ltd.--10,000,000-Advances to suppliersCCCC Fourth Highway Engineering Co. Ltd.--6,000,003-Advances to suppliers
No.2 Engineering Co., Ltd. of CCCC FourthHarbor Engineering Co., Ltd.
--5,000,000-Advances to suppliersCCCC Third Harbor Engineering Co., Ltd.--5,000,000-
(2) Payables
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemRelated party
Endingbook value
Beginningbook valueAccounts payable and notes payableChuwa Bussan Co. Ltd.272,058,371254,526,575Accounts payable and notes payableCCCC Fourth Highway Engineering Co. Ltd.145,983,99897,685,283Accounts payable and notes payableCCCC Third Harbor Engineering Co., Ltd.142,373,233148,448,390Accounts payable and notes payableCCCC Second Harbor Engineering Co., Ltd.140,174,674178,914,819Accounts payable and notes payableCCCC - SHEC Second Engineering Co. Ltd.125,227,201184,712,479Accounts payable and notes payableCCCC First Highway Engineering Co., Ltd.95,538,686109,392,836Accounts payable and notes payable
China Communications Second Navigational Bureau ThirdEngineering Co., Ltd.
84,371,458134,081,469Accounts payable and notes payableCCCC Tianjin Dredging Co., Ltd.69,699,557181,111,928Accounts payable and notes payableCCCC Tianjin Industry and Trade Co., Ltd.62,576,979-Accounts payable and notes payableCCCC Shanghai Equipment Engineering Co., Ltd.54,219,21034,449,016Accounts payable and notes payableCCCC First Harbor Engineering Co., Ltd.45,054,549-Accounts payable and notes payable
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor EngineeringCo., Ltd.
42,885,40715,626,120Accounts payable and notes payable
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co.,Ltd.
39,691,61825,348,030Accounts payable and notes payableCCCC Third Highway Engineering Co. Ltd.30,977,016-Accounts payable and notes payableCCCC Shanghai Dredging Co., Ltd30,964,3422,020,983Accounts payable and notes payableCCCC First Harbor Consultants Co., Ltd.24,254,1761,367,890Accounts payable and notes payableCCCC Finance Company Ltd.20,600,000-Accounts payable and notes payableCCCC - SHEC Third Highway Engineering Co. Ltd.19,811,475-Accounts payable and notes payableShanghai Jiangtian Industrial Co., Ltd17,535,8329,942,274Accounts payable and notes payableCCCC Second Highway Consultants Co., Ltd.17,087,47841,215,576
ItemRelated party
Endingbook value
Beginningbook valueAccounts payable and notes payable
Engineering Materials Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.
16,067,701-Accounts payable and notes payableShanghai Communications Construction Contracting Co., Ltd.16,046,39047,138,300Accounts payable and notes payableZPMC Changzhou Coatings Co., Ltd.15,543,89017,929,841Accounts payable and notes payableJiangsu Longyuan Zhenhua Marine Engineering Co., Ltd10,532,7512,079,751Accounts payable and notes payable
CCCC Marine Engineering & Technology Research Center Co.,Ltd.
10,118,7829,363,830Accounts payable and notes payable
XING AN JI Engineering Co., Ltd. of CCCC Third HarborEngineering Co., Ltd.
10,051,35210,051,352Accounts payable and notes payableCCCC Water Transportation Planning and Design Institute Co., Ltd.9,547,89114,162,960Accounts payable and notes payable
No.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,Ltd.
7,815,01813,760,366Accounts payable and notes payableChina Communications Construction Company Limited4,388,9384,388,938Accounts payable and notes payable
CCCC Tianjin Port Waterway Prospection & Design ResearchInstitute Co., Ltd.
4,408,3362,999,400Accounts payable and notes payable
CCCC National Engineering Research Center of DredgingTechnology and Equipment
2,986,050-Accounts payable and notes payableCNPC & CCCC Petroleum Sales Co., Ltd.2,660,621-Accounts payable and notes payableCCCC Tunnel Engineering Co., Ltd.2,477,30714,678,757Accounts payable and notes payableCCCC Xi’an Road Construction Machinery Co., Ltd.2,122,471-Accounts payable and notes payable
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,Ltd.
1,600,0005,000,000Accounts payable and notes payableZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi1,217,089-Accounts payable and notes payableCTTIC Shanghai Co., Ltd.1,088,0001,088,000Accounts payable and notes payable
Installation Engineering Co., Ltd. of CCCC First Harbor EngineeringCo. Ltd.
1,067,5997,007,599Accounts payable and notes payableCCCC WuHan Harbour Engineering Design and Research Co. Ltd700,000700,000Accounts payable and notes payableCCCC Tianhe Xi’an Equipment Manufacturing Co., Ltd.304,798-Accounts payable and notes payableChina Communications Materials & Equipment Co., Ltd242,563-Accounts payable and notes payableCCCC Third Harbor Consultants Co., Ltd.100,000-Accounts payable and notes payableCCCC Second Highway Engineering Co. Ltd.-23,175,061Advances from customers
CCCC Tianjin Dredging - Binhai Environmental ProtectionEngineering Co., Ltd.
70,058,10065,257,080Advances from customersCCCC Tunnel Engineering Co., Ltd.30,250,99345,095,030Advances from customers
China Communications Second Navigational Bureau ThirdEngineering Co., Ltd.
