1. Stock code: 600320 900947 Stock Name: Zhenhua Heavy Zhenhua B-share
1.
Shanghai Zhenhua Heavy Industries Co., Ltd.
Annual Report 2018
Section I Definitions 4
Section II Company Profile and Principal Financial Indexes 5
9
Section III Business Profile
10
Section IV Discussion and Analysis of the Performance
Section V 20
Important Events
Section VI Changes in Ordinary Shares and Information about Shareholders 36
Section VII Preference Shares 41
Section VIII Directors, Supervisors, Senior Management and Employees 42
Section IX Corporate Governance 48
Section X Corporate Bonds 50
Section XI Financial Statement 51
Section XII Contents of Reference Files 185
Important Notice
1. The Board of Directors, Board of Supervisors, directors, supervisors and senior executives
of the Company hereby guarantee the truthfulness, accuracy and completeness of the contents
carried in this annual report, guarantee no false record, serious misleading statement or great
omission carried in this annual report and guarantee to assume the legal responsibilities jointly
and 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 without
qualified opinion for the Company.
4. Zhu Lianyu, the chairman of the Company, Huang Qingfeng, responsible person for
accounting, and Zhu Xiaohuai , the person in charge of accounting organ (accountant in charge)
hereby declare that the financial statements in this Annual Report are true, accurate and complete.
5. Proposal for profit distribution or common reserves capitalizing during the reporting period
reviewed by the board of directors
Profit distribution proposal for 2018: based on the total share capital of 5,268,353,501 shares
by Dec. 31, 2018, a cash dividend of RMB 0.5 Yuan per 10 shares (tax-included) will be distributed
to all shareholders from the undistributed profit by Dec. 31, 2018 and the total cash dividend to be
distributed will be RMB 263,417,675.05 Yuan. The Company will not distribute the bonus shares
or 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 its
related 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 to
discussion and analysis of the performance and related chapters for the risks the company may
be confronted with in the future development.
10. Others
□Applicable √Not applicable
This English version is converted from the Chinese version. In case of any discrepancy
between the Chinese version and the English version, the Chinese version shall prevail.
3
Section I Definitions
I.Definitions
The terms used in this report shall be defined as follows, unless otherwise specified:
Definitions of high frequency terms
Company, the Company Refers to Shanghai Zhenhua Heavy Industries Co., Ltd.
CCCC Refers to China Communications Construction Company Ltd.
CCCG Refers to China Communications Construction Group
CCCG HK Refers to CCCG (HK) Holding Limited
Public-Private-Partnership, a cooperation mode between the
government and the social capital, which means the pooling
of interest, allocation of risks and the long-term cooperation
relationship established by and between the government and
PPP Refers to
the social capital by means of licensed operation, service
procurement and stock equity cooperation in order to increase the
supply capability of the public goods and service and improve the
supply efficiency.
Reporting period Refers to From Jan. 1, 2018 to Dec. 31, 2018
4
Section II Company Profile and Principal Financial Indexes
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 English Shanghai Zhenhua Heavy Industries Co., Ltd.
Abbreviation of the Company name in English ZPMC
Legal representative of the Company Zhu Lianyu
2.Contact information
Board Secretary
Name Sun Li
Address No. 3261, Dongfang Road, Shanghai
Telephone 021-50390727
Fax 021-31193316
E-mail IR@ZPMC.COM
3.Basic information
Registered address No. 3470, Pudong South Road, Shanghai
Postal code of registered address 200125
Office address No. 3261, Dongfang Road, Shanghai
Postal code of office address 200125
Website http://www.zpmc.com
E-mail IR@ZPMC.COM
4.Information disclosure and placement location
Newspaper designated by the Company for information
Shanghai Securities News, Hong Kong Wen Wei Po
disclosure
Website designated by China Securities Regulatory
Commission (CSRC) for publishing the annual report of the www.sse.com.cn
Company
Placement location of the annual report of the Company Securities Affairs Office
5
5.Stock information
Stock Information
Stock type Stock exchange Stock abbreviation Stock code Stock abbreviation before change
A-share Shanghai Stock Exchange (SSE) Zhenhua Heavy 600320 ZPMC Industries
B-share Shanghai Stock Exchange (SSE) Zhenhua B-share 900947 -
6.Other relevant information
Name Ernst & Young LLP.
Public accounting
Room 01-12, Floor 17th, Ernst & Young Tower Oriental Plaza, No.1
firm engaged by the Office address
East Changan Street, Dongcheng District, Beijing
Company (domestic)
Signed by the Accountants Yang Lei, Liu Wei
7.Main accounting data and financial indexes in recent three years
(I) Main accounting data
Unit: Yuan Currency: RMB
Year-on-year
Main accounting data 2018 2017 2016
change (%)
Operating revenue 21,812,389,644 21,858,814,000 -0.21 24,348,087,928
Net profit attributable to the shareholders of the listed
443,005,092 300,195,422 47.57 212,419,946
company
Net profit attributable to the shareholders of the listed
121,335,528 277,837,568 -56.33 157,445,435
company after deducting the non-recurring profits and losses
Net cash flows from operating activities 553,943,979 1,332,209,274 -58.42 1,658,422,636
At the end of At the end of Year-on-year At the end of
2018 2017 change (%) 2016
Net assets attributable to the shareholders of the listed
15,185,861,952 15,011,306,366 1.16 15,196,736,263
company
Total assets 70,598,364,627 67,519,953,829 4.56 60,823,819,098
(II) Major financial indexes
Major financial indexes 2018 2017 Year-on-year change (%) 2016
Basic earnings per share (Yuan/share) 0.084 0.057 47.37 0.040
Diluted earnings per share (Yuan/share) 0.084 0.057 47.37 0.040
Basic earnings per share after deducting non-
0.023 0.053 -56.60 0.030
recurring profits and losses (Yuan/share)
Weighted average ROE (%) 2.92 1.99 +0.93 1.41
Weighted average ROE after deducting non-recurring
0.80 1.84 -1.04 1.05
gains and losses (%)
6
Notes to the main accounting data and financial indexes in the past 3 years before the end of the reporting period
√Applicable □Not applicable
In this year, the Company adopted the profit distribution plan for 2017. Based on the total shares of the Company by
Dec. 31, 2017, 2 shares per 10 shares were transferred to all of the shareholders with the capital public reserves and the
total shares after transfer were 5,268,353,501 shares. According to the related rules, the Company recalculated the basic
EPS, diluted EPS and EPS after deducting the non-recurring profits 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 financial
statement 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 financial
statement 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 applicable
9.Main financial data in 2018 by quarters
Unit: Yuan Currency: RMB
Q1 Q2 Q3 Q4
(Jan. to Mar.) (Apr. to Jun.) (Jul. to Sep.) (Oct. to Dec.)
Operating revenue 4,689,586,634 5,382,013,297 4,717,407,673 7,023,382,040
Net profit attributable to the shareholders of the listed Company 83,590,257 78,528,509 32,811,152 248,075,174
Net profit attributable to the shareholders of the listed company
72,514,677 49,272,456 1,447,664 -1,899,269
after deducting the non-recurring profits and losses
Net cash flows from operating activities 20,699,815 30,107,603 73,165,300 429,971,261
Notes to differences between the quarterly data and the data in periodically disclosed reports
□Applicable √Not applicable
7
10.Non-recurring profit and loss items and amount
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Note Amount in Amount in
Non-recurring profit and loss items Amount in 2018
(if applicable) 2017 2016
Profit or loss from disposal of non-current assets 155,557,716 13,285,984 1,340,612
Tax refunds, exemptions and reductions with ultra vires approval or
without official approval documents
Government grants included in current profits and losses except
for government grants closely related to the Company business,
114,412,517 83,502,544 45,042,910
in line with national policies and obtained by quota or quantity at
unified state standards
Current net profit or loss of the subsidiary generated from the
business combination under common control from the beginning of 0 0
the period to the combination date
Profit or loss on changes in fair values of financial assets held
for trading and financial liabilities held for trading and investment
income obtained from disposal of financial assets held for trading,
74,200,750 20,563,270 23,420,959
financial liabilities held for trading and available-for-sale financial
assets, except for effective hedging operations associated with the
company's normal operations
Reversal of provision for impairment of receivables subject to
150,327,138
separate impairment test
Other non-operating revenue and expenses except for the
-67,069,856 -70,077,032 6,435,660
aforementioned items
Affected amount of minority equit -30,908,588 -14,565,022 -6,708,080
Amount affected by income tax -74,850,113 -10,351,890 -14,557,550
Total 321,669,564 22,357,854 54,974,511
11.Items measured at fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Impact on
Item Opening balance Closing balance Changes
current profit
Financial assets held for trading equity instrument
8,438,278 8,438,278 0 0
investment
Financial assets held for trading derivative financial assets 0 44,481,806 44,481,806 44,481,806
Available-for-sale equity instrument - Jiangxi Huawu 178,952,712 102,163,301 -76,789,411 667,732
Available-for-sale equity instrument - Qingdao Port 451,528,660 476,713,253 25,184,593 0
Available-for-sale equity instrument - CRSC 629,554,373 591,773,048 -37,781,325 18,459,450
Available-for-sale equity instrument - Shenwan Hongyuan 1,174,000 889,792 -284,208 17,465
Total 1,269,648,023 1,224,459,478 -45,188,545 63,626,453
12.Others
□Applicable √Not applicable
8
Section III Business Profile
I. Main business, business model of the Company and the industrial profile 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 been
keeping 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 actively
expanding 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 and
actively strive for a new growth space in the field of intelligent industry, civil-military integration, livelihood consumption and
digitalized industry.
The business scope of the Company covers: design, construction, installation and contracting of large port loading and
unloading system and equipment, offshore heavy equipment, engineering machinery, engineering vessels and large metal
structural parts and their parts and components; ship repair; leasing of self-produced crane; sales of the products made by
the 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 of
electromechanical installation and construction engineering. (In case of quota, license management, special regulations,
quality inspection, safety inspection and construction qualification requirements involved, it shall not carry out the business
activities before obtaining the corresponding qualifications 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 applicable
III. 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.
9
Section IV Discussion and Analysis of the Performance
I. Discussion and analysis of the performance
In 2018, confronted with the challenges from many adverse factors such as slowdown of the global economic growth
speed and increase in trade friction among the regions and areas, guided with the development strategy of “One Entity and
Two Wings”, the Board of Directors and management team of the Company led all of the employees to persist in the overall
working keynote of “making progress while remaining stable” and the new development concept, adhere to accelerating the
high quality development, facilitate the new layout for the business development, devote themselves to the new reform in
production and management, deepen the scientific and technological innovation to strengthen the advantage, excite the new
driving force for operation and management, coordinate the internal and external forces to achieve the joint development and
successfully 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 powerful
strength, the products had successfully entered the 101 st country and region and the value of the newly concluded
contracts had stably increased. The order receiving capability for the ocean engineering had remarkably upgraded and new
achievements 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 general
contracting for the construction of the first offshore wind farm. The electrical business had made great achievements in many
aspects 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 modification works of
about 100 shore bridges, the general contracting was in good condition and the general contracting for electromechanical
engineering was launched at the international dock for the first 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 balance
basically year on year; the total profit was RMB 0.537 billion Yuan, with a year-on-year increase by 27.34%; the net profit
attributable 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 profit statement and cash flow statement
Unit: Yuan Currency: RMB
Amount in the
Amount in
Item same period of Change (%)
current period
the last year
Operating revenue 21,812,389,644 21,858,814,000 -0.21
Operating cost 18,082,285,752 18,019,075,299 0.35
Selling and distribution expenses 115,541,161 121,457,892 -4.87
General and administrative expenses 1,142,337,348 1,039,774,787 9.86
Financial expenses 1,522,264,813 758,201,305 100.77
Net cash flow from operating activities 553,943,979 1,332,209,274 -58.42
Net cash flow from investing activities -2,779,460,550 -1,681,611,030 65.29
Net cash flow from financing activities -408,453,790 2,576,865,754 -115.85
10
2. Analysis of income and cost
√Applicable □Not applicable
The increase in the management expenses was mainly caused by the increase in the salary of the employees in this
Company.
The increase in the financial cost was mainly caused by the interest exchange of the Company and the increase in the
exchange loss caused by the fluctuation in exchange of CNY: USD.
The change in net cash flows from operating activities was mainly caused by the increase in the payment for the
commodities purchased and the labor services.
The change in net cash flows from investing activities was mainly caused by the increase in the cash paid for purchase
and construction of fixed assets of the Company.
The change in the net cash flow from financing activities was mainly caused by the increase in the repayment of loans
from bank by the Company.
(1) Main businesses by sectors, products and regions
Unit: Yuan Currency: RMB
Main business by products
Year-on- Year-on-year
Operating Gross profit year change change in Year-on-year change in
Product Operating cost
income rate (%) in operating operating cost gross profit rate (%)
income (%) (%)
Port machinery 14,983,974,898 11,405,896,707 23.88 1.68 -0.75 +1.87
Heavy-duty
2,746,107,406 2,608,895,653 5.00 -18.87 -15.41 -3.89
equipment
Steel structure and
1,558,778,586 1,656,155,935 -6.25 2.54 11.34 -8.39
related income
Building-transfer
1,221,194,799 1,226,872,864 -0.46 -21.20 -20.77 -0.54
projects
Marine transport
1,071,458,397 1,042,254,342 2.73 137.53 270.12 -34.84
and others
11
Main business by regions
Year-on-year Year-on-year Year-on-year
Operating Gross profit
Region Operating cost change in operating change in operating change in gross
income rate (%)
income (%) cost (%) profit rate (%)
Chinese Mainland 10,042,507,059 10,015,152,441 0.27 -0.98 6.18 -6.73
Asia (excluding
4,204,353,552 2,516,316,271 40.15 -22.29 -38.28 +15.51
Chinese Mainland)
North America 2,029,837,441 1,695,912,260 16.45 19.18 26.27 -4.70
South America 1,040,540,883 608,903,110 41.48 23.07 17.76 +2.64
Europe 1,560,574,842 1,277,580,562 18.13 237.34 533.94 -38.30
Mainland China
664,121,407 285,134,594 57.07 -51.62 -75.05 +40.32
(export sales)
Africa 1,508,172,239 1,119,387,335 25.78 8.90 21.56 -7.73
Oceania 531,406,663 421,688,928 20.65 65.72 62.72 +1.46
Notes to the main business by sectors, products and regions
√Applicable □Not applicable
Note 1: The amount listed in “Chinese Mainland (export sales)” in “Main business by regions” was the main operation
income from the export sales of this Company to the overseas subsidiaries or the related parties of the Company and then
sales 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 and
cost.
(2) Analysis table of cost-volume-profit relationship
□Applicable √Not applicable
The Company mainly manufactures and sells the large-sized port equipment, heavy-duty equipment and fabricated
steel structure and the “Accounting Standards- Construction Contract” is applicable to recognize the income as per the
percentage-of-completion method. So this table is not applicable.
(3) Cost analysis table
Unit: Yuan
By products
Proportion Proportion of the one
Amount in the
Amount in in total cost in the same period of Year-on-year
Product Items of cost structure same period of Notes
current period in current the last year in total change (%)
the last year
period (%) cost (%)
Raw material cost, labor
Port machinery 11,405,896,707 63.58 11,492,182,908 64.23 -0.75 None
cost and production cost
Heavy-duty Raw material cost, labor
2,608,895,653 14.54 3,084,117,712 17.24 -15.41 None
equipment cost and production cost
Building-transfer Raw material cost, labor
1,226,872,864 6.84 1,548,520,638 8.65 -20.77 None
projects cost and production cost
Raw material cost, labor
Steel structure 1,656,155,935 9.23 1,487,522,614 8.31 11.34 None
cost and production cost
Marine transport Raw material cost, labor
1,042,254,342 5.81 281,599,002 1.57 270.12 None
and others cost and production cost
Total 17,940,075,501 100.00 17,893,942,874 100.00 0.26
12
Other information about cost analysis
□Applicable √Not applicable
(4) Particulars about main customers and suppliers
√Applicable □Not applicable
The 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 total
annual sales volume.
The purchase amount of Top 5 suppliers was RMB 2.85966 billion Yuan, accounting for 12% of total annual purchase
amount; the purchase of the related parties in that of Top 5 suppliers was RMB 0.43549 billion Yuan, accounting for 2% of
total annual purchase amount.
3. Expenses
√Applicable □Not applicable
The financial 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 in
exchange of CNY: USD.
4. Investment in R&D
Detail table of investment in R&D
√Applicable □Not applicable
Unit: Yuan
Current expensed investment in R&D 672,614,073
Current capitalized investment in R&D 39,298,740
Total investment in R&D 711,912,813
Proportion of total investment in R&D in operating income (%) 3.26
Number of R&D employees in the Company 1,600
Proportion of number of R&D employees in the total 18.19
employees of the Company (%)
Proportion of capitalized investment in R&D (%) 5.52
Explanation
□Applicable √Not applicable
5.Cash flow
√Applicable □Not applicable
The net cash flow from operating activities was RMB 0.554 billion Yuan, mainly caused by the increase in payment
for goods and the labor services purchased. The net cash flow from the investment activities was RMB -2.779 billion Yuan,
mainly caused by the increase in cash payment for purchase and construction of fixed assets of the Company. The net cash
flow from the financing activities was RMB -0.408 billion Yuan, mainly caused by the increase in the repayment of bank loans
by the Company.
13
2.Explanation for the significant changes in profits due to non-main business
□Applicable √Not applicable
3.Analysis of assets and liabilities
√Applicable □Not applicable
1.Assets and liabilities
Unit: Yuan
Proportion Proportion of the Year-
Closing balance Closing balance
Item in total closing balance on-year Notes
of current period of last period
assets (%) in the total assets change (%)
Monetary funds 3,697,338,708 5.24 5,770,227,369 8.55 -35.92
Financial assets measured at fair
value through current profit or 52,920,084 0.07 8,438,278 0.01 527.14
loss
Advances to suppliers 1,681,187,715 2.38 1,036,783,170 1.54 62.15
Non-current assets maturing
894,638,424 1.27 1,896,475,472 2.81 -52.83
within one year
Other current assets 1,152,476,439 1.63 591,311,853 0.88 94.90
Construction in progress 3,050,468,292 4.32 1,889,146,009 2.80 61.47
Short-term borrowings 16,554,687,487 23.45 25,468,980,401 37.72 -35.00
Non-current liabilities maturing
4,209,532,510 5.96 2,198,931,219 3.26 91.44
within one year
Long-term borrowings 15,097,725,259 21.39 6,664,914,383 9.87 126.53
Other non-current liabilities 288,474,696 0.41 152,954,098 0.23 88.60
Other information
The decrease in the monetary fund was mainly caused by the increase in the disbursement of the monetary fund for
production and manufacture of the newly-commenced projects, payment for materials and repayment for the loans from the
banks.
The increase in the financial assets measured at fair value with changes included in the current profits and losses was
mainly 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 the
productive 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 receivables
due 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 of
the Company.
The increase in the projects under construction was mainly caused by the increase in the large-sized mechanical
equipment 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-term
borrowings 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-term
borrowings from the banks due within one year.
14
The increase in the Long-term borrowings was mainly caused by the increase in the Long-term borrowings from the
banks 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
Item Final book value Reason of restriction
Special fund, letter of guarantee from the bank and guarantee fund
Monetary fund 548,351,336 for L/C collected from the overseas projects and deposited in the
overseas supervision account
Fixed assets 5,270,355,777 Collateral for loan
Long-term receivables 3,850,867,673 Hypothecation for loan
Total 9,669,574,786 /
3. Other information
□Applicable √Not applicable
4.Analysis of operational information of the industry
√Applicable □Not applicable
During the reporting period, the value of newly concluded contracts by the Company on the port machinery was USD
2.652 billion, with a year-on-year increase by 5.24%. The one on marine engineering products and steel structure was USD
903 million, with a year-on-year increase by 26.47%, among which the one on steel structure was USD 320 million. As to the
investment, affected by the changes in policy for PPP project, the value of the newly concluded contracts was RMB 1.935
billion 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 for
construction of the automated dock from the mass flow 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 due
to the upgrade and reconstruction of the port and the renewal of the equipment. These factors provided powerful support
for the upgrade of the mass of the port machinery business, in particular, it laid the solid foundation for the expansion of the
integrated 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 in
ocean engineering projects still existed in a large scale and the market outlook of the newly-built vessel was not so good and
no 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 demand
in China is still great, however, the key role of the investment shall be brought into full play. The investment field is not
confronted with the integration and reorganization and PPP project with high risk and low income is gradually suspended and
readjusted. In 2019, the investment in the capital construction is still the important driving force for the economic growth, the
urban rail transit, AI and industrial internet will be the core of the capital construction and will bring new opportunity for the
high quality development of the Company.
15
5.Analysis of investment
1.Overall analysis of external equity investment
√Applicable □Not applicable
Investment amount by the end of reporting period 3,990,335,314
Changes in investment amount (Yuan) 365,660,888
Investment amount in the same period of the last year (Yuan) 3,624,674,426
Change in investment amount (%) 10.09
(1) Significant equity investment
√Applicable □Not applicable
On June 4, 2018, the 32nd meeting of the 6th Board of Directors of the Company deliberated and approved Proposal for
Incorporating a Wholly-owned Subsidiary in Xiongan New District by the Company. The Company invested RMB 2.0 billion
Yuan to establish Xiongan Zhenhua Intelligent Industry Holding Co., Ltd (a provisional name, subject to the industrial and
commercial registration) to carry out the local related business. At present, the preparations for the incorporation are actively
being made and accelerated.
(2) Significant non-equity investment
□Applicable √Not applicable
(3) Financial assets measured at fair value
√Applicable □Not applicable
Stock equity held in other listed companies
Profit or Changes in
Initial Initial Final
Stock Final book loss in owner’s equity Accounting Source of
Stock code investment shareholding shareholding
abbreviation value reporting during the subject shares
cost ratio ratio
period reporting period
Available-for-
300095 Huawu Stock 11,071,606 5.9 5.9 102,163,301 667,732 -76,789,411 sale financial Contribution
assets
Available-for-
03969 Purchase on
CRSC 617,854,000 1.4 1.4 591,773,048 18,459,450 -37,781,325 sale financial
(H-share) market
assets
Available-for-
06198 Purchase on
Qingdao Port 308,515,588 1.71 1.71 476,713,253 0 25,184,593 sale financial
(H-share) market
assets
Stock equity held in financial enterprises
Changes in
Initial Initial Final Profit or loss
Object Final book owner’s equity Accounting Source of
investment shareholding shareholding in reporting
name value during the subject shares
cost ratio ratio period
reporting period
Shenwan Available-for-sale
200,000 ﹤0.01 ﹤0.01 889,792 17,465 -284,208 Subscription
Hongyuan financial assets
6.Sales of significant assets and equities
□Applicable √Not applicable
16
7.Analysis of the primary holding companies and the joint-stock companies
√Applicable □Not applicable
Registered Net profit /
Company name Main product or service Assets size
capital (loss)
Operation of international offshore sea transportation; ordinary
Shanghai Zhenhua Shipping Co.,
cargo liner traffic in the middle and lower reaches of Yangtze River; 120,000,000 2,715,546,362 1,397,537
Ltd
transportation of port machinery.
Shanghai Zhenhua Port Design, manufacturing and sales of port machinery, engineering
50,000,000HKD 11,966,123,135 -232,481,229
Machinery (Hong Kong) Co., Ltd. vessel, steel structure and other parts
Sales of port loading and unloading machine, bulk cargo and
container machine, port engineering vessels (including floating
Shanghai Zhenhua Heavy
engineering crane), material handling mechanical products and
Industries Port Machinery 2,184,730,000 2,373,155,162 -119,304,520
parts, sales and technical services, installation and maintenance,
General Equipment Co., Ltd.
technical consultation of all types of machine and equipment, key
parts of the raw materials and accessories equipment.
Construction and installation of large-scale port equipment,
engineering vessels, offshore heavy equipment, mechanical
Shanghai Zhenhua Heavy
equipment, gear box for wind power generation equipment; large-
Industries Group (Nantong) 300,000,000 2,999,196,938 11,501,551
sized reverse branch, transmission mechanism, dynamic positioning,
Transmitter Co., Ltd
large-sized anchor windlass, offshore oil platform lifting device and
components; design and manufacturing of the accessories.
Installation of heavy port equipment, engineering vessels, heavy
Nantong Zhenghua Heavy metal structure and its parts; manufacturing and installation of gear
Equipment Manufacturing Co., box, container yard crane, super heavy-duty bridge steel structure, 854,936,900 2,635,845,017 7,400,673
Ltd heavy marine machinery equipment; leasing of cranes; specialized
contracting of steel structures etc
System integration design, R&D and manufacturing of tunnel boring
machine with the diameter of over 6m; system integration design,
R&D and manufacturing of tunnel boring machine (TBM) with the
diameter of over 5m; design, R&D and manufacturing of marine
machinery and parts, cranes and parts, bridges and high damping
bracket for buildings; sales of self-produced products. Whole sales
Tianhe Mechanical Equipment and import & export business of marine machinery and parts, cranes
681,627,100 4,394,476,738 58,624,548
Manufacturing Co., Ltd of CCCC and parts, bridges and high damping bracket for buildings (if no
commodity controlled by the national trade, designed quota and
license 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%) (as
for the items requiring the approval, carry out the business activities
after obtaining the approval from the authorities)
Shanghai Zhenhua Heavy
Industries Qidong Marine Machinery manufacturing 303,000,000 1,970,656,133 -138,478,499
Engineering Co., Ltd
Agency of international land transport, air transport, ocean
shipping and domestic freight; sales of large-scale port equipment,
Shanghai Zhenhua Ocean engineering vessel equipment and marine materials at home
and abroad; construction of ocean engineering and leasing of 100,000,000 752,902,844 3,144,709
Engineering Service Co., Ltd engineering vessels; import and export of goods and technologies,
transit trade, trade between enterprises and trade agency within the
free trade zone.
Nanjing Ninggao New Channel Engaged in the construction, investment and management of
100,000,000 652,553,954 74,107,859
Construction Co., Ltd Nanjing-Gaochun new channel project.
Zhenhua Pufeng Wind Energy
Installation of offshore wind turbine 16,326,531USD 5,516,448 -71,902,331
(HongKong) Co., Ltd
CCCC Financial Leasing Co., Ltd Financing lease 5,000,000,000 31,206,826,556 351,695,926
China Communications
Construction of port, waterway, highway and bridge. 50,000,000USD 257,589,119 -35,569,034
Construction USA Inc.
CCCC Estate Yixing Co., Ltd. Real estate development 900,000,000 1,525,930,907 12,764,832
17
Registered Net profit /
Company name Main product or service Assets size
capital (loss)
Fabrication and installation of steel structure; construction of
the foundation for offshore wind power facilities, installation and
Jiangsu Longyuan Zhenhua
maintenance of equipment; construction and maintenance of 26,000,000 2,391,840,716 25,246,738
Marine Engineering Co., Ltd
submarine cable system, construction of marine engineering;
installation and maintenance of equipment and leasing of equipment..
Greenland Heavylift
(Hongkong) Marine transport 91,975,158USD 1,496,412,229 -60,006,966
Limited
8.Particulars about structured entities controlled by the Company
□Applicable √Not applicable
III. Discussion and analysis of the future development of the Company
1.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 are
confronted with the replacement in batches. Affected by the large-scale trend of the ship, the heightening and the remote
upgrade and reconstruction of the traditional docks is becoming a new market. The dock handling technique is rapidly
changing and the automation and intelligentization of the dock is the development mainstream in the future. The demand
in the global market for the bulk cargo machinery is not flourishing, the domestic market takes on the trend of low price
competition and the automation development of the bulk cargo machinery and the service market expansion are the main
direction. The price of oil and gas in the world fluctuates frequently, the uncertainty of procurement of oil/gas production
equipment is not fundamentally improved. The main development direction of the ocean engineering equipment in the future
is to persist in destocking, high-end different positioning and whole industrial chain development; the low-end capacity in
the steel structure market is excess and the competition is fierce. It is urgent for the offshore wind power market to rebuild
the competitive advantages of the Company through the industrial integration and active layout of the operation and
maintenance 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 to
enter 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 upgrade
of the Company after objectively analyzing the development stage and orientation of the Company, based on national and
industrial development trend at present and in future, around “Industry 4.0”, “Made in China 2025” and pilot reform of the
state-owned capital investment, in combination with the development features of equipment manufacturing industry. “Capital
operation” will help the Company to extend the industrial chain of the port machine business and create the whole industrial
chain of marine heavy industry and offshore wind power; help the Company and the customers as well as the partners to
form a community of a shared future with the capital as the tie. The digitized transformation and upgrade of the Company
under “Internet” can accelerate the upgrade of the information system in an all-round way and create the cloud platform
through the top information-oriented design of the Company to offer more convenient, efficient, intelligent and integrated
service to the global customers and greatly improve the management level and operation efficiency 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 Chinese
Characteristics for a New Era, implementing the spirits of the 19th National Congress of the Communist Party of China and
the second and third plenary session of the 19th Communist Party of China Central Committee in an all-round way, persisting
in the overall keynote of making progress while remaining stable, persisting in the new development concept, adhering to
accelerating the high quality development, abiding by the supply-side structural reform as the main-thread, sticking to the
guidance of “One Entity and Two Wings” Strategy of the Company, driven by innovation, accelerating the new layout for the
18
business development of the Company and deepening the reform in an all-round way and fully coordinating the internal and
external 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, it
adheres to the combination of the traditional business with the new business and persists in the unity of scale and benefit
and the double acceleration of manufacturing and service to achieve the transformation from the manufacturer to the
integrated service provider step by step. As to the ocean engineering sector, while the Company dissolves the risks of
the stocking projects, it will further sort out and optimize the development concept of the ocean engineering, optimize the
management and control mode of the ocean engineering projects and explore the building of the whole industrial chain
of the ocean engineering. As to the steel structure sector, the Company will pay great attention to the construction of the
demonstration projects and raise the benefit through optimizing the operation and management model of the project. As
to the investment business, it will rely on the good situation of the investment in capital construction in 2019, aim at the
opportunity of the regional construction in China including Xiongan, Hainan and Fuzhou, bring into play of the capital around
the main business and carry out the investment projects helpful to make up the short plate of the business or expand the
industrial chain in good time. As to the shipping business, it will seize the opportunity of the construction of offshore wind
farm at home and abroad, integrate the industrial resources, vigorously expand the business of the high-end transportation
and 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 quicken
the independent development of its own brand EZ. As to the integrated service, it will further explore the actual demands of
the existing and potential customers, enhance the relationships with the major customers, improve the service quality and
accelerate the joint-win of both parties. As to the general contracting of the system, it will optimize the project management
model 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 the
deglobalization trend on the global economy impose some uncertainties upon the development of the Company. The market
competition of the container port machinery is still fierce, the ocean engineering industry is slightly resuscitative, but the sign
of 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, highly
concern the market change and carry out the benchmarking management like the high quality companies in the same
industry, deepen the reform, tamp the basic management, enhance the risk resistivity, optimize and adjust the market and
business 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 and
accelerate 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-bearing
liabilities. 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, gradually
reduce the foreign exchange liabilities, pay attention to the research on policies and strategies of foreign exchange risk
management, closely concern the changes in exchange rates, regularly analyze the trend of exchange rate, strictly conduct
the approval procedure related to the transaction of the financial derivatives, do well in statistics of the products, currencies
and exchange rates, further tamp the basic work of the foreign exchange management and reduce the Company’s exchange
rate risk. By arranging favorable settlement terms in the contract (for example, concluding with a RMB exchange rate
linkage, and the increase in the proportion of prepayments and settlement of exchange as early as possible), or control and
lock in the exchange rate risks with proper financial instruments or means.
As to credit risk, reduce raw material reserves, cut down the capital expenditure, adjust the Company’s debt structure
in many ways (such as medium-term notes, short-term financing bond, perpetual bond), strengthen the collection of the
account receivable, reduce the amount of bank debt step by step and reduce the business risks of the enterprise.
5.Others
□Applicable √Not applicable
IV. Explanation for non-disclosure in accordance with the accounting standard due to being not applicable to the
provisions of the standard or state secret and business secrete and other special reasons
□Applicable √Not applicable
19
Section V Important Events
I. Proposal for profit distribution of ordinary shares or converting capital reserve to bonus shares
1.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 Concerning
Cash Dividend Distribution of Listed Companies (ZJF [2012] No. 37), as proposed by the 10th meeting of the Company’s
fifth session of Board held on August 21, 2012, amendments were made to the Articles of Association of the Company
concerning profit distribution and cash dividends policy, and as a result, the dividend distribution standard and proportion
became clearer, related decision making process and mechanism were compete, and the minority shareholders’ legal rights
and interests were fully protected, giving them the opportunity to fully express their views and demands.
2.The Company’s plan or proposal for profit distribution of ordinary shares, plan or proposal for converting capital
reserve to bonus shares in recent 3 years (including the reporting period)
Unit: Yuan Currency: RMB
Net profit attributable
Ratio of the net profit
Bonus to the ordinary
Dividend for Shares attributable to the
Year for shares Amount of shareholders of the
every 10 shares converted for ordinary shareholders
dividend for every cash dividend listed company in the
(Yuan) (tax every 10 shares of the listed Company
distribution 10 shares (tax included) consolidated statement
included) (share) in the consolidated
(share) in the year for dividend
statements (%)
distribution
2018 0 0.5 0 263,417,675 443,005,092 59.46
2017 0 0.5 2 219,514,729 300,195,422 73.12
2016 0 1 0 439,029,458 212,419,946 206.68
Note: it was proposed by the board of directors of the Company that the cash dividends in 2018 adopted the continuous
and stable profit 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 profit by Dec. 31, 2018 is
distributed to all of the shareholders, with the total of the cash dividend to be distributed of RMB 263,417,675.05 Yuan. The
Company will not distribute the bonus share or convert the capital reserves to the bonus shares. The annual profit distribution
plan for 2018 is just a proposal and the opinions have been released by the independent directors of the Company and the
plan 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 applicable
4.If the profit is positive in the reporting period and the profit of the parent company available for distribution to the
ordinary shareholders is positive but the Company does not represent the plan or proposal for profit distribution
of ordinary shares in cash, the Company shall disclose in detail the reasons and the purpose and use plan of the
undistributed profit
□Applicable √Not applicable
20
II.Fulfillment of commitments
1.Commitments of the actual controller, shareholders, related parties, acquirer, the Company and other commitment
makers in the reporting period or ongoing at the period-end
□Applicable √Not applicable
2.If there is earnings forecast for the assets or projects of the Company and the reporting period is still in the
earnings forecast period, the Company shall explain whether the assets or project reaches the original earnings
forecast and give the reasons
□Reached □Failing to reach √Not applicable
3.Fulfillment of commitments on the performance and its impacts on goodwill impairment test
□Applicable √Not applicable
III. Fund occupation and progress in returning scheme during the reporting period
□Applicable √Not applicable
IV. Explanation of the Company for Accounting Firm’s “audit report with nonstandard opinions”
□Applicable √Not applicable
V. Analysis and explanation of the Company of the causes and the impacts of the major changes in accounting
policies and accounting estimates or correction of significant accounting errors
1.Analysis and explanation of the Company on the causes and the impacts of the changes in accounting policies
and accounting estimates
√Applicable □Not applicable
1. Changes in the presentation of financial statement
In accordance with the requirements of Notice on Revising and Issuing the Format of Financial Statements for General
Enterprises in 2018 (No. CK[2018] 15), in the balance sheet, “notes receivable” and “accounts receivable” were consolidated
into the newly increased item of “notes and accounts receivable”; “interests receivable” and “dividends receivables” were
consolidated into the item of “other receivables”; “liquidation of fixed assets” was consolidated into the item of “fixed assets”;
“notes payable” and “accounts payable” were consolidated into and listed in “notes and accounts payable”; “interests
payable” and “dividends payable” were consolidated into the item of “other payables”. In the profit statement, the newly
increased item of “expenses for R&D” was included the expensed expenditure in the process of R&D, the item of “financial
cost” was split into the item of “interest charges” and “interest income”; this group correspondingly backdated and adjusted
the comparative data including: interest expenses” and “interest income” were newly added under the item of Financial cost
in income statement. The comparative data were adjusted accordingly. The change in the accounting policy had no impact
on the net profit 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 the
Company
□Applicable √Not applicable
3.Communication with former CPA firm
□Applicable √Not applicable
4.Other information
□Applicable √Not applicable
21
VI. Engagement and dismissal of the public accounting firm
Unit: Yuan Currency: RMB
Now engaging
Name of the domestic accounting firm Ernst & Young LLP. (Special General Partnership)
Remuneration of domestic accounting firm 4,500,000
Audit term of the domestic accounting firm 3
Name Remuneration
Accounting firm performing internal control audit Ernst & Young LLP. (Special General Partnership) 400,000
Particulars about the engagement and dismissal of the accounting firm
□Applicable √Not applicable
Particulars about reappointment of the accounting firm in the auditing period
□Applicable √Not applicable
VII. Risk of suspension of the listing
1.Cause for shares suspended from listing
□Applicable √Not applicable
2.Countermeasures to be taken by the Company
□Applicable √Not applicable
VIII. Termination of the listing and its reasons
□Applicable √Not applicable
IX. Events related to bankruptcy and reorganization
□Applicable √Not applicable
X. Major lawsuit and arbitration issues
□Existence major lawsuit and arbitration in the year √No major lawsuit or arbitration in this year
1.Lawsuit and arbitration already disclosed in provisional announcement, without follow-up progress
□Applicable √Not applicable
22
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:
Expected
liabilities
Party Amount Results of
Type of and amount Execution of
Plaintiff Defendant bearing involved Progress in lawsuit the lawsuit
lawsuit and Background of the lawsuit (arbitration) caused adjudication of
(applicant) (respondent) joint in lawsuit (arbitration) (arbitration) and
arbitration by lawsuit lawsuit (arbitration)
liabilities (arbitration) impacts
(arbitration)
or not
In 2008, the Company and Fluor Limited (hereinafter
referred to as “Fluor”) signed an agreement on
On Jan. 11, 2018,
sales and installation of steel pipe pile products for
the court made
the wind power generation of British Wind Power
quantized partial
Project. In the process of the project construction,
judgment on this
based on the cooperative spirits of friendly
case and adjudicated
negotiation, the Company and Fluor maintained
this Company to
the normal dispute settlement and communication
pay 5,893,591 U.S.
mechanism. In 2010, as for the issues in contract
dollars, 15,033,681
execution process, after reviewed by the board of
pounds, 7,165,740
directors of the Company, the Company signed a
Eurodollars, 7,259
mutual exemption letter with Fluor, and settled the On Jan. 11,
Canadian dollars and
remaining payment in 2011. Afterwards, Fluor lodged 2018, the court
RMB 485,346 Yuan
a quality claim against the Company, and requested made quantized
to Fluor. On Mar.
the payment of the demand quality guarantee issued partial judgment
16, 2018, the court
by the Company, while the Company rejected the on this case
made the judgment
claim. On March 20, 2014, Fluor cashed the above and made the
on the interest and
letter of guarantee with the amount of 23,409,750 written judgment
Shanghai adjudicated this
EUR in the bank opening the letter of guarantee. on the interest
Zhenhua Company to pay
In September 2014, Fluor initiated proceedings for and the legal
Fluor Heavy About 250 million 3,518,549 pounds
None Lawsuit the breach attributed to the problems related to the 0 The case had been settled. expenses in Mar.
Corporation Industries pounds to Fluor. On Mar. 26
product quality to High Court of Justice, Queen’s and Apr. 2018
(Group) Co., and Apr. 11, 2018,
Bench Division, the Technology and Construction respectively.
Ltd the court made the
Court (hereinafter referred to as “TCC Court of Both parties
judgment on the
Britain Queen’s Bench”) and asked the Company signed the
legal expenses and
for the total compensation of 250 million pounds reconciliation
adjudicated this
for additional test and repair cost, construction agreement in
Company to pay
duration delay and other related loss (including the May 2018 and
6,000,000 pounds
cashed letter of guarantee amount of 23,409,750 this case was
and 1,500,000
EUR). The Company didn’t acknowledge the claim settled.
pounds to Fluor.
for the compensation from Fluor. Since then, the
On May 9, 2018,
Company prepared the evidence disclosure, witness
both parties signed
testimony, exchange work and other preparatory
the reconciliation
work before the court session was opened. In
agreement and
February, March, April, June of 2016, British High
this Company
Court TCC court was in trial for first instance on
paid 523219.24
obligation part. In May 2017, the trial of quantized
pounds to Fluor as
part of this case was conducted. In July 2017, both
the reconciliation
parties exchanged the written final address. In Aug.
expenses.
2017, the proceeding at law for the quantized part of
this case was settled.
It was planned to open the court
session in Mar. 2019. In order to
settle the disputes and reduce
the losses, both parties kept
the communication and made
efforts to seek for the acceptable
dispute settlement methods.
Through rounds of negotiation,
both parties concluded the
reconciliation scheme regarding
the joint shipbuilding and reached
In 2013, the Company had signed the contract an agreement on the details.
on construction and sales of a 6000 t pipe-laying Approved by the resolution of the
vessel with Petrofac Limited (hereinafter referred to 30th meeting of the 6th session of
as Petrofac). On Oct. 9, 2015, in the construction Board of Directors of the Company,
process of the project, Petrofac issued Contract the Company has signed an
Termination Letter due to the delay in the project. agreement with Petrofac and it will
Petrofac asked the Company to terminate the purchase the related project assets
contract and requested the Company to return at the contract price such as the
This Company Both parties
the prepaid payment and interest. The Company equipment such as J-Lay Tower
stood for about applied for
Shanghai rejected the claim. Petrofac honored the demand (OFE equipment) purchased by
200 million terminating
Zhenhua guarantee from the opening bank in December Petrofac, technical documents and
USD; Petrofac's the arbitration
Heavy Petrofac 2015, with total amount of 44,720,000 USD. Thus, the patents so as to continue the
None Arbitration counterclaim was 0 and received Not applicable
Industries (ship-owner) the Company employed the professional lawyer and construction of the vessel. Petrofac
182 million USD the notice of
(Group) Co., expert team both at home and abroad to apply for will provide the technical support
or 213 million arbitration
Ltd arbitration to the London International Arbitration in the process of construction and
USD in two termination on
Court in January 2016 and asked Petrofac to possess 10% of the stock equity of
different ways. May 29, 2018.
return the payment of Letter of Guarantee and the single-vessel company after the
compensated for the corresponding loss of vessel is put into operation. Both
200 million USD. After receiving the arbitration parties will bring into play their own
application from the Company, Petrofac filed a advantages to jointly expand the
counterclaim application, and asked the Company market of the vessel. Both parties
to compensate about 182 million USD or 213 million agree to cancel the arbitration.
USD under the requirements of continuing or not The transaction consideration was
continuing to construct the vessel. about 190,000,000 USD. After
counterbalance of the amount
of the letter of guarantee paid
by the Company (44,720,000
USD) and part of the amount
carried in the shipbuilding contract
(21,720,000 USD), the transaction
consideration to be paid by the
Company was 167,000,000 USD.
This transaction has no significant
impact on the profit in this period or
after the period.
23
In the reporting period:
Expected
liabilities
Party Amount Results of
Type of and amount Execution of
Plaintiff Defendant bearing involved Progress in lawsuit the lawsuit
lawsuit and Background of the lawsuit (arbitration) caused adjudication of
(applicant) (respondent) joint in lawsuit (arbitration) (arbitration) and
arbitration by lawsuit lawsuit (arbitration)
liabilities (arbitration) impacts
(arbitration)
or not
At the end of February 2014, the Company
completed the acquisition of the former Jiangsu
Shanghai
Daoda Ocean Engineering Co., Ltd through capital
Zhenhua
increase and held 67% of the shares. At the same
Heavy
time, it was agreed that the losses of the company,
Indusries
was borne by the former shareholders including
(Group)
Nantong Nantong Huafu Port Co., Ltd, Li Aidong and Zhao
Co., Ltd,
Huafu Port Xiaohua before February 28, 2014. During the
Shanghai RMB 368.722 Not
Co., Ltd, None Lawsuit subsequent business process, it was found that the 0 The case is still pending. Not yet judged
Zhenhua million Yuan yet judged
Li Aidong, former Daoda Company untruthfully disclosed some
Heavy
Zhao Xiaohua matters of lawsuit or debts, resulting in a series of
Industries
losses of the Company. Through the related audit
Qidong
and readjustment etc, it was deemed that the loss
Marine
of RMB 368.7222 million Yuan should be in borne
Engineering
in the former shareholders and the lawsuit was
Co., Ltd.
prosecuted again after an inconclusive press for
payment.
The claim of
Lovanda was
In 2014, Lovanda signed a construction contract about USD
(ZP14-2125) on one JU2000E offshore drilling 13,800,000
platform with this Company, which was designed, dollars. The
built, commissioned and delivered by this Company. cross bill claim
In the construction process, some disputes arose of this Company:
between Lovanda and this Company regarding 1) the other
the construction schedule of this platform, the party should
extension of delivery time and other aspects. pay the last
Lovanda submitted to arbitration to London Maritime sum of money
Arbitrators Association against this Company on payable under Both parties
Mar. 6, 2017 and proposed to terminate the platform the contract had concluded
Shanghai construction contract and required this Company to and its interest the umbrella
Zhenhua repay USD 13800000 dollars including the advance arising herefrom, The arbitral tribunal signed the reconciliation The arbitral tribunal
Lovanda Heavy cost of construction, related expenses and interest. totaling consent award according to the agreement with signed the consent
None Arbitration 0
Offshore Ltd Industries This Company established a special working group 186,200,000 application of both parties and then Lovansing and award and the case
(Group) Co., and employed the professional domestic and foreign USD to this party; the case was settled. Xinyuda and was settled.
Ltd lawyers and experts to actively respond to action to 2) the income of then applied for
maintain the legitimate right of this Company. After this party from withdrawal of the
receiving the request for arbitration, this Company the sale of the case.
took a cross bill application against Lovanda and platform minus
claimed: 1) the other party should pay the last sum the cost of sale
of money payable under the contract and its interest should be used
arising herefrom, totaling USD 186,200,000 dollars for deducting the
to this party; 2) the income of this party from the account payable
sale of the platform minus the cost of sale should be of the other party;
used for deducting the account payable of the other 3) Other losses,
party; 3) Other losses, interest and other expenses interest and
that may occur in the future. other expenses
that may occur in
the future.
The claim of
Lovanda was
about USD
In 2014, Lovanda signed a construction contract
13,800,000
(ZP14-2126) on one JU2000E offshore drilling
dollars. The
platform with this Company, which was designed,
cross bill claim
built, commissioned and delivered by this Company.
of this Company:
In the construction process, some disputes arose
1) the other
between Lovanda and this Company regarding
party should
the construction schedule of this platform, the
pay the last
extension of delivery time and other aspects.
sum of money
Lovanda submitted to arbitration to London Maritime
payable under
Arbitrators Association against this Company on Both parties
the contract
Mar. 6, 2017 and proposed to terminate the platform had concluded
and its interest
Shanghai construction contract and required this Company to the umbrella
arising herefrom,
Zhenhua repay USD 13,800,000 dollars including the advance The arbitral tribunal signed the reconciliation The arbitral tribunal
totaling USD
Lovansing Heavy cost of construction, related expenses and interest. consent award according to the agreements with signed the consent
None Arbitration 186,200,000 0
Offshore Ltd Industries This Company established a special working group application of both parties and then Lovansing and award and the case
dollars to this
(Group) Co., and employed the professional domestic and foreign the case was settled. Xinyuda and was settled.
party; 2) the
Ltd lawyers and experts to actively respond to action to then applied for
income of this
maintain the legitimate right of this Company. After withdrawal of the
party from the
receiving the request for arbitration, this Company case.
sale of the
took a cross bill application against Lovanda and
platform minus
claimed: 1) the other party should pay the last sum
the cost of sale
of money payable under the contract and its interest
should be used
arising herefrom, totaling USD 186,200,000 dollars
for deducting the
to this party; 2) the income of this party from the
account payable
sale of the platform minus the cost of sale should be
of the other party;
used for deducting the account payable of the other
3) Other losses,
party; 3) Other losses, interest and other expenses
interest and
that may occur in the future.
other expenses
that may occur in
the future.
24
In the reporting period:
Expected
liabilities
Party Amount Results of
Type of and amount Execution of
Plaintiff Defendant bearing involved Progress in lawsuit the lawsuit
lawsuit and Background of the lawsuit (arbitration) caused adjudication of
(applicant) (respondent) joint in lawsuit (arbitration) (arbitration) and
arbitration by lawsuit lawsuit (arbitration)
liabilities (arbitration) impacts
(arbitration)
or not
On Jan. 28, 2014, this Company signed
Procurement Contract on Main Chord of Spud Leg
for F&G-JU2000E Self-elevating Drilling Platform
with Xinyuda Ocean Engineering (Hong Kong) Co.,
Ltd (hereinafter referred to as “Xinyuda Company”)
(Contract No.: ZP14-2125-0030, based on which
Xinyuda Company provided one set of main chord
equipment for the Zhenhai No. 5 Drilling Platform.
The product provided by Xinyuda Company had Both parties
the quality defects and was in breach of the had concluded Hong Kong
requirements of the contract, as a result, the the umbrella International
construction schedule of Zhenhai No. 5 Drilling reconciliation Arbitration Centre
Shanghai Hong Kong International Arbitration
Xinyuda Platform of this Company was seriously affected. agreements will issue the consent
Zhenhua Centre agreed to issue the consent
Ocean This Company had sent many letters to request with Lovanda award and settle the
Heavy About award and settle the case after
Engineering None Arbitration Xinyuda Company to settle the quality defects, but 0 and Lovansing case after receiving
Industries 35,250,000 USD receiving the supplementary cash
(Hong Kong) Xinyuda Company had not effectively responded to and Xinyuda and the supplementary
(Group) Co., deposit for the costs of arbitration
Co., Ltd them and dealt with these defects. therefore, based then applied for cash deposit for the
Ltd paid by both parties.
on the dispute settlement mode stipulated by the withdrawal of the costs of arbitration
contract, this Company took a arbitration against case and issued paid by this
Xinyuda Company to Hong Kong International the consent Company.
Arbitration Center on May 9, 2017 and requested award.
Xinyuda Company to compensate this Company
for the expenses for replacement, repair, removal,
reconstruction and reinstallation of main chord,
about USD 35,250,000 dollars, and reserved the
rights of compensation for the losses caused by
the quality of the main chord under the platform
construction contract and other losses arising
herefrom.
On Jan. 28, 2014, this Company signed
Procurement Contract on Main Chord of Spud Leg
for F&G-JU2000E Self-elevating Drilling Platform
with Xinyuda Ocean Engineering (Hong Kong) Co.,
Ltd (hereinafter referred to as “Xinyuda Company”)
(Contract No.: ZP14-2126-0030, based on which
Xinyuda Company provided one set of main chord
equipment for the Zhenhai No. 6 Drilling Platform.
The product provided by Xinyuda Company had Both parties
the quality defects and was in breach of the had concluded Hong Kong
requirements of the contract, as a result, the the umbrella International
construction schedule of Zhenhai No. 6 Drilling reconciliation Arbitration Centre
Shanghai Hong Kong International Arbitration
Xinyuda Platform of this Company was seriously affected. agreements will issue the consent
Zhenhua Centre agreed to issue the consent
Ocean This Company had sent many letters to request with Lovanda award and settle the
Heavy About award and settle the case after
Engineering None Arbitration Xinyuda Company to settle the quality defects, but 0 and Lovansing case after receiving
Industries 35,250,000 USD receiving the supplementary cash
(Hong Kong) Xinyuda Company had not effectively responded to and Xinyuda and the supplementary
(Group) Co., deposit for the costs of arbitration
Co., Ltd them and dealt with these defects. therefore, based then applied for cash deposit for the
Ltd paid by both parties.
on the dispute settlement mode stipulated by the withdrawal of the costs of arbitration
contract, this Company took a arbitration against case and issued paid by this
Xinyuda Company to Hong Kong International the consent Company.
Arbitration Center on May 9, 2017 and requested award.
Xinyuda Company to compensate this Company
for the expenses for replacement, repair, removal,
reconstruction and reinstallation of main chord,
about USD 35,250,000 dollars, and reserved the
rights of compensation for the losses caused by
the quality of the main chord under the platform
construction contract and other losses arising
herefrom.
3.Other information
□Applicable √Not applicable
XI. Punishment to the listed Company and its directors, supervisors, senior executives, controlling shareholder,
actual controller and acquirer and the rectification
□Applicable √Not applicable
XII. Particulars about the credit conditions of the Company and its controlling shareholder and the actual controller
during the reporting period
□Applicable √Not applicable
25
XIII. The Company’s equity incentive plan, employee stock ownership plan or other incentives to the employees and
their impacts
1.Related incentives disclosed in provisional announcement, without progress or change in follow-up
implementation
□Applicable √Not applicable
2.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 applicable
XIV. Material associated transactions
1.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 event Query index
The first meeting of 7th session of Board of Directors deliberated and approved Shanghai Stock Exchange website: www.sse.
Proposal for Joint Incorporation of Overseas Port Service Platform Company by the com.cn, Shanghai Securities News and Hong
Company and the Related Parties on Aug. 22, 2018. 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
Summary of event Query index
The 29th meeting of the 6th session of Board of Directors deliberated and approved Shanghai Stock Exchange website: www.sse.
Proposal for Participation in PPP Project at the Section from Yongjia Xunzhai to com.cn and the Shanghai Securities News and
Qiaoxia of Anji-Dongtou Highway on Feb. 2, 2018. Hong Kong Wen Wei Po on Feb. 3, 2018.
The 1st meeting of the 7th session of Board of Directors deliberated and approved
Proposal for Joint Investment in CCCC-Zhenhua Lvjian Technology (Ningbo) Co., Shanghai Stock Exchange website: www.sse.
Ltd by the Company and the Related Parties, Proposal for Capital Increase in South com.cn and the Shanghai Securities News and
America Company of CCCC and Proposal for Joint Investment in Yancheng Urban Hong Kong Wen Wei Po on Aug. 23, 2018.
Expressway by the Company and the Related Parties on Aug. 22, 2018.
26
3. Events not disclosed in provisional announcements
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Reason
Proportion for great
Pricing in the Settlement differences
Type of Content of Price of Amount of
principle of amount mode of between
Related party Relationship associated associated associated associated Market price
associated of similar associated the bargain
transaction transaction transaction transaction
transaction transactions transaction price and
(%) market
price
CCCC Financial Leasing Co., Holding subsidiary of Pricing based Monetary
Selling goods Project income 502,962,177.00 502,962,177.00 2.31 502,962,177.00 /
Ltd. parent company on market price fund
China Road & Bridge Holding subsidiary of Pricing based Monetary
Selling goods Project income 358,243,636 358,243,636.00 1.64 358,243,636.00 /
Corporation parent company on market price fund
China Communications Holding subsidiary of Pricing based Monetary
Selling goods Project income 248,519,083.00 248,519,083.00 1.14 248,519,083.00 /
Construction Company Ltd. parent company on market price fund
CCCC Electrical and
Holding subsidiary of Pricing based Monetary
Mechanical Engineering Co., Selling goods Project income 187,488,462.00 187,488,462.00 0.86 187,488,462.00 /
parent company on market price fund
Ltd.
CCCC Tianjin Dredging Co., Holding subsidiary of Pricing based Monetary
Selling goods Project income 137,098,857.00 137,098,857.00 0.63 137,098,857.00 /
Ltd. parent company on market price fund
China Communications Second
Holding subsidiary of Pricing based Monetary
Navigational Bureau Third Selling goods Project income 117,230,621.00 117,230,621.00 0.54 117,230,621.00 /
parent company on market price fund
Engineering Co., Ltd.
Jiangsu Longyuan Zhenhua Pricing based Monetary
Joint venture Selling goods Project income 110,250,126.00 110,250,126.00 0.51 110,250,126.00 /
Marine Engineering Co., Ltd on market price fund
Road & Bridge International Holding subsidiary of Pricing based Monetary
Selling goods Project income 105,144,086.00 105,144,086.00 0.48 105,144,086.00 /
Co., Ltd. parent company on market price fund
CCCC Second Harbor Holding subsidiary of Pricing based Monetary
Selling goods Project income 101,372,715.00 101,372,715.00 0.46 101,372,715.00 /
Engineering Co., Ltd. parent company on market price fund
CCCC Third Harbor Holding subsidiary of Pricing based Monetary
Selling goods Project income 100,341,951.00 100,341,951.00 0.46 100,341,951.00 /
Engineering Co., Ltd. parent company on market price fund
CCCC First Harbor Engineering Holding subsidiary of Pricing based Monetary
Selling goods Project income 70,466,403.00 70,466,403.00 0.32 70,466,403.00 /
Co., Ltd. parent company on market price fund
China Communications Holding subsidiary of Rendering of Pricing based Monetary
Project income 70,216,049.00 70,216,049.00 0.32 70,216,049.00 /
Construction Company Ltd. parent company labor service on market price fund
CCCC Second Highway Holding subsidiary of Pricing based Monetary
Selling goods Project income 63,557,612.00 63,557,612.00 0.29 63,557,612.00 /
Engineering Co. Ltd. parent company on market price fund
CCCC Tunnel Engineering Co., Holding subsidiary of Pricing based Monetary
Selling goods Project income 57,261,136.00 57,261,136.00 0.26 57,261,136.00 /
Ltd. parent company on market price fund
Shanghai Communications
Holding subsidiary of Pricing based Monetary
Construction Contracting Co., Selling goods Project income 34,589,744.00 34,589,744.00 0.16 34,589,744.00 /
parent company on market price fund
Ltd.
ZPMC-OTL MARINE Rendering of Pricing based Monetary
Joint venture Project income 30,377,284.00 30,377,284.00 0.14 30,377,284.00 /
CONTRACTOR LIMITED labor service on market price fund
CCCC First Highway Holding subsidiary of Pricing based Monetary
Selling goods Project income 30,000,000.00 30,000,000.00 0.14 30,000,000.00 /
Engineering Co., Ltd. parent company on market price fund
CCCC Third Harbor Holding subsidiary of Rendering of Pricing based Monetary
Project income 24,710,083.00 24,710,083.00 0.11 24,710,083.00 /
Engineering Co., Ltd. parent company labor service on market price fund
No.4 Engineering Co., Ltd.
Holding subsidiary of Pricing based Monetary
of CCCC Second Harbor Selling goods Project income 24,459,644.00 24,459,644.00 0.11 24,459,644.00 /
parent company on market price fund
Engineering Co., Ltd.
Jiangsu Longyuan Zhenhua Rendering of Pricing based Monetary
Joint venture Project income 24,438,318.00 24,438,318.00 0.11 24,438,318.00 /
Marine Engineering Co., Ltd labor service on market price fund
China Harbor Engineering Co., Holding subsidiary of Pricing based Monetary
Selling goods Project income 22,231,105.00 22,231,105.00 0.10 22,231,105.00 /
Ltd parent company on market price fund
No.1 Engineering Co., Ltd.
Holding subsidiary of Pricing based Monetary
of CCCC Second Harbor Selling goods Project income 19,181,054.00 19,181,054.00 0.09 19,181,054.00 /
parent company on market price fund
Engineering Co., Ltd.
Road & Bridge South China Holding subsidiary of Pricing based Monetary
Selling goods Project income 16,524,972.00 16,524,972.00 0.08 16,524,972.00 /
Engineering Co., Ltd. parent company on market price fund
CCCC Fourth Highway Holding subsidiary of Rendering of Pricing based Monetary
Project income 13,801,887.00 13,801,887.00 0.06 13,801,887.00 /
Engineering Co. Ltd. parent company labor service on market price fund
CCCC Second Highway Holding subsidiary of Rendering of Pricing based Monetary
Project income 12,905,660.00 12,905,660.00 0.06 12,905,660.00 /
Consultants Co., Ltd. parent company labor service on market price fund
27
Reason
Proportion for great
Pricing in the Settlement differences
Type of Content of Price of Amount of
principle of amount mode of between
Related party Relationship associated associated associated associated Market price
associated of similar associated the bargain
transaction transaction transaction transaction
transaction transactions transaction price and
(%) market
price
CCCC First Harbor Consultants Holding subsidiary of Pricing based Monetary
Selling goods Project income 9,654,872.00 9,654,872.00 0.04 9,654,872.00 /
Co., Ltd. parent company on market price fund
CCCC First Highway Fifth Holding subsidiary of Rendering of Pricing based Monetary
Project income 7,500,000.00 7,500,000.00 0.03 7,500,000.00 /
Engineering Co., Ltd. parent company labor service on market price fund
The Third Engineering Co.,
Holding subsidiary of Pricing based Monetary
Ltd. of The First Highway Selling goods Project income 6,550,315.00 6,550,315.00 0.03 6,550,315.00 /
parent company on market price fund
Engineering Bureau of CCCC
No.1 Engineering Co., Ltd. of
Holding subsidiary of Pricing based Monetary
CCCC First Harbor Engineering Selling goods Project income 5,264,957.00 5,264,957.00 0.02 5,264,957.00 /
parent company on market price fund
Co., Ltd.
CCCC Third Harbor Consultants Holding subsidiary of Pricing based Monetary
Selling goods Project income 5,018,319.00 5,018,319.00 0.02 5,018,319.00 /
Co., Ltd. parent company on market price fund
CCCC Guangzhou Dredging Holding subsidiary of Rendering of Pricing based Monetary
Project income 4,664,101.00 4,664,101.00 0.02 4,664,101.00 /
Co. Ltd. parent company labor service on market price fund
ZPMC Mediterranean Liman
Pricing based Monetary
Makinalari Ticaret Anonim Joint venture Selling goods Project income 4,262,198.00 4,262,198.00 0.02 4,262,198.00 /
on market price fund
Sirketi
CCCC First Highway Holding subsidiary of Rendering of Pricing based Monetary
Project income 4,000,000.00 4,000,000.00 0.02 4,000,000.00 /
Engineering Co., Ltd. parent company labor service on market price fund
Holding subsidiary of Pricing based Monetary
Friede &Goldman, Llc Selling goods Project income 2,673,016.00 2,673,016.00 0.01 2,673,016.00 /
parent company on market price fund
Holding subsidiary of Pricing based Monetary
Chuwa Bussan Co. Ltd. Selling goods Project income 2,023,654.00 2,023,654.00 0.01 2,023,654.00 /
parent company on market price fund
ZPMC Changzhou Coatings Rendering of Pricing based Monetary
Associated company Project income 1,396,226.00 1,396,226.00 0.01 1,396,226.00 /
Co., Ltd. labor service on market price fund
CCCC - SHEC Third Highway Holding subsidiary of Pricing based Monetary
Selling goods Project income 1,057,048.00 1,057,048.00 0.00 1,057,048.00 /
Engineering Co. Ltd. parent company on market price fund
CCCC Tianjin Industry and Holding subsidiary of Pricing based Monetary
Selling goods Project income 674,414.00 674,414.00 0.00 674,414.00 /
Trade Co., Ltd. parent company on market price fund
CCCC (Tianjin) Eco-
environmental Protection Holding subsidiary of Rendering of Pricing based Monetary
Project income 207,547.00 207,547.00 0.00 207,547.00 /
Design & Research Institute parent company labor service on market price fund
Co., Ltd.
CCCC Highway Consultants Holding subsidiary of Pricing based Monetary
Selling goods Project income 65,517.00 65,517.00 0.00 65,517.00 /
Co. Ltd. parent company on market price fund
CCCC Guangzhou Logistics Holding subsidiary of Rendering of Pricing based Monetary
Project income 56,604.00 56,604.00 0.00 56,604.00 /
Co., Ltd. parent company labor service on market price fund
Hainan CCCC Fourth Harbor Holding subsidiary of Pricing based Monetary
Selling goods Project income 13,248.00 13,248.00 0.00 13,248.00 /
Construction Co., Ltd parent company on market price fund
CCCC - SHEC Second Holding subsidiary of Pricing based Monetary
Selling goods Project income 7,727.00 7,727.00 0.00 7,727.00 /
Engineering Co. Ltd. parent company on market price fund
CCCC Second Highway Holding subsidiary of Rendering of Pricing based Monetary
Project income 7,547.00 7,547.00 0.00 7,547.00 /
Engineering Co. Ltd. parent company labor service on market price fund
No.2 Engineering Co., Ltd. Consigned
Holding subsidiary of Receiving Pricing based Monetary
of CCCC Third Harbor processing for the 435,493,711.00 435,493,711.00 2.41 435,493,711.00 /
parent company labor service on market price fund
Engineering Co., Ltd. Company
Consigned
CCCC Second Harbor Holding subsidiary of Receiving Pricing based Monetary
processing for the 319,635,901.00 319,635,901.00 1.77 319,635,901.00 /
Engineering Co., Ltd. parent company labor service on market price fund
Company
CCCC Electrical and Consigned
Holding subsidiary of Receiving Pricing based Monetary
Mechanical Engineering Co., processing for the 183,813,849.00 183,813,849.00 1.02 183,813,849.00 /
parent company labor service on market price fund
Ltd. Company
Consigned
CCCC Fourth Highway Holding subsidiary of Receiving Pricing based Monetary
processing for the 180,145,846.00 180,145,846.00 1.00 180,145,846.00 /
Engineering Co. Ltd. parent company labor service on market price fund
Company
Consigned
CCCC Third Harbor Holding subsidiary of Receiving Pricing based Monetary
processing for the 171,166,061.00 171,166,061.00 0.95 171,166,061.00 /
Engineering Co., Ltd. parent company labor service on market price fund
Company
Consigned
CCCC Tianjin Dredging Co., Holding subsidiary of Receiving Pricing based Monetary
processing for the 119,241,651.00 119,241,651.00 0.66 119,241,651.00 /
Ltd. parent company labor service on market price fund
Company
No.2 Engineering Co., Ltd. Consigned
Holding subsidiary of Receiving Pricing based Monetary
of CCCC Fourth Harbor processing for the 58,238,659.00 58,238,659.00 0.32 58,238,659.00 /
parent company labor service on market price fund
Engineering Co., Ltd. Company
Consigned
CCCC - SHEC Second Holding subsidiary of Receiving Pricing based Monetary
processing for the 51,067,364.00 51,067,364.00 0.28 51,067,364.00 /
Engineering Co. Ltd. parent company labor service on market price fund
Company
28
Reason
Proportion for great
Pricing in the Settlement differences
Type of Content of Price of Amount of
principle of amount mode of between
Related party Relationship associated associated associated associated Market price
associated of similar associated the bargain
transaction transaction transaction transaction
transaction transactions transaction price and
(%) market
price
Consigned
CCCC Shanghai Dredging Co., Holding subsidiary of Receiving Pricing based Monetary
processing for the 44,255,071.00 44,255,071.00 0.24 44,255,071.00 /
Ltd parent company labor service on market price fund
Company
Consigned
CCCC Shanghai Equipment Holding subsidiary of Receiving Pricing based Monetary
processing for the 31,619,960.00 31,619,960.00 0.17 31,619,960.00 /
Engineering Co., Ltd. parent company labor service on market price fund
Company
Consigned
CCCC Third Highway Holding subsidiary of Receiving Pricing based Monetary
processing for the 26,704,324.00 26,704,324.00 0.15 26,704,324.00 /
Engineering Co. Ltd. parent company labor service on market price fund
Company
Consigned
CCCC First Harbor Consultants Holding subsidiary of Receiving Pricing based Monetary
processing for the 26,259,626.00 26,259,626.00 0.15 26,259,626.00 /
Co., Ltd. parent company labor service on market price fund
Company
Consigned
CCCC First Harbor Engineering Holding subsidiary of Receiving Pricing based Monetary
processing for the 24,659,835.00 24,659,835.00 0.14 24,659,835.00 /
Co., Ltd. parent company labor service on market price fund
Company
Consigned
CCCC Second Highway Holding subsidiary of Receiving Pricing based Monetary
processing for the 22,139,413.00 22,139,413.00 0.12 22,139,413.00 /
Consultants Co., Ltd. parent company labor service on market price fund
Company
Consigned
Holding subsidiary of Receiving Pricing based Monetary
CCCC Leasing No.2 Co. Ltd. processing for the 17,399,943.00 17,399,943.00 0.10 17,399,943.00 /
parent company labor service on market price fund
Company
No.1 Engineering Co., Ltd. of Consigned
Holding subsidiary of Receiving Pricing based Monetary
CCCC First Harbor Engineering processing for the 16,698,341.00 16,698,341.00 0.09 16,698,341.00 /
parent company labor service on market price fund
Co., Ltd. Company
China Communications Second Consigned
Holding subsidiary of Receiving Pricing based Monetary
Navigational Bureau Third processing for the 13,181,025.00 13,181,025.00 0.07 13,181,025.00 /
parent company labor service on market price fund
Engineering Co., Ltd. Company
Consigned
CCCC - SHEC Third Highway Holding subsidiary of Receiving Pricing based Monetary
processing for the 12,990,744.00 12,990,744.00 0.07 12,990,744.00 /
Engineering Co. Ltd. parent company labor service on market price fund
Company
No.3 Engineering Co., Ltd. Consigned
Holding subsidiary of Receiving Pricing based Monetary
of CCCC Third Harbor processing for the 10,326,479.00 10,326,479.00 0.06 10,326,479.00 /
parent company labor service on market price fund
Engineering Co., Ltd. Company
CCCC Water Transportation Consigned
Holding subsidiary of Receiving Pricing based Monetary
Planning and Design Institute processing for the 9,564,649.00 9,564,649.00 0.05 9,564,649.00 /
parent company labor service on market price fund
Co., Ltd. Company
Consigned
ZPMCMediterraneanLimanMak Receiving Pricing based Monetary
Joint venture processing for the 8,502,537.00 8,502,537.00 0.05 8,502,537.00 /
inalariTicaretAnonimSirketi labor service on market price fund
Company
Consigned
Holding subsidiary of Receiving Pricing based Monetary
Chuwa Bussan Co. Ltd. processing for the 7,063,023.00 7,063,023.00 0.04 7,063,023.00 /
parent company labor service on market price fund
Company
Installation Engineering Co., Consigned
Holding subsidiary of Receiving Pricing based Monetary
Ltd. of CCCC First Harbor processing for the 5,974,138.00 5,974,138.00 0.03 5,974,138.00 /
parent company labor service on market price fund
Engineering Co. Ltd. Company
Consigned
CCCC Tunnel Engineering Co., Holding subsidiary of Receiving Pricing based Monetary
processing for the 4,536,422.00 4,536,422.00 0.03 4,536,422.00 /
Ltd. parent company labor service on market price fund
Company
Consigned
China Communications Holding subsidiary of Receiving Pricing based Monetary
processing for the 3,701,020.00 3,701,020.00 0.02 3,701,020.00 /
Construction Company Ltd. parent company labor service on market price fund
Company
CCCC Marine Engineering & Consigned
Holding subsidiary of Receiving Pricing based Monetary
Technology Research Center processing for the 3,425,753.00 3,425,753.00 0.02 3,425,753.00 /
parent company labor service on market price fund
Co., Ltd. Company
Consigned
Shanghai Jiangtian Industrial Holding subsidiary of Receiving Pricing based Monetary
processing for the 2,594,773.00 2,594,773.00 0.01 2,594,773.00 /
Co., Ltd parent company labor service on market price fund
Company
Shanghai Communications Consigned
Holding subsidiary of Receiving Pricing based Monetary
Construction Contracting Co., processing for the 1,254,523.00 1,254,523.00 0.01 1,254,523.00 /
parent company labor service on market price fund
Ltd. Company
Consigned
China Communications Holding subsidiary of Receiving Pricing based Monetary
processing for the 318,966.00 318,966.00 0.00 318,966.00 /
Materials & Equipment Co., Ltd parent company labor service on market price fund
Company
Consigned
CCCC Third Harbor Consultants Holding subsidiary of Receiving Pricing based Monetary
processing for the 85,470.00 85,470.00 0.00 85,470.00 /
Co., Ltd. parent company labor service on market price fund
Company
Holding subsidiary of Purchase of Providing materials Pricing based Monetary
Chuwa Bussan Co. Ltd. 19,663,204.00 19,663,204.00 0.11 19,663,204.00 /
parent company goods for the Company on market price fund
CCCC Shanghai Equipment Holding subsidiary of Purchase of Providing materials Pricing based Monetary
210,238,846.00 210,238,846.00 1.16 210,238,846.00 /
Engineering Co., Ltd. parent company goods for the Company on market price fund
29
Reason
Proportion for great
Pricing in the Settlement differences
Type of Content of Price of Amount of
principle of amount mode of between
Related party Relationship associated associated associated associated Market price
associated of similar associated the bargain
transaction transaction transaction transaction
transaction transactions transaction price and
(%) market
price
ZPMC Changzhou Coatings Purchase of Providing materials Pricing based Monetary
Associated company 108,484,161.00 108,484,161.00 0.60 108,484,161.00 /
Co., Ltd. goods for the Company on market price fund
Shanghai Jiangtian Industrial Holding subsidiary of Purchase of Providing materials Pricing based Monetary
65,858,536.00 65,858,536.00 0.36 65,858,536.00 /
Co., Ltd parent company goods for the Company on market price fund
CCCC National Engineering
Holding subsidiary of Purchase of Providing materials Pricing based Monetary
Research Center of Dredging 1,245,211.00 1,245,211.00 0.01 1,245,211.00 /
parent company goods for the Company on market price fund
Technology and Equipment
China Communications Holding subsidiary of Purchase of Providing materials Pricing based Monetary
258,621.00 258,621.00 0.00 258,621.00 /
Construction Company Ltd. parent company goods for the Company on market price fund
CCCC Water Transportation
Holding subsidiary of Purchase of Providing materials Pricing based Monetary
Planning and Design Institute 237,931.00 237,931.00 0.00 237,931.00 /
parent company goods for the Company on market price fund
Co., Ltd.