8,917,608-Advances from customers
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,Ltd.
1,891,307-Advances from customersChina Harbor Engineering Co., Ltd736,500-Advances from customersZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi558,589-Advances from customers
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co.,Ltd.
487,482-Advances from customersChina Communications Construction Company Limited182,513-
ItemRelated party
Endingbook value
Beginningbook valueAdvances from customersYueyang Chenglingji New Port Co., Ltd.35,980-Advances from customersCCCC First Highway Engineering Co., Ltd.-15,614,964Advances from customersCCCC - SHEC Railway Engineering Co. Ltd.-9,564,373Advances from customersCCCC Second Highway Engineering Co. Ltd.-1,000,000Advances from customersCranetech Global Sdn. Bhd.-218,242Advances from customersCCCC Shanghai Dredging Co., Ltd-13,690Other payablesChina Communications Construction Company Limited101,209,468102,784,486Other payablesCCCC Dredging (Group) Co., Ltd.88,219,38388,219,383Other payablesRoad & Bridge International Co., Ltd.45,840,000-Other payablesCCCC Tianjin Dredging Co., Ltd.27,079,49427,941,338Other payablesCCCC Marine Construction and Development Co. Ltd.17,472,60017,472,600Other payablesCCCC Third Harbor Engineering Co., Ltd.12,285,00012,285,000Other payablesChuwa Bussan Co. Ltd.6,269,8736,269,873Other payablesShanghai Jiangtian Industrial Co., Ltd4,586,0854,586,085Other payablesCCCC Tunnel Engineering Co., Ltd.4,000,000-Other payablesChina Harbor Engineering Co., Ltd3,625,0003,625,000Other payablesChina Communications Construction Company Ltd.1,672,705-Other payablesCCCC Third Highway Engineering Co. Ltd.1,286,5961,172,612Other payablesCCCC Leasing Jiahua No.1 Co. Ltd.1,141,960Other payables
The Fourth Engineering Co., Ltd. of CCCC Second HighwayEngineering Co., Ltd.
1,000,000-Other payablesCCCC Tianjin Dredging Co., Ltd.871,856-Other payablesCCCC Finance Company Ltd.537,708869,396Other payablesRoad & Bridge East China Engineering Co., Ltd.525,186-Other payablesZhenhua Engineering Co., Ltd.346,005346,005Other payablesCCCC Water Transportation Planning and Design Institute Co., Ltd.319,340199,812Other payablesShanghai Zhensha Longfu Machinery Co., Ltd.146,558-Other payablesJiangsu Longyuan Zhenhua Marine Engineering Co., Ltd143,395143,395Other payablesZPMC Changzhou Coatings Co., Ltd.108,583100,000Other payablesCCCC Shanghai Equipment Engineering Co., Ltd.89,00089,000Other payables
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor EngineeringCo., Ltd.
11,40011,401Other payablesZhen Hwa Harbour Construction Co., Ltd.6,5936,593Other payablesCCCC First Harbor Engineering Co., Ltd.-87,893Other payablesCCCC Financial Leasing Co., Ltd.-39,547,004Other payablesCCCC Nanjing Weisanlu River Tunnel Co., Ltd-306,974Short-term borrowingsCCCC Finance Company Ltd.50,000,000350,000,000
ItemRelated party
Endingbook value
Beginningbook valueLong-term borrowingsCCCC Finance Company Ltd.500,000,000500,000,000Non-current liabilities maturing withinone year
CCCC Financial Leasing Co., Ltd.407,455,030407,455,030Non-current liabilities maturing withinone year
CCCC Leasing Jiahua No.1 Co. Ltd.405,909,257387,778,932Non-current liabilities maturing withinone year
CCCC Leasing Jiahua No.2 Co. Ltd.62,749,25759,741,257Long-term payablesCCCC Leasing Jiahua No.1 Co. Ltd.535,329,601896,118,857Long-term payablesCCCC Financial Leasing Co., Ltd.203,727,814556,387,041Long-term payablesCCCC Leasing Jiahua No.2 Co. Ltd.192,169,601242,698,858Long-term payablesCCCC Tianjin Dredging Co., Ltd.131,402,483108,466,881Long-term payablesCCCC Second Harbor Engineering Co., Ltd.82,663,041-Long-term payablesCCCC Third Harbor Engineering Co., Ltd.16,923,594-Long-term payables
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering
Co., Ltd.