China Communications Holding subsidiary of Purchase of Providing materials Pricing based Monetary
209,106.00 209,106.00 0.00 209,106.00 /
Materials & Equipment Co., Ltd parent company goods for the Company on market price fund
Jiangsu Longyuan Zhenhua Purchase of Providing materials Pricing based Monetary
Joint venture 10,643,590.00 10,643,590.00 0.06 10,643,590.00 /
Marine Engineering Co., Ltd goods for the Company on market price fund
CNPC & CCCC Petroleum Holding subsidiary of Purchase of Providing materials Pricing based Monetary
1,487,613.00 1,487,613.00 0.01 1,487,613.00
Sales Co., Ltd. parent company goods for the Company on market price fund
CCCC Shanghai Channel Holding subsidiary of Purchase of Providing materials Pricing based Monetary
302,564.00 302,564.00 0.00 302,564.00 /
Equipment Industry Co., Ltd. parent company goods for the Company on market price fund
CCCC Tunnel Engineering Co., Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 34,392,257.00 34,392,257.00 0.16 34,392,257.00 /
Ltd. parent company boring machine on market price fund
CCCC Second Highway Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 26,075,675.00 26,075,675.00 0.12 26,075,675.00 /
Engineering Co. Ltd. parent company boring machine on market price fund
CCCC First Highway Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 17,393,504.00 17,393,504.00 0.08 17,393,504.00 /
Engineering Co., Ltd. parent company boring machine on market price fund
Jiangsu Longyuan Zhenhua Pricing based Monetary
Joint venture Other inflows Vessel leasing 17,133,962.00 17,133,962.00 0.08 17,133,962.00 /
Marine Engineering Co., Ltd on market price fund
Binhai Environmental Protection
Holding subsidiary of Pricing based Monetary
Dredging Co., ltd. of CCCC Other inflows Vessel leasing 16,810,345.00 16,810,345.00 0.08 16,810,345.00 /
parent company on market price fund
Tianjin Dredging Co., Ltd.
China Communications Second
Holding subsidiary of Leasing of tunnel Pricing based Monetary
Navigational Bureau Third Other inflows 15,756,410.00 15,756,410.00 0.07 15,756,410.00 /
parent company boring machine on market price fund
Engineering Co., Ltd.
China Communications Second
Holding subsidiary of Pricing based Monetary
Navigational Bureau Third Other inflows Vessel leasing 8,909,091 8,909,091 0.04 8,909,091 /
parent company on market price fund
Engineering Co., Ltd.
CCCC First Harbor Engineering Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 12,181,009.00 12,181,009.00 0.06 12,181,009.00 /
Co., Ltd. parent company boring machine on market price fund
CCCC - SHEC First Highway Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 7,304,022.00 7,304,022.00 0.03 7,304,022.00 /
Engineering Co. Ltd. parent company boring machine on market price fund
CCCC Third Highway Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 5,617,718.00 5,617,718.00 0.03 5,617,718.00 /
Engineering Co. Ltd. parent company boring machine on market price fund
Road & Bridge International Holding subsidiary of Leasing of tunnel Pricing based Monetary
Other inflows 4,909,838.00 4,909,838.00 0.02 4,909,838.00 /
Co., Ltd. parent company boring machine on market price fund
The Fourth Engineering Co.,
Holding subsidiary of Leasing of tunnel Pricing based Monetary
Ltd. of CCCC Second Highway Other inflows 2,949,470.00 2,949,470.00 0.01 2,949,470.00 /
parent company boring machine on market price fund
Engineering Co., Ltd.
China Communications Holding subsidiary of Pricing based Monetary
Other inflows Vessel leasing 358,225.00 358,225.00 0.00 358,225.00 /
Construction Company Ltd. parent company on market price fund
Total / / 4,938,949,961.00 12.38 / / /
Details of large amount of sales returns None
On May 9, 2016, the annual general meeting of the Company in 2015 approved Proposal for Signing Framework
Agreement on Associated Transaction between the Company and CHINA COMMUNICATIONS CONSTRUCTION CO.,
Explanation for associated transactions LTD. In 2018, the amount of the annual associated transaction in the normal business between the Company and its
subsidiaries 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 specific 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
30
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
4. Where agreed performance is involved, the performance achievement during the reporting period should be disclosed
□Applicable √Not applicable
3.Material associated transactions with joint external investments
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 applicable
3. Events not disclosed in provisional announcements
□Applicable √Not applicable
4.Current associated rights of credit and liabilities
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 applicable
3. Events not disclosed in provisional announcements
□Applicable √Not applicable
5.Others
□Applicable √Not applicable
XV. Material contracts and their performance
1.Trusteeship, contracting and leasing matters
1. Trusteeship
□Applicable √Not applicable
2. Contracting
□Applicable √Not applicable
3. Leasing
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Basis for Impacts of
Amount Starting Termination Associated
Name of Leased Income from determining income from
Name of lessee involved in date of date of transaction Relationship
lessor assets leasing income from leasing on the
leased assets leasing leasing or not
leasing Company
Shanghai
Zhenlong Asset
The Lease of Aug. 10,
Management Co., 264,709,805.71 July 9, 2025 45,037,758.64 Agreed 45,037,758.64 No Other
Company houses 2012
Ltd, and other
companies
31
(II) Guarantee
√Applicable □Not applicable
Unit: Yuan Currency: RMB
External guarantee of the Company (excluding guarantee to the subsidiaries)
Relation
between the Date of Guarantee
Starting Due Fulfillment of Amount of Counter
guarantor Guaranteed Amount of guarantee Type of Overdue by the
Guarantor date of date of the guarantee overdue guarantee Relationship
and the party guarantee (signing date of guarantee or not related
guarantee guarantee or not guarantee or not
listed agreement) party or not
company
Total amount of guarantee incurred during the reporting period (excluding
-10,790,000
guarantee to the subsidiaries)
Total balance of guarantee at the end of the reporting period (A) (excluding
-
guarantee to the subsidiaries)
Guarantee of the Company and its subsidiaries to the subsidiaries
Total amount of guarantee to the subsidiaries incurred during the reporting
943,700,800
period
Total balance of guarantee to the subsidiaries at the end of the reporting
3,099,986,800
period (B)
Total amount of guarantee of the Company (including guarantee to the subsidiaries)
Total amount of guarantee (A+B) 3,099,986,800
Proportion of total amount of guarantee in the net assets of the Company (%) 17.6
Including:
Amount of guarantee to the shareholders, the actual controller and related
parties (C)
Amount of debt guarantee directly or indirectly provided to the guaranteed
2,315,882,800
party with the asset-liability ratio over 70% (D)
Amount of guarantee exceeding 50% of net assets (E)
Total guarantee amount of the above three items (C+D+E) 2,315,882,800
Explanation for the joint and several repayment liabilities if the undue
guarantee
The 1st provisional general meeting for 2008 held in Sept. 22, 2008 deliberated and approved Proposal for Providing
Financing Guarantee to the Subsidiary Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd by the Company and
Description of guarantee agreed to provide the financial support to the subsidiary in Hong Kong and provided the guarantee for the loan it applied
for through the bank and other guarantee matters were deliberated and approved on the 30th meeting of the 5th session of
Board of Directors.
3.Consigned cash assets management
1. Consigned financing
(1) General of consigned financing
□Applicable √Not applicable
Other information
□Applicable √Not applicable
(2) Information on individual consigned financing
□Applicable √Not applicable
Other information
□Applicable √Not applicable
(3) Provision for impairment of consigned financing
□Applicable √Not applicable
2. Consigned loans
(1) General of consigned loans
□Applicable √Not applicable
Other information
□Applicable √Not applicable
32
(2) Individual consigned loan
□Applicable √Not applicable
Other information
□Applicable √Not applicable
(3) Provision for impairment of consigned loan
□Applicable √Not applicable
3. Other information
□Applicable √Not applicable
4.Other material contracts
□Applicable √Not applicable
XVI. Particulars about other important events
□Applicable √Not applicable
XVII. Particulars about actively performing social responsibilities
1.Poverty reduction of the listed company
□Applicable √Not applicable
2.Fulfillment of social responsibility
√Applicable □Not applicable
The Company actively bears the social responsibilities of the state-owned enterprise, enhances the responsibility
management to create the benefit for the shareholders, upgrades the operation quality to create the high quality products for
the 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 manufacturing
as 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 faster
and more efficient services to the global customers.
The Company is always keeping “human oriented”, actively builds the occupational development platform for the
employees and earnestly maintains the rights and interests of the employees with many measures. The Company pays
high attention to the communication with the stakeholders including the customers, the communities, schools and the social
public and continually adjusts the overall operation of the Company according to the expectations of the related parties. As
a manufacturing enterprise, Shanghai Zhenhua Heavy Industries Co., Ltd advocates the green development and integrates
the 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 Dream
Building of Shanghai Zhenhua Heavy Industries Co., Ltd”, continually carries out the help and support activities in the
targeted poverty alleviation unit of the Company, Tu’e Town, Lanping County Nujiang City, Yunnan Province in the aspect
of 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 Schooling
and Dream Building of Shanghai Zhenhua Heavy Industries Co., Ltd” to contribute 4 computers, 110 bed clothes for the
students 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 contribution
to schooling. In addition, it denoted over 900 new clothes to the front line of the poverty alleviation workers in two schools
in Xihe County, Longnan City, Gansu Province and Ninglang County, Linjiang City, Yunnan Province and Fugong County,
Nujiang City, Yunnan Province.
33
3.Environmental information
1. Information about environmental protection of the Company and its subsidiaries as the key pollutant
discharge 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 the
Company: in accordance with the requirements of the local government, it installed online monitoring equipment and
achieved the networking of the monitoring data about the discharged wastewater and waste gas into the network of the
government.
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 flow
line and coating flow line, reconstructed VOCs end treatment unit, newly increased the weld fume adsorption and treatment
unit; 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 qualified 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 of
pretreatment and coating flow line and VOCs end treatment unit, installed the sound-proof cotton in the workshops with
relatively 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 environmental
protection
√Applicable □Not applicable
It accomplished the environmental impact assessment for the reconstruction of 4# hazardous goods dock of Changxing
Subsidiary 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 General
Equipment Co., Ltd and Qidong Ocean Engineering Co., Ltd established comprehensive and special emergency preplan
for typhoon prevention, flood prevention, sunstroke prevention, cooling, special equipment and ship. Up to now, Shanghai
Zhenhua 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., Ltd
was: 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 defined as key pollutant-
discharge unit
√Applicable □Not applicable
The types of the main pollutants discharged from Qidong Ocean Engineering Co., Ltd, Shanghai Port Machinery Heavy
Industries Co., Ltd and Nantong Transmitter Co., Ltd included wastewater, waste gas, fume, volatile organic substances,
general industrial solid wastes and hazardous wastes.
34
Discharge mode: Shanghai Port Machinery Heavy Industries Co., Ltd and Qidong Ocean Engineering Co., Ltd
reconstructed 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 the
waste gas, fume and VOCs were discharged in the manner of organized discharge; the solid wastes and the hazardous
wastes were handed over to the qualified units for treatment.
3. Description of the reasons for failing to disclose the environmental information by the companies other than
the key pollutant discharge unit
□Applicable √Not applicable
4. Description of the follow-up progress and changes in the contents of environmental information disclosed
during the reporting period
□Applicable √Not applicable
4.Other information
□Applicable √Not applicable
XVIII. Convertible bonds
1.Issuance of convertible bonds
□Applicable √Not applicable
2.Information about the convertible bond holder and guarantor during the reporting period
□Applicable √Not applicable
3.Changes in convertible bonds during the reporting period
□Applicable √Not applicable
Accumulated conversion of convertible bonds during the reporting period
□Applicable √Not applicable
4.Previous adjustments of conversion price
□Applicable √Not applicable
5.Particulars about the liabilities, credit changes and cash arrangement for debt repayment in future years
□Applicable √Not applicable
6.Other information about convertible bonds
□Applicable √Not applicable
35
Section VI Changes in Ordinary Shares and Information about Shareholders
I.Changes in ordinary shares capital
1.Table of changes in ordinary shares
1.Table of changes in ordinary shares
Unit: share
Before this change Change (+, -) After this change
Dividend Contributed Ratio
Number Ratio (%) Stock issue Others Subtotal Number
stock Capital Surplus (%)
I. Floating shares with trading
limited conditions
1. Shared held by the state
2. Shares held by state legal entity
3. Other shares held by the domestic
investors
Thereinto: shares held by the domestic
non-state legal entity
Share held by domestic natural person
4. Shares held by foreign investors
Thereinto: shares held by overseas
legal entity
Shares held by the overseas natural
person
II. Floating shares without trading
4,390,294,584 100.00 878,058,917 878,058,917 5,268,353,501 100.00
limited conditions
1. Common stock (RMB denominated) 2,768,331,384 63.06 553,666,277 553,666,277 3,321,997,661 63.06
Domestically-Listed Shares Held By
1,621,963,200 36.94 324,392,640 324,392,640 1,946,355,840 36.94
Foreign Investors-Dividend Stock
3. Overseas-Listed Shares Held By
Foreign Investors-Dividend Stock
4. Others
III. Total of ordinary shares 4,390,294,584 100.00 878,058,917 878,058,917 5,268,353,501 100.00
2. Description of the changes in ordinary shares
√Applicable □Not applicable
This year, The Company adopted the profit 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 the
total 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 year
and the latest one period (if any)
√Applicable □Not applicable
Before change in shares After change in shares
EPS (Yuan) 0.101 0.084
Net assets per share (Yuan) 3.46 2.88
36
4. Other contents that the Company deems necessary or is required by the securities regulatory authorities to
disclose
□Applicable √Not applicable
2.Changes in restricted shares
□Applicable √Not applicable
II. Issuance and listing of securities
1.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 the
duration, please state them respectively):
□Applicable √Not applicable
2.Changes in total ordinary shares of the Company and the shareholder structure, as well as the assets and
liabilities
□Applicable √Not applicable
3.Existing internal employee ownership
□Applicable √Not applicable
III. Shareholders and actual controller
1.Total number of shareholders
Total of ordinary shareholders by the end of the reporting period 246,260
Total of ordinary shareholders by the end of the month previous to the disclosure
235,940
date of annual report
2.Table of the shares held by Top 10 shareholders, Top 10 holders of marketable shares (or shareholders without
trading limited conditions) by the end of reporting period
Unit: share
Shares held by Top 10 shareholders
Shares held Number of Pledged or frozen
Changes in status
at end of the Proportion shares with Nature of
Name of shareholder (in full) the reporting
reporting (%) trading limited Share Number shareholder
period
period conditions held status of shares
Overseas
CCCG (HK) Holding Limited 152,792,640 916,755,840 17.401 0 None 0
legal person
China Communications Construction State-owned
142,590,341 855,542,044 16.239 0 None 0
Company Ltd. legal person
China Communications Construction Group State-owned
110,537,229 663,223,375 12.589 0 None 0
Co., Ltd. legal person
Central Huijin Asset Management Co., Ltd 14,896,440 89,378,640 1.70 Unknown Unknown
China Securities Finance Co., Ltd 25,481,394 82,269,868 1.56 Unknown Unknown
Securities investment fund for Structural
Adjustment ETF by CMBChina-Bosera 21,860,489 21,860,489 0.41 Unknown Unknown
Central Securities Enterprises
37
Shares held by Top 10 shareholders
Shares held Number of Pledged or frozen
Changes in status
at end of the Proportion shares with Nature of
Name of shareholder (in full) the reporting
reporting (%) trading limited Share Number shareholder
period
period conditions held status of shares
BOSERA FUNDS - Agricultural Bank of China
- BOSARE China Securities Financial Assets 3,309,320 19,855,920 0.38 Unknown Unknown
Management Plan
E FUND Management - Agricultural Bank
of China - E FUND Management China 3,309,320 19,855,920 0.38 Unknown Unknown
Securities Financial Assets Management Plan
DACHENG FUND - Agricultural Bank of
China - DACHENG China Securities Financial 3,309,320 19,855,920 0.38 Unknown Unknown
Assets Management Plan
Harvest Fund - Agricultural Bank of China -
Harvest China Securities Financial Assets 3,309,320 19,855,920 0.38 Unknown Unknown
Management Plan
GF Fund - Agricultural Bank of China -
GF China Securities Financial Assets 3,309,320 19,855,920 0.38 Unknown Unknown
Management Plan
Lombarda China Fund - Agricultural Bank
of China - Lombarda China Fund China 3,309,320 19,855,920 0.38 Unknown Unknown
Securities Financial Assets Management Plan
China Asset Management - Agricultural Bank
of China - China Asset Management China 3,309,320 19,855,920 0.38 Unknown Unknown
Securities Financial Assets Management Plan
Yinhua Fund - Agricultural Bank of China -
Yinhua China Securities Financial Assets 3,309,320 19,855,920 0.38 Unknown Unknown
Management Plan
China Southern Asset Management -
Agricultural Bank of China - CSAM China 3,309,320 19,855,920 0.38 Unknown Unknown
Securities Financial Assets Management Plan
ICBC Credit Suisse Fund - Agricultural
Bank of China - ICBC Credit Suisse China 3,309,320 19,855,920 0.38 Unknown Unknown
Securities Financial Assets Management Plan
Shareholdings of Top 10 shareholders without trading limited conditions
Number of marketable Type & number of shares
shares without trading
Name of shareholder
limited conditions Type Number
held
Foreign-oriented
CCCG (HK) Holding Limited 916,755,840
stocks
China Communications Construction Company Ltd. 855,542,044 A-share
China Communications Construction Group Co., Ltd. 663,223,375 A-share
Central Huijin Asset Management Co., Ltd 89,378,640 A-share
China Securities Finance Co., Ltd 82,269,868 A-share
Securities investment fund for Structural Adjustment ETF by CMB China-
21,860,489 A-share
Bosera Central Securities Enterprises
FUNDS - Agricultural Bank of China - BOSARE China Securities Financial
19,855,920 A-share
Assets Management Plan
E FUND Management - Agricultural Bank of China - E FUND
19,855,920 A-share
Management China Securities Financial Assets Management Plan
DACHENG FUND - Agricultural Bank of China - DACHENG China
19,855,920 A-share
Securities Financial Assets Management Plan
38
Shareholdings of Top 10 shareholders without trading limited conditions
Number of marketable Type & number of shares
shares without trading
Name of shareholder
limited conditions Type Number
held
Harvest Fund - Agricultural Bank of China - Harvest China Securities
19,855,920 A-share
Financial Assets Management Plan
GF Fund - Agricultural Bank of China - GF China Securities Financial
19,855,920 A-share
Assets Management Plan
Lombarda China Fund - Agricultural Bank of China - Lombarda China
19,855,920 A-share
Fund China Securities Financial Assets Management Plan
China Asset Management - Agricultural Bank of China - China Asset
19,855,920 A-share
Management China Securities Financial Assets Management Plan
Yinhua Fund - Agricultural Bank of China - Yinhua China Securities
19,855,920 A-share
Financial Assets Management Plan
China Southern Asset Management - Agricultural Bank of China - CSAM
19,855,920 A-share
China Securities Financial Assets Management Plan
ICBC Credit Suisse Fund - Agricultural Bank of China - ICBC Credit
19,855,920 A-share
Suisse China Securities Financial Assets Management Plan
Among the above top 10 shareholders, CCCG (HK) Holding
Limited, China Communications Construction Group Co.,
Ltd. and China Communications Construction Company
Notes to the related relation or consistent actions of the above-mentioned Ltd. are related companies. It was unknown to the
shareholders Company whether there was related relation or concerted
actor specified in the Management Method on Information
Disclosure for Shareholding Change of the Shareholders of
Listed Companies.
Number of shares held by Top 10 shareholders with trading limited conditions and the trading limited conditions
□Applicable √Not applicable
3.Strategic investor or ordinary corporations as Top 10 shareholders for rights issue
□Applicable √Not applicable
IV. Particulars about the controlling shareholder and the actual controller
1.Controlling shareholder
1. Legal person
√Applicable □Not applicable
Name China Communications Construction Group Co., Ltd.
Company principal or legal
Liu Qitao
representative
Date of establishment Dec. 8, 2005
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
Main business
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.
39
CCCG holds 59.91% of the stock equity of CCCC (601800.SH) and it is the controlling
shareholder.
CCCG holds 100% of the stock equity of CCCG Real Estate Group Co., Ltd. CCCG Real
Estate Group Co., Ltd holds 100% of the stock equity of Zhongzhu Real Estate Development
Shareholdings in other controlled or
Co., Ltd. Zhongzhu Real Estate Development Co., Ltd holds 53.32% of the stock equity
non-controlled listed companies at
of CCCG Real Estate Co., Ltd (name used before: Chongqing Industries, Zhongfang Real
home or abroad during the reporting
Estate) (000726.SZ) and it is the controlling shareholder.
period
CCCG and its controlling subsidiaries totally hold 28.91% of the stock equity of Greentown
Holding Co., Ltd (03900.HK) and are the controlling shareholder.
CCCG and its subsidiaries hold 29.99% of the stock equity of Shanghai Zhenhua Heavy
Industries Co., Ltd (600320.SH) and are the controlling shareholder.
Other information
2. Natural person
□Applicable √Not applicable
3. Particulars about no controlling shareholder in the Company
□Applicable √Not applicable
4. Index and date of change in the controlling shareholder during the reporting period
□Applicable √Not applicable
5. Block diagram of ownership and control relation between the Company and the controlling shareholder
√Applicable □Not applicable
CCCG
Shareholding 100% Shareholding 59.91%
CCCC Hong Kong CCCC
Shareholding 17.4012% Shareholding 12.5888% Shareholding 16.2393%
Shanghai Zhenhua Heavy Industries, Co., Ltd.
2.Actual controller
1.Legal person
□Applicable √Not applicable
2.Natural person
□Applicable √Not applicable
3.Particulars about no actual controller in the Company
□Applicable √Not applicable
4.Index and date of change in the actual controller during the reporting period
□Applicable √Not applicable
40
5.Block diagram of ownership and control relation between the Company and the actual controller
√Applicable □Not applicable
SASAC
Shareholding100%
CCCG
Shareholding100% Shareholding 59.91%
CCCC Hong Kong CCCC
Shareholding 17.4012% Shareholding 12.5888% Shareholding 16.2393%
Shanghai Zhenhua Heavy Industries, Co., Ltd.
6. Control over the Company by the actual controller via trust or other ways of assets management
□Applicable √Not applicable
3.Other information about the controlling shareholder and the actual controller
□Applicable √Not applicable
V. Other corporate shareholders holding over 10% shares
□Applicable √Not applicable
VI. Particulars about restriction on reduction in shares held
□Applicable √Not applicable
Section VII Preference Shares
□Applicable √Not applicable
41
Section VIII Directors, 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 the
reporting period and their remunerations
√Applicable □Not applicable
Unit: share
Total
Amount remuneration Remuneration
Shares
Shares of before tax from from the
Starting Expiry held
held at change Reason of the Company related
Name Title (note) Sex Age date of date of at the
the end in shares change during the party of the
tenure tenure beginning
of year in the reporting Company or
of year
year period (RMB not
10000)
Buying on
Chairman of secondary
June 26, June 25,
Song Lianyu the Board, Male 49 0 427,200 427,200 market 73.67 No
2018 2021
Party secretary and profit
distribution
Director,
Huang President, June 26, June 25,
Male 44 0 0 0 73.67 No
Qingfeng Deputy party 2018 2021
secretary
Zhang June 26, June 25,
Director Male 59 0 0 0 0 Yes
Hongwen 2018 2021
Director, chief June 26, June 25,
Yan Yunfu Male 60 0 0 0 58.94 No
engineer 2018 2021
Director, vice June 26, June 25,
Liu Qizhong Male 55 0 0 0 58.94 No
president 2018 2021
Director, vice June 26, June 25,
Dai Wenkai Male 52 0 0 0 58.94 No
president 2018 2021
Zhu June 26, June 25,
Director, CFO Male 50 0 0 0 44.02 No
Xiaohuai 2018 2021
Zhao Independent June 26, June 25,
Male 43 0 0 0 6 No
Zhanbo director 2018 2021
Independent June 26, June 25,
Ji Linhong Male 57 0 0 0 6 No
director 2018 2021
Independent June 26, June 25,
Ling He Male 67 0 0 0 12.32 No
director 2018 2021
Independent June 26, June 25,
Yang Jun Male 62 0 0 0 12.32 No
director 2018 2021
Independent June 26, June 25,
Bai Yunxia Female 46 0 0 0 11.83 No
director 2018 2021
Supervisor,
deputy party
secretary,
Secretary of
June 26, June 25,
Wang Cheng Committee Male 46 0 0 0 51.53 No
2018 2021
for Discipline
Inspection,
chairman of
labour union
Zhang June 26, June 25, Profit
Supervisor Male 57 20,259 24,311 4,052 83.47 No
Minghai 2018 2021 distribution
42
Total
Amount remuneration Remuneration
Shares
Shares of before tax from from the
Starting Expiry held
held at change Reason of the Company related
Name Title (note) Sex Age date of date of at the
the end in shares change during the party of the
tenure tenure beginning
of year in the reporting Company or
of year
year period (RMB not
10000)
Xiang June 26, June 25,
Supervisor Male 43 0 0 0 72.27 No
Xudong 2018 2021
Aug. 22, June 25,
Liu Jianbo Vice president Male 56 0 0 0 58.94 No
2018 2021
Aug. 22, June 25,
Zhou Qi Vice president Male 47 0 0 0 58.94 No
2018 2021
Aug. 22, June 25, Profit
Chen Bin Vice president Male 45 89,440 107,328 17,888 58.94 No
2018 2021 distribution
Shan Aug. 22, June 25,
Vice president Male 55 0 0 0 58.94 No
Jianguo 2018 2021
Aug. 22, June 25,
Zhang Jian Vice president Male 50 0 0 0 58.94 No
2018 2021
Aug. 22, June 25,
Fei Guo Chief engineer Male 57 0 0 0 58.94 No
2018 2021
Chief Aug. 22, June 25,
Li Ruixiang Male 44 0 0 0 58.94 No
economist 2018 2021
General
counsel and Aug. 22, June 25,
Sun Li Male 47 0 0 0 58.94 No
secretary of the 2018 2021
board
Former
Apr. 21, June 26,
She Lian independent Male 60 0 0 0 6 No
2015 2018
director
Former
Apr. 21, June 26,
Gu Wei independent Male 62 0 0 0 6 No
2015 2018
director
Total / / / / / 109,699 558,839 449,140 / 1,107.44 /
Name Main working experiences
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 CCCC
Song Lianyu First Harbor Engineering Co., Ltd; the general manager of CCCC International Shipping Co., Ltd and the deputy general manager of the
Equipment Manufacturing Marine Heavy Industry Department of China Communications Construction Co., Ltd. Now, her is the Chairman of
the Board and Party secretary of the Company.
Born in 1975, male, EMBA, senior engineer. He began his career in August 1996 and successively served as the quality project chief, director
of field bridge office of quality management department; deputy general manager of after-sales department, general manager of Quality
Huang
Inspection Company; vice director of off-shore office, director of Quality Safety Department, director of Product Service Center and assistant
Qingfeng
president of the Company; vice president of the Company from Jan. 2005 and the executive vice president and director of Production and
Project Management Center since 2014. Now, he is the director, president, deputy party secretary of the Company.
Born in 1960, male, bachelor, senior engineer; engaged in work in August, 1983. He successively served as the deputy general manager
of Overseas Division and manager of Integrated Department of Zhonggung Group, deputy general manager of Engineering Management
Department and Operation & Management Department of China Communications Construction Co., Ltd, deputy general manager and
Zhang
general manager of Capital Construction Department (Dredging Department) and the executive general manger and general manager of Port
Hongwen
Dredging Business Department of CCCC, as well as the director, executive general manager, temporary member of the Party committee and
non-executive director of CCCC Dredging (Group) Co., Ltd. Now, he is the general manager of CCCC Equipment Manufacturing & Marine
Heavy Industry Department and the director of the Company.
Born in 1959, male, EMBA, professor-level senior engineer. He successively served as the Vice Chief of Technical Department, manager
Yan Yunfu of Mechanical Design Department, deputy chief engineer, chief engineer and vice president of the Company, and President of Land Heavy
Industry Equipment Design Institute, director of the Company since 2004. Now, he is the director and chief engineer of the Company.
Born in 1964, male, bachelor degree, senior economist. He successively served as the vice manager and manager of Operating Department
Liu Qizhong
and the director of the Company since 1997. Now, he is the director and vice president of the Company.
43
Name Main working experiences
Born in 1967, male, master of physics, EMBA, senior engineer. He began his career in 1993 and served as the Vice Manger and Manager of
Dai Wenkai
Operating Department, vice chief economist and chief economist of the Company. Now, his is the director and vice president of the Company.
Born in 1969, male, master of MBA, senior accountant. He began his career in 1991 and successively served as the deputy section manager
of Financial Division of CCCC Shanghai Dredging Co., Ltd, deputy director of Budget and Finance Department, deputy manager, manager
Zhu Xiaohuai
and member of commission for disciplinary inspection of Finance Department of CCCC Shanghai Dredging Co., Ltd, and the director, chief
account and standing committee member of CCCC Shanghai Dredging Co. Ltd. Now, he served as the director and CFO of the Company.
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 is
Zhao
mainly engaged in the research in Internet business model innovation and corporate development strategy. Now he acts as the independent
Zhanbo
director of the Company.
Born in 1962, Male, Ph. D. He successively acted as the assistant and the lecturer of Department of Precision Instrument of Tsinghua
University; assistant professor of Department of Precision Engineering of Faculty of Engineering of the University of Tokyo, the Postdoctoral
Researcher in Ministry of Education, Culture, Sports, Science and Technology of Japan. He had acted as deputy director of Department of
Precision Instrument of Tsinghua University, deputy director of Department of Mechanical Engineering of Tsinghua University, director of
Ji Linhong
Design Engineering Research Institute of Tsinghua University, director of Experiment & Teaching Center of Mechanical Engineering, deputy
director of State Key Lab of Tribology , Tsinghua University and so on. Now he serves as a professor and a doctoral tutor in Department of
Mechanical Engineering, Tsinghua University. He is mainly engaged in digitalized design and system optimization of complicated mechanical
system and the intelligent and biological mechanical design. Now he acts as the independent director of the Company.
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 the
Ling He democratic 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 first National 100 Journalists, China News first prize for three times, Shanghai News first prize
for 15 times. Now, he is the independent director of the Company.
Born in 1957, male, master degree. He successively served as intermediate and Senior court judge of Shanghai Court, president and
members of the judicial committee member, Property Trade Operation Director of Shanghai United Property Rights Exchange. Now he is the
assistant president of Shanghai United Property Rights Exchange, general manager of Beijing HQ, director of Financial Property Rights Trade
Yang Jun Center, arbitrator of China International Economic and Trade Arbitration Commission, Shanghai International Economic and Trade Arbitration
Commission, arbitrator of Shanghai Arbitration Commission, Shanghai Financial Arbitration Court, expert of China domain name dispute
resolution center, director of Intellectual Property Association of China Law Society, director of Company Law Research Society of Shanghai
Law Society, director of Shanghai Patent/Trademark/Copyright Association, and the independent director of the Company.
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 under
Bai Yunxia Xi’an Jiaotong University, lecturer of School of Economics and Management of Tongji University, research scholar of CKGSB. Now, she acts
as the director of Department of Accounting, School of Economics and Management, Tongji University and the research scholar of Investment
Center of CKGSB, and the independent director of the Company.
Born in 1973, male, undergraduate, senior political worker. Successively serving as the secretary of Committee of the Communist Youth
League and secretary of Party Branch of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; deputy director and director
of Organization Department of CCCC Third Harbor Engineering Co., Ltd; Secretary of the Party Committee and vice general manager of
Wang Cheng
No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; chairman of board of supervisors and Vice Secretary of the Party
Committee of CCCC Third Harbor Engineering Co., Ltd. Now serving as the Vice Secretary of the Party Committee, Secretary of Commission
for Disciplinary Inspection, chairman of labor union and supervisor of the Company.
Born in1962, male, EMBA, professor-level senior engineer; he formerly served as the engineer of Technology Division of Shanghai Port
Zhang Machinery Plant; deputy manager of mechanical office, deputy chief engineer, general manager of Shore Bridge No. 1 Company of
Minghai Mechanical Office, 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.
Born in 1976, male, bachelor degree, senior engineer. He successively served as the vice director and vice manager of Quality Department,
Xiang general manager of ZPMC Inspection Co., Ltd. Currently, he is the staff representative supervisor of the board of supervisors, Vice General
Xudong Manager of ZPMC Port Machinery subsidiary, and the secretary of the party committee and executive deputy general manger of Changxing
Branch.
Born in 1963, male, master degree，senior engineer. He successively served as the engineer at technological office of Shanghai Port
Machinery Plant; assistant director in engineering with Technology Office of Shanghai Container Dock Co. Ltd., deputy general manager and
Liu Jianbo
general manager of ZPMC Changxing Base. Currently, he is the vice president of the Company and chairman of board of Shanghai Zhenhua
Marine Engineering Service Co., Ltd.
Born in 1972, male, EMBA, senior engineer. He successively served as the manager and deputy general engineer, general manager and
Zhou Qi chief engineer of the Electric Appliance Office of the Company. Currently, he is the vice president of the Company and chairman of Electric
Group of the Company.
44
Name Main working experiences
Born in 1974, male, EMBA, senior engineer; he formerly served as the project quality leader of Quality Control Division, deputy manager
of tire crane office of quality control division, manager of quality control division, deputy general manager and general manager of quality
Chen Bin inspection company, vice director of quality and safety office, manager of Quality Safety Division, supervisor of the Company, general
manager of Shanghai Zhenhua Shipment Co., Ltd, president assistant of the Company. Current: vice president of the Company and general
manager of Shanghai Zhenhua Marine Engineering Service Co., Ltd.
Born in 1964, male, bachelor degree. He formerly worked in Shanghai Port Machinery Manufacturing Plant and started to work in Shanghai
Shan Zhenhua Port Machinery Co., Ltd since 1992, served as the engineer, chief engineer of Machinery Office, general manager of design
Jianguo company, deputy director and director of Machinery Office, manager of budget assessment department. He is now the vice presidnet of the
Company and the dean of Land-based Heavy Industry Research & Design Institute.
Born in 1969, male, MBA. He successively served as the technician, production planner and assistant of director of No. 2 Panel beater of
Shanghai Port Machinery Manufacturing Plant, chief of Changzhou Plant of Shanghai Port Machinery Manufacturing Plant, vice general
Zhang Jian
manager of Shanghai Port Machinery Co., Ltd, vice general manager of Shanghai Port Machinery Heavy Industry Co., Ltd, general manager
and assistant of president of Port Machinery Co., Ltd. Currently, he is the vice president of the Company.
Born in 1962, male, EMBA, professor level senior engineer. He successively served as the engineer of Shanghai Port Machinery Plant,
Fei Guo director of No. 5 electrical office, vice chief engineer, chief engineer, director of Development Office of Shanghai Zhenhua Port Machinery
Co., Ltd, VP and executive director of Shanghai Zhenhua Heavy Industry Electric Co., Ltd; and is now the chief engineer of the Company.
Born in 1975, male, bachelor degree. He successively served as the vice manager of Manufacturing Department and manger of Quality
Assurance Department of Zhangjiagang Base of Shanghai Machinery Plant; manager of Quality Inspection Office, vice director of Quality and
Li Ruixiang
Safety Office, vice general manager and general manager of machinery supporting base, Party branch secretary and president assistant of
the Company; and is now the chief economist of the Company and general manager of Marine Engineering Group.
Born in 1972, male, EMBA, senior engineer. He successively served as the project supervisor vice manager and assistant of General
Sun Li Manager of Operating Department, and Vice President and director of the Company. He is now the Chief Legal Counsel of and secretary of
the boar of the Company.
Born in 1959, male, professor and doctoral tutor. He enjoyed the State-Council Allowance in 1995. He successively acted as the deputy
director and secretary of the Department of Business Administration of Wuhan Transportation University, chief director of Transportation
Enterprise Management sponsored by the Ministry of Transport, the director of Research Center for Emergency Management and the
She Lian professor and doctoral supervisor of Management of Wuhan University of Technology, and the director of Public Safety Early Warning
Research Center and the professor and doctoral supervisor of Huazhong University of Science and Technology. He is now serving as
the professor and doctoral supervisor of Sino-European Emergency Management Institute of National Academy of Governance. Formal
independent director of the Company.
Born in 1957, male, Ph.D., professor and doctoral tutor; since 1982, he has been teaching at Shanghai Maritime University; since the year
2000, enjoys special government allowances from the State Council, and the IEEE Society member, MTS Society member and the British
Royal Physical Society member, senior member of China Electro technical Society, senior member of Chinese Society of Naval Architects,
Gu Wei
senior member of Chinese Mechanical Engineering Society. He is now the director of the Key Laboratory of the Ministry of Transportation's
Shipping Technology and Control Engineering; member of the Vessel Electrical Committee of China Electro-technical Society; member of the
Committee of Experts of Shanghai Transportation Electronics Association. Former independent director of the Company.
Other information
□Applicable √Not applicable
2.Equity incentives awarded to the directors and senior executives during the reporting period
□Applicable √Not applicable
II. Incumbency of current and resigned directors, supervisors and senior executives during the reporting period
1.Positions held in shareholding entities
√Applicable □Not applicable
Starting date Expiration date
Name Shareholding entity Position
of tenure of tenure
General manger of equipment
China Communications Construction
Zhang Hongwen manufacturing and marine heavy Jan. 4, 2018
Company Ltd.
industry division
Statement of the position held in shareholding entity
45
2.Positions held in other entities
√Applicable □Not applicable
Starting Expiration
Name Other entity Position date of date of
tenure tenure
Zhao Zhanbo School of Software, Peking University Professor
Professor and doctoral
Ji Linhong Department of Mechanical Engineering, Tsinghua University
supervisor
Jiefang Daily, Shanghai Journalists Association, Shanghai Essays Senior editor (Senior
Ling He
Society. professional title), director
Shanghai United Assets and Equity Exchange, Financial Assets
Exchange, Shanghai International Economic and Trade Arbitration
Commission, Shanghai Arbitration Commission, Shanghai Court of Assistant president,
Yang Jun Financial Arbitration, Chinese Domain Name Dispute Settlement general manager, director,
Center, Intellectual Property Association of China Law Society, arbitrator, expert, director
Company Law Association of Shanghai Law Society, Shanghai
Patent/Trademark/Copyright Association.
Director of Accounting
School of Economics and Management of Tongji University,
Bai Yunxia Department, research
Investment Centre of Cheung Kong Graduate School of Business
scholar
Sino-European Emergency Management Institute of National Professor and doctoral
She Lian
Academy of Governance supervisor, etc.
Shipping Technology and Engineering key Lab of Ministry of
Director,professor,doctoral
Transportation, Vessel Electrical Committee of China Electrical
Gu Wei tutor, council member,
Association, Committee of Experts of Shanghai Transportation
committee member
Electronics Association, etc.
Statement of the position held in other entities
III.Remuneration of directors, supervisors and senior executives
√Applicable □Not applicable
In accordance with the regulations of Articles of Association, the remuneration of
Decision-making process for the remuneration of
directors and supervisors are subject to the general meeting of shareholders and the
directors, supervisors and senior executives
remuneration of the senior executives are assessed and approved by the President.
Basis for deciding the remuneration of the Basic salary plus performance bonus, combined with assessment utilizing quantizing
directors, supervisors and senior executives index of production and operation.
Actual payout of remuneration for directors, All in-service and resigned director, supervisor and senior executives are paid by the
supervisors and senior executives Company
Total remuneration actually obtained by all
directors, supervisors and senior executives at RMB11,074,400 Yuan
the end of reporting period
IV. Changes of directors, supervisors and senior executives of the Company
√Applicable □Not applicable
Name Position Change Reason of change
Zhang Hongwen Director Elected Job demand
Zhu Xiaohuai Director, CFO Elected Job demand
Zhao Zhanbo Independent director Elected Job demand
Ji Linhong Independent director Elected Job demand
She Lian Independent director Resigned Expiration of term of office
Gu Wei Independent director Resigned Expiration of term of office
46
V. Punishments by securities regulatory authority in recent three years
□Applicable √Not applicable
VI. Particulars about the employees in the parent company and the main subsidiaries
1.Particulars about employees
Number of in-service employees of the parent company 3,002
Number of in-service employees of the main subsidiaries 5,794
Total of in-service employees 8,796
Number of retired employees to whom the parent company and main subsidiaries need to pay retirement pension
Specialties
Category Number of staff
Production staff 3,189
Sales staff 230
Technical staff 4,520
Financial staff 137
Administrative staff 720
Total 8,796
Education background
Education level Number (person)
Doctor 23
Master 609
Bachelor 3,735
Junior college 2,115
Technical secondary school 2,314
Total 8,796
2.Remuneration policies
√Applicable □Not applicable
In line with the Company’s development strategy, it continuously perfected the distribution incentive system, perfected
the performance assessment system and established and improved the performance assessment system based on the
different properties and characteristics of each entity and division; promoted the salary incentive system closely liking the
performance distribution with the unit or division performance, value contribution, industrial characteristics, growth phase and
similar factors, and comprehensively liking the staff performance with position duty and value contribution, and thus initially
established the distribution mode integrating with the market.
3.Training plan
√Applicable □Not applicable
In line with the Company’s development strategy, the Company gradually established a rigid staff training system
with systematic, directional and continuous features. At the beginning of each year, the Company sets up all-staff annual
educational and training plan and implements according to the plan to improve the competence level and professional quality
of staff at various levels.
4.Labor outsourcing
√Applicable □Not applicable
Labor outsourcing hours 7,633,728 hours
Total Labor outsourcing remuneration RMB 310,070,000 Yuan
VII.Others
□Applicable √Not applicable
47
Section IX Corporate Governance
I. Related information about corporate governance
√Applicable □Not applicable
During the reporting period, the Company strictly followed the regulations specified in Company law, Securities Law,
Stock Listing Rules, Articles of Association and the legal requirements of China Securities Regulatory Commission to
standardize the Company’s daily operation, further established and improved the internal control system, improved the
internal control management and corporate governance structure, strengthened the insider information management,
strengthened the information disclosure, continuously improved the company governance, made efforts to improve the
construction of legal person governance structure, and gradually established a modern enterprise system, earnestly
protected the legal rights and interests of the Company and all the shareholders, ensuring the sustainable and stable
development.
After self-inspection, the staffs who know the insider information didn’t trade the stocks of the company before major
price information is disclosed. There is no difference between the company governance and the regulations of China
Securities Regulatory Commission.
Whether there is important difference between corporate governance and the requirements of relevant regulations of
China Securities Regulatory Commission; if any, please give the reason
□Applicable √Not applicable
II. Brief introduction to the general meeting of shareholders
Index of the website specified for Date of disclosure for
Session of the meeting Opening date
publishing resolutions publishing resolutions
The first interim general meeting of www.sse.com.cn
2018-03-07 2018-03-08
stockholders held in 2018 Enter the stock code to search
2017 General Meeting of www.sse.com.cn
2018-06-26 2018-06-27
Shareholders Enter the stock code to search
Particulars about the general meeting of shareholders
□Applicable √Not applicable
III. Duty fulfillment of directors
1.Attendance of the directors at the board meetings and the general meeting of shareholders
Attendance at the
Attendance at Board Meetings general meeting of
shareholders
Independent
Name of
director or
director Expected Times of Personal Times of presence
not Times of Times of
times of presence Times of absence for two in the general
personal presence by
presence in through a absence consecutive meeting of
presence telecommunication
this year proxy times shareholders
Song Lianyu No 8 8 7 0 0 No 2
Huang Qingfeng No 8 8 7 0 0 No 1
Yan Yunfu No 8 8 7 0 0 No 1
Liu Qizhong No 8 8 7 0 0 No 1
Dai Wenkai No 8 8 7 0 0 No 1
Zhu Xiaohuai No 7 7 6 0 0 No 0
48
Attendance at the
Attendance at Board Meetings general meeting of
shareholders
Independent
Name of
director or
director Expected Times of Personal Times of presence
not Times of Times of
times of presence Times of absence for two in the general
personal presence by
presence in through a absence consecutive meeting of
presence telecommunication
this year proxy times shareholders
Zhang Hongwen No 7 7 6 0 0 No 0
She Lian Yes 5 5 4 0 0 No 2
Gu Wei Yes 5 5 4 0 0 No 1
Ling He Yes 8 8 7 0 0 No 1
Yang Jun Yes 8 8 7 0 0 No 1
Bai Yunxia Yes 8 8 7 0 0 No 2
Zhao Zhanbo Yes 3 3 3 0 0 No 1
Ji Linhong Yes 3 3 3 0 0 No 1
Explanations for personal absence from the meeting for two consecutive times
□Applicable √Not applicable
Times of the board meetings convened in current year 8
Incl.: times of on-site meetings 0
Times of meetings convened through telecommunication 7
Times of meetings convened on-site and through telecommunication 1
2.Objections from independent directors against related issues of the Company
□Applicable √Not applicable
3.Others
□Applicable √Not applicable
IV. As for the important suggestions and advices raised by the special interest committees under the Board of
Directors while performing their duties in the reporting period, where there is any objection, the details shall be
disclosed
□Applicable √Not applicable
V. Description of the risks found by the board of supervisors
□Applicable √Not applicable
VI. Particulars about the inability of the Company and its controlling shareholders to guarantee the independence
and keep independent operation capacity with regard to business, personnel, assets, institution, finance, 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
49
VII. Establishment and implementation of the assessment mechanism and incentive mechanism for senior
executives during the reporting period
√Applicable □Not applicable
The Company appoints the directors, supervisors and senior executives in accordance with the provisions of Company
Law and the Articles of Association, has built up a preliminary cultivation, selection, supervision, assessment, reward
and punishment, constraint system for the Company’s senior executives suitable for the actual situation. The Company
formulated corresponding administrative methods for senior executives. According to the production and development need
of the Company, the senior executives are appointed, resigned and assessed following the principles of “being from top to
bottom integrating the virtue and talent”, and are subject to annual appraisal by the Company according to the due diligence
and 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 benefit
maximization and standard operation of the Company.
VIII. Disclosure of self-evaluation report on internal control or not
√Applicable □Not applicable
Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internal
control of the financial statement as of December 31, 2018 and issued a standard internal control audit report without
qualified opinion (see the attachment to the announcement for details).
Description of the important deficiencies in internal control during the reporting period
□Applicable √Not applicable
IX. Particulars about the audit report on internal control
√Applicable □Not applicable
Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internal
control of the financial statement as of December 31, 2018 and issued a standard internal control audit report without
qualified opinion (see the attachment to the announcement for details).
Audit report on internal control disclosed or not: Yes
X. Others
□Applicable √Not applicable
Section X Corporate Bonds
□Applicable √Not applicable
50
Section XI Financial Statement
I. Auditors' report
√Applicable □Not applicable
Auditors' Report
Ernst & Young (2019) SZ No.61249778_B01
Shanghai Zhenhua Heavy Industries Co., Ltd.
To all shareholders of Shanghai Zhenhua Heavy Industries Co., Ltd.,
I. Audit Opinion
We have audited the financial statements of Shanghai Zhenhua Heavy Industries Co., Ltd., including the consolidated
balance sheet and the Company’s balance sheet as of December 31, 2018, the consolidated income statement and the
Company’s income statement, the statement of changes in shareholders' equity, statement of cash flows for the year then
ended and notes to the financial statements.
In our opinion, the accompanying financial statements of Shanghai Zhenhua Heavy Industries Co., Ltd. have been
prepared in accordance with the provisions of the enterprise accounting standard in all major aspects, and have fairly
presented the consolidated and the Company’s financial performance. as of Dec. 31, 2018 and the consolidated and the
Company’s operating results and cash flow 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 those
standards are further described in the Auditor’s Responsibilities for Audit of Financial Statements section of our report. We
are independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have
fulfilled our other ethical responsibilities in accordance with the said Code of Ethics. We believe that the audit evidence we
have obtained is sufficient 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 of
the financial statements for the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The
following description of how our audit addressed the key audit matter is also against this background.
We have fulfilled the responsibilities stated in “Responsibilities of Certified Public Accountant for Auditing of Financial
Statement” in this report, including the responsibilities related to these key auditing matters. Correspondingly, our auditing
work includes the implementation of the auditing procedure designed for dealing with the great misstatement risks of the
financial statement to be evaluated. The results from the implementation of the auditing procedure by us, including the
procedure to be implemented for the following key auditing matters, offers a foundation for releasing the auditing opinions of
the financial statements.
51
Key Audit Matters How our audit addressed the key audit matter:
1. Inventory depreciation reserves
Shanghai 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 handling
machine, offshore heavy-duty machine and large-sized steel structure. Its Our procedure mainly included knowing and testing the
inventories mainly include engineering raw materials, outsourcing parts validity of the control related to the provision of inventory
and components, products in the process and inventory goods. Since the depreciation reserves and the method of calculating the
production cycle of the products of this group is relatively long, the net net realizable value of the Group. We also implemented
realizable value of the related inventory may fluctuate with the change in the related auditing procedures over the inventory such as
the market demand, resulting in the inventory depreciation risks. The Group supervision of inventory to verify whether the Group had
sets aside the inventory depreciation reserves according to the balance of marked the inventory with slow turnover and defectives
the inventory cost and the net realizable value. The net realizable value is and taken into full account in provision of inventory
determined as per the estimated selling price of the inventory minus the depreciation reserves. In addition, we obtained the
cost, the estimated selling expenses and the related taxes that may occur computation sheet of provision of inventory depreciation
in the completion on the assumption that the management layer adopts a reserves on Dec. 31, 2018 from the Group, rechecked
certain estimate and hypothesis in determining the net realizable value. In the calculation method. As to the key elements taken
case of difference between the actual figure and the originally estimated into consideration by the Group in calculating the net
figure, the related balance will affect the book value of the inventory and the realizable value, including the estimated selling price,
depreciation loss in the estimated fluctuation. the cost that may occur till completion, the estimated
As of Dec. 31, 2018, in the consolidated financial statements, the balance selling expenses and the related taxes, we evaluated
of inventories was EMB 9.98 billion Yuan and the reserve for inventory the hypothesis and the estimates through analyzing the
depreciation was RMB 1.18 billion Yuan; in the financial statements of the related historical data and comparing the after-date data.
Company, the balance of inventory was RMB 8.87 billion Yuan and the We also tested the calculation of the provision amount of
reserve for inventory depreciation was RMB 1.21 billion Yuan. the inventory depreciation reserves.
The accounting policy and other disclosures regarding the inventory are
stated in Note (V) (12), Note (V) (33) and Note (VII) (7) of the financial
statement.
2. Bad-debt reserves for accounts receivable
The accounts receivable of the Group is mainly from the business contract
on port machine and ocean engineering manufacturing. Since it involves
large contracted value, long construction period, relatively complicated
technical parameters, the implementation of the contract may be affected by
the periodicity of the economic environment. The accounts receivable of the
Group has certain risk in the recovery in case of any dispute in contract or We evaluated the accounting estimate relating to the
the stagnant industry. As to the bad-debt reserves for accounts receivable, depreciation reserves, such as the financial status and
the management of the Group shall evaluate the guarantee obtained for the credit rating of the counterpart; checked the account age
accounts receivable, age of accounts receivable, credit rating and historical of accounts receivable and historical repayment record
repayment record of the counterparty based on the financial status of and evaluated whether the financial problems of the
the counterparty. The provision of bad-debt reserves shall adopt the key counterparty had effects on the recovery of the accounts
accounting estimate, including the consideration of the credit risk, historical receivable; we checked the related supporting documents
repayment record and the existing disputes of the customer. for the selected samples and the account age of the
As of Dec. 31, 2018, in the consolidated financial statements, the balance accounts receivable; reviewed the after-date recovery
of accounts receivable was RMB 6.56 billion Yuan and the bad-debt of the accounts receivable and rechecked the related
reserves for accounts receivable was RMB 1.53 billion Yuan; in the financial evidences of the accounts receivable that could not be
statements of the Company, the balance of accounts receivable was RMB recovered and was written off.
8.63 billion and the bad-debt reserves for accounts receivable was RMB 1.50
billion Yuan.
The accounting policy and other disclosures regarding the inventory are
stated in Note (V) (11), Note (V) (33), Note (VII) (4) and Note (XVII) (1) of
the financial statement.
52
Key Audit Matters How our audit report addressed this key audit matter:
3. Recognition of the income from construction contract
Most of the income of the Group comes from the one of the construction
contracts on the large-sized port equipment, heavy equipment, steel We evaluated and tested the internal control for
structure and construction projects customized by the customer. The Group accounting the contract cost, contract income, achieved
adopts the percentage of completion method to calculate the income of the node and recognition and for calculating the flow of
construction contracts. As to the large-sized port equipment, its completion completion schedule. We got the important contracts to
schedule is determined according to the corresponding percentage verify the total contract income and review the important
of completion of the confirmation node of the income achieved by the contract clauses. Through selecting the samples, we
construction contract at the end of period. As to the heavy equipment and verified whether the contract cost that occurred conformed
construction period, its completion schedule is determined according to the to the certification. We implemented the cutoff check
percentage of the accumulative contract cost in the expected total contract
procedure to validate the cost was confirmed in the proper
cost. As to the fabrication of the steel structure, its completion schedule is
accounting period; as to the large-sized port equipment,
determined according to the percentage of the accumulatively completed
through sampling, we got the certification for the achieved
processing tonnage in the expected total processing tonnage. The above-
mentioned methods involve the use of the major judgment and estimate of node and made the sampling for field observation. We
the management, including the achieved node, expected total contract cost, evaluated the judgment and estimate of the total contract
total contract income and expected contract loss. In addition, the income, cost made by the management. We made sampling
cost and realizable gross profit of the contract may change with the actual to calculate and check the income determined by the
conditions, resulting in important differences in the initial estimate of the occurred contract cost and the expected total contract
Group. cost again. In addition, we implemented the analysis-
The accounting policy and other disclosures regarding the inventories are oriented recheck procedure against the gross profit of the
stated in Note (V) (33), Note (VII) (7), Note (VII) (52) and Note (XVII) (4) of key construction contract of the Group.
the financial statement.
IV. Other Information
The management of Shanghai Zhenhua Heavy Industries Co., Ltd. is responsible for other information. The other
information comprises all of the information included in the annual report other than the financial statements and our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in 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 are
required 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 Accounting
Standards for Business Enterprises to make them a fair presentation, and designing, implementing and maintaining
necessary internal control, to ensure that the financial statements are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the management is responsible for assessing the ability of Shanghai Zhenhua
Heavy Industries Co., Ltd. to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial statementing process of Shanghai Zhenhua
Heavy Industries Co., Ltd.
VI. CPA’s Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
53
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement arising from fraud is higher than for
one arising from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal 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 and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the ability of Shanghai Zhenhua Heavy Industries Co., Ltd. to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
statements, or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause Shanghai Zhenhua Heavy
Industries 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 fair
presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within Shanghai Zhenhua Heavy Industries Co., Ltd. to express an opinion on the financial statements. We are responsible
for 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 timing
of the audit and important audit findings, including any important deficiency in internal control that we identified during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may reasonably
be 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 most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless the law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Ernst & Young LLP. (Special general Chinese CPA: Yang Lei
partnership) (Engagement partner)
Chinese CPA: Liu Wei
Beijing, China Mar. 29, 2019
54
Consolidated Balance Sheet and the Company's Balance Sheet as at 31 December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
As at Dec. 31, 2018 As at Dec. 31, 2017 As at Dec. 31, 2018 As at Dec. 31, 2017
Assets
Consolidated Consolidated Parent Company Parent Company
Current assets
Monetary funds 3,697,338,708 5,770,227,369 2,459,295,919 3,392,595,294
Financial assets measured at fair
52,920,084 8,438,278 44,481,806 -
value through current profit or loss
Notes receivable and accounts
5,221,919,846 4,400,803,623 7,212,568,840 6,961,643,776
receivable
Including: 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 6,547,864,759
Advances to suppliers 1,681,187,715 1,036,783,170 2,268,577,972 1,173,384,482
Other receivables 1,149,035,349 996,826,712 13,955,146,640 13,666,515,962
Including: interest receivable - - - -
Dividends receivable - 665,346 - 665,346
Inventories 8,803,035,942 7,071,266,879 7,658,200,294 5,786,210,236
Outstanding payments for
12,054,580,392 13,453,980,326 7,476,738,206 9,021,852,353
construction completed
Non-current assets maturing within
894,638,424 1,896,475,472 16,068,800
one year
Other current assets 1,152,476,439 591,311,853 683,547,950 261,325,439
Total current assets 34,707,132,899 35,226,113,682 41,774,626,427 40,263,527,542
Non-current assets
Available-for-sale financial assets 1,214,533,554 1,304,203,905 145,157,462 221,946,872
Held-to-maturity investments - - - -
Long-term receivables 5,188,341,089 4,238,704,827 368,585,118 417,914,193
Long-term equity investment 2,775,801,760 2,320,470,521 8,636,018,724 8,922,200,826
Investment properties 436,760,631 455,063,723 436,760,631 455,063,723
Fixed assets 18,654,732,030 17,335,351,611 4,819,571,556 5,231,211,582
Construction in progress 3,050,468,292 1,889,146,009 308,737,034 660,662,593
Intangible assets 3,588,412,732 3,683,165,608 1,571,347,557 1,618,835,106
Goodwill 266,591,462 265,188,465 - -
Deferred income tax assets 539,684,925 618,054,364 510,532,925 563,785,515
Long-term deferred expenses 5,112,664 7,764,501
Other non-current assets 170,792,589 176,726,613
Total non-current assets 35,891,231,728 32,293,840,147 16,796,711,007 18,091,620,410
Total assets 70,598,364,627 67,519,953,829 58,571,337,434 58,355,147,952
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
55
Consolidated Balance Sheet and the Company's Balance Sheet (Continued) as at 31 December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
As at Dec. 31, 2018 As at Dec. 31, 2017 As at Dec. 31, 2018 As at Dec. 31, 2017
Liabilities and shareholders’ equity
Consolidated Consolidated Parent Company Parent Company
Current liabilities
Short-term borrowings 16,554,687,487 25,468,980,401 12,958,295,349 22,855,801,381
Financial liabilities measured at fair value
- - - -
through the current profit or loss
Notes payable and accounts payable 9,769,273,923 8,780,825,653 8,860,350,035 7,627,346,050
Including: 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 5,970,208,396
Advance from customers 494,744,374 591,727,255 370,660,873 393,410,039
Outstanding payments for construction
1,989,560,887 2,508,598,913 2,390,332,471 2,922,827,192
completed
Employee compensation payable 310,112,327 273,733,207 294,662,685 258,990,282
Taxes and surcharges payable 164,964,681 194,948,927 22,636,402 50,220,742
Other payables 1,098,580,447 843,207,676 1,508,889,581 1,644,923,271
Including: interest payable 114,397,903 118,825,582 90,106,459 102,690,137
Dividends payable 31,701,965 31,701,965 352,598 352,598
Non-current liabilities maturing within one
4,209,532,510 2,198,931,219 2,820,655,037 1,367,901,030
year
Other current liabilities - - - -
Total current liabilities 34,591,456,636 40,860,953,251 29,226,482,433 37,121,419,987
Non-current liabilities
Long-term borrowings 15,097,725,259 6,664,914,383 12,922,319,986 4,897,199,999
Bonds payable
Long-term payables 1,967,461,119 1,884,986,333 182,174,839 556,387,041
Estimated liabilities 439,052,683 464,888,663 422,869,949 451,128,341
Deferred income 469,296,220 479,174,120 336,941,770 348,455,388
Deferred income tax liabilities 132,401,282 183,462,320 - -
Other non-current liabilities 288,474,696 152,954,098 9,783,043 3,456,670
Total 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 43,378,047,426
Shareholders’ equity
Share capital 5,268,353,501 4,390,294,584 5,268,353,501 4,390,294,584
Capital reserves 4,648,919,658 5,526,978,575 4,914,468,683 5,792,527,600
Other comprehensive income 223,853,860 273,892,978 71,258,509 140,264,717
Surplus reserves 1,696,762,554 1,618,543,971 1,696,254,281 1,618,035,698
Specific reserves 3,019,173 1,914,832 - -
Undistributed profits 3,344,953,206 3,199,681,426 3,520,430,440 3,035,977,927
Total shareholders’ equity attributable to
15,185,861,952 15,011,306,366 15,470,765,414 14,977,100,526
parent company
Minority equity 2,426,634,780 1,817,314,295
Total shareholders’ equity 17,612,496,732 16,828,620,661 15,470,765,414 14,977,100,526
Total liabilities and shareholders’ equity 70,598,364,627 67,519,953,829 58,571,337,434 58,355,147,952
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
56
Consolidated Income Statement and the Company's Income Statement For the Year Ended December 31, 2018
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
2,018 2,017 2,018 2,017
Item
Consolidated Consolidated Parent Company Parent Company
I. 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 44,763,858
Selling and distribution expenses 115,541,161 121,457,892 84,713,588 83,481,628
General and administrative expenses 1,142,337,348 1,039,774,787 523,147,247 512,402,152
Research and development expenditures 672,614,073 702,392,513 557,762,997 578,309,233
Financial expenses 1,522,264,813 758,201,305 1,259,434,698 1,060,351,306
Including: 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 49,458,268
Impairment loss on assets -12,576,222 824,836,448 -25,476,619 619,199,093
Plus: Other income 112,065,705 76,198,207 71,471,982 47,634,541
Investment income ("-" for losses) 116,030,979 123,368,931 101,099,249 156,502,074
Gains from the changes in fair value ("-" for losses) 44,481,806 -4,615,775 44,481,806 -4,615,775
Gains from assets disposal ("-" for losses) 155,557,716 10,749,056 69,575,485 1,303,038
II. Operating profits ("-" 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 3,753,311
Less: Non-operating expenses 76,825,324 92,116,253 72,568,075 86,711,533
III. Total profits (“-” 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 -14,928,712
IV. Net profits (“-” for net losses) 393,842,439 329,443,420 782,185,825 154,209,887
(I) Classified by operating sustainability
1. Net profit from continued operations (“-” for net losses) 393,842,439 329,443,420 782,185,825 154,209,887
2. Net profit from discontinued operations (“-” for net losses)
(II) Classified by ownership
1. Net profit 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 29,247,998
V. 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
-50,039,118 -48,510,693 -69,006,208 -123,810,476
parent company
(I) Other comprehensive income that cannot be reclassified into profit or
loss
1. Changes in re-measurement of the defined benefit plan
2.Other comprehensive income that cannot be transferred to profit or loss
under the equity method
(II) Other comprehensive income that will be reclassified into profit or loss -50,039,118 -48,510,693 -69,006,208 -123,810,476
1. Other comprehensive income that can be transferred to profit or loss
-4,655,831 -8,449,542 -4,655,831 -8,449,542
under the equity method
2. Profit or loss from changes in fair value of available-for-sale financial
-76,002,428 -9,826,324 -65,270,999 -114,460,736
assets
3. Translation differences of foreign currency financial statements 30,619,141 -30,234,827 920,622 -900,198
Other comprehensive income, net of tax attributable to minority
19,274,288 -18,166,833
shareholders
VI. 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 30,399,411
Total 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
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
57
Consolidated Statement of Cash Flows and the Company's Statement of Cash Flows For the Year Ended December 31, 2018
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
2018 2017 2018 2017
Item
Consolidated Consolidated Parent company Parent company
I. Cash flows from operating activities
Cash received from sales of goods and rendering of service 20,116,019,149 16,640,760,111 19,289,270,419 15,763,239,504
Refund of tax received 327,889,433 889,705,824 291,302,010 831,198,628
Cash received from other operating activities 380,058,325 382,299,156 377,616,135 292,626,816
Subtotal of cash inflows from operating activities 20,823,966,907 17,912,765,091 19,958,188,564 16,887,064,948
Cash paid for purchase of goods and labor received 17,045,009,084 13,683,031,255 17,744,386,344 15,196,972,901
Cash paid to and on behalf of employees 2,128,181,027 1,897,864,942 1,035,785,352 991,857,309
Cash paid for taxes and surcharges 399,974,649 477,730,293 100,888,209 162,924,111
Cash paid for other operating activities 696,858,168 521,929,327 438,838,219 494,142,751
Subtotal of cash outflows from operating activities 20,270,022,928 16,580,555,817 19,319,898,124 16,845,897,072
Net cash flow from operating activities 553,943,979 1,332,209,274 638,290,440 41,167,876
II. Cash flows from investing activities
Cash received from disposal of investment 998,000,000
Cash received from returns on investment 65,672,231 23,201,157 47,195,316 1,160,353
Net cash received from the disposal of fixed assets, intangible
367,198,136 98,401,263 179,932,134 3,487,103
assets and other long-term assets
Cash received from other investing activities 302,041,173 50,163,105 34,930,409
Subtotal of cash inflows from investing activities 734,911,540 171,765,525 1,260,057,859 4,647,456
Cash paid for acquisition of fixed assets, intangible assets and
3,105,409,114 1,333,961,486 135,206,982 99,333,396
other long-term assets
Cash paid for investments 408,962,976 286,000,000 661,904,450 509,898,290
Net cash paid for the acquisition of subsidiaries 60,338,410
Cash paid for other investing activities 173,076,659
Subtotal of cash outflows from investing activities 3,514,372,090 1,853,376,555 797,111,432 609,231,686
Net cash flows from investing activities -2,779,460,550 -1,681,611,030 462,946,427 -604,584,230
III. Cash flows from financing activities:
Cash from absorption of investments 194,345,310 206,029,110
Including: cash received by subsidiaries from investments by
194,345,310 206,029,110
minority shareholders
Cash received from borrowings 34,277,959,026 33,077,608,125 29,304,939,364 28,289,415,519
Cash received from bonds issue
Cash received from other financing activities 1,284,314,355 1,360,930,000
Subtotal of cash inflows from financing activities 35,756,618,691 34,644,567,235 29,304,939,364 28,289,415,519
Cash paid for debts repayments 33,134,286,292 29,020,665,806 29,914,416,598 24,398,943,306
Cash paid for distribution of dividends, profits or interest expenses 1,828,486,604 1,623,289,546 1,501,107,415 1,466,838,827
Cash paid for other financing activities 1,202,299,585 1,423,746,129 407,455,030 407,455,030
Subtotal of cash outflows from financing activities 36,165,072,481 32,067,701,481 31,822,979,043 26,273,237,163
Net cash flow from financing activities -408,453,790 2,576,865,754 -2,518,039,679 2,016,178,356
IV. Effect of foreign exchange rate changes on cash and cash
109,110,732 -50,822,183 45,951,367 -23,870,002
equivalents
V. 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 equivalents 5,673,847,001 3,497,205,186 3,301,302,585 1,872,410,585
VI. Ending balance of cash and cash equivalents 3,148,987,372 5,673,847,001 1,930,451,140 3,301,302,585
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
58
Consolidated Statement of Changes in Shareholders' Equity for the Year Ended December 31, 2018
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Shareholders’ equity attributable to parent company
Total
Item Less: Other Minority equity shareholders'
Surplus Special Undistributed
Share capital Capital reserves Treasury comprehensive equity
reserves reserves profits
stock income
Balance 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 16,487,149,950
Changes in 2017 -
Total comprehensive income -48,510,693 300,195,422 11,081,165 262,765,894
Capital contributed or reduced by
-
shareholders
Capital contributed by shareholders 513,802,736 513,802,736
Amounts of share-based payments
-
recognized in shareholder's equity
Others -
Profit distribution -
Withdrawal of surplus reserves 15,420,989 -15,420,989 -
Distribution to shareholders -439,029,458 -545,570 -439,575,028
Others -
Special reserves -
Amount withdrawn in this year 45,958,231 5,006,115 50,964,346
Amount used in this year -44,043,399 -2,443,838 -46,487,237
Internal carry-forward of
-
shareholder's equity
Conversion of capital reserves into
-
share capital
Conversion of surplus reserves into
-
share 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 16,828,620,661
Balance 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 16,828,620,661
Changes in 2018 -
Total comprehensive income -50,039,118 443,005,092 -29,888,365 363,077,609
Capital contributed or reduced by
-
shareholders
Capital contributed by shareholders 640,453,310 640,453,310
Amounts of share-based payments
-
recognized in shareholder's equity
Others -
Profit distribution -
Withdrawal of surplus reserves 78,218,583 -78,218,583 -
Distribution to shareholders -219,514,729 -1,481,438 -220,996,167
Others -
Specific reserves -
Amount withdrawn in this year 40,081,847 4,422,690 44,504,537
Amount used in this year -38,977,506 -4,185,712 -43,163,218
Internal carry-forward shareholder's
-
equity
Conversion of capital reserves into
878,058,917 -878,058,917 -
share capital
Conversion of surplus reserves into
-
share 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
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
59
Statement of Changes in Shareholders' Equity of the Company For the Year Ended December 31, 2018
From January to December 2018
Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB
Less: Other Total
Capital Surplus Special Undistributed
Item Share capital Treasury comprehensive shareholders'
reserves reserves reserves profits
stock income equity
Balance as at Jan.1, 2017 4,390,294,584 5,792,527,600 264,075,193 1,602,614,709 - 3,336,218,487 15,385,730,573
Changes in 2017
Total comprehensive income -123,810,476 154,209,887 30,399,411
Capital contributed or reduced by shareholders -
Capital contributed by shareholders -
Amounts of share-based payments recognized
-
in shareholder's equity
Others -
Profit distribution -
Withdrawal of surplus reserves 15,420,989 -15,420,989 -
Distribution to shareholders -439,029,458 -439,029,458
Others -
Special reserves -
Amount withdrawn in this year 25,340,978 25,340,978
Amount used in this year -25,340,978 -25,340,978
Internal carry-forward of shareholder's equity -
Conversion of capital reserves into share
-
capital
Conversion of surplus reserves into share
-
capital
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 14,977,100,526
Balance as at Jan.1, 2018 4,390,294,584 5,792,527,600 140,264,717 1,618,035,698 - 3,035,977,927 14,977,100,526
Changes in 2018
Total comprehensive income -69,006,208 782,185,825 713,179,617
Capital contributed or reduced by shareholders
Capital contributed by shareholders -
Amounts of share-based payments recognized
-
in shareholder's equity
Others -
Profit distribution
Withdrawal of surplus reserves 78,218,583 -78,218,583 -
Distribution to shareholders -219,514,729 -219,514,729
Others -
Special reserves -
Amount withdrawn in this year 15,614,116 15,614,116
Amount used in this year -15,614,116 -15,614,116
Internal carry-forward of shareholder's equity -
Conversion of capital reserves into share
878,058,917 -878,058,917 -
capital
Conversion of surplus reserves into share
-
capital
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
The accompanying notes to the financial statementsare integral parts of the financial statements.