7,788,241-
7. Commitments in relation to related parties
√Applicable □Not applicableOn balance sheet date, the commitments relating to related parties, contracted by the Group but not necessarily listedon balance sheet, are as follows:
Labor service provided to the Group by related party20182017CCCC Third Harbor Engineering Co., Ltd.1,150,776,369326,513,794CCCC Tianjin Dredging Co., Ltd.770,500,180927,318,851CCCC Fourth Highway Engineering Co. Ltd.544,767,057734,725,379CCCC First Highway Engineering Co., Ltd.449,685,317590,349,313CCCC Shanghai Dredging Co., Ltd73,170,956-No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.56,568,99674,178,156CCCC Second Highway Consultants Co., Ltd.1,766,36210,832,844CCCC Tunnel Engineering Co., Ltd.158,0705,265,067
3,047,393,3072,669,183,404Leasing assets to related party 20182017Zhenhua Marine Energy (Hong Kong) Co., Ltd.1,206,719,3181,363,334,924
Selling goods/rendering of labor service to the related parties
20182017China Road & Bridge Corporation1,594,741,6154,521,227CCCC Financial Leasing Co., Ltd.520,893,238558,387,580China Communications Construction Company Limited431,794,106114,814,493CCCC Second Harbor Engineering Co., Ltd.333,337,00547,304,779CCCC First Harbor Engineering Co., Ltd.215,550,52525,180China Harbor Engineering Co., Ltd85,809,15152,196,041Road & Bridge International Co., Ltd.46,506,51643,462,687CCCC Third Harbor Engineering Co., Ltd.26,223,5959,069,488CCCC Electrical and Mechanical Engineering Co., Ltd.22,754,735210,243,196CCCC Tunnel Engineering Co., Ltd.22,489,71950,732,292Friede & Goldman, Llc.19,160,384-The Third Engineering Co., Ltd. of The First Highway Engineering Bureau of CCCC7,992,240-CCCC Second Highway Engineering Co. Ltd.7,482,37770,783,170Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd6,361,92246,426,694Chuwa Bussan Co. Ltd.2,420,0134,443,667China Communications Second Navigational Bureau Third Engineering Co., Ltd.14,538117,245,158No.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.12,23624,471,879Road & Bridge South China Engineering Co., Ltd.6,06016,531,032CCCC - SHEC Third Highway Engineering Co. Ltd.3,2421,060,291CCCC Tianjin Dredging Co., Ltd.-23,885,509No.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.-19,181,054CCCC Water Transportation Planning and Design Institute Co., Ltd.-6,672,629No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.-5,264,957CCCC Third Harbor Consultants Co., Ltd.-4,130,393CCCC Third Highway Engineering Co. Ltd.-80,867Hainan CCCC Fourth Harbor Construction Co., Ltd.-13,248CCCC - SHEC Second Engineering Co. Ltd.-7,727
3,343,553,2171,430,955,238
Standby leasing agreement signed with the related partiesOn December 16, 2015, the Company signed ship rental standby agreement with CCCC Leasing Jiahua No.1 Co.,Ltd and CCCC Leasing Jiahua No.2 Co., Ltd (collectively referred to as “CCCC Jiahua”), with the rental term from March 5,2016 to December 5, 2021.The contract would come into effect when the ship rental agreement signed by the subsidiary ofthe Company and CCCC Jiahua couldn’t be performed normally. On Dec. 31, 2018, the maximum payment amount of thecontract was RMB 509,837,715 Yuan (Dec. 31, 2017: RMB 604,861,711 Yuan).8. Others
□Applicable √Not applicable
XIII.Share-based payment1. General information of share-based payment
□Applicable √Not applicable2. Particulars about the equity- settled share-based payment
□Applicable √Not applicable3. Particulars about the share-based payment settled in cash
□Applicable √Not applicable4. Modication and termination of share-based payment
□Applicable √Not applicable5. Others
□Applicable √Not applicableXIV. Commitments and Contingencies1. Important commitments
√Applicable □Not applicable
Important external commitments on balance sheet date and their nature and amount
Capital expenditure commitments
The following is the capital expenditure commitment signed by the Group but not necessarily listed on the balance sheeton balance sheet date:
Dec. 31, 2018Dec. 31, 2017Housing, buildings and machinery equipment136,573,38189,659,929
Operating leasing commitmentsIn accordance with the signed and irrevocable operating leasing contract, the minimum rental payable by the Companyin the future is summarized as follows:
Dec. 31, 2018Dec. 31, 2017Within 1 year58,661,86859,932,7871-2 years18,859,93058,309,0912-3 years8,864,86723,591,704Over 3 years4,849,51337,717,614
91,236,178179,551,196
L/C commitmentsThe Company had entrusted the bank to issue several L/Cs to purchase imported components and parts. On Dec. 31,2018, the unpaid amount under the L/Cs was about RMB 1,764,643,618 Yuan (Dec. 31, 2017: RMB 1,783,453,627 Yuan).2. Contingencies
(1) Important contingencies on balance sheet date□Applicable √Not applicable(2) If the Company has no import contingency to disclose, it shall also be stated:
□Applicable √Not applicable
3. Others
□Applicable √Not applicableXV. Post balance sheet events1. Important non-adjustment events
□Applicable √Not applicable2. Prot distribution
□Applicable √Not applicable3. Sales return
□Applicable √Not applicable4. Notes to other posy balancr sheet events
√Applicable □Not applicable
On Jan. 18, 2019, the Company and COSCO Shipping Holdings Co., Ltd. (referred to as “COSCO SHIPPINGHOLDINGS”) signed the Share Subscription Agreement for Private Placement of Shares Between COSCO ShippingHoldings Co., Ltd. and Shanghai Zhenhua Heavy Industries Co., Ltd., and the Company subscribed 111,111,111 A-shareswhere were for private placement at the price of RMB 3.78Yuan per share with its own funds of RMB 419,999,999.58 Yuan.Such shares would not be transferred within 12 months after the closing date of private placement.XVI. Other important events1. Correction of accounting errors in prior years
(1) Retrospective restatement method
□Applicable √Not applicable
(2) Prospective application method
□Applicable √Not applicable2. Debt restructuring
□Applicable √Not applicable3. Asset swap
(1) Non-monetary assets swap
□Applicable √Not applicable
(2) Other asset swap
□Applicable √Not applicable4. Pension plan
□Applicable √Not applicable5. Termination of operation
□Applicable √Not applicable6. Segment information
(1) Determination basis and accounting policies of reportable segment
√Applicable □Not applicable
The Group determined the operating segment based on the internal organizational structure, management requirementsand internal report system, and determine the reportable segment based on operating segment and disclosed the informationof the segment.