Legal Representative: Accounting principal: Head of the Accounting
Department:
60
III. Basic Information of the Company
1. Company profile
√Applicable □Not applicable
Shanghai Zhenhua Heavy Industries Co., Ltd. (hereinafter referred to as “the Company”) is a joint-stock company
limited 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 are
in Shanghai City, P. R. China.
As approved by ZWFZ (1997) No.42 Document issued by the Securities Commission under the State Council, the
Company 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 Company
additionally 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 additionally
issued 114,280,000 A-shares held by the domestic investors on Dec. 23, 2004. The additionally issued A-shares were listed
at 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 Company
additionally issued 125,515,000 A-shares held by the domestic investors on October 15, 2007. The additionally issued
A-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 privately
placed 169,794,680 A-shares on Sep. 22, 2008 to its controller China Communications Construction Co., Ltd. (hereafter
referred to as “China Communications Corporation”). A-shares privately placed were the floating shares with trading limited
conditions. From Mar. 20, 2012 on, the term of trading limitation expired for above-mentioned A-shares which were listed at
Shanghai 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 of
the shares of the Company were 5,268,353,501 shares, par value per share was RMB 1.00 Yuan and the capital stock was
RMB 5,268,353,501 Yuan.
On Dec. 18, 2005, China Road and Bridge Construction Group General Company and the company’s former controlling
shareholder China Harbor Construction (Group) General Company were consolidated into China Communications
Construction (Group) Co. Ltd after restructuring (hereafter referred to as “China Communications Group”). In accordance
with Written Reply to Overall Reorganization and Overseas-listed and Domestically-listed Share of China Communications
Construction Co. Ltd. (GZGG [2006] No.1063 Document) by State-owned Assets Supervision and Administration
Commission 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 China
Communications Construction Co. Ltd. (GZCQ [2006] No.1072 Document) on Sep. 30, 2006 and Written Reply to Approval of
China 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 Communications
Construction Co. Ltd. and invested the stock equity of the Company held into the newly incorporated China Communications
Co., Ltd. With the completion of reorganization, China Communications Co., Ltd thus became the controlling shareholder of
the 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 approved
Proposal for Transfer of Some Shares of Shanghai Zhenhua Heavy Industries (Group) Co., Ltd by Agreement and
Associated Transaction and agreed to transfer totally 1,316,649,346 shares of this Company held by it to CCCG and
CCCG (Hong Kong) Holdings Co., Ltd. (hereinafter referred to as “CCCG Hong Kong”), accounting for 29.990% of the total
shares of this Company, after that, China Communications Construction Co., Ltd. held 16.239% of the stock equity of this
Company. 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 total
shares of this Company) and held 712,951,703 A-shares of this Company through China Communications Construction
Co., Ltd. (accounting for 16.239% of the total shares of this Company), as a result, it became the holding shareholder of this
Company.
61
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; repair
of vessel; leasing of self-produced crane, sales of the self-produced products; international shipment by available special
transportation vessel and specialized contracting for steel structure engineering.
The financial statements were approved by the resolution of the Company’s board of directors on Mar. 29, 2019.
2. Scope of consolidated financial statements
√Applicable □Not applicable
The scope of the consolidated financial statements is confirmed based on the control. Please refer to Notes IX.1 for the
annual changes in this year and the main subsidiaries included in the scope of consolidation.
IV. Preparation basis of financial statements
1. Preparation basis
The financial statements are prepared on the basis of Accounting Standards for Business Enterprise– Basic Standards
issued 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 Business
Enterprise”).
2. Sustainable operation
√Applicable □Not applicable
The financial statements are presented based on sustainable business.
The preparation of the financial statements, in addition to certain financial instruments, is based on the principle of
historical cost valuation. If the assets are impaired, the corresponding impairment provision shall be made in accordance
with the relevant provisions.
V. Significant accounting policies and accounting estimates
√Applicable □Not applicable
The Company determines the specific accounting policies and accounting estimates based on actual production and
operation characteristics, which are mainly reflected in the provision for bad debts receivable, inventory valuation methods,
business accounting of construction contracts, depreciation of fixed assets, amortization of intangible assets, measurement
model 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, which
authentically and completely reflect the financial status as of Dec. 31, 2018 and the financial performance and cash flow of
the 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 applicable
4. Recording currency
RMB is the recording currency of the Group and also the currency used in the financial statements. Unless otherwise
specified, the financial statements are shown in RMB.
The subsidiaries, joint ventures and associated enterprises under the Group shall, on the basis of the main economic
environment in which they operate, decide their own recording currency, and convert them into RMB when preparing
financial statements.
62
5. Accounting treatment of the business combination under common control and not under common control
√Applicable □Not applicable
The business combinations are divided into the one under common control and the one not under common control.
Business combination under common control
The business combination under common control is a business combination in which all of the combining enterprises
are ultimately controlled by the same party or the same parties both before and after the business combination and on which
the control is not temporary. In a business combination under common control, the party which obtains control of other
combining enterprise on the combining date is the absorbing party, the other combining enterprise is the combined party. The
combining 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 the
goodwill formed by the acquisition of the combined party by the ultimate controlling party), are subject to the corresponding
accounting treatment in accordance with the carrying amount in the financial statements of the ultimate controlling party
on the combining date. The difference between the carrying amount of the net assets obtained from the combination and
the carrying amount of the consideration paid (or total par value of the shares issued) for the combination is treated as an
adjustment to capital premium in the capital reserves and the capital reserves carried out under the former system.If the
capital premium is not sufficient 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 enterprises
are not controlled by the same party or the same parties before and after the combination. As for the business combination
not under the same control, the party which obtains the control of other combining enterprises on the combining date is the
acquirer, and the other combining enterprises is the acquiree. The combination date refers to the date on which the acquirer
actually obtains the control of the acquiree.
The identifiable assets, liabilities and contingent liabilities obtained of the acquiree in the business combination not
under 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 issued
equity securities) and the fair value of the held stock equity of the acquiree before the acquisition date and the fair value
of the identifiable net assets obtained in the combination from the acquiree is confirmed as goodwill, and shall be for
subsequent measurement after subtracting the accumulated impairment losses from the cost. If the sum of the fair value of
the combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stock equity of
the acquiree before the acquisition date is smaller than the fair value of the identifiable net assets of the acquiree obtained
in the combination, firstly recheck the measurement of the fair value of the identifiable assets, liabilities and contingent
liabilities obtained from the acquiree, and the fair value of the combined consideration paid (or fair value of the issued equity
securities), and the fair value of the held stock equity of the acquiree before the acquisition date, after that, if the sum the
fair value of the combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stock
equity of the acquiree before the acquisition date is still smaller than the fair value of the identifiable net assets obtained in
combination from the acquiree, the balance shall be recorded in the current profit or loss.
6. Preparation method of consolidated financial statements
√Applicable □Not applicable
The scope of the consolidated financial statements is determined based on control, including the financial statements of
the Company and its subsidiaries. A subsidiary is a subject which is controlled by the Company (including the enterprise, the
separable part of the invested entity, and the structural entity controlled by the Company).
When preparing the consolidated financial statements, the subsidiary adopts the accounting period and the accounting
policies consistent with the Company. Assets, liabilities, equity, income, expenses and cash flows arising from all transactions
between 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 minority
shareholders 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 cash
flows of the acquiree shall be included in the consolidated financial statements on the date of acquisition of control till the
termination of control. When preparing the consolidated financial statements, the financial statements shall be adjusted
based on the fair value of various identifiable assets, liabilities and contingent liability confirmed on the acquisition date.
63
For the subsidiaries acquired in business combination under common control, the operating results and the cash flows
of the acquiree shall be included in the consolidated financial statements at the beginning of the combination period. When
preparing the consolidated financial statements, relevant items of the previous financial statements shall be adjusted and
the reporting entity formed after the consolidation is regarded as having been in existence since the ultimate controlling party
begins to implement control.
If changes in the relevant facts and circumstances lead to changes in one or more control elements, the Group will
reevaluate whether or not the investee is controlled.
7. Classification of joint venture arrangements and accounting treatment methods of joint operation
□Applicable √Not applicable
8. 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 subject
to an insignificant risk of changes in value.
9. Foreign currency transactions and transaction of financial 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 the
recording currency.
At the time of initial confirmation, the amount of foreign currency transaction shall be translated into the amount of the
recording currency at the spot rate of the transaction date. On the date of balance sheet, the currency exchange rate of
the currency denominated items shall be translated at the spot rate on the date of balance sheet. The resulting transaction
difference of settlement and monetary items, in addition to the difference arising from foreign currency special borrowing
relating to the assets of which the purchase and construction conform to the capitalized conditions, which shall be handled
in accordance with the principle of capitalization of borrowing costs, shall be included in the current profit or loss. The foreign
currency 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 shall
be translated at the spot rate on fair value determination date, and the resulting difference shall be recorded in the current
profits 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 financial
statements: 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 profits”, other items are translated using
the spot exchange rate at the time of incurrence; the income and expense items in the income statement shall be translated
at the spot exchange rate of the transaction. The conversion difference of foreign currency statements arising from above
translation shall be recognized as other comprehensive income. When disposing overseas operations, other comprehensive
income related to the overseas operation shall be transferred into the current profits and losses, partial disposal shall be
calculated according to the proportion of disposal.
Foreign currency cash flows shall be translated at the spot exchange rate on the day of incurrence of the cash flow.
Cash flow from overseas subsidiaries is translated at the spot exchange rate on the day of incurrence of the cash flow. Effect
of changes in exchange rate on cash amount is shown separately in the cash flow statements as an adjustment item.
10. Financial instruments
√Applicable □Not applicable
Financial instrument is the contract that forms the financial assets of one party and forms financial liabilities or equity
instruments of the other party.
Recognition and termination of financial instruments
The Group identifies a financial asset or financial liability when becoming a party of a financial instrument contract.
64
Once the following conditions are satisfied, terminate the confirmation of financial assets (or part of financial assets or of
a group of similar financial assets), that is to say, write off from its account and balance sheet:
(1) The right to receive cash flows from financial assets expires;
(2) The right to receive the cash flow from financial asset has been transferred, or have assumed the obligation in the
“pass-through agreement” to pay the collected cash flow timely to the third party in full; and (a) has transferred substantially
almost all the risks and rewards of ownership of the financial asset, or (b) although does not transfer or retain substantially
nearly all of the risks and rewards of ownership of the financial asset, but has given up the control over the financial asset.
In the event that the liability of a financial liability has been fulfilled, cancelled or expired, the determination of financial
liabilities shall be terminated. If the existing financial liability is replaced by the same creditor with another financial liabilities
of virtually entirely different terms, or the terms of the existing liabilities are almost entirely modified substantially, such
substitutions or modifications shall be handled as the termination of the original liability and the recognition of new liabilities,
and the difference shall be included in current profits and losses.
In case of trading financial assets in the conventional way, confirm 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 limit
prescribed in the law or the prevailing practice in accordance with the terms and conditions of the contract. Trading day is the
date on which the Group commits to buy or sell financial assets.
Classification and measurement of financial assets
During initial recognition, the financial assets of the Group are classified into: financial assets measured at fair value
with the changes included into current profits and losses, loans and receivables, and available-for-sale financial assets . The
financial assets are measured at fair value at the time of initial recognition. As for the financial assets measured at fair value
with the changes included into current profits or losses, related transaction costs shall be included directly in current profit or
loss, while the related transaction costs of other financial assets are included in the initially recognized amount.
Subsequent measurement of financial assets is subject to its classification:
Financial assets measured at fair value with the changes included into current profits or losses
Financial assets measured at fair value through current profit or losses shall include the trading financial assets and the
financial assets designated at the time of initial recognition, which are measured at fair value through current profit or loss.
Trading financial assets are financial assets that meet one of the following conditions: getting the financial assets for the
purpose of selling in the short term; belonging to part of a combination of identifiable financial for centralized management,
and there is objective evidence showing that the company has recently adopted a short-term profit approach to manage the
portfolio; belonging to derivatives, but excepting for the derivatives that are designated and are effective hedging tools, the
derivatives belongings to financial guarantee contracts and the derivatives that are linked to equity instrument investment
which has no offer in the active market and its fair value cannot be measured reliably and must be settled through the
delivery of the equity instrument. For such financial assets, use fair value for subsequent measurement, all realized and
unrealized gains and losses are included in the current profits and losses. Dividends or interest income related to the
financial assets measured at fair value through the current profit or loss shall be recorded in current profits and losses.
Only when one of the following conditions is met, can the financial assets be designated as the financial assets
measured at the fair value through the current profit or loss at the initial measurement:
(1) The designation can eliminate or obviously reduce the discrepancies in recognition and measurement of the related
gains or losses arisen from the difference in measurement basis.
(2) The official written document on risk management or investment strategy has stated that the financial instrument will
be 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 derivative
instruments do not greatly change the cash flow of the hybrid instrument or the embedded derivative instruments shall not be
split from the related hybrid instruments obviously;
(4) The hybrid instruments containing embedded derivative instruments that shall be split but cannot individually
measured 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 measured
reliably shall not be designated as the financial assets measured at fair value through the current profit or loss.
65
The financial assets classified as the financial assets measured at fair value through the current profit or loss by the
enterprise during initial recognition shall not be reclassified as any other type of financial assets; while other types of financial
assets shall not be reclassified as the financial assets measured at fair value through the current profit or loss.
In accordance with the above conditions, such financial assets of the Group mainly include forward foreign exchange
contracts.
Loans and account receivables
Loans and receivables refer to the non-derivative financial assets with no quotation on active market and fixed
or identifiable recoverable amount. For such financial assets, adopt the actual interest rate method for subsequent
measurement based on amortized cost, and the gains or losses arising from its amortization or impairment shall be included
in current profits or losses.
Available-for-sale financial assets
The available-for-sale financial assets refer to the non-derivative financial assets that are designated as available for
sale during initial recognition, and the financial assets other than those listed above. For such financial assets, use fair
value for subsequent measurement. The discount or premium shall be amortized using the effective interest method and
be recognized as interest income or expense. In addition to recognizing the impairment loss and the balance of exchange
of foreign currency monetary financial assets as the current profits or losses, the changes in fair value of available-for-sale
financial assets shall be recognized as other comprehensive income, and the cumulative gains or losses shall be transferred
to the current profits or losses until the financial asset has been derecognized or impaired. Dividends or interest income
related to the available-for-sale financial assets shall be included in the current profits or losses.
The equity instrument investments that are not quoted in an active market and whose fair value cannot be reliably
measured shall be measured at cost.
Classification and measurement of financial liabilities
The financial liabilities of the Group are classified as other financial liabilities at the time of initial recognition. The related
transaction costs of other financial liabilities shall be included in the initial recognized amount; actual interest rate method
shall be used for subsequent measurement based on amortized cost.
Offset of financial instruments
When meeting the following conditions simultaneously, the net amount after financial assets and financial liabilities
offsetting shall be listed in the balance sheet: having the legal right to offset the recognized amount, and that legal rights are
currently enforceable; the plan is to be settled in net, or at the same time, realize the financial assets and pay off the financial
liabilities.
Financial guarantee contract
A financial guarantee contract is a contract signed between the guarantor and the creditor, when the debtor fails to
perform the obligations, the guarantor shall perform the obligation or bear the liability in accordance with the contract.
The financial guarantee contract is measured at fair value at the time of initial recognition, does not belong to the financial
guarantee contract designated as the financial liabilities measured at fair value with changes included in the current profits
and losses, after initial recognition, in accordance with the amount confirmed by the current best estimate of the expenditure
required to perform relevant obligations at the date of balance sheet and the balance after deducting the accumulative
amortization determined in accordance with the revenue recognition principle from the initial recognized amount, the higher
of the two shall be for subsequent measurement.
Derivative financial instruments
The Group uses derivative financial instruments, such as forward foreign exchange contracts, to hedge against
exchange rate risk. Derivative financial instruments are initially measured at the fair value on the date of derivative trading
contract signing, with subsequent measurement at fair value. The derivative financial instrument with positive fair value is
recognized as an asset, and the one with negative fair value is recognized as a liability. However, the derivative financial
instruments, which are linked to the equity instrument which has no offer in the active market and its fair value cannot be
measured reliably and shall be settled through the delivery of the equity instrument, shall be measured at cost.
66
In addition to the part of an effective hedge in a cash flow hedge included in other comprehensive income, and rolled out
from the current profits or losses in the event that the hedged item affects the profit or loss, the gains or losses arising from
changes in fair value of derivative instruments are directly included into the current profits or losses.
Impairment of financial assets
The Group checks the book value of the financial assets on date of balance sheet. If there is objective evidence showing
that financial assets are impaired, the provision for impairment shall be made. The objective evidence for financial assets
impairment refers to the items which actually happened after initial recognition of financial assets, influenced the estimated
future cash flows of the financial assets, and its impact can be reliably measured by the enterprise. The objective evidences
for impairment of financial assets include: serious financial difficulties occurred to the issuer or debtor, violating the terms of
the contract (such as default or overdue payment of interest or principal) by the debtor, likely bankruptcy or other financial
restructuring of the debtor, and reduction in and measurable expected future cash flows shown by public data.
Financial assets measured at amortized cost
In the event of impairment, the book value of the financial asset shall be written down through the allowance for project
value to the present value of estimated future cash flow (excluding the future credit losses that have not yet occurred), the
amount of write downs shall be recorded in the current profits or losses. The present value of the expected future cash flow
is determined by discounting based on the original effective interest rate (the actual interest rate calculated and determined
at the time of initial recognition) of the financial asset, and the value of collateral shall also be taken into account. The interest
income after impairment shall be calculated and determined using the discount rate used to discount future cash flows in the
light of the determination of impairment losses as the interest rate. For loans and receivables, if there is no real expectation
for future recovery and all collaterals have been realized or transferred to the Group, the loans and receivables and related
impairment provisions shall be written off.
If the amount of individual financial assets is significant, individual impairment test shall be conducted. If there is
objective evidence to prove that the impairment has occurred, the impairment loss shall be recognized and included in
current profit or loss. As for individual financial asset with no significant amount, the impairment test shall be conducted in the
portfolio of financial assets with similar credit risk features or conducted separately. As for the financial assets (including the
financial assets with or without significant amount) with no impairment in separate test, impairment test shall be conducted
again in the portfolio of financial assets with similar credit risk features. The financial assets which have suffered from an
impairment loss in any single amount shall not be included in any portfolio of financial assets with similar risk features for any
impairment test.
When the Group have confirmed the impairment losses on financial assets measured at amortized cost, if there is any
objective evidence showing that the financial assets value has been restored, and it is objectively related with the events
incurred after the confirmation of the loss, the previously recognized impairment loss shall be reversed into current profit or
loss. However, the book value after the reversal shall not exceed the amortized cost of the financial asset at the reversal
date, assuming that the impairment provision is not included.
Available-for-sale financial assets
If there is objective evidence for financial asset impairment, the cumulative losses originally included in other
comprehensive income due to the decline in the fair value, shall be transferred out and included in the current profits and
losses. The transferred cumulative loss refers to the balance after deducting the recovered principal and the amortized
amount, current fair value and the impairment loss originally included in the profits or losses from the initial acquisition cost
of the available-for-sale financial assets.
The objective evidences for proving impairment of available-for-sale equity instruments investments includes serious
or 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 of
impairment, the transferred aggregate losses shall be the balance after deducting the current fair value and the impairment
loss originally included in the profits or losses from the acquisition cost. The impairment losses of equity instrument
investment available for sale shall not be carried back through profit or loss, and the increase in fair value after impairment
shall 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 degree
or duration of the fair value below cost as well as other factors.
67
For the debt instruments investment available for sale, the impairment shall be assessed in the same manner as the
financial assets measured at amortized cost. However, the transferred aggregate losses shall be the balance after deducting
the current fair value and the impairment loss originally included in the profits or losses from the acquisition cost. The interest
income after impairment shall be calculated and recognized in accordance with the discount rate used to discount future
cash flows during the determination of impairment losses.
As for the debt instruments available for sale of which impairment losses have been recognized, if, in the subsequent
accounting period, the fair value rises and is objectively related to events that occur after the impairment losses were
recognized, the previously recognized impairment losses shall be reversed and included in the current profits or losses.
Financial assets measured at cost
If there is objective evidence showing the impairment of financial assets, the difference between the book value of
financial assets and the present value determined by discounting the future cash flows according to the market return of
similar financial assets at that time shall be recognized as impairment loss and included in current profits or losses. Once
recognized, the impairment loss shall not be carried back.
Transfer of financial assets
If the Group has transferred almost all risks and rewards of the ownership of the financial assets to the transferee, the
recognition of such financial assets shall be terminated. If almost all risks and rewards of the ownership of the financial
assets are retained, the recognition of such financial assets shall not be terminated.
When the Group has neither transferred nor retained almost all risks and rewards of the ownership of financial assets,
handle respectively in the following manners: if the control over the financial asset is given up, stop recognizing the financial
assets and recognize assets and liabilities arising; if the control is not given up, recognize related financial assets and
liabilities accordingly according to the extent of its continued involvement in the transferred financial 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 financial
asset and the amount of financial guarantee. The amount of financial guarantee refers to the maximum amount to be repaid
in the considerations received.
11. Receivables
(1) Receivables with individually significant amount and individual provision for bad debts
√Applicable □Not applicable
Basis or monetary criteria for determining an individually
Top 5 of the receivables from non-related party
significant receivable
Method of determining provision for receivables with
Based on the balance of the present value of the expected future cash
individually significant amount and individual provision for bad
flow of the account receivable less than its book value
debts
(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 method
and other method)
Portfolio 1 Accounts receivables of related party
The basis for confirming the credit risk portfolio is as follows:
Portfolio 2 Accounts receivables of non-related party
Portfolio 1 The provision for bad debts shall not be made for the
accounts receivable from related party except that there is objective
Method of provision for bad debts on the basis of credit risk
evidence showing that the Group is unable to recover the money
portfolio:
according to the original provisions of account receivables
Portfolio 2 Aging analysis method
68
In the portfolio, the provision for bad debts made by aging analysis method
√Applicable □Not applicable
Provision proportion of Provision proportion of
Aging
receivables (%) other receivables (%)
Within 1 year (including 1 year)
Thereinto: as to the sub-items within 1 year, the lines can be added
Within 6 months 0 0
7~12 months 1 1
1~2 years 15 15
2~3 years 30 30
Over 3 years
3~4 years 50 50
4~5 years 75 75
Over 5 years 100 100
In the portfolio, the provision for bad debts made by balance percentage method
□Applicable √Not applicable
In the portfolio, the provision for bad debts made by other methods
□Applicable √Not applicable
(3) Receivables with individually significant amount and individual provision for bad debts
√Applicable □Not applicable
Criteria of individual Objective evidence shows that the Group is unable to recover the money according to the original provisions of
provision for bad debts other receivables.
Method of provision According to the difference of the present value of the expected future cash flow of other receivable less than its
for bad debts book value
12. Inventories
√Applicable □Not applicable
Inventories 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 include
low-value consumption goods and the packing, etc.; the low-value consumption goods are amortized by installment while
packing 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 cost
that is higher than the net realizable value, the provision for depreciation of inventories shall be included in the current profits
or losses. If the influence factors of the provision for depreciation of inventories before have disappeared, making the net
realizable 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 profits or losses.
Net realizable value is the amount that the estimated selling price of the inventory minus the cost that would incur at the
time of completion, the estimated cost of sales and relevant taxes and fees in daily activities. For the provision for decline in
value of inventories, the raw materials shall be by category while the finished goods shall be by individual inventory item.
13. Held-for-sale assets
□Applicable √Not applicable
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14. Long-term equity investment
√Applicable □Not applicable
Long-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 equity
investment obtained by business combination under the same control takes the share of the book value in the consolidated
financial statements of the ultimate controlling party acquired from the acquiree on the combination date as the initial
investment cost; the difference between the initial investment cost and the book value of the combined consideration is
adjusted to the capital reserves (when sufficient for offset, write down the retained earnings); as for other comprehensive
income prior to the date of combination, when handling the investment, it shall carry out the accounting treatment on the
same basis of the relevant assets or liabilities directly disposed by the investee, as for the shareholders’ equity recognized
due to the changes in other shareholders’ equity except for net profit or loss, other comprehensive income and profit
distribution in the investee, it shall be transferred to current profits or losses during disposal of the investment. In which, if it is
still long-term equity investment after disposal, carry forward in proportion, if it is converted to the financial instruments, then
carry forward fully.
Long-term equity investments obtained by business combination not under the same control shall take the combined
cost as the initial investment cost (if the business combination not under the same control is realized by two or more
transactions in steps, take the sum of the book value of equity investments held by acquiree prior to purchase date and
newly increased investment cost on purchase date as the initial investment cost), and the combined cost includes the sum of
the assets paid by the purchaser, the liabilities incurred or assumed, the fair value of the equity securities issued; as for other
comprehensive income prior to the purchasing date recognized by the equity method accounting, such investment shall be
handled 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 profit or loss, other comprehensive income
and profit distribution in the investee, it shall be transferred to current profits 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 to
the financial instruments, then carry forward fully. When equity investments held prior to the purchasing date as financial
instrument included in the cumulative changes in fair value of other comprehensive income is counted according to the cost
method, it shall be transferred fully into the current profit or loss. As for the long term equity investments acquired other than
long term equity investments formed by the business combination, the initial investment cost shall be determined according
to the following methods: obtained by making payment in cash, it shall take the actual purchase price paid and the directly
related costs and taxes with the acquisition of long term equity investment and other necessary expenses as the initial
investment; obtained by issue of equity securities, the fair value of the issue of equity securities shall be taken as the initial
investment cost.
The Company can measure the long-term equity investments controlled by the investment enterprises with cost method
in individual financial statement of the Company. Control means having the power over the investee and enjoying variable
gains through participating in related activities of the investee, and having the ability to utilize the power over the investee to
influence the return amount.
When the cost method is used, the long-term equity investment is priced at the initial investment cost. The cost of the
long-term equity investment shall be adjusted if the investment is added or withdrawn. The cash dividends or profits declared
by the investee shall be recognized as the current gain on investment.
If the Group has a joint control or material influence on the investee, the long-term equity investment shall be accounted
by the equity method. Joint control means enjoying control over certain arrangement according to contract, and such
arranged activities must be decided upon agreement of the Group and the other participants that share the control rights.
Material influence means that the company possesses the right of decision-making participation in the financial and operating
policies 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 value
of identifiable net assets of the invested enterprise, it shall be included in the initial investment cost of long-term equity
investment; if the initial cost of a long-term equity investment less than the share of fair value of identifiable net assets the
invested enterprise, the difference shall be included in the current profits or losses and the cost of the long-term equity
investment shall also be adjusted.
When the equity method is adopted, after obtaining a long-term equity investment, in accordance with the share of other
comprehensive income and net income achieved by the investee which should be enjoyed or shared, respectively confirm
the investment profit or loss and other comprehensive income, and adjust the book value of the long-term equity investment.
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In confirmation of the share of the net profit or loss of the investee, based on the fair value of the identifiable assets of the
investee when obtaining the investment, in accordance with the Group's accounting policies and accounting periods, offset
the internal transaction gains and losses between affiliated enterprises and joint ventures and attribute to the investing party
in accordance with the enjoyed proportion (but the loss of internal transactions is an impairment loss of assets, which should
be fully recognized), confirm the net profit of the investee after adjustment, except for the assets that are invested or sold
to form a business. In accordance with the portion of the profits or cash dividends declared by the investee entity, the book
value of the long-term equity investment shall be reduced accordingly. The Group confirms the net losses of the invested
enterprise, the book value of the long-term equity investment and other long-term interests in the net investment of the
investee is reduced to zero, except for which the Group bears extra liability for loss. For the other changes in the equity of
the investee other than net gains/losses, other comprehensive income and profit distribution, the book value of the long-term
equity 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 price
shall be included in current profits or losses. Accounting treatment shall be carried out for the long-term equity investments
accounted for using the equity method, terminating the equity method, and relevant other comprehensive income
accounted for using original equity on the same basis of direct disposal of relevant assets or liabilities by the investee. The
shareholders’ equity recognized by the changes in other shareholder’s equity of the investee other than net profit or loss,
other comprehensive income and profit distribution shall be transferred fully into the current profits or losses; in case of still
using the equity method, carry out the accounting treatment for other comprehensive income related to the original equity
accounting shall on the same basis of direct disposal of relevant assets or liabilities by the investee and transfer into the
current profits or losses in proportion, and the shareholders’ equity recognized by the changes in other shareholder’s equity
of the investee other than net profit or loss, other comprehensive income and profit distribution shall be transferred into the
current profits 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 measurement
of the investment properties. Depreciation and amortization are made for buildings and land use rights according to their
estimated 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) rate
Building 30 years 0% 3.3%
Calculated and determined based on the estimated
Land use right Land use years 0%
residual value rate and land use years
The estimated useful lives, estimated net residual values and depreciation (amortization) method of the investment
properties 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 estate
for investment to fixed assets or intangible assets. When the purpose of self-use property is changed to earning rentals or
for capital appreciation, from the date of change, convert the fixed assets or intangible assets to investment properties. Upon
conversion, 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 flow to the Group and their costs
can be reliably measured. In case of meeting the recognition condition, the subsequent expenditure relating to fixed assets
shall be included in the cost of fixed assets, and stop recognizing the book value of the replaced part; otherwise, it shall be
included in current profits or losses at the time of incurrence.
71
The initial measurement of the fixed assets shall be made at its cost. The cost of purchasing a fixed asset consists of
the purchase price, relevant taxes, and other expenditures incurred before making the fixed asset reaching the expected
conditions for use and attributable directly to such asset.
(2) Depreciation method
√Applicable □Not applicable
Depreciation period
Category Depreciation method Residual rate Annual depreciation rate
(year)
Housing and buildings Straight line method 20-40 years 0% 2.5%-5%
Confirmed based on the
based on the price
Machinery and equipment Straight line method 3-20 years estimated residual value rate
of scrap steel
and expected service life
Office and electronic equipment Straight line method 3-5 years 0% 20-33.3%
Transportation facilities
Straight line method 5 years 0% 20%
(excluding vessels)
Vessels Straight line method 10-30 years 5%/10% 3-9.5%
(3) Recognition and measurement depreciation of fixed assets under financing lease
√Applicable □Not applicable
Depreciation for fixed assets under financing lease is calculated in accordance with the same policy as fixed assets. If
the acquisition of ownership of the leased asset at the expiration of the lease period can be confirmed rationally, depreciation
shall be accrued within the service life of the leased asset. If not, depreciation shall be accrued within lease term or the
service 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 of
each 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 project
expenditures occurred in construction period, capitalized loan expenses before making the construction in progress reach
expected status of use and other relevant expenses.
When the construction in progress reaches the expected condition for use, it shall be transferred into fixed 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 the
interest on borrowings, the amortization of the discount or premium, auxiliary expenses and the exchange difference arising
from the foreign currency borrowings.
The borrowing cost directly attributable to the purchase, construction or production of assets eligible for capitalization
shall be capitalized, while other borrowing costs shall be included in current profits or losses. The assets eligible for
capitalization refers to assets such as fixed assets and investment properties which take a rather long period of time to
purchase, 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 salable
condition has started.
When the purchased, built or produced fixed asset reached expected usable or salable condition, stop capitalization.
The subsequent borrowing costs shall be included in current profits or losses.
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The amount of interest capitalization in each accounting period during the capitalization period is determined by the
following method:
(1) The special borrowings shall be determined based on the amount that the interest expense actually incurred in the
current 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 assets
expenditures expenses exceeding that of special borrowings by the weighted average interest rate of the general borrowings
occupied.
In case that purchasing, building or production activities of assets cease accidentally for reasons other than reaching
expected usable or salable status and the term of cease exceeds 3 months on end, capitalization of borrowing cost shall be
stopped. The borrowing costs occurring during the term of cease shall be recognized as cost and included in current profits
or losses until purchasing, building or production activities resume.
19. Biological assets
□Applicable √Not applicable
20. Oil and gas assets
□Applicable √Not applicable
21. Intangible assets
(1) Valuation method, service life and impairment test
√Applicable □Not applicable
Intangible assets are recognized only when the related financial benefits will probably flow into the Group and their
costs can be reliably valued, and initial measurement is taken at cost. However, intangible assets acquired in business
combination under the same control can be measured reliably, that is, intangible assets are recognized as intangible assets
separately and measured at fair value. The evaluation value confirmed by the state-owned authority shall be the book value
for the intangible assets invested by the state-owned shareholders at the re-structuring of the Company.
Service life of intangible assets shall be confirmed based on the term in which they can bring benefits to the Company.
If the term in which intangible assets bring benefits to the Company cannot be expected, such assets shall be confirmed as
intangible assets with uncertain service life.
The service life of intangible assets is shown as follows:
Service life
Land use right Land service life
Software use cost 5 years
Proprietary technology 10 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 assets
respectively. If the price paid for outsourced land and building is difficult to distribute in a reasonable way between the land
use rights and the building, they are all regarded as fixed assets.
Intangible assets with limited service life are amortized in straight line method in the service life. Double check is made
by the Group at the end of each year to expected life in use and amortization method of intangible assets with limited use of
life 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 in
development phase. Expenditure in research phase shall be included in the current profits or losses at the time of incurrence.
Expenses in development stage are capitalized when simultaneously satisfying the following conditions: It is technically
feasible to complete the intangible assets to make them usable and marketable; the management has the intention to
complete the intangible assets and to use them or to sell them; the ways intangible assets yield financial benefits. It’s
73
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 resources
supports to complete the development of the intangible assets, with the ability to use and sell; the expenses attributable to
such development stage of intangible assets can be reliably measured. The development expenditures not satisfying the
above conditions are included in current profits or losses when incurred.
22. Long-term assets impairment
√Applicable □Not applicable
The assets impairment, except for inventories, deferred income tax and financial 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 sign
of impairment, the Group will estimate recoverable amount and conduct impairment test. An impairment test shall be
conducted at the end of the year at least for the goodwill formed due to the business combination no matter whether there is
any sign of impairment. Impairment test shall also be made at least once each year for the intangible assets not reaching the
usable state.
The recoverable amount is the higher between net amount of asset’s fair value deducting disposal expenses and
the present value of expected future cash flow. Recoverable amount is estimated by individual piece of asset. In case
recoverable amount of individual asset is difficult to value, recoverable amount of asset group to which they said individual
asset belongs is confirmed. An asset group can be recognized on the basis that its main cash in-flow is independent of that
of 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 book
value to the recoverable amount, the amount written down is included in the current profits or losses, and the corresponding
asset impairment provision shall be withdrawn.
In terms of goodwill impairment test, the book value of goodwill formed by the business combination shall be amortized
to the relevant asset group by reasonable means from the date of purchase; it shall be amortized to relevant combination
of asset groups when it is difficult to amortize to relevant asset group. The relevant asset group or combination of asset
groups is the one that can benefit from the synergy effect of the business combination, and is not larger than the reporting
subsection determined by the Group.
For impairment test of relevant asset groups or combination of asset groups that contain goodwill, if there is a sign of
impairment, the impairment test on the asset group or the asset group that does not include goodwill is performed first. Then
calculate the recoverable amount and confirm corresponding impairment loss. Next, impairment test is made to relevant
asset groups or combination of asset groups that contain goodwill. If the recoverable amount is lower than the book value
of the asset. The impairment loss is firstly to compensate the book value of the goodwill amortized in the asset group or
portfolio, and then to compensate the book value of other assets in the proportion of the book value of other assets except
for 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 period
Improvement of leased fixed asset for operation Expected benefit period
24. Employee compensation
(1) Accounting treatment of short-term compensation
√Applicable □Not applicable
During the accounting period when the employees have rendered services, the actual short-term compensation shall be
recognized as liability and included in current profit or loss or related assets cost.
(2) Accounting treatment of post-employment benefits
√Applicable □Not applicable
74
The Group shall buy endowment insurance and unemployment insurance managed by the local government and open
the enterprise annuity for the employees. The corresponding expenditure shall be included in related asset cost or current
profits or losses at the time of incurrence.
(3) Accounting treatment of dismissal benefits
□Applicable √Not applicable
(4) Accounting treatment of other long-term employee compensation
□Applicable √Not applicable
25. 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 estimated
liability:
(1) This liability is the current liability of the Group;
(2) The fulfillment of the liability may cause outflow 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 reflect present best estimates. Where there is conclusive evidence
that the book value does not reflect the current best estimate, the book value is adjusted in accordance with the current best
estimate.
26. Share-based payment
□Applicable √Not applicable
27. Other financial instruments such as preferred shares and perpetual bonds
□Applicable √Not applicable
28. Revenues
√Applicable □Not applicable
Revenue shall be recognized when related benefits are likely to flow into the Group, the amount can be reliably
calculated, and the following conditions are met synchronously.
(a) Revenue from sales of large-scale port equipment, ocean heavy equipment, product of steel structure and
construction 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 constructing
item the Group responsible for, in the construction phase, in accordance with the construction contract standards, when
the results can be estimated reliably, the construction contract revenue should be valued by the fair value of consideration
chargeable, at the same time to confirm the “Long term receivables”, to be written off when payment received from the
owners.
29. Government subsidies
√Applicable □Not applicable
Government subsidies are recognized when they are able to meet the conditions attached and can be received. Where
government subsidies are monetary assets, they are measured in amounts received or receivable. Where the government
subsidies are non-monetary assets, they shall be measured at fair value; if the fair value cannot be reliably obtained, it shall
be measured in nominal amount.
75
According to government documents, for long-term assets for the purposes of purchasing and constructing or formed in
other ways, relevant subsidy shall be recognized as government subsidy related to assets; if it is not clear in the government
documents, judgment shall be based on the basic conditions necessary to obtain the subsidy. If the basic condition is that
long-term assets are for the purposes of purchasing and constructing or formed in other ways, the subsidy is recognized as
government 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 periods
is recognized as deferred income and is booked into current P&L in the period when related expenses are recognized. That
used 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 periods
is recognized as deferred income and is booked into current P&L in the period when related expenses are recognized. That
used 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 profits or losses by installments in reasonable and systemic way within the service life of the
asset (but the government subsidy measured based on nominal amount shall be directly included in current profits or losses);
of relevant assets are sold, transferred, retired or damaged before the end of service life, the balance of undistributed
deferred income shall be transferred to profits 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 balance
sheet, the temporary differences arising from the difference between the book value and tax base of the item that is not
recognized as the asset and liability but which tax base can be determined according to tax law, the Group shall withdraw
the 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 initial
recognition of assets or liabilities arising from transactions with the following characteristics: the transaction is not an
enterprise merger, and the accounting profits, taxable income and deductible loss are not affected when the transaction
occurs.
(2) For investment-related taxable temporary differences of subsidiaries, associates and joint ventures, the time of
the temporary difference reversal can be controlled and the temporary difference will not likely be transferred back in the
foreseeable future.
For deductible temporary differences, deductible losses and tax credits to be carried forward to subsequent year, and
the Group will confirm the deferred income tax assets arising therefrom to the extent that it is likely to obtain the amount of
future 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 profits, 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 and
joint ventures are confirmed as deferred income tax assets, when the temporary difference is able to be transferred back
in the foreseeable future and when possible taxable income which is used to compensate the provisional difference can be
possibly obtained in future.
On the date of balance sheet, deferred income tax assets and deferred income tax liabilities are calculated by tax rate
applicable to the period of term the assets or liabilities are expected to be collected back in accordance with regulations of
tax law, and reflect 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 likely
that taxable income obtained in future periods is not enough to deduct the benefits from book value of the deferred income
tax assets, the carry value of deferred income tax assets shall be written down. On the date of balance sheet, the Group
reevaluates unrecognized deferred income tax assets and recognizes the deferred income tax assets to the extent that
sufficient 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 tax
liabilities after offset shall be listed: the Company is legally authorized to settle the income tax assets and liabilities of the
current period at net amounts; the deferred income tax assets and liabilities are related to the income tax levied by the same
tax authority on the same tax payer, or such on different tax payers but in the future period of the reversal of each important
76
deferred income tax assets and liabilities, the involved tax payers intend to settle the income tax assets and liabilities of the
current period at net amounts or obtain assets and repay debts at the same time.
31. Leases
(1) Accounting treatment for operating leases
√Applicable □Not applicable
A lease substantially transferring all risks and remuneration related to the ownership of the assets is a financing lease.
Others are operating leases.
As the lessee of operating leases
The rental expenses of operating leases are included in the asset cost or the current P&L based on straight-line method
in the lease period.
As the lessor of operating leases
The rental income of the operating lease is included in the asset cost or the current P&L based on straight-line method
in the lease period.
(2) Accounting treatment of financing leases
√Applicable □Not applicable
As the lessee of finance leases
As for the assets from finance leases, on the beginning date of lease term, the lower one of the fair value of the leased
asset and the minimum rental payment the present value is accounted in the book as the leased assets; the minimum lease
payment shall be the entry value of long-term payables; the difference shall be the unrecognized financing charges, which
shall be amortized in each period within the leasing term based on actual interest rate method. Contingent rental is included
in the current profits or losses statements at the time of incurrence.
Leaseback
Leaseback for financing purposes will be treated as a whole, which is accounted by mortgage loan, on the condition that
asset sale is related to lease transaction and can be repurchased when the lease term expires, that is to say, the accounting
treatment shall be conducted as per mortgage loan.
32. Other significant accounting policies and accounting estimates
√Applicable □Not applicable
32.1 Construction contract
For customized production of large port equipment, heavy equipment, steel structure product and construction project,
because the commencement and completion dates usually in different fiscal years, the Group shall use construction contract
calculate the revenue and cost.
If the result of individual construction contract can be reliably estimated, the revenue and cost of the construction project
can 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 benefit related to the contract is likely to
flow into the group, and the actual contract cost can be clearly distinguished and measured reliably. In the case of a fixed
cost contract, the following conditions should be satisfied: the total contract revenue can be measured reliably, and the
contract completion progress and the cost to be taken for the completion of the contract can be reliably determined. The
amount of total contract revenue includes the initial revenue stipulated in the contract and income resulting from contract
change, 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 percentage
corresponding to the revenue recognition node of the construction contract reached at the end of the term. The Group has
established 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 qualification certificate
issued, shipping documents acquired, product ready for shipping;
77
Third node: the product is delivered after final inspection by the buyer and the final delivery certificate issued by the
buyer is obtained.
The Group will analyze the construction contracts completed in prior year by product category, and will calculate and
determine the completion percentage that should be recognized when reaching the revenue recognition node, and take it as
the 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 proportion
of accumulated contract cost incurred in total expected contract cost. The accumulated contract cost does not include that
related to future activities of the contract.
(iii) The completion progress of steel structure manufacturing shall be determined by the proportion of cumulative
processing 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 cost
that 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 other
than contract revenue.
(c) When expected total contract cost exceeds total revenue, the expected losses should be immediately recognized as
current profits or losses.
(d) When contract value is settled in installments, the settled installment is recognized as settled value, which will be
transferred and set off with related accumulated costs and confirmed margin after the settlement of construction contract. On
the date of balance sheet, when the sum of accumulated costs and confirmed margin is greater than the accumulated settled
value, the difference shall be listed as the amount due from customer for completed work in current assets. Otherwise, it
shall be listed in the amount due from customer for contract work in current liabilities.
32.2 Profit 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 relevant
products or current profit or loss, and shall also be included in the special reserves; it shall be processed separately
when used by distinguishing whether to form fixed asset or not: in case of belonging to expense expenditure, write down
the special reserves directly; in case of forming fixed assets, collect the expenditures incurred and recognize the fixed
assets when reaching expected usable status, and write down the equivalent special reserves and recognize equivalent
accumulated depreciation at the same time.
32.4 Measurement at fair value
The Group measures the derivative financial instruments and listed equity instruments investments at fair value on each
date of balance sheet. Fair value refers to the price that a market participant gains or pay for sale of an asset or transfer
of a liability in an orderly transaction occurring on the measurement date. For relevant assets or liabilities measured by fair
value, the orderly transaction for sale of an asset or transfer of a liability is assumed to be conducted in the main market. If
it relevant assets or liability measured by fair value do not exist in the market, the transaction is assumed to be conducted in
the most advantageous market for relevant assets or liabilities. The main market (or the most advantageous market) is the
trading market in which the Group is able to enter on the measurement date. The Group assumes that market participants
intend to realize their maximum economic benefits 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 for
economic benefit or to sell the assets to other market participants that can put the assets in best use for economic benefits.
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 value
cannot be obtained or is not practicable.
For assets and liabilities measured or disclosed at fair value in the financial statements, fair value level shall be
determined by the input value of lowest level, which is important for the fair value measurement as a whole: the input value
of the first level is the unadjusted quotation on the active market of the same assets or liabilities that can be obtained on the
78
measurement date; the input value of the second level is the input value that may be observed directly or indirectly by the
relevant assets or liabilities except the first level input value; the input value of the third level is the unobservable input value
of the relevant assets or liabilities.
On each date of balance sheet, the Group reevaluates the assets and liabilities that continue to be measured at fair
value as recognized in the financial statements to determine whether a conversion has occurred at the fair value level.
32.5 Major accounting judgments and estimates
For the preparation of financial statements, the management is required to make judgments, estimates and assumptions
that will affect the presentation amount of income, costs, assets and liabilities and disclosure thereof, as well as disclosure
of contingent liabilities on Date of balance sheet. However, the results of these assumptions and uncertainties may result in
major 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 estimate
uncertainty 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 construction
contract based on the situation of actual cost of the construction contract and the actual cost of the similar products in the
reference, so that the expected total cost of the contract is approximate to its final actual cost. If there is a discrepancy
between the expected total cost and the actual total cost of contracts in the future, the discrepancy will affect the cost
confirmed by the Group this year.
At the same time, the Group management regularly performs impairment testing on construction contracts. If the
expected total cost of the construction contract exceeds the total contract income, the contract expected loss shall be
calculated and withdrawn. Changes of the expected total cost due to continuous review and revision may affect the carrying
value of the construction completed amount not closed/construction uncompleted amount closed and impairment losses
during 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 the
bad debt reserves of the accounts receivable based on the analysis of the actual conditions (including but not limited to the
advances to suppliers capacity of the debtor, the age of the accounts receivable, the collection after the period). In case of
any event or change, if the estimate adopted is changed, the estimate shall be adjusted accordingly, and the appropriate bad
debt reserve for receivables shall be accrued. If the expected amount is different from the original estimate, the difference
will 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 price
reserves. If any event or circumstance changes, it is necessary to use the estimate to prepare the inventory falling price
if the inventory is not likely to realize the relevant value. If the expected amount is different from the original estimate, the
difference will affect the book value of the inventories and the impairment loss during the estimated change.
Service life and the net residual value of fixed assets
Expected service life and the net residual value of fixed assets are estimated by the Group. These estimates are based
on the actual service life and net residual value of fixed assets similar in nature and function. Technological innovation and
the actions taken by competitors due to severe industry cycles may cause major changes to such estimates; changes in the
economic environment, technical environment and other environmental changes in service life of fixed assets may also lead
to material differences in the expected implementation of the economic benefits associated with fixed assets.
Impairment of non-current assets except for financial assets (except for goodwill)
The Group determines whether there is any indication of possible impairment of non-current assets other than financial
assets on the date of balance sheet. For non-current assets except financial assets, when there are indications that its
carrying amount is not recoverable, an impairment test is conducted. Impairment is indicated when the book value of the
79
asset or asset group is higher than the recoverable amount, that is, the higher one between the net amount of the fair value
less the disposal expenses and the present value of the expected future cash flows.Net amount gained by fair value less
disposal expenses shall be determined by the price in sale agreement of similar assets in fair transaction or market price
observed less the incremental cost attributable to the assets. The management must estimate the expected future cash flow
of the asset or asset group and select the appropriate discount rate to determine the present value of the future cash flow
when estimating the present value of future cash flow.
Goodwill impairment
Impairment test for goodwill shall be conducted at least annually. This requires estimate of the present value of the
future cash flows of the asset group or the asset group to which goodwill is distributed. The Group shall estimate the
expected future cash flow of asset or asset group and select the appropriate discount rate to determine the present value of
the future cash flow when estimating present value of future cash flow. For details, please refer to clause 23 in Note VII. 23.
Income tax and deferred income tax
The Company was recognized as a high-tech enterprise in 2014, with a three-year period of validity. The company
calculated and paid the enterprise income tax at the rate of 15% according to the relevant income tax laws. According to the
relevant regulations, one condition for the qualification of high-tech enterprises is that the proportion of R & D expenditure in
sales income must not be lower than the specified proportion, in which the proportion is 3% for enterprise with annual sales
income more than 200 million Yuan. If the final determination result given by tax authority in charge is different from that of
the 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 and
takes into consideration applicable income tax provisions and tax preferences. There is uncertainty in the final tax treatment
for some of the transactions and events involved in normal operations. The Group needs to make major judgments when
the income tax is calculated and withdrawn. The Group shall estimate whether additional taxes need to be paid in respect of
future tax adjustments for tax purposes so as to confirm corresponding income tax liabilities. If the final determination result
of these tax matters is different from the originally entered amount, the difference will affect the amount of income tax and
deferred income tax for the period of final recognition.
When evaluating temporary differences, the Group also considers the possibility that deferred income tax assets can
be recovered. The temporary differences mainly include the impacts of deductible losses, asset impairment provision,
unrealized profits of internal transactions, expected liabilities that have not been approved before tax, interest not yet paid,
wages and salaries, financial assets measured at fair value through the current profit or loss, and changes in the fair value
of liabilities. The confirmation of the deferred income tax assets is based on the estimation of the Group and assumes that
the deferred income tax assets are reversed through the Group’s continuous operation in the foreseeable future. At the same
time, the Group also takes into account the deferred tax assets and the tax rate at which the deferred income tax liabilities
are reversed. Based on the experience gained by the Company for many years, as well as the continuous input into the
research and development projects, the Company is expected to obtain the qualification of high-tech enterprises the year
and beyond, and hereby calculate and recognize the deferred income tax assets and deferred income tax liabilities at the
preferential tax rate.
The Group has calculated and withdrawn income tax liabilities and deferred income tax items of this year based on
current tax laws and current best estimates and assumptions. In the future, tax liabilities and deferred income tax items may
need to be adjusted due to changes of tax laws or related circumstances.
80
33. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√Applicable □Not applicable
Contents and reasons Remarks (name and account
of the changes in Approval procedure of the significantly affected
accounting policies items in the statements)
In accordance with requirements of Notice on Revising and Issuing Format of
Financial Statement of General Enterprise for 2018 (CK [2018] No. 15), in the
balance sheet, “notes receivable” and “accounts receivable” are consolidated
into the newly increased item of “Notes receivable and accounts receivable”,
The changes in this
“interest receivable” and “dividend on shares receivable” are consolidated
accounting policy had no
Change in presentation into “other accounts receivable”, “clearance of fixed assets” is consolidated
effect on the consolidation
mode of the financial into the item of “fixed assets”, “notes payable” and “accounts payable” are
and the net profit as well as
statements consolidated into the newly increased item of “notes and accounts payable”,
the shareholders’ equity of
“interest payable” and “dividend on shares payable” are consolidated into
the Company.
“other accounts payable”; in the profit statement, “expenses for R&D” is
added to present the expensed expenditures in the process of research and
development, the item of “financial expenses” is split into the specific item of
“interest expenses” and “interest income”.
(2) Changes in significant accounting estimates
□Applicable √Not applicable
34. Others
□Applicable √Not applicable
VI. Taxation
1. Main taxes and tax rates
Main taxes and tax rates
√Applicable □Not applicable
Tax Taxation basis Tax rate
VAT is applicable to the sales of the Group’s products, among which the taxable income from
the sales of the products in domestic market is subject to the output tax as per 17% before
May 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 include
16%, 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 income
VAT is applicable is subject to 11% for tax payment before May 1, 2018 and 10% from May 1, 2018 on;
VAT to the sales of the the income from leasing of the equipment is applicable to VAT and is subject 17% for tax
Group’s products. payment before May 1, 2018 and 16% from May 1, 2018 on; the income from the sales of the
equipment is applicable to the simple collection measures of VAT and the tax rate is halved to
2%; the Group’s income from the leasing of the housing is applicable to the simple collection
measures of VAT as per 5%; “B-T” project is applicable to VAT and the output tax on the
taxable 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 tax
deductible, except for the applicable VAT’s simple collection method.
Consumption tax / /
Business tax / /
Urban
The Group calculates and pays by 7% and 3% of the actual payment of turnover tax
maintenance and Amount of paid VAT
respectively.
construction tax
81
Tax Taxation basis Tax rate
Enterprise income tax is calculated and paid in accordance with Enterprise Income Tax
Enterprise income tax Law of P.R. China (“Income Tax Law”). In accordance with relevant regulations in High-
is calculated and paid tech Enterprise Recognition Management Approaches (GKFH [2016] No. 32) and the High-
in accordance with tech Enterprise Recognition Management Work Guidelines (GKFH [2016] No. 195) and the
Enterprise
Enterprise Income Notification on Announcing List of Second Batch of Shanghai Municipality 2017 High-tech
income tax
Tax Law of P.R. China Enterprises Recognition, the Company replied and passed the reexamination in 2017, and
(hereinafter referred to was awarded the High-tech Enterprise Certificate (certificate number: GR201731002345).
as “Income Tax Law”). The certificate shall be valid for 3 years. The Company actually applied the enterprise income
tax 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 Company 15%
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., Ltd 25%
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., Ltd 25%
CCCC Rudong Construction Development Co., Ltd. 25%
ZPMC Netherlands Coperatie 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 Hamburg 32.28%
ZPMC Lanka Company (Private) Limited 17.5%
ZPMC North Amercia Inc. (Note 5) 15%
ZPMC Korea Co., Ltd. 20%
ZPMC Engineering Africa (Pty) Ltd. 28%
ZPMC Engineering (India) Private Limited 30%
ZPMC Southeast Asia Holding Pte. Ltd. 17%
82
Name of taxation subject Income tax rate (%)
ZPMC Engineering (Malaysia) Sdn. Bhd. 20%
ZPMC Australia Company (Pty) Ltd. 30%
ZPMC Brazil Servio Portuários LTDA 25%
ZPMC Limited Liability Company 20%
ZPMC NA East Coast Inc. (Note 5) 15%
ZPMC NA Huston Inc. (Note 5) 15%
ZPMC Middle East FZE 0%
ZPMC UK LTD 20%
Greenland Heavylift (Hong Kong) Limited 16.5%
GPO Grace Limited 0%
GPO Amethyst Limited 0%
GPO Sapphire Limited 0%
GPO Emerald Limited 0%
GPO Heavylift Limited 0%
GPO Heavylift AS 0%
ZPMC Latin America Holding Corporation 25%
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 liability
companies registered in Hong Kong, China. Based on Hong Kong’s taxation regulations, the actual profits tax rate applicable
to such companies is 16.5% (2017: 16.5%).
Note 2: Shanghai Zhenhua Heavy Industries Group (Nantong) Heavy Gear Reducer Co., Ltd won Hi-tech Enterprise
Certificate (No. GR201732001352) in 2017, with the valid term of 3 years. Shanghai Zhenhua Heavy Industries Electric
Co., 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. was
recognized as hi-tech enterprise in August, 2015 and won Hi-tech Enterprise Certificate (No. GR201832001451) after
reexamination in 2018, with the valid term of 3 years. In accordance with relevant provisions in Article 28 of Income Tax
Law, the actually applicable enterprise income tax rate for these companies in this year was 15% (2017: 15%). ZMPC
Qidong Ocean Engineering Company was recognized as hi-tech enterprise in November, 2015 and won Hi-tech Enterprise
Certificate (No.GF201532000832) with the valid term of 3 years, and the certificate expired in November, 2018, so the
applicable Enterprise income tax rate in this year is 25% (2017: 15%).
Note 3: ZPMC Netherlands Coperatie U.A., ZPMC Netherlands B.V. and Verspannen B.V. are the private limited
liability companies incorporated in Netherlands and the actually applicable enterprise income tax of the companies in this
year 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 the
income 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 liability
companies 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 been
cancelled in this year and the applicable income tax rate was 25% (2017: 25%) before cancellation.
2. Tax preference
□Applicable √Not applicable
3. Others
□Applicable √Not applicable
83
VII. Notes to Items of Consolidated Financial Statements
1. Monetary funds
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Cash on hand 1,569,455 1,365,865
Bank deposit 3,147,417,917 5,672,481,136
Other monetary funds 548,351,336 96,380,368
Total 3,697,338,708 5,770,227,369
Including: total amounts deposited abroad 998,711,134 637,201,842
Other information
On 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 the
overseas regulatory accounts and the cash deposit deposited for application to the bank for the letter of credit and letter of
guarantee.
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 as
per the interest rate of the current deposit.
2. Financial assets measured at fair value with changes included in current profits or losses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Financial assets held for trading 52,920,084 8,438,278
Including: Debt instrument investment - -
Equity instrument investment 8,438,278 8,438,278
Derivative financial assets 44,481,806 -
Others - -
Financial assets measured at fair value with - -
changes included in current profits or losses
Including: Debt instrument investment - -
Equity instrument investment - -
Others - -
Total 52,920,084 8,438,278
Other information:
(1) On Dec. 31, 2018, the financial assets held for trading - equity instrument investment held by the Company was
acquired 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 financial assets held for trading-derivative financial assets held by the Company were the
84
forward exchange contracts, which was signed by and between the Company and the banks, was not due and could change
USD 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 confirmed by the trading banks.