Operating segment refers to the component part of the Group that meet the following requirements: (1) it can generateincome and expenses in daily activities; (2) the management of the Group can regularly evaluate its operating resultsto determine its allocation of resources and to evaluate its performance; (3) the Group is able to obtain its accountinginformation regarding nancial position, operating results and cash ows, etc. Two or more operating segments, with thesame economic characteristics and meeting certain requirements, can be integrated to one.
The Group identied the business as an operating segment for analysis and assessment based on internal organizationstructure, management requirement and internal report system.
(2) Financial information of reportable segment
□Applicable √Not applicable
(3) If the Company has no reportable segment or is unable to disclose the total assets and liabilities of the reportablesegment, please specify the reason
□Applicable √Not applicable
(4) Other information
√Applicable □Not applicable
Products and labor service
Revenue from external transaction
20182017Port machinery14,983,974,898 14,736,363,747Heavy equipment2,746,107,406 3,384,886,419Building-transfer project1,221,194,799 1,549,820,489Steel structure and related income1,558,778,586 1,520,119,032Shipping and others1,071,458,397 451,081,492Sales of materials64,386,03058,465,010Equipment leasing and others166,489,528158,077,811
21,812,389,64421,858,814,000
Geographic informationRevenue from external transaction
20182017Chinese Mainland10,273,382,61710,358,861,169Asia (excluding Chinese Mainland)4,204,353,5525,410,267,855North America2,029,837,441 1,703,209,759Africa1,508,172,2391,384,873,367Europe1,560,574,842462,606,586South America1,040,540,883845,507,562Chinese Mainland (export sales)664,121,4071,372,828,183Oceania531,406,663320,659,519
21,812,389,64421,858,814,000
The revenue from external transaction is attributable to where the customer is located.Total non-current assets
20182017Chinese Mainland19,922,533,91218,215,467,783Asia (excluding Chinese Mainland)5,774,343,2295,114,032,367Others38,609,20840,991,302
25,735,486,34923,370,491,452
The Non-current assets are attributable to where they are located, excluding financial assets, long-term equityinvestment, goodwill, deferred income tax assets and other non-current assets.7. Other important transactions and events with impact on the investor’s decision-making
□Applicable √Not applicable8. Others
√Applicable □Not applicable
Due to the changes in the presentation of the Notes receivable and accounts receivable, other receivables, notes andaccounts payable, other payables, nancial expenses and general and administrative expenses, the accounting disposaland statements for several items as well as the amount in the nancial presentation had been modied to meet the newrequirements. Because the capital reserve was converted into share capital in this year, the earnings per share would becalculated based on the shares after adjustment. Correspondingly, the comparative data had been restated to conform to thepresentation requirements for current year.XVII. Notes to main items in the nancial statements of parent company1. Notes receivable and accounts receivable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceNotes receivable75,801,953413,779,017Accounts receivable7,136,766,8876,547,864,759Total7,212,568,8406,961,643,776
Other information:
□Applicable √Not applicableNotes receivable(2) Presentation of notes receivable by category√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding BalanceBeginning BalanceBank acceptance bill75,801,953413,779,017Commercial acceptance bill--Total75,801,953 413,779,017
(3) Notes receivable pledged by the Company at the end of the period□Applicable √Not applicable(4) Notes receivable endorsed or discounted by the Company at the end of the period but not yet due on balance sheetdate
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemEnding amount of recognition terminatedEnding amount of recognition not terminatedBank acceptance bill259,768,814-Commercial acceptance bill--Total259,768,814-
(5) Notes transferred to accounts receivable by the Company due to non-performance of the drawer at the end of theperiod
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Accounts receivable
(1) Disclosure of accounts receivable by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Category
Ending BalanceBeginning BalanceBook balanceProvision for bad debts
Book value
Book balanceProvision for bad debts
Book valueAmount
Proportion
(%)
Amount
Provisionproportion
(%)
Amount
Proportion
(%)
Amount
Provisionproportion
(%)Accounts receivable that areindividually signicant and for whichbad debt provision is individuallyassessed
588,585,8317440,054,33175148,531,500182,649,8922182,649,8921000Accounts receivable for which baddebt provision is assessed on thebasis of credit risk portfolio
7,919,653,56292931,418,175126,988,235,3877,456,139,28495908,274,525126,547,864,759Accounts receivable that areindividually insignicant andfor which bad debt provision isindividually assessed
125,247,4011125,247,4011000216,121,5343216,121,5341000Total8,633,486,7941001,496,719,907177,136,766,8877,854,910,7101001,307,045,951176,547,864,759
Accounts receivable that are individually signicant and for which bad debt provision is individually assessed:
√Applicable □Not applicable
Unit: Yuan Currency: RMBAccounts receivable (by unit)
Ending BalanceAccounts receivableProvision for bad debtsProvision proportion (%) ReasonAccounts receivable 1183,703,331183,703,331100Contract disputesAccounts receivable 2297,063,000148,531,50050Contract disputesAccounts receivable 3107,819,500107,819,500100
Counter-party incapital shortageTotal588,585,831440,054,331//
In the portfolio, accounts receivable with for which bad debt provision is assessed with the aging analysis method:
□Applicable √Not applicable
Unit: Yuan Currency: RMBAging
Ending BalanceAccounts receivableProvision for bad debtsProvision proportion (%)Within 1 yearIncluding: sub-items within 1 yearWithin 6 months1,069,737,753--7~12 months854,283,9938,542,8401Subtotal of those within 1 year1,924,021,7468,542,8400.41~2 years501,366,59375,204,989152~3 years321,730,51996,519,15530Over 3 years3~4 years188,175,88994,087,945504~5 years76,423,97757,317,98375Over 5 years599,745,263599,745,263100Total3,611,463,987931,418,17526
In the portfolio, accounts receivable for which bad debt provision is assessed with the balance percentage method:
□Applicable √Not applicableIn the portfolio, accounts receivable for which bad debt provision is assessed with the other methods:
√Applicable □Not applicableOn Dec. 31, 2018, the accounts receivable that are individually insignificant and for which bad debt provision isindividually assessed are as follows:
Book balanceProvision for bad debtsProvision proportion %ReasonAccounts receivable 150,365,00050,365,000100Counter-party in capital shortageAccounts receivable 227,452,86827,452,868100Contract disputesAccounts receivable 314,854,46714,854,467100Contract disputesAccounts receivable 410,792,60510,792,605100Contract disputesAccounts receivable 57,847,3007,847,300100Contract disputesAccounts receivable 67,342,2867,342,286100Contract disputesAccounts receivable 73,524,1123,524,112100Contract disputesAccounts receivable 82,187,9882,187,988100Contract disputesAccounts receivable 9880,775880,775100Contract disputes
125,247,401125,247,401
(2) Particulars about the provision for bad debts made, recovered and carried back in current periodThe amount of provision for bad debts made in current period was RMB 385,413,154 Yuan; the provision for bad debtsrecovered or carried back in current period was RMB 195,739,198 Yuan.
Thereinto, the amount of provision for bad debts recovered or carried back for the reporting period is important:
□Applicable √Not applicable
(3) Particulars about the actual accounts receivable written off for the reporting period□Applicable √Not applicableParticulars about the cancellation of important accounts receivable after verication□Applicable √Not applicable(4) Particulars about the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower√Applicable □Not applicableOn Dec. 31, 2018, the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower issummarized and analyzed as follows:
Amount
Amount of provision for bad
debts
Proportion in total accounts
receivable balanceTotal accounts receivable of Top 5 balances3,680,578,75518,169,27943%
(5) Accounts receivable derecognized due to the transfer of nancial assets□Applicable √Not applicable(6) The amount of assets or liabilities arising from accounts receivable transferred with continuing involvement□Applicable √Not applicableOther information:
□Applicable √Not applicable2. Other receivables
Particulars about summary statement
(1)Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem Ending BalanceBeginning BalanceInterest receivable--Dividend receivable-665,346Other receivables13,955,146,64013,665,850,616Total13,955,146,64013,666,515,962
Other information:
□Applicable √Not applicableInterest receivable(2) Classication of interest receivable□Applicable √Not applicable(3) Signicant overdue interest□Applicable √Not applicableOther information:
□Applicable √Not applicable
Dividends receivable
(4) Dividends receivable
√Applicable □Not applicable
Unit: Yuan Currency: RMBProject (or Invested entity)Ending BalanceBeginning BalanceJiangxi Huawu Brake Co., Ltd.-665,346Total-665,346
(5) Important dividends receivable with an age over 1 year□Applicable √Not applicableOther information:
□Applicable √Not applicableOther receivables(1) Disclosure of other receivables by category√Applicable □Not applicable
Unit: Yuan Currency: RMB
Category
Ending BalanceBeginning BalanceBook balanceProvision for bad debts
Book value
Book balanceProvision for bad debts
Book valueAmount
Proportion
(%)
Amount
Provisionproportion
(%)
Amount
Proportion
(%)
Amount
Provisionproportion
(%)Other receivables that areindividually signicant and forwhich the provision for bad debts isindividually made
-----150,327,1381150,327,138100-Other receivables for which theprovision for bad debts is madeby portfolio with the credit riskcharacteristics
13,958,736,3361003,589,696-13,955,146,64013,669,440,382993,589,766-13,665,850,616Other receivables that areindividually insignicant and forwhich the provision for bad debts isindividually made
9,722,55509,722,55510009,722,555-9,722,555100-Total13,968,458,89110013,312,251-13,955,146,64013,829,490,075100163,639,459113,665,850,616
Other receivables that are individually signicant and for which provision for bad debts is individually made at the end ofthe reporting period:
□Applicable √Not applicable
In the portfolio, other receivables for which provision for bad debts is made with the aging analysis method:
√Applicable □Not applicable
Unit: Yuan Currency: RMBAging
Ending BalanceOther receivablesProvision for bad debtsProvision proportion (%)Within 1 yearIncluding: sub-items within 1 yearWithin 6 months13,644,611,754--7~12 months1,612,89216,1291Subtotal of those within 1 year13,646,224,64616,129-1~2 years183,04127,456152~3 years41,81012,54330Over 3 years
Aging
Ending BalanceOther receivablesProvision for bad debtsProvision proportion (%)3~4 years20,84710,424504~5 years100,30475,22875Over 5 years3,447,9163,447,916100Total13,650,018,5643,589,696-
In the portfolio, other receivables for which the provision for bad debts is made with the balance percentage method:
□Applicable √Not applicableIn the portfolio, other receivable for which provision for bad debts is made with other method:
√Applicable □Not applicableOn Dec. 31, 2018, the other receivables that are individually insignicant and for which the provision for bad debts isindividually made are as follows:
Book balanceProvision for bad debts
Provision proportion
(%)
ReasonOther receivables 13,037,0423,037,042100Contract cancellationOther receivables 21,692,7651,692,765100Contract cancellationOther receivables 31,170,2821,170,282100Contract cancellationOthers3,822,4663,822,466100
9,722,5559,722,555100
(2) Particulars about classication by nature of payment√Applicable □Not applicable
Unit: Yuan Currency: RMBNature of paymentEnding book valueBeginning book valueAccount current of subsidiary13,391,496,98613,097,601,236Bid and performance bond171,149,432298,716,662Taxes on outstanding payment receivable181,205,119198,696,002Money on call of onsite product service46,372,65968,190,281Staff loan receivable27,854,14533,553,284Lease payment receivable33,434,66833,434,668Customs deposit63,341,5364,269,756Others53,604,34695,028,186Total13,968,458,89113,829,490,075
(3) Particulars about the provision for bad debts made, recovered and carried back in current periodThe provision for bad debt made in current period was RMB 0 Yuan; the provision for bad debt recovered or carriedback in current period was RMB 150,327,208 Yuan.
Thereinto, the amount of provision for bad debts recovered or carried back for the reporting period is important:
□Applicable √Not applicable(4) Particulars about the other actual receivables written off for the reporting period□Applicable √Not applicable
(5) Particulars about the other receivables whose ending balance ranks Top 5 on the basis of totals by borrower√Applicable □Not applicable
Unit: Yuan Currency: RMBName of entityNatureEnding BalanceAge
Proportion in totalending balance ofother receivables (%)
Endingbalance ofProvision for
bad debtsOther receivables 1 Account current of the subsidiary5,620,231,055 Within 1 year40Other receivables 2 Account current of the subsidiary1,705,364,678 Within 1 year12-Other receivables 3 Account current of the subsidiary1,589,824,451 Within 1 year11-Other receivables 4 Account current of the subsidiary1,339,983,013 Within 1 year10-Other receivables 5 Account current of the subsidiary1,232,207,999 Within 1 year9-Total/11,487,611,196/82-
(6) Receivables involving government subsidies□Applicable √Not applicable(7) Other receivables derecognized due to the transfer of nancial assets□Applicable √Not applicable(8) The amount of assets or liabilities arising from other receivables transferred with continuing involvement□Applicable √Not applicableOther information:
□Applicable √Not applicable3. Long-term entity investment
√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Ending BalanceBeginning BalanceBook balance
Depreciation
reserves
Book valueBook balance
Depreciation
reserves
Book valueInvestment in subsidiaries5,909,665,076-5,909,665,0766,634,723,602-6,634,723,602Investment in associatedenterprise and joint venture
2,726,353,648-2,726,353,6482,287,477,224-2,287,477,224Total8,636,018,724-8,636,018,7248,922,200,826-8,922,200,826
(1) Investment in subsidiaries√Applicable □Not applicable
Unit: Yuan Currency: RMB
Invested entity
Beginning
Balance
Increasein current
period
Decreasein current
period
EndingBalance
Provision forimpairmentin current
period
Endingbalance ofdepreciation
reservesShanghai Zhenhua Port Machinery Heavy IndustryCo., Ltd.
9,964,200--9,964,200--Shanghai Zhenhua Port Machinery (Hongkong) Co.,Ltd. (Note 1)
------
Invested entity
Beginning
Balance
Increasein current
period
Decreasein current
period
EndingBalance
Provision forimpairmentin current
period
Endingbalance ofdepreciation
reservesShanghai Zhenhua Shipping Co., Ltd.140,260,673--140,260,673--ZPMC Zhangjiagang Port Machinery Co., Ltd.4,518,000--4,518,000--Nantong Zhenhua Heavy Equipment ManufacturingCo., Ltd.
854,936,900--854,936,900--ZPMC Jiangyin Steel Structure Manufacturing Co.,Ltd.
579,983--579,983--ZPMC Port Machinery General Equipment Co., Ltd2,201,086,744--2,201,086,744--ZPMC Transmission Machinery (Nantong) Co., Ltd.600,000,000--600,000,000--ZPMC Electric Co., Ltd.50,000,000--50,000,000--ZPMC GmbH Hamburg207,940--207,940--ZPMC Netherlands Cooperatie V.A.26,662,5792,703,505-29,366,084--ZPMC Netherlands B.V.----Verspannen B.V.---Shanghai Zhenhua Marine Engineering Service Co.,Ltd.