3. Derivative financial assets
□Applicable √Not applicable
4. Notes receivable and accounts receivable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Notes receivable 189,371,105 420,786,012
Accounts receivable 5,032,548,741 3,980,017,611
Total 5,221,919,846 4,400,803,623
Other information:
□Applicable √Not applicable
Notes receivable
(2) Presentation of notes receivable by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Bank acceptance bill 162,148,105 395,649,259
Commercial acceptance bill 27,223,000 25,136,753
Total 189,371,105 420,786,012
(3) Notes receivable pledged by the Company at the end of the period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Amount pledged at the end of the period
Bank acceptance bill 31,522,267
Commercial acceptance bill
Total 31,522,267
(4) Notes receivable endorsed or discounted by the Company at the end of the period but not yet due on date of balance
sheet
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending amount of recognition
Item Ending amount of recognition not terminated
terminated
Bank acceptance bill 364,908,608 -
Commercial acceptance bill - -
Total 364,908,608 -
85
(5) Notes transferred to accounts receivable by the Company due to non-performance of the drawer at the end of period
□Applicable √Not applicable
Other information
□Applicable √Not applicable
Accounts receivable
(1) Disclosure of accounts receivable by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Accounts receivable with
individually significant
588,585,831 9 440,054,331 75 148,531,500 182,649,892 3 182,649,892 100 -
amounts and individual
provision for bad debts
Accounts receivable with
provision for bad debts
5,848,023,730 89 964,006,489 16 4,884,017,241 4,916,647,965 93 936,630,354 19 3,980,017,611
made by portfolio with
credit risk characteristics
Accounts receivable with
individually insignificant
125,247,401 2 125,247,401 100 - 216,121,534 4 216,121,534 100 -
amount and individual
provision for bad debts
Total 6,561,856,962 100 1,529,308,221 23 5,032,548,741 5,315,419,391 100 1,335,401,780 25 3,980,017,611
Accounts receivable with individually significant amounts and individual provision for bad debts at the end of period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Accounts receivable Ending Balance
(by unit) Accounts receivable Provision for bad debts Provision proportion (%) Reason
Accounts receivable 1 297,063,000 148,531,500 50 Contract disputes
Accounts receivable 2 183,703,331 183,703,331 100 Contract disputes
Counter-party in capital
Accounts receivable 3 107,819,500 107,819,500 100
shortage
Total 588,585,831 440,054,331 / /
In the portfolio, the accounts receivable for which provision for bad debts is assessed with the aging method
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance
Age
Accounts receivable Provision for bad debts Provision proportion (%)
Within 1 year
Including: sub-items within 1 year
Within 6 months 1,801,135,202 - -
7~12 months 879,500,972 8,795,010 1
Subtotal of those within 1 year 2,680,636,174 8,795,010
86
Ending Balance
Age
Accounts receivable Provision for bad debts Provision proportion (%)
1~2 years 547,403,660 82,110,549 15
2~3 years 333,225,101 99,967,530 30
Over 3 years
3~4 years 188,508,451 94,254,225 50
4~5 years 76,862,217 57,646,662 75
Over 5 years 621,232,513 621,232,513 100
Total 4,447,868,116 964,006,489
In the portfolio, the accounts receivable for which provision for bad debts is assessed with the balance percentage method
□Applicable √Not applicable
In the portfolio, accounts receivable for which provision for bad debts is assessed with other methods
√Applicable □Not applicable
On Dec. 31, 2018, the accounts receivable with that are individually insignificant and for which provision for bad debts is
individually assessed are as follows:
Book balance Provision for bad debts Provision proportion (%) Reason
Accounts receivable 1 50,365,000 50,365,000 100 Counter-party in capital shortage
Accounts receivable 2 27,452,868 27,452,868 100 Contract disputes
Accounts receivable 3 14,854,467 14,854,467 100 Contract disputes
Accounts receivable 4 10,792,605 10,792,605 100 Contract disputes
Accounts receivable 5 7,847,300 7,847,300 100 Contract disputes
Accounts receivable 6 7,342,286 7,342,286 100 Contract disputes
Accounts receivable 7 3,524,112 3,524,112 100 Contract disputes
Accounts receivable 8 2,187,988 2,187,988 100 Contract disputes
Accounts receivable 9 880,775 880,775 100 Contract disputes
125,247,401 125,247,401 100
(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 debts
recovered 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 is
summarized and analyzed as follows:
Amount of provision for bad Proportion in total balance of accounts
Balance
debts receivable %
Total accounts receivable of Top 5
1,214,312,641 450,959,59 18
balances
87
On Dec. 31, 2017, the accounts receivable whose ending balance ranks Top 5 on the basis of totals by borrower is
summarized and analyzed as follows:
Proportion in total balance of
Balance Amount of provision for bad debts
accounts receivable %
Total accounts receivable of Top 5
777,865,552 279,069,695 15
balances
(5) Accounts receivable derecognized due to the transfer of financial assets
□Applicable √Not applicable
(6) The amount of assets or liabilities arising from accounts receivable transferred with continuing involvement
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
5. Advances to suppliers
(1) Presentation of advances to suppliers by age
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Age
Amount Proportion (%) Amount Proportion (%)
Within 1 year 1,438,324,530 86 819,125,581 79
1~2 years 165,247,645 10 108,191,230 10
2~3 years 36,491,651 2 28,266,965 3
Over 3 years 41,123,889 2 81,199,394 8
Total 1,681,187,715 100 1,036,783,170 100
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 has
not 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 of
advances 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 of
advances to suppliers is summarized and analyzed as follows:
Amount Proportion in total advances to suppliers %
Total advances to suppliers whose ending
784,431,874 47
balance ranks Top 5
On Dec. 31, 2017, the advances to suppliers whose ending balance ranks Top 5 on the basis of totals by object of
advances to suppliers is summarized and analyzed as follows:
Amount Proportion in total advances to suppliers %
Total advances to suppliers whose ending
210,805,030 20
balance ranks Top 5
88
Other information
□Applicable √Not applicable
6. Other receivables
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Interest receivable - -
Dividends receivable - 665,346
Other receivables 1,149,035,349 996,161,366
Total 1,149,035,349 996,826,712
Other information:
□Applicable √Not applicable
Interest receivable
(2) Classification of interest receivable
□Applicable √Not applicable
(3) Significant overdue interest
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
(4) Dividends receivable
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Project (investee) Ending Balance Beginning Balance
Jiangxi Huawu Brake Co., Ltd. - 665,346
Total - 665,346
(5) Significant dividends receivable with an age over 1 year
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Other receivables
(6) Disclosure of other receivables by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Other receivables with
individually significant
218,557,893 16 209,985,645 96 8,572,248 366,281,031 26 354,460,071 97 11,820,960
amount and individual
provision for bad debts
89
Ending Balance Beginning Balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Other receivables with
provision for bad debts
1,148,563,695 83 8,100,594 0.7 1,140,463,101 991,689,894 73 7,349,488 0.7 984,340,406
made by portfolio with
credit risk characteristics
Other receivables with
individually insignificant
16,029,282 1 16,029,282 100 - 16,029,282 1 16,029,282 100 -
amount and individual
provision for bad debts
Total 1,383,150,870 100 234,115,521 17 1,149,035,349 1,374,000,207 100 377,838,841 27 996,161,366
Other receivables with individually significant amount and individual provision for bad debts provision is individually
assessed debt at the end of reporting period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Other receivables (by Ending Balance
unit) Other receivables Provision for bad debts Provision proportion (%) Reason
Other receivables 1 164,124,678 164,124,678 100 Counter-party in capital shortage
Other receivables 2 54,433,215 45,860,967 84 Contract disputes
Total 218,557,893 209,985,645 /
In the portfolio, other receivables with the provision for bad debts by aging analysis method
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance
Aging
Other receivables Provision for bad debts Provision proportion (%)
Within 1 year
Including: sub-items within 1 year
Within 6 months 592,643,053 - -
7~12 months 1,630,497 16,306 1
Subtotal of those within 1 year 594,273,550 16,306 1
1~2 years 790,426 118,564 15
2~3 years 110,592 33,178 30
Over 3 years
3~4 years 348,735 174,367 50
4~5 years 150,304 112,729 75
Over 5 years 7,645,450 7,645,450 100
Total 603,319,057 8,100,594
In the portfolio, other receivable with the provision for bad debts by balance percentage method
□Applicable √Not applicable
In the portfolio, other receivables with the provision for bad debts by other methods
√Applicable □Not applicable
90
On Dec. 31, 2018, the other receivables that are individually insignificant and for which provision for bad debts is
individually assessed are as follows:
Book balance Provision for bad debts Provision proportion (%) Reason
Other receivables 1 4,214,642 4,214,642 100 Counter-party bankruptcy
Other receivables 2 3,037,042 3,037,042 100 Contract cancellation
Other receivables 3 1,692,765 1,692,765 100 Contract cancellation
Other receivables 4 1,539,600 1,539,600 100 Contract cancellation
Other receivables 5 1,170,282 1,170,282 100 Contract cancellation
Others 4,374,951 4,374,951 100 Contract cancellation
16,029,282 16,029,282 100
(7) Classification of other receivables by nature
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Nature Ending book balance Beginning book balance
Bid and performance bond 389,218,822 509,244,563
Unpaid taxes receivable 361,289,603 359,755,913
Secured repayment (i) 164,124,678 164,124,678
Advance payment receivable on behalf of the third party 108,068,254 26,010,084
Customs deposit 63,341,536 4,269,756
Money on call for product field service 58,832,432 83,673,256
Export rebates 43,627,838 4,258,496
Lease payment receivable 33,434,668 33,434,668
Staff borrowings receivable 28,506,262 34,257,357
Deposit receivable 5,345,585 45,458,548
Others 127,361,192 109,512,888
Total 1,383,150,870 1,374,000,207
(8) Particulars about the provision for bad debts made, recovered and carried back in current period
The provision for bad debts made for the reporting period was RMB 6,603,888; and the provision for bad debts
recovered 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: RMB
Proportion in total Ending balance of
Name of entity Nature Ending Balance Aging ending balance of provision for bad
other receivables (%) debts
Other receivables 1 Performance bond 176,800,000 1-2 years 13 -
Other receivables 2 Secured repayment 164,124,678 1-2 years 12 164,124,678
With in 1
Other receivables 3 Performance bond 75,500,000 5 -
year/1-2 years
91
Proportion in total Ending balance of
Name of entity Nature Ending Balance Aging ending balance of provision for bad
other receivables (%) debts
Other receivables 4 Customs deposit 63,341,536 Within 1 year 5 -
Advance money for
Other receivables 5 54,433,215 2-3 years 4 45,860,967
another
Total / 534,199,429 / 39 209,985,645
(11) Receivables involving government subsidies
□Applicable √Not applicable
(12) Receivables derecognized due to the transfer of financial assets
□Applicable √Not applicable
(13) The amount of assets or liabilities arising from other receivables transferred with continuing involvement
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
7. Inventories
(1) Classification of inventories
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw material 2,834,989,507 98,418,559 2,736,570,948 2,160,945,988 78,519,214 2,082,426,774
Goods in process 7,141,481,861 1,082,734,687 6,058,747,174 6,492,603,460 1,516,893,869 4,975,709,591
Merchandise inventory 7,717,820 - 7,717,820 24,284,499 11,153,985 13,130,514
Turnover materials - - - - - -
Consumptive biological assets - - - - - -
Unsettled assets for the
incompletion formed by the - - - - - -
construction contract
Total 9,984,189,188 1,181,153,246 8,803,035,942 8,677,833,947 1,606,567,068 7,071,266,879
(2) Falling price reserves of inventories
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount increased in current Amount decreased in current
Beginning period period Ending
Item
Balance Balance
Provision Others Reversal or write-off Others
Raw material 78,519,214 55,128,654 35,229,309 98,418,559
Goods in process 1,516,893,869 42,157,991 476,317,173 1,082,734,687
Merchandise inventory 11,153,985 - 11,153,985 -
Turnover materials - - - - - -
92
Amount increased in current Amount decreased in current
Beginning period period Ending
Item
Balance Balance
Provision Others Reversal or write-off Others
Consumptive biological
- - - - - -
assets
Unsettled assets for the
incompletion formed by the - - - - - -
construction contract
Total 1,606,567,068 97,286,645 522,700,467 1,181,153,246
(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: RMB
Item Balance
Accumulated costs incurred 52,716,364,109
Accumulated gross profit recognized 4,645,085,079
Less: expected loss 202,565,726
Settled amount 45,104,303,070
Assets completed but not settled, formed by the construction contract 12,054,580,392
Other information
√Applicable □Not applicable
Expected contract loss
2018 Beginning balance Increase in this year Reduction in this year Ending balance
Completed but not settled 167,373,950 211,730,653 (176,538,877) 202,565,726
Settled but not completed 122,353,724 66,003,010 (122,975,328) 65,381,406
289,727,674 277,733,663 (299,514,205) 267,947,132
2017 Beginning balance Increase in this year Reduction in this year Ending balance
Completed but not settled 426,807,687 114,395,849 (373,829,586) 167,373,950
Settled but not completed 25,011,087 103,234,343 (5,891,706) 122,353,724
451,818,774 217,630,192 (379,721,292) 289,727,674
On Dec. 31, 2018, the total contracted value of the construction contract still in construction (VAT not included) was
about RMB 31,234,014,562 Yuan (Dec. 31, 2017: RMB 32,334,004,931 Yuan).
Total amount of possible penalties for failure to fulfill the obligations as contracted
2018 2017
Valid letter of guarantee signed by the bank 12,425,695,774 15,315,071,475
Letter of guarantee not signed by the bank 5,601,715,384 4,101,363,500
18,027,411,158 19,416,434,975
93
8. Held-for-sale assets
□Applicable √Not applicable
9. Non-current assets due within one year
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Long-term receivables due within one year 894,638,424 1,896,475,472
Total 894,638,424 1,896,475,472
10. Other current assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Input VAT to be deducted 1,145,606,901 591,311,853
Advance payment of income tax 6,869,538 -
Total 1,152,476,439 591,311,853
11. Available-for-sale financial assets
(1) Particulars about available-for-sale financial assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale debt
instruments:
Available-for-sale equity
1,244,533,554 30,000,000 1,214,533,554 1,334,203,905 30,000,000 1,304,203,905
instruments:
Measured at fair value 1,171,539,394 - 1,171,539,394 1,261,209,745 - 1,261,209,745
Measured at cost 72,994,160 30,000,000 42,994,160 72,994,160 30,000,000 42,994,160
Total 1,244,533,554 30,000,000 1,214,533,554 1,334,203,905 30,000,000 1,304,203,905
(2) Available-for-sale financial assets measured at fair value by the end of the period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Classification of available-for-sale financial Available-for-sale equity Available-for-sale debt
Total
assets instruments instruments
Amortized cost of cost/debt instruments of
937,641,194 - 937,641,194
equity instruments
Fair value 1,171,539,394 - 1,171,539,394
Amount of change in fair value accumulatively
233,898,200 - 233,898,200
included into other comprehensive gains
Amount of impairment accrued - - -
94
(3) Available-for-sale financial assets measures at cost by the end of the period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Book balance Depreciation reserves
Shareholding Current
Increase Decrease Increase Decrease
Investee ratio in cash
Beginning in current in current Ending Beginning in current in current Ending
investee (%) dividend
period period period period
21st Century Science and
30,000,000 - - 30,000,000 30,000,000 - - 30,000,000 8.96 -
Technology Investment Co., Ltd.
CCCC Highway Bridges
National Engineering 13,000,000 - - 13,000,000 - - - - 10 -
Research Centre Co., Ltd.
National Engineering
Research Centre of Dredging 6,400,000 - - 6,400,000 - - - - 3.2 -
Technology and Equipment
ZPMC Longchang Lifting
800,000 - - 800,000 - - - - 10 -
Equipment Co., Ltd.
ZPMC Shenyang Elevator
1,500,000 - - 1,500,000 - - - - 10 -
Co., Ltd
ZMPC Ningbo Transmission
1,296,000 - - 1,296,000 - - - - 10 -
Machinery Co., Ltd
Hunan Fengri Power &
19,998,160 - - 19,998,160 - - - - 6.38 -
Electric Co., Ltd.
Total 72,994,160 - - 72,994,160 30,000,000 - - 30,000,000 / -
(4) Changes in depreciation of the available-for-sale financial assets in the reporting period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Classification of available-for-sale Available-for-sale equity Available-for-sale debt
Total
financial assets instruments instruments
Amount of impairment accrued at the
30,000,000 - 30,000,000
beginning of the period
Provision in this period - - -
Including: carry-forward from other
- - -
comprehensive gains
Reduction in this period - - -
Including: reversal due to recovery of fair
/ - -
value as at the end of the period
Balance of the amount of impairment
30,000,000 - 30,000,000
accrued at the end of the period
(5) Related explanation for fair value of the available-for-sale equity instruments with serious drop or non-provisional
drop, 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 investment
cost was RMB 11,071,606 Yuan.
The fair value of the available-for-sales equity instruments was confirmed by the closing price on the last trading day of
95
Shenzhen Stock Exchange. By Dec 31, 2018, the Company had confirmed the accumulated revenue of RMB 91,091,695
Yuan 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 included
in 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 the
investment cost was RMB 308,515,588 Yuan.
The fair value of the available-for-sales equity instruments was confirmed by the closing price on the last trading day of
Hong Kong Stock Exchange. By Dec 31, 2018, the Company had confirmed the revenue of RMB 168,197,665 Yuan for the
available-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 RMB
617,854,000 Yuan.
he fair value of the available-for-sale equity instruments was confirmed by the closing price on the last trading day of
Hong Kong Stock Exchange. By Dec 31, 2018, the Company had recognized the loss of RMB 26,080,952 Yuan for the
available-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 investment
income.
(iv) The Group held less than 0.01% of the stock equity of Shenwan Hongyuan Group and the investment cost was
RMB 200,000 Yuan, with the shareholding ratio less than 0.01%.
The fair value of the available-for-sales equity instruments was confirmed by the closing price on the last trading day
of Shenzhen Stock Exchange. By Dec 31, 2018, the Company had recognized the revenue of RMB 689,792 Yuan for the
available-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 in
investment 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 reclassified in this period
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
13. Long-term receivables
(1) Particulars about long-term receivables
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Interval of
Item Provision for Provision for
Book balance Book value Book balance Book value discount rate
bad debts bad debts
Leasing payment from financing - - - - - - -
Including: unrealized financing gain - - - - - - -
Merchandising goods for collection of payment by installment - - - - - - -
Labor for collection of payment by installment - - - - - - -
Account receivable of B-T project
96
Ending Balance Beginning Balance
Interval of
Item Provision for Provision for
Book balance Book value Book balance Book value discount rate
bad debts bad debts
-Principal 5,742,499,069 - 5,742,499,069 5,893,243,470 - 5,893,243,470
-Interest receivable 273,527,110 - 273,527,110 241,936,829 - 241,936,829
Accounts receivable from the projects of collection of
66,953,334 - 66,953,334 - - -
payment by installment
Less: long-term accounts receivable due within one year -894,638,424 - -894,638,424 -1,896,475,472 - -1,896,475,472
Total 5,188,341,089 - 5,188,341,089 4,238,704,827 - 4,238,704,827 /
(2) Long-term receivables derecognized due to the transfer of financial assets
□Applicable √Not applicable
(3) The amount of assets or liabilities arising from long-term receivables transferred with continuing involvement
□Applicable √Not applicable
Other information
√Applicable □Not applicable
On 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 financing return recognized based on the
contract.
On Dec. 31, 2018, the long-term accounts receivable were RMB 3,850,867,673 Yuan (Dec. 31, 2017: RMB
2,571,908,986 Yuan), which had been pledged to the bank as the guarantee for the Long-term borrowings of RMB
1,549,240,000 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:
2018 2017
Within 1 year 1,660,580,813 2,274,432,739
1~2 years 2,057,388,738 1,935,013,530
2~3 years 1,829,854,335 518,450,490
Over 3 years 535,155,627 1,407,283,540
6,082,979,513 6,135,180,299
Less: Long-term receivables due within one year 894,638,424 1,896,475,472
5,188,341,089 4,238,704,827
14. Long-term equity investment
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Change in current period
Profit or loss Adjustment Cash dividends Ending balance
Beginning Other
Investee Additional Reduced on investment of other or profits Provision for Ending balance of provision for
balance changes in Others
investment investment recognized under comprehensive declared to be impairment impairment
equity
equity method income paid
I. Joint venture
Jiangsu LongYuan
Zhenhua Marine 231,309,282 - 12,955,931 - - - - - 244,265,213 -
Engineering Co., Ltd
CCCC Tianhe
Xi’an Equipment
29,820,347 10,000,000 - -1,914,865 - - - - - 37,905,482 -
Manufacturing Co.,
Ltd (iii)
ZPMC Mediterranean
Liman Makinalari
3,775,146 - - 999,397 - - - - - 4,774,543 -
Ticaret Anonim
Sirketi
97
Change in current period
Profit or loss Adjustment Cash dividends Ending balance
Beginning Other
Investee Additional Reduced on investment of other or profits Provision for Ending balance of provision for
balance changes in Others
investment investment recognized under comprehensive declared to be impairment impairment
equity
equity method income paid
ZPMC-OTL MARINE
CONTRACTOR 2,976,740 - - -2,976,740 - - - - - - -
LIMITED (iv)
Zhenhua Marine
Energy (Hong Kong) - - - - - - - - - - -
Co., Ltd. (i)
Cranetech Global
629,241 - - 117,459 - - - - - 746,700 -
Sdn. Bnd. (ii)
Subtotal 268,510,756 10,000,000 - 9,181,182 - - - - - 287,691,938 -
II. Associated enterprise
CCCC Financial
1,678,550,583 - - 87,246,932 647,839 - -45,000,000 - - 1,721,445,354 -
Leasing Co., Ltd. (i)
CCCC Real Estate
178,099,707 - - 2,552,966 - - - - - 180,652,673 -
Yixing Co., Ltd.
CCCC South
American Regional 96,195,387 99,912,976 - 3,288,529 -8,331,909 - - - - 191,064,983 -
Company SARL (ii)
China
Communications
67,230,450 - - -8,536,568 3,028,239 - - - - 61,722,121 -
Construction USA
Inc. (iii)
CCCC Marine
Engineering &
15,849,544 - - 402,730 - - - - - 16,252,274 -
Technology Research
Center Co., Ltd.
ZPMC Changzhou
15,786,438 - - 1,191,077 - - -862,238 - - 16,115,277 -
Coatings Co., Ltd.
ZPMC Southeast Asia
247,656 - - 1,153,983 - - - - - 1,401,639 -
Pte. Ltd
CCCC Yancheng
Construction and
- 289,050,000 - 330,523 - - - - - 289,380,523 -
Development Co.,
Ltd. (iv)
Suzhou Chuanglian
Electric Drive Co., - 10,000,000 - 74,978 - - - - - 10,074,978 -
Ltd. (v)
Subtotal 2,051,959,765 398,962,976 - 87,705,150 -4,655,831 - -45,862,238 - - 2,488,109,822 -
Total 2,320,470,521 408,962,976 - 96,886,332 -4,655,831 - -45,862,238 - - 2,775,801,760 -
Other information
Joint 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 Company
contributed 3,044,699 USD, holding 51% of the shares. The company focused on the vessel transportation business. Based
on 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, the
important events of the Company shall be agreed by both parties. Therefore, the Group controls the company together with
the partner.
(iii) On May 5, 2017, the subsidiary of the Company and the partner jointly established CCCC Tianhe Xi’an Equipment
Manufacturing Co., Ltd. The registered capital of the company is RMB 300 million Yuan, of which, the contribution its
subsidiary is RMB 3,000,000 Yuan, with the shareholding ratio of 50%. The company is mainly engaged in shield machine
machinery manufacturing business. Based on the regulations of the shareholder agreement, the important events of the
Company 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 CONTRACTOR
LIMITED at the price of 400,000 USD. After alternation, the registered capital of the company became 2,000,000 USD
98
for the shareholding ratio of 50%. The company is mainly engaged in shipping business. Based on the regulations of the
shareholder agreement, the important events of the Company shall be agreed by both parties. Therefore, the Group controls
the 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 420,000,000
Yuan. After the capital increase, the Group’s investment costs to CCCC Financial Leasing Co., Ltd. increased to RMB
1,500,000,000 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 the
shares of CCCC South American Regional Company SARL. The registered capital was 103,000,000 USD, the Company
held16% of the shares. The company was mainly engaged in port construction business. Based on the related regulations of
the Articles of Association, the Company had the right to designate one director to that company and implement significant
impact to that company. On Oct. 31, 2018, the Company increased the investment in CCCC South American Regional
Company SARL by 14,489,171 USD, converted into RMB 99,912,976 Yuan. After the increase in the investment, the
investment in CCCC South American Regional Company SARL by the Company increased to RMB 214,234,736 Yuan and
the Company held 17% of the shares.
(iii) On Oct. 8, 2015, the Company participated and invested to establish China Communications Construction USA
Inc. The registered capital is 50,000,000 USD, of which, the Company’s contribution is 12,000,000 USD, equivalent to RMB
76,206,000 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 purchase
it shares. The registered capital of the company was RMB 1,156,200,000 Yuan, among which the capital contributed by
the Company was RMB 289,050,000 Yuan, with the shareholding ratio of 25%. The company was mainly engaged in the
engineering construction.
(v) On Sept. 13, 2018, the Company invested to incorporate Suzhou Chuanglian Electric Drive Co., Ltd. to purchase
its shares. The registered capital of the company was RMB 50,000,000 Yuan, among which the capital contributed by the
Company was RMB 10,000,000 Yuan, with the shareholding ratio of 20%. The company was mainly engaged in the electrical
engineering business.
15. Investment properties
Measurement mode of investment properties
(1) Investment properties measured by cost
Unit: Yuan Currency: RMB
Construction in
Item Housing & buildings Land use right Total
progress
I. Original book value
1.Beginning Balance 397,820,689 209,845,794 - 607,666,483
2. Amount increased in current period - - - -
(1) Purchase - - - -
(2) Inventories/fixed assets/construction in
- - - -
progress transferred in
(3) Increase from business combination - - - -
3. Amount decreased in current period - - - -
(1) Disposal - - - -
(2) Other transfers - - - -
4. Ending Balance 397,820,689 209,845,794 - 607,666,483
99
Construction in
Item Housing & buildings Land use right Total
progress
II. Accumulated depreciation and
amortization
1.Beginning Balance 97,115,184 55,487,576 - 152,602,760
2.Amount increased in current period 12,978,428 5,324,664 - 18,303,092
(1) Provision or amortization 12,978,428 5,324,664 - 18,303,092
3.Amount decreased in current period - - - -
(1) Disposal - - - -
(2) Other transfers - - - -
4.Ending Balance 110,093,612 60,812,240 170,905,852
III. Depreciation reserves
1.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 value
1. Ending book value 287,727,077 149,033,554 - 436,760,631
2.Begining book value 300,705,505 - 455,063,723
(2) Investment properties not completing the certificate of title
□Applicable √Not applicable
Other information
□Applicable √Not applicable
16. Fixed assets
Particulars about summary statement
(1) Presentation by category
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Fixed assets
(2) Particulars about fixed assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Machinery Office and electronic Means of transport
Item Housing & buildings Vessels Total
equipment equipment (except for vessels)
I. Original book value:
1.Beginning Balance 11,675,835,741 7,061,236,685 248,048,072 274,791,263 10,251,529,286 29,511,441,047
2.Amount increased in current period 103,371,774 1,227,236,599 15,461,366 7,843,184 1,379,612,216 2,733,525,139
(1) Purchase 3,081,123 32,097,069 14,560,576 7,843,184 698,371,763 755,953,715
(2) Transfer-in of construction in
100,290,651 1,195,139,530 756,662 - 637,802,141 1,933,988,984
progress
(3) Increase from business combination - - 144,128 - - 144,128
100
Machinery Office and electronic Means of transport
Item Housing & buildings Vessels Total
equipment equipment (except for vessels)
(4) Change in exchange rate - - - - 43,438,312 43,438,312
3.Amount decreased in current period 113,094,077 154,043,919 6,016,483 17,062,770 507,983,782 798,201,031
(1) Disposal or rejection 113,094,077 154,043,919 6,016,483 17,062,770 507,983,782 798,201,031
4.Ending Balance 11,666,113,438 8,134,429,365 257,492,955 265,571,677 11,123,157,720 31,446,765,155
II. Accumulated depreciation
1.Beginning Balance 3,487,513,540 5,152,968,939 184,766,115 186,449,320 3,164,391,522 12,176,089,436
2.Amount increased in current period 375,689,195 402,382,995 18,622,519 13,590,086 462,097,161 1,272,381,956
(1) Provision 375,689,195 402,382,995 18,622,519 13,590,086 467,117,212 1,277,402,007
(2) Change in exchange rate - - - - -5,020,051 -5,020,051
3.Amount decreased in current period 75,809,173 145,103,646 5,200,895 17,062,770 413,261,783 656,438,267
(1) Disposal or rejection 75,809,173 145,103,646 5,200,895 17,062,770 413,261,783 656,438,267
4.EndingBalance 3,787,393,562 5,410,248,288 198,187,739 182,976,636 3,213,226,900 12,792,033,125
III. Depreciation reserves
1. 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 value
1. Ending book value 7,878,719,876 2,724,181,077 59,305,216 82,595,041 7,909,930,820 18,654,732,030
2. Beginning book value 8,188,322,201 1,908,267,746 63,281,957 88,341,943 7,087,137,764 17,335,351,611
(3) Temporarily idle fixed assets
□Applicable √Not applicable
(4) Fixed assets held under finance leases
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Original book value Accumulated depreciation Depreciation reserves Book value
Machinery equipment 1,398,297,681 1,068,501,492 - 329,796,189
Vessel 5,847,522,360 906,962,772 - 4,940,559,588
(5) Fixed assets leased out under operating leases
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending book value
Shield machine 734,607,031
Vessel 1,695,800,485
(6) Fixed assets not completing the certificate of title
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Book value Reason for not completing the certificate of title
Housing and buildings 1,989,409,330 Relevant formalities are undergoing
101
Other information:
√Applicable □Not applicable
On Dec. 31, 2018, the following fixed assets were taken as loan mortgage:
Loan
Original cost Book value
Nature Amount
Machinery equipment 1,398,297,681 329,796,189 Long-term payables 258,565,211
Vessel 5,847,522,360 4,940,559,588 Long-term payables 2,420,668,918
7,245,820,041 5,270,355,777 2,679,234,129
On Dec. 31, 2017, the following fixed assets were taken as loan mortgage:
Loan
Original cost Book value
Nature Amount
Machinery equipment 1,403,907,681 437,072,634 Long-term payables 447,048,030
Vessel 4,455,152,847 3,687,007,865 Long-term payables 2,103,131,945
5,859,060,528 4,124,080,499 2,550,179,975
On Dec. 31, 2018 and Dec. 31, 2017, the book values of fixed assets for operating lease were as follows:
2018 2017
Shield machine 734,607,031 246,133,053
Vessel 1,695,800,485 1,733,818,283
2,430,407,516 1,979,951,336
On Dec. 31, 2018, the fixed assets not completing the certificate of title were as follows:
Book value Reason for not completing the certificate of title
Housing and buildings 1,989,409,330 Relevant formalities are undergoing
Liquidation of fixed assets
□Applicable √Not applicable
17. Construction in process
Particulars about summary statement
(1) Presentation by category
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Construction in process
(2) Particulars about construction in process
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Project Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Infrastructure construction
97,628,960 - 97,628,960 53,508,755 - 53,508,755
of Nantong Base
Infrastructure construction
45,615,124 - 45,615,124 30,242,212 - 30,242,212
of Changxing Base
102
Ending Balance Beginning Balance
Project Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Large machinery and
engineering equipment of 2,815,026,280 - 2,815,026,280 1,123,208,028 - 1,123,208,028
the base under construction
Office building and ancillary
16,131,833 - 16,131,833
facilities
Shield machine parts project 10,284,487 - 10,284,487 74,507,300 - 74,507,300
Infrastructure construction
3,893,442 - 3,893,442 3,893,442 - 3,893,442
of Nanhui Base
Large mechanical
reconstruction and 61,888,166 - 61,888,166 603,786,272 - 603,786,272
upgrading project
Total 3,050,468,292 - 3,050,468,292 1,889,146,009 - 1,889,146,009
(3) Changes of major construction in process in current period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Proportion of Including:
Amount Transfer-in fixed Accumulated
Beginning Other Ending accumulated Construction capitalized Capitalization Source of
Project name Budget increased in assets in current capitalized
balance reductions balance input in the progress interest in rate (%) fund
current period year interest
budget (%) current period
Infrastructure
construction of Nantong 7,745,549,471 53,508,755 62,113,177 17,992,972 - 97,628,960 84 84 - - - Own funds
Base
Infrastructure
Own funds
construction of 8,645,540,000 30,242,212 35,225,697 18,888,804 963,981 45,615,124 83 83 23,531,836 - -
and bank loan
Changxing Base
Large machinery and
engineering equipment Own funds
9,086,660,631 1,123,208,028 2,955,472,032 1,263,653,780 - 2,815,026,280 78 78 115,286,827 18,794,122 3.82
of the base under and bank loan
construction
Office building and
23,500,000 - 16,131,833 - - 16,131,833 90 90 - - - Own funds
ancillary facilities
Shield machine parts Own funds
130,587,500 74,507,300 8,494,856 72,717,669 - 10,284,487 79 79 5,762,616 - -
project and bank loan
Infrastructure
construction of Nanhui 504,500,000 3,893,442 443,966 443,966 - 3,893,442 91 91 - - - Own funds
Base
Large mechanical
reconstruction and 830,025,368 603,786,272 18,393,687 560,291,793 - 61,888,166 87 87 - - - Own funds
upgrading project
Total 26,966,362,970 1,889,146,009 3,096,275,248 1,933,988,984 963,981 3,050,468,292 / / 144,581,279 18,794,122 / /
(4) Provision for impairment of construction in progress for current period
□Applicable √Not applicable
Other information
□Applicable √Not applicable
Construction materials
(5) Particulars about construction materials
□Applicable √Not applicable
18. Productive biological assets
(1) Productive biological assets measured by cost
□Applicable √Not applicable
103
(2) Productive biological assets measured by fair value
□Applicable √Not applicable
Other information
□Applicable √Not applicable
19. Oil and gas assets
□Applicable √Not applicable
20. Intangible assets
(1) Particulars about intangible assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Patent Nonproprietary Software Proprietary
Item Land use right Total
right technology usage fee technology
I. Original book value
1.Beginning Balance 4,297,078,828 - - 55,046,834 65,201,810 4,417,327,472
2.Amount increased in current
2,932,857 2,932,857
period
(1) Purchase - - - 1,968,876 - 1,968,876
(2) Internal R&D - - - - - -
(3) Increase from business
- - - - - -
combination
(4) Transfer-in of construction
- - - 963,981 - 963,981
in progress
3.Amount decreased in current
- - - - - -
period
(1) Disposal - - - - - -
4.Ending Balance 4,297,078,828 - - 57,979,691 65,201,810 4,420,260,329
II. Accumulated amortization
1.Beginning Balance 642,231,145 - - 42,451,672 49,479,047 734,161,864
2.Amount increased in current
87,504,235 - - 3,320,406 6,861,092 97,685,733
period
(1) Provision 87,504,235 - - 3,320,406 6,861,092 97,685,733
3.Amount decreased in current
- - - - -
period
(1) Disposal - - - - - -
4.Ending Balance 729,735,380 - - 45,772,078 56,340,139 831,847,597
III. Depreciation reserves
1.Beginning Balance - - - - - -
2.Amount increased in current
- - - - - -
period
(1) Provision - - - - - -
3.Amount decreased in
- - - - - -
current period
(1) Disposal - - - - - -
4.Ending Balance - - - - - -
IV. Book value
1.Ending book value 3,567,343,448 - - 12,207,613 8,861,671 3,588,412,732
2.Begining book value 3,654,847,683 - - 12,595,162 15,722,763 3,683,165,608
104
At the end of reporting period, the proportion of intangible assets formed through internal research and development in
the balance of intangible assets was 0%
(2) Land use right not completing the certificate 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 expenses
were not capitalized. The intangible assets on Dec. 31, 2018 and Dec. 31, 2017 excluded any capitalized expenditure on
R&D
21. Development expenditure
□Applicable √Not applicable
22. Goodwill
(1) Original book value of goodwill
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Increase in current period Decrease in current period
Name of investee or Beginning Ending
matters forming goodwill Balance Business Balance
Disposal
combination
ZPMC Qidong Marine
149,212,956 - - - - 149,212,956
Engineering Co., Ltd.
Verspannen B.V. 5,412,807 - - - - 5,412,807
Greenland Heavylift (Hong
110,562,702 1,402,997 - - - 111,965,699
Kong) Limited
Total 265,188,465 1,402,997 - - - 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,
profit rate, discount rate and forecast period for forecasting the present value of future cash flow, if applicable) of goodwill
impairment test and the method for recognizing the goodwill impairment loss
□Applicable √Not applicable
(5) Impact of goodwill impairment test
□Applicable √Not applicable
Other information
√Applicable □Not applicable
On Dec, 31, 2018, the Group had not accrued the goodwill depreciation reserves. In impairment testing, the book value
of the goodwill was allocated to asset group portfolio benefiting from synergistic effect of expected business combination.
The goodwill acquired from business combination has been distributed to the following asset groups for impairment
testing:
Heavy equipment asset group
105
Semi-submerged ship transport assets group of Greenland Heavylift (Hongkong) Limited (GHHL)Heavy equipment
asset group
The recoverable amount of heavy equipment asset group is measured based on the five-year budget approved by the
management and shall be measured with cash flow forecast method. Cash flow over 5-year period shall be calculated based
on the estimated growth rate.
Main assumptions based on future cash flow discount method:
Growth rate in forecast perioｄ 12.12%-15.20%
Perpetual growth rate 3%
Gross profit rate 17.26%-17.80%
Discount rate 11%
GHHL semi-submerged ship transport assets group
The recoverable amount of GHHL semi-submerged ship transport assets group combination is determined based on
the expected future cash flow of the asset group, and the expected future cash flow is determined according to the cash flow
forecast based on the transport service contract revenue expected to be obtained within the service life of vessel.
Main assumptions based on future cash flow discount method:
Number of customized short-distance and long-distance transport
3 /year/vessel
service contracts expected to be obtained
Vessel utilization rate of general charter party 65%
Charter rate of general charter party 65,000 USD/day
Discount rate 11%
The distributions of the book value of goodwill to asset groups are as follows:
GHHL semi-submerged ship
Heavy equipment asset group Total
transport assets group
2018 2017 2018 2017 2018 2017
Book amount of
154,625,763 154,625,763 111,965,699 110,562,702 266,591,462 265,188,465
goodwill
The perpetual growth rate adopted by the management is consistent with the forecast data contained in the industry
report, and shall not exceed the long-term average growth rate of the industry. Based on the historical experience and the
forecasts of market development, the management determines the budget gross profit rate and adopts the pretax interest
rate which can reflect the specific risk of relevant asset group portfolio as the discount rate. The above assumptions are used
to analyze the recoverable amount of the asset group portfolio.