100,000,000--100,000,000--ZPMC Machinery Equipment Services Co., Ltd.7,000,000--7,000,000--ZPMC Lanka Company(Private)Limited6,183,978--6,183,978--Nanjing Ninggao New Channel Construction Co.,Ltd.
1,098,000,000-998,000,000100,000,000--ZPMC Qidong Marine Engineering Co., Ltd.203,000,000--203,000,000--ZPMC Engineering Africa (Pty) Ltd.3,084,000--3,084,000--ZPMC Korea Co., Ltd.2,876,209--2,876,209--ZPMC Engineering (India)Private Limited2,953,200--2,953,200--ZPMC Australia Company (Pty) Limited2,708,500--2,708,500--ZPMC North America Inc.18,564,520--18,564,520--ZPMC Southeast Asia Holding Pte. Ltd.3,875,9498,637,165-12,513,114--ZPMC Brazil Servio Portuários LTDA2,936,771--2,936,771--ZPMC Limited Liability Company7,211,4162,960,654-10,172,070--CCCC Liyang Urban Investment and ConstructionCo., Ltd.
183,000,00060,000,000-243,000,000--CCCC Tianhe Mechanical Equipment ManufacturingCo., Ltd.
242,542,999--242,542,999--CCCC Investment & Development Qidong Co., Ltd.147,500,00045,000,000-192,500,000--CCCC Zhenjiang Investment ConstructionManagement Development Co., Ltd
707,000,000--707,000,000--CCCC Rudong Construction Development Co., Ltd.-18,332,300-18,332,300--CCCC Yongjia Construction Development Co., Ltd.-128,000,000-128,000,000--CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd.-4,000,000-4,000,000--ZPMC Latin America Holding Corporation-3,307,850-3,307,850--
Invested entity
Beginning
Balance
Increasein current
period
Decreasein current
period
EndingBalance
Provision forimpairmentin current
period
Endingbalance ofdepreciation
reservesZPMC Middle East Fze5,271,120--5,271,120--ZPMC UK LD2,797,921--2,797,921--Total6,634,723,602272,941,474998,000,0005,909,665,076--
(2) Investment in associated enterprise and joint venture√Applicable □Not applicable
Unit: Yuan Currency: RMB
Investing entity
Beginning
balance
Changes in current period
Ending balance
Ending balance
of provision for
impairmentAdditionalinvestment
Negativeinvestment
Prots orlosses oninvestmentrecognizedunder equity
method
Adjustment of other
comprehensive
income
Otherchanges in
equity
Payment ofcash divided
or protdeclared
Provision forimpairmentd
OthersI. Joint venturesJiangsu LongyuanZhenhua MarineEngineering Co., Ltd
231,309,282--12,955,931-----244,265,213-ZPMC MediterraneanLimanMakinalari TicaretAnonimSirketi
3,775,146--999,397-----4,774,543-Subtotal235,084,428--13,955,328-----249,039,756-II. AssociatedsCCCC MarineEngineering &Technology ResearchCenter Co., Ltd.
15,849,544--402,730-----16,252,274-ZPMC ChangzhouCoatings Co., Ltd.
16,467,125--1,191,077--862,238--16,795,964-CCCC Real EstateYinxing Co., Ltd.
178,099,707--2,552,966----180,652,673-CCCC Financial LeasingCo., Ltd.
1,678,550,583--87,246,932647,839-45,000,000--1,721,445,354-CCCC YanchengConstruction andDevelopment Co., Ltd.
-289,050,000-330,523----289,380,523-China CommunicationsConstruction USA Inc.
67,230,450---8,536,5683,028,239----61,722,121-CCCC South AmericanRegional CompanySARL
96,195,38799,912,976-3,288,529-8,331,909----191,064,983-Subtotal2,052,392,796388,962,976-86,476,189-4,655,831-45,862,238--2,477,313,892-Total2,287,477,224388,962,976-100,431,517-4,655,831-45,862,238--2,726,353,648-
4. Operating revenue and operating cost
(1) Particulars about the operating revenue and operating cost√Applicable □Not applicable
Unit: Yuan Currency: RMBItem
Current amountPrior amountRevenueCostRevenueCostMain business18,070,463,75315,061,380,93617,846,043,72414,996,960,714Other business1,316,224,2511,220,964,7901,136,241,0041,065,401,225Total19,386,688,00416,282,345,72618,982,284,72816,062,361,939
Other information:
20182017Main business revenueMain business costMain business revenueMain business costPort machinery14,576,864,13511,382,215,68214,193,972,31111,462,619,170Heavy equipment1,651,058,2291,675,938,3422,118,361,2222,020,870,244Steel structure and related income1,527,592,9321,712,519,9001,482,802,0591,468,620,910“Building-transfer” project70,313,03061,946,22950,908,13244,850,390Shipping and other244,635,427228,760,783--
18,070,463,75315,061,380,93617,846,043,72414,996,960,714
The other business income and cost are listed below:
20182017Other business revenueOther business costOther business revenueOther business costSales of materials1,044,182,5051,046,418,417877,119,802868,901,948Equipment leasing and others272,041,746174,546,373259,121,202196,499,277
1,316,224,2511,220,964,7901,136,241,0041,065,401,225
5. Investment income
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemCurrent amountPrior amountIncome from long-term equity investment under cost method-58,570,536Income from long-term equity investment under equity method100,431,51794,574,906Investment income from the disposal of long-term equity investment--Investment income from the nancial assets measured at fair value through thecurrent prot or loss included in the current prot or loss during holding period
--Investment income from the disposal of nancial assets measured at fair valuethrough the current prot or loss included in the current prot or loss
--Income from held-to-maturity investment during holding--Income from the disposal of held-to-maturity investment--Investment income of available-for-sale nancial assets during holding period667,7323,356,632Investment income for the disposal of available-for-sale nancial assets--Gains from the re-measurement of remaining equity at fair value after the lossof control
--Total101,099,249156,502,074
6. Others
□Applicable √Not applicable
XVIII. Supplementary information1. Statement of non-recurring prots and losses in current period
√Applicable □Not applicable
Unit: Yuan Currency: RMBItemAmountNotesProts and losses on disposal of non-current assets155,557,716Unauthorized examination and approval, or lack of ofcial approval documents, or occasional tax revenuereturn and abatement
Government subsidies included in the current prot or loss (except for the one closely related to the normaloperation of the Company and gained constantly at a xed amount or quantity according tocertain standard based on state policies)
114,412,517Capital occupation fees charged to the non-nancial enterprises and counted into the current prot and lossGains when the investment cost of acquiring a subsidiary, afliated company and joint venture by theCompany is less than the fair value of identiable net assets of the invested unitProt and loss from non-monetary assets exchangeProt and loss from entrusting others for investment or assets managementRetained assets impairment provisions arising from force majeure such as natural disastersProt and loss from debt reorganizationEnterprise reorganization fee, such as stafng expenses and integration feesProt and loss in excess of the fair value in transaction with unfair priceCurrent net prot and loss of the subsidiaries established by merger of enterprises under common controlfrom the beginning of the period to the merger dayProt and loss on contingency that has no relation with the normal operation of the CompanyProt or loss from changes in fair value by holding tradable nancial assets and liabilities, and earningson investment from disposal of tradable nancial assets and liabilities as well as salable nancial assets,excluding the effective hedging business related with the normal operation of the Company
74,200,750Switch-back of impairment provisions of accounts receivable that have undergone impairment test alone150,327,138Prot and loss from outward entrusted loaningProt and loss from the changes in the fair value of investment property by follow-up measurement in thefair value modeImpact on current prot and loss due to one-off adjustment to the current prot and loss according to therequirements of the tax as well as accounting laws and rulesCustody fees of entrusted operationOther non-operating income and expenses besides the aforementioned items-67,069,856Other prot and loss items that conform to the denition of non- recurring prot and lossAmount of income tax affected-74,850,113Amount of minority shareholders’ interest affected-30,908,588Total321,669,564
As for the non-recurring prot and loss items dened in accordance with Announcement No. 1 on Information Disclosurefor Companies Offering Their Securities to the Public – Non-recurring Profit and Loss and the recurrent profit and lossitems dened from the non-recurring prot and loss items listed in the Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public – Non-recurring Prot and Loss, please specify the reason.
□Applicable √Not applicable
2. Net return on assets and earnings per share
√Applicable □Not applicable
Prot during the reporting period
Weighted averagereturn on assets (%)
Earning per shareBasic earnings
per share
Diluted earnings
per shareNet prot attributable to the common shareholders of the Company2.920.080.08Net prot attributable to the common shareholders of the Company afterdeducting the non-recurring prot and loss
0.800.020.02
3. Accounting data differences under domestic and foreign accounting standards
□Applicable √Not applicable4. Others
√Applicable □Not applicable
Reconciliation of net prot to cash ow from operating activities:
20182017Net prot782,185,825154,209,887Plus: Provision for assets depreciation (carried back)/retained(25,476,619)619,199,093Depreciation of investment properties and xed assets466,954,562499,700,815Amortization of intangible assets53,202,55253,126,664Net income from the disposal of xed assets and intangible assets(69,575,485)(1,303,038)(Prot)/loss from changes in fair value(44,481,806)4,615,775Financial cost1,410,797,106882,094,629Income from investment(101,099,249)(156,502,074)Net decrease/(increase) in deferred income tax asset (less liabilities)53,252,590(69,483,616)Increase in inventories(1,546,854,405)(613,086,964)Change in construction contract payment1,028,657,153(1,332,273,798)Change in operating receivables(2,198,475,931)435,650,557Change in operating payables829,204,147(434,780,054)Net cash ow from operating activities638,290,44041,167,876
Net changes in cash and cash equivalents:
20182017Ending balance of cash1,930,451,1403,301,302,585Less: Beginning balance of cash3,301,302,5851,872,410,585Change in cash and cash equivalents(1,370,851,445)1,428,892,000
Section XIIContents of Reference Files
Contents of Reference Files
Financial statements signed and sealed by the legal representative, the responsible person foraccounting and the person in charge of accounting organ.Contents of Reference Files
The originals of audit report with the seal of accounting rm, and signed and stamped by certiedpublic accountants.Contents of Reference Files
The originals of all corporate documents and announcements that are disclosed to the public vianewspaper designated by CSRC during the reporting period.
Chairman of the Board: Zhu LianyuDate of submission upon approval by the board of directors:
Mar. 29, 2019
Revision□Applicable √Not applicable