106
23. Long-term deferred expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Beginning Amount increased Amortization in
Item Other reductions Ending Balance
Balance in current period current year
Improvement expenditure of fixed
7,764,501 1,654,070 4,305,907 - 5,112,664
assets under operating lease
Total 7,764,501 1,654,070 4,305,907 - 5,112,664
24. Deferred income tax assets/liabilities
(1) Deferred income tax assets before offsetting
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Deductible Deferred income tax Deductible Deferred income tax
temporary difference assets temporary difference assets
Assets depreciation reserves 3,164,854,396 477,266,865 3,492,989,876 526,410,350
Unrealized profit of internal transaction 110,927,560 17,314,143 93,487,825 14,515,523
Deductible losses - - 8,441,406 1,266,211
Expected liabilities 424,901,994 63,735,299 451,642,802 67,746,420
Unpaid wages and salaries 27,975,207 4,196,281 27,824,781 4,173,717
Unpaid interests 90,106,459 13,515,968 102,690,137 15,403,520
Deferred income 73,819,776 11,072,966 90,237,676 13,535,651
Special reserves - - 1,234,252 185,138
Total 3,892,585,392 587,101,522 4,268,548,755 643,236,530
(2)Deferred income tax liabilities after offsetting
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Assets evaluation appreciation of business
143,843,959 21,576,594 154,879,706 23,231,959
combination not under the common control
Changes in fair value of the available-for-
233,898,200 37,285,461 323,568,551 50,953,384
sale financial assets
Depreciation of fixed assets 692,627,602 114,283,553 814,903,900 134,459,143
Changes in fair value of the financial
assets measured at fair value with changes 44,481,806 6,672,271 - -
included in current profits or losses
Total 1,114,851,567 179,817,879 1,293,352,157 208,644,486
107
(3) Deferred income tax assets or liabilities disclosed as net amount after offsetting
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Offsetting amount Offsetting amount
Ending balance of Ending balance of
between deferred of deferred income
deferred income deferred income
Item income tax and tax and liabilities
tax and liabilities tax and liabilities
liabilities at the end at the beginning of
after offsetting after offsetting
of reporting period the period
Deferred income tax assets 47,416,597 539,684,925 25,182,166 618,054,364
Deferred income tax liabilities 47,416,597 132,401,282 25,182,166 183,462,320
(4) Items not recognized deferred income tax assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Deductible temporary difference 203,797,399 154,900,393
Deductible losses 1,627,279,485 1,336,383,846
Total 1,831,076,884 1,491,284,239
(5) Expiry years of deductible losses not yet recognized deferred income tax assets are as follows
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Year Ending amount Beginning amount Remarks
2018 - 257,678,634
2019 304,056,031 320,476,005
2020 368,426,916 373,462,715
2021 105,576,931 111,737,653
2022 272,388,360 273,028,839
2023 576,831,247 -
Total 1,627,279,485 1,336,383,846 /
Other information:
□Applicable √Not applicable
25. Other non-current assets
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Advance payment for vessels 142,126,354 148,060,378
Advance payment for office buildings 28,666,235 28,666,235
Total 170,792,589 176,726,613
108
26. Short-term borrowings
(1) Classification of Short-term borrowings
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Pledge loans - -
Collateral loans - -
Guaranteed loans 1,259,397,200 3,254,299,000
Credit loans 15,295,290,287 22,214,681,401
Total 16,554,687,487 25,468,980,401
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 the
Company, 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 and
several 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 subsidiaries
of Company provided joint and several liability repayment guarantee.
(2) Overdue Short-term borrowings
□Applicable √Not applicable
The significant overdue Short-term borrowings are as follows:
□Applicable √Not applicable
Other information
□Applicable √Not applicable
27. Financial liabilities measured at fair value with changes included in current profits or losses
□Applicable √Not applicable
28. Derivative financial liabilities
□Applicable √Not applicable
29. Notes and accounts payable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Notes payable 2,732,404,222 1,893,227,482
Accounts payable 7,036,869,701 6,887,598,171
Total 9,769,273,923 8,780,825,653
109
Other information:
□Applicable √Not applicable
Notes payable
(2) Presentation of notes payable
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Category Ending Balance Beginning Balance
Commercial acceptance bill - -
Bank acceptance bill 2,732,404,222 1,893,227,482
Total 2,732,404,222 1,893,227,482
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: RMB
Item Ending Balance Beginning Balance
Material purchase and product manufacturing payables 6,556,698,942 6,189,910,557
Equipment and vessel purchase payables 132,468,294 303,044,496
Infrastructure payables 77,821,238 81,145,537
Quality guarantee deposit payable 265,219,012 309,201,127
Port charge payable 4,662,215 4,296,454
Total 7,036,869,701 6,887,598,171
(4) Important accounts payable aged over 1 year
□Applicable √Not applicable
Other information
√Applicable □Not applicable
The aging analysis of accounts payable is as follows:
2018 2017
Proportion in total Proportion in total
Amount Amount
amount % amount %
Within 1 year 5,178,586,023 74 5,301,236,729 77
Over 1 year 1,858,283,678 26 1,586,361,442 23
7,036,869,701 100 6,887,598,171 100
On Dec. 31, 2018, the accounts payable aged over 1 year were mainly the payables for imported parts, which had not
been fro final settlement.
30. Advances from customers
(1) Presentation of advances from customers
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Advances for product sales received 447,761,752 535,922,102
Advances for lease payment 46,982,622 55,805,153
Total 494,744,374 591,727,255
110
(2) Significant advances from customers aged over one year
□Applicable √Not applicable
(3) Settled but uncompleted projects accounted for by construction contracts
□Applicable √Not applicable
Other information
√Applicable □Not applicable
The aging analysis of advances from customers is as follows:
Proportion in total Proportion in total
Amount Amount
amount % amount %
Within 1 year 436,464,764 88 474,250,196 80
Over 1 year 58,279,610 12 117,477,059 20
494,744,374 100 591,727,255 100
On Dec. 31, 2018, the advances from customers aged over 1 year mainly included the unsettled sales fund of spare
parts for products.
31. Employee compensation payable
(1) Presentation of employee compensation payable
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance
I. Short-term compensation 272,766,860 1,853,262,752 1,816,899,768 309,129,844
II. Post-employment welfare (defined
966,347 308,301,593 308,285,457 982,483
contribution plans)
III. Dismissal benefits - - - -
IV. Other benefits due within one year - - - -
Total 273,733,207 2,161,564,345 2,125,185,225 310,112,327
(2) Short-term compensation
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance
I. Wage, bonus, allowance and subsidy 237,081,631 1,504,565,034 1,468,544,068 273,102,597
II. Employee welfare expense - 60,344,342 60,309,354 34,988
III. Social insurance charges 554,452 121,121,387 121,126,142 549,697
Including: medical insurance premiums 445,494 103,465,704 103,458,238 452,960
Work injury insurance 69,338 7,133,651 7,146,559 56,430
Maternity insurance premiums 39,620 10,522,032 10,521,345 40,307
IV. Housing provident fund 479,386 124,837,764 124,828,363 488,787
V. Labor union fund and employee education fee 34,541,033 31,831,526 31,418,784 34,953,775
VI. Short-term compensated absences - - - -
VII. Short-term profit sharing plan - - - -
VIII. Other short-term compensation 110,358 10,562,699 10,673,057 -
Total 272,766,860 1,853,262,752 1,816,899,768 309,129,844
111
(3) Presentation of defined contribution plan
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance
1. Basic endowment insurance premium 941,529 221,794,310 221,778,550 957,289
2. Unemployment insurance expense 24,818 5,258,521 5,258,145 25,194
3. Enterprise annuity payment - - - -
Supplementary endowment insurance premium - 81,248,762 81,248,762 -
Total 966,347 308,301,593 308,285,457 982,483
Other information:
□Applicable √Not applicable
32. Taxes and surcharges payable
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
VAT 43,724,528 58,341,748
Consumption tax - -
Business tax - -
Enterprise income tax 81,219,652 98,206,405
Individual income tax 9,390,756 12,386,558
Urban maintenance and construction tax 1,912,715 1,758,287
Educational surtax 1,624,991 2,018,432
Others 27,092,039 22,237,497
Total 164,964,681 194,948,927
33. Other payables
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Interest payable 114,397,903 118,825,582
Dividend payable 31,701,965 31,701,965
Other payables 952,480,579 692,680,129
Total 1,098,580,447 843,207,676
Other information:
□Applicable √Not applicable
112
Interest payable
(2) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Long-term borrowings with interest paid by installments
- -
and with principal paid at maturity
Interest on corporate bonds - -
Interest payable for short-term borrowings 114,397,903 118,825,582
Interest of preferred shares/perpetual bonds classified as
- -
financial liabilities
Total 114,397,903 118,825,582
Significant overdue and unpaid interests:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Dividends payable
(3) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Dividend for common shares - -
Dividends for preferred shares/perpetual bonds classified
- -
as equity instruments
CCCC Tianjin Dredging Co., Ltd. 25,079,494 25,079,494
Chuwa Bussan Co. Ltd. 6,269,873 6,269,873
Hong Kong Zhenhua Engineering Co., Ltd. 346,005 346,005
Macau Zhenhua Harbour Construction Co., Ltd. 6,593 6,593
Total 31,701,965 31,701,965
Other information, including the important unpaid dividends payable for more than one years, please disclose the reason
for non-payment:
On Dec. 31, 2018, the dividend payable aged over 1 year of RMB 31,701,965 Yuan (Dec. 31, 2017: RMB 31,701,965
Yuan) 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: RMB
Item Ending Balance Beginning Balance
Engineering deposit and quality guarantee deposit 206,589,722 225,779,472
Payables to related party 184,440,322 133,772,685
Investment section payable to CCCC (i) 100,971,833 100,971,833
113
Item Ending Balance Beginning Balance
Borrowings from related party - 38,700,000
Special payables 146,470,013 -
Contract advance payment to be returned 129,540,880 -
Others 184,467,809 193,456,139
Total 952,480,579 692,680,129
(2) Other important payables aged over 1 year
□Applicable √Not applicable
Other 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 the
investment liquidation fund payable by the Group and attributable to China Communications Construction Company Ltd. who
was another shareholder of the subsidiary; meanwhile, the Group completed the merger and acquisition of the subsidiary of
CCCC under the common control in 2015, and RMB 75,000,000 Yuan in the balance was the purchase fund payable by the
Group to China Communications Construction Company Ltd.
The aging analysis of other payables is as follows:
Dec. 31, 2018 Dec. 31, 2017
Amount Proportion% Amount Proportion%
Within 1 year 703,845,813 74 355,748,932 51
Over 1 year 248,634,766 26 336,931,197 49
952,480,579 100 692,680,129 100
On Dec. 31, 2018, the other payables aged over 1 year were mainly the investment section payable to China
Communications Construction Company Ltd., payable deposit and quality guarantee deposited collected from outsourcing
engineering team and payables to related party.
Special payables
2018
Decrease in current
Beginning balance Increase in current year Ending balance
year
Relocation compensation for
- 262,535,000 (116,064,987) 146,470,013
Jiangyin Base
2017
Decrease in current
Beginning balance Increase in current year Ending balance
year
Relocation compensation for
- - - -
Jiangyin Base
34. Held-for-sale liabilities
□Applicable √Not applicable
114
35. Non-current liabilities due within one year
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Long-term borrowings due within one year 3,258,154,392 1,343,956,000
Bonds payable due within 1 year - -
Long-term payables due within one year 951,378,118 854,975,219
Total 4,209,532,510 2,198,931,219
36. Other current liabilities
Particulars about current liabilities
□Applicable √Not applicable
Changes in short-term bonds payable:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
37. Long-term borrowings
(1) Classification of Long-term borrowings
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Pledge loan 1,549,240,000 1,066,150,000
Collateral loan - -
Guaranteed loan 2,532,225,280 326,710,000
Credit loan 14,274,414,371 6,616,010,383
Less: Long-term borrowings matured within
one year
Credit loan -2,833,064,392 -971,446,000
Guaranteed loan - -326,710,000
Pledge loan -425,090,000 -45,800,000
Total 15,097,725,259 6,664,914,383
Other information, including the interest rate interval:
√Applicable □Not applicable
On 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 subsidiary
Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd. and the guarantee was provided by the Company. The interest
shall 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 the
bank 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 be
paid at maturity on Nov. 12, 2020.
115
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 several
liability 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: RMB
1,066,150,000 Yuan) took the long-term accounts receivable of the “building-transfer” project of the Group as pledge. The
interest 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 financial instruments classified as financial liabilities, such as preferred
shares and perpetual bond)
□Applicable √Not applicable
(3) Notes to the conversion conditions and time of convertible bonds
□Applicable √Not applicable
(4) Other financial instruments classified as financial liabilities
Basic information of other outstanding financial instruments at the end of reporting period, such as preferred shares and
perpetual bond
□Applicable √Not applicable
Changes in the outstanding financial instruments at the end of reporting period, such as preferred shares and perpetual
bond
□Applicable √Not applicable
Notes to the basis for classifying other financial instruments to financial liabilities:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
39. 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: RMB
Item Beginning Balance Ending Balance
Sale-leaseback financing fund (i) 2,550,179,975 2,679,234,129
"Building - transfer” project fund (ii) 108,466,881 131,402,483
Project quality guarantee deposit 81,314,696 108,202,625
Less: sale-leaseback financing fund matured within one year(Note V. 28) -854,975,219 -951,378,118
1,884,986,333 1,967,461,119
116
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) were
obtained from the vessel with the book value of RMB 4,940,559,588 Yuan (Dec. 31, 2017: RMB 3,687,007,865 Yuan) and
the 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 financial leasing company, with the maturity date from Apr. 11, 2020 to
Feb. 24, 2028 (Dec. 31, 2017: from Apr. 11, 2020 to Dec. 5, 2021). The Group will pay the sale and leaseback financing fund
on schedule each year in accordance with the contract terms. The Group takes the above series of transactions as mortgage
loans for accounting treatment.
(ii) The Group and the Construction Party of “building-transfer” project agreed that part of the project payments would be
paid to the Construction Party after the final acceptance of the “building-transfer” project within a certain term.
Special payables
(3) Special payable presented by nature
□Applicable √Not applicable
40. Long-term employee compensation payable
□Applicable √Not applicable
41. Estimated liabilities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Ending Balance Reason
External guarantee
Pending lawsuit
Warranties for product quality 514,462 2,032,046
Reconstructing obligations
Loss contract to be executed
Others 2,658,150 2,658,150
Estimated after-sale service cost 376,515,711 434,362,487
Lawsuit compensation 85,200,340 -
Total 464,888,663 439,052,683 /
42. Deferred income
Particulars about deferred income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance Reason
Government subsidy 376,238,268 96,133,365 103,576,272 368,795,361
Land compensation 102,935,852 - 2,434,993 100,500,859
Total 479,174,120 96,133,365 106,011,265 469,296,220 /
117
Items involving government subsidy:
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount included in Amount included
Beginning Increase in Other Ending Related to
Liability non-operating income in other incomes
Balance current period changes Balance assets/income
for current period for current period
Hoisting and pipe laying ship R&D project 92,500,000 - - - - 92,500,000
Submarine pipeline laying R&D project 41,300,500 - - -41,300,500 - -
Automated dock R&D project 24,820,000 3,430,000 - - -200,000 28,050,000
Floating crane R&D project 18,139,800 - - -2,740,400 - 15,399,400
Comprehensive standardization of intelligent
17,000,000 - - - - 17,000,000
manufacturing of marine engineering equipment
Deep sea drilling ship and auxiliary equipment
14,860,000 - - - - 14,860,000
research project
Drilling package R&D project 14,410,000 - - -8,000,000 - 6,410,000
Intelligent manufacturing workshop for crane box of
14,171,796 - - - - 14,171,796
automated terminal
10,000t semi-submerged ship R&D project 13,626,667 - - -560,000 - 13,066,667
Transportation emplacement system R&D project 10,000,000 - - - - 10,000,000
Drilling platform R&D project 9,390,000 - - - - 9,390,000
Research and development of large-scale
8,533,000 - - - - 8,533,000
underwater robot work-system
Manufacturing process optimization R&D project in
8,000,000 - - - - 8,000,000
marine engineering field
Marine engineering positioning system R&D project 7,697,321 - - -1,612,218 - 6,085,103
Intelligent transportation system of Automatic
6,000,000 10,800,000 - - - 16,800,000
Guided Vehicle (AGV)
Development and industrialization of large deep
5,572,000 - - - - 5,572,000
water crane piping ship
CCCC DCM ship achievement transformation
4,031,250 - - -3,223,288 - 807,962
project
Self-elevating platform central control system 3,810,000 2,380,000 - - - 6,190,000
Finishing intelligent production line of special gear
2,560,000 - - - - 2,560,000
shaft for port machinery
Retractable boarding trestle system R&D project 2,160,300 2,288,000 - - - 4,448,300
Intelligent equipment for container yard 1,445,000 - - -200,000 - 1,245,000
Intelligent electric differential traction bridge crane 1,122,900 - - -1,122,900 - -
Collaborative innovation in the industrial chain of
core components for high-end marine engineering - 18,900,000 - -16,800,000 - 2,100,000
equipment
Key technology research project of bottom-
- 16,000,000 - -3,600,000 - 12,400,000
supported offshore wind power installation platform
R&D and application demonstration project for the
intelligent coating system of the main structure of - 8,000,000 - - - 8,000,000
large port machinery
Others 55,087,734 34,335,365 - -16,741,963 -7,475,003 65,206,133
Total 376,238,268 96,133,365 - -95,901,269 -7,675,003 368,795,361
Other information:
√Applicable □Not applicable
The 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 and
development agreement.
Land compensation refers to the land compensation acquired by the subsidiary of the Company, which shall be
amortized over the 50 years’ land use term.
118
43. Other non-current liabilities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Stay-recognition VAT Output tax to be carried forward 288,474,696 152,954,098
Total 288,474,696 152,954,098
Other information:
On balance sheet date, the income of some construction contracts and interest income of “building-transfer” projects of
the Company had not reached the time point of the VAT liability. In accordance with the requirements of the Provisions on
Accounting Treatment of VAT (CK 2016 No. [22]), the Group reclassified the ending credit balance of the item “Taxes and
surcharges 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: RMB
Changes (+, -)
Beginning Ending
Balance New issue of Issue of bonus Converted from Balance
Others Subtotal
shares share accumulation fund
Total shares 4,390,294,584 - - 878,058,917 - 878,058,917 5,268,353,501
Other information:
The increase in capital for current year was caused by the implementation of capital increase and allotment scheme
by the Company. Based on the total share capital on Dec. 31, 2017, 2 shares per 10 shares were transferred to all of the
shareholders with the capital reserves.
45. Other equity instruments
(1) Basic information of other outstanding financial instruments at the end of reporting period, such as preferred stock
and perpetual bond
□Applicable √Not applicable
(2) Changes in the outstanding financial instruments at the end of reporting period, including preferred stock and
perpetual bond
□Applicable √Not applicable
Description of the changes in other equity instruments and the reasons as well as the basis for relevant accounting
treatment:
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
46. Capital reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Items Beginning Balance Increase Decrease Ending Balance
Capital premium (premium on share capital) 5,415,833,470 878,058,917 4,537,774,553
Other capital reserves 111,145,105 111,145,105
Total 5,526,978,575 878,058,917 4,648,919,658
119
47. Treasury stock
□Applicable √Not applicable
48. Other comprehensive income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Current amount
Less: Other
Beginning comprehensive Attributable Attributable Ending
Item Amount
balance income in prior Less: income to parent to minority balance
before
period transferred tax expenses company, shareholders,
income tax
to profits and losses after tax after tax
for current period
I. Other comprehensive income which will
not be subsequently reclassified to profit - - - - - -
or loss
Including: Changes in remeasurement of
- - - - - -
defined benefit plan
Other comprehensive income which will
not be transferred to profit or loss under - - - - - -
equity method
II. Other comprehensive income which
will be subsequently reclassified to profit 273,892,978 -44,432,753 - -13,667,923 -50,039,118 19,274,288 223,853,860
or loss
Including: Other comprehensive income
which will be transferred to profit or loss -2,391,155 -4,655,831 - - -4,655,831 - -7,046,986
under equity method
Profit or loss from changes in fair value of
272,615,163 -89,670,351 - -13,667,923 -76,002,428 - 196,612,735
available-for-sale financial assets
Profit or loss from the reclassification of
held-to-maturity assets to available-for- - - - - - -
sale financial assets
Effective hedging portion of profit or loss
- - - - - -
from cash flow hedging
Translation balance of foreign currency
3,668,970 49,893,429 - - 30,619,141 19,274,288 34,288,111
financial statements
Total other comprehensive income 273,892,978 -44,432,753 - -13,667,923 -50,039,118 19,274,288 223,853,860
49. Specific reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance
Work safety expenses 1,914,832 40,081,847 38,977,506 3,019,173
Total 1,914,832 40,081,847 38,977,506 3,019,173
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 Safety
Expenses, the enterprises engaged in large - scale machinery manufacture, engineering construction, etc. shall retain the
work safety expenses according to the standards. The increase and decrease in current year was the work safety expenses
retained and used by the Group for the reporting year in accordance with relevant requirements.
120
50. Surplus reserves
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Beginning Balance Increase Decrease Ending Balance
Statutory surplus reserves 1,326,165,303 78,218,583 - 1,404,383,886
Discretionary surplus reserves 292,378,668 - - 292,378,668
Reserve fund - - - -
Enterprise expansion fund - - - -
Others - - - -
Total 1,618,543,971 78,218,583 - 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 profit as statutory surplus reserves. When the accumulated amount of statutory surplus
reserves 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. The
Company’s statutory surplus reserves were RMB 78,218,583 Yuan in 2018 (2017: RMB 15,420,989 Yuan).
51. Undistributed profits
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current period Prior period
Undistributed profit at the end of prior period before adjustment 3,199,681,426 3,353,936,451
Total adjustment of undistributed profit at the beginning of the period (increase +,
- -
decrease -)
Undistributed profits at the beginning of the period after adjustment 3,199,681,426 3,353,936,451
Plus: Net profit attributable to the shareholders of parent company in current period 443,005,092 300,195,422
Less: Withdrawal of statutory surplus reserves 78,218,583 15,420,989
Withdrawal of discretionary surplus reserves - -
Withdrawal of general risk reserves - -
Common share dividends payable 219,514,729 439,029,458
Common share dividends converted to share capital - -
Undistributed profits at the end of the period 3,344,953,206 3,199,681,426
Details of the undistributed profit 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 profit was RMB 0 Yuan.
2. The impact of changes in accounting policies on the beginning undistributed profit was RMB 0 Yuan.
3. The impact of correction of significant accounting errors on the beginning undistributed profit was RMB 0 Yuan.
4. The impact of changes in consolidation scope caused by the common control on the beginning undistributed profit
was RMB 0 Yuan.
5. The total impact of other adjustments on the beginning undistributed profit was RMB 0 Yuan.
121
52. Operating revenue and operating cost
(1) Particulars about operating revenue and operating cost
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Current amount Previous amount
Item
Revenue Cost Revenue Cost
Main business 21,581,514,086 17,940,075,501 21,642,271,179 17,893,942,874
Other business 230,875,558 142,210,251 216,542,821 125,132,425
Total 21,812,389,644 18,082,285,752 21,858,814,000 18,019,075,299
The main business revenue and cost are listed below:
2018 2017
Main business revenue Main business cost Main business revenue Main business cost
Port machinery 14,983,974,898 11,405,896,707 14,736,363,747 11,492,182,908
Heavy equipment 2,746,107,406 2,608,895,653 3,384,886,419 3,084,117,712
Steel structures and related revenue 1,558,778,586 1,656,155,935 1,520,119,032 1,487,522,614
"Building-transfer" project 1,221,194,799 1,226,872,864 1,549,820,489 1,548,520,638
Vessel shipping and others 1,071,458,397 1,042,254,342 451,081,492 281,599,002
21,581,514,086 17,940,075,501 21,642,271,179 17,893,942,874
Other business revenue and cost are listed below:
2018 2017
Other business revenue Other business cost Other business revenue Other business cost
Sales of materials 64,386,030 62,947,534 58,465,010 58,551,465
Equipment leasing and others 166,489,528 79,262,717 158,077,811 66,580,960
230,875,558 142,210,251 216,542,821 125,132,425
53. Taxes and surcharges
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Consumption tax - -
Business tax - -
Urban maintenance and construction tax 9,113,572 9,591,497
Educational surtax 8,062,514 8,764,726
Resource tax - -
Housing property tax 54,701,491 52,506,650
Land use tax 24,648,393 27,395,297
Vehicle and vessel usage tax - -
Stamp tax 14,526,274 14,088,249
Others 5,227,750 1,894,225
Total 116,279,994 114,240,644
122
54. Selling and distribution expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Employee benefits 64,666,352 58,860,634
Travel expenses 23,270,054 28,710,299
Exhibition fees 8,541,412 2,038,404
Advertising and publicity costs 3,966,124 4,332,045
Sales service expenses 3,448,859 6,616,534
Office expenses 2,186,270 5,997,281
Bidding and tendering expenses 2,087,276 2,394,084
Others 7,374,814 12,508,611
Total 115,541,161 121,457,892
55. General and administrative expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Employee benefits 569,997,151 480,979,047
Intangible assets amortization 97,685,733 98,814,843
Office expenses 75,138,588 47,525,626
Depreciation of fixed assets 72,047,391 74,485,191
Expenses on employing intermediary 62,799,747 143,878,907
Travel expenses 54,893,674 26,332,516
Informatization expense 28,395,805 17,283,659
Consulting fees 27,249,851 26,877,773
Management and security fees 21,796,844 22,892,275
Business entertainment expenses 15,774,517 14,644,990
Management and cleaning fee 15,449,059 14,560,712
Insurance expense 16,063,873 7,083,929
Maintenance charge 5,696,924 5,019,467
Others 79,348,191 59,395,852
Total 1,142,337,348 1,039,774,787
56. Research and development expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Employee benefits 393,654,871 373,884,771
Depreciation of R&D fixed assets 128,117,342 131,807,450
Materials expenses 87,551,345 98,810,177
Processing cost 30,312,011 73,401,282
Product design expenses 2,553,979 1,898,208
Others 30,424,525 22,590,625
Total 672,614,073 702,392,513
123
57. Financial expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Interest expenditure 1,621,856,880 1,162,344,297
Less: interest income -332,607,896 -293,152,359
Less: Amount of interest capitalization -18,794,122 -5,494,319
Exchange (losses)/ gains 195,218,216 -180,764,448
Amortization of discount on issue cost - 3,974,665
Others 56,591,735 71,293,469
Total 1,522,264,813 758,201,305
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: RMB
Item Current amount Prior amount
I. Loss on bad debts 50,183,121 335,689,296
II. Loss on inventories valuation -317,328,816 414,898,419
III. Impairment loss on available-for-sale financial 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 fixed 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. Others 254,569,473 74,248,733
Total -12,576,222 824,836,448
59. Other income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Financial appropriations 92,341,144 71,702,575
Technological subsidy 17,289,568 2,145,783
Land compensation 2,434,993 2,349,849
Total 112,065,705 76,198,207
124
60. Investment income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Income from long-term equity investment under equity method 96,886,332 94,274,214
Investment income from the disposal of long-term equity
- 2,536,928
investment
Investment income from financial assets measured at fair value
- -
through the current profit or loss in the current profit or loss
Investment income from the disposal of financial assets
- -
measured at fair value through the current profit 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 financial assets 19,144,647 26,557,789
Investment income for the disposal of available-for-sale
- -
financial assets
Gains from the remeasurement of remaining equity at fair value
- -
after the loss of control
Investment income from the available-for-sale financial assets
- -
under cost method
Total 116,030,979 123,368,931
61. Gains from the changes in fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Sources of the gains from changes in fair value Current amount Prior amount
Financial assets measured at fair value through the current
44,481,806 -4,615,775
profit or loss
Including: income from changes in fair value of derivative
- -
financial instruments
Financial liabilities measured at fair value through the current
- -
profit or loss
Investment properties measured at fair value - -
Total 44,481,806 -4,615,775
62. Gains from assets disposal
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Gains from assets disposal 155,557,716 10,749,056
Total 155,557,716 10,749,056
125
63. Non-operating revenue
Particulars about non-operating revenue
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount included in non-recurring
Item Current amount Prior amount
profit or loss in the current period
Total gains from the disposal of
- - -
non-current assets
Including: Total gains from the
- - -
disposal of fixed assets
Total gains from the disposal of
- - -
intangible assets
Gains from debt restructuring - - -
Gains from non-monetary
- - -
assets exchange
Accepting donations - - -
Government subsidy 2,346,812 7,304,337 2,346,812
Insurance indemnity income 290,941 12,383,293 290,941
Others 9,464,527 9,655,928 9,464,527
Total 12,102,280 29,343,558 12,102,280
Government subsidies included in the current profit or loss
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Subsidy item Current amount Prior amount Assets/income related
Financial appropriations
unrelated to daily activities/ 2,346,812 7,304,337 Income related
financial appropriations
Technological subsidies - - Income related
Land compensation - - Assets related
Total 2,346,812 7,304,337 /
Other information:
□Applicable √Not applicable
64. Non-operating expensese
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount included in non-recurring
Item Current amount Prior amount
profit or loss in the current period
Loss from the disposal of non-current assets - - -
Including: Loss from the disposal of fixed assets - - -
126
Amount included in non-recurring
Item Current amount Prior amount
profit or loss in the current period
Loss from the disposal of intangible assets - - -
Loss from debt restructuring - - -
Loss from non-monetary assets exchange - - -
External donations 330,000 225,279 330,000
Lawsuit compensation 70,449,299 85,200,340 70,449,299
Overdue fine payment 1,471,289 2,402,174 1,471,289
Others 4,574,736 4,288,460 4,574,736
Total 76,825,324 92,116,253 76,825,324
65. Income tax expenses
(1) Income tax expenses statement
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Current income tax expenses 102,237,124 126,087,069
Deferred income tax expenses 40,976,324 -33,767,653
Total 143,213,448 92,319,416
(2) Reconciliation between accounting profit and income tax expenses
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount
Total profit 537,055,887
Income tax expense calculated at statutory/applicable tax rate 80,558,383
Impact of different tax rates in subsidiaries 23,403,438
Impact of adjustment for income tax in prior period 7,088,780
Impact of income not subject to income tax -11,249
Impact of cost, expenses and loss non-deductible for tax purposes 4,068,352
Impact of utilization of deductible tax losses which haven’t been recognized deferred tax assets in prior
-4,034,159
period
Impact of unrecognized deductible temporary differences and deductible losses that haven’t been
88,991,848
recognized as deferred tax assets in current period
Profits and losses attributable to the joint venture and associated enterprise -17,404,647
Weighted deduction of technical development fee -39,447,304
Income tax expenses 143,213,448
Other information:
□Applicable √Not applicable
127
66. Other comprehensive income
√Applicable □Not applicable
Refer to VII. 48 for details
67. Items in statement of cash flows
(1) Cash received from other operating activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Customs guarantee deposit recovered 134,438,167 185,539,292
Cash received from government subsidy and grants 210,466,281 124,377,444
Employee loan recovered 5,751,095 9,296,606
Cash received from penalty incomes 5,842,463 7,234,130
Others 23,560,319 55,851,684
Total 380,058,325 382,299,156
(2) Cash paid for other operating activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Customs guarantee deposit paid 193,509,947 118,660,849
Sales, management and R&D expenditures 321,991,460 240,550,811
Financial cost commission 36,673,878 28,677,981
R&D subsidy paid to cooperation units 7,675,003 12,736,804
Others 137,007,880 121,302,882
Total 696,858,168 521,929,327
(3) Cash received from other investing activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Interest income 301,254,856 50,163,105
Others 786,317
Total 302,041,173 50,163,105
128
(4) Cash paid for other investing activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Repayment on behalf due to obligation of guarantee - 173,076,659
Total - 173,076,659
(5) Cash received from other financing activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Restricted bank deposits received 323,466,355 326,925,000
Related party borrowings received - 1,034,005,000
Third party borrowings received 960,848,000 -
Total 1,284,314,355 1,360,930,000
(6) Cash paid for other financing activities
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Bank deposits restricted for saving out 311,887,883 323,466,355
Overseas loan expenditure under domestic guarantee 19,917,857 42,615,488
Repayment of related party borrowings 803,092,390 1,057,664,286
Repayment of third party borrowings 67,401,455 -
Total 1,202,299,585 1,423,746,129
68. Supplementary information to the statement of cash flows
(1) Supplementary information to the statement of cash flows
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Current
Supplementary information Prior amount
amount
1. Net profit adjusted to cash flows from operating activities:
Net profit 393,842,439 329,443,420
Plus: Provision for asset impairment reserves -12,576,222 824,836,448
Depreciation of fixed assets, depreciation and depletion of oil and gas assets and depreciation of
1,295,705,099 1,240,838,899
productive biological assets
Amortization of intangible assets 101,991,640 101,931,605
Amortization of long-term deferred expenses - -
129
Current
Supplementary information Prior amount
amount
Losses from disposal of fixed assets, intangible assets and other long-term assets ( “-” for gains) -155,557,716 -10,749,056
Losses from write-down of fixed assets (“-” for gains) - -
Losses from changes in fair value (“-” for gains) -44,481,806 4,615,775
Financial expenses (“-” for income) 1,489,952,919 747,304,445
Investment loss (“-” for gains) -116,030,979 -123,368,931
Decrease in deferred income tax assets ( “-” for increase) 78,369,439 112,607,677
Increase in deferred income tax liabilities ( “-” for decrease) -37,393,115 -146,375,330
Decrease in inventories ( “-” for increase) -1,532,625,209 -710,079,284
Decrease in operating receivables ( “-” for increase) -2,166,466,826 -979,057,110
Increase in operating payables ( “-” for decrease) 355,967,525 2,009,268,552
Others 903,246,791 -2,069,007,836
Net cash flows from operating activities 553,943,979 1,332,209,274
2. Significant investing and financing activities not involving cash inflow and outflow
Conversion of debt into capital - -
Capital injection by minority shareholders with discounted engineering materials 446,108,000 -
Convertible corporate bonds maturing within one year - -
Fixed assets acquired under financial lease - -
3. Changes in cash and cash equivalents:
Ending balance of cash 3,148,987,372 5,673,847,001
Less: Beginning balance of cash 5,673,847,001 3,497,205,186
Plus: Ending balance of cash equivalents - -
Less: Beginning balance of cash equivalents - -
Net increase in cash and cash equivalents -2,524,859,629 2,176,641,815
(2) Net cash paid for acquiring subsidiaries during the period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount
Cash and cash equivalents paid during the period for business combination incurred in the period 100,000
Less: cash and cash equivalents held by the subsidiary at acquisition date 886,316
Plus: 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
130
(4) Composition of cash and cash equivalents
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
I. Cash 3,148,987,372 5,673,847,001
Including: Cash on hand 1,569,455 1,365,865
Bank deposit available for payment at any time 3,147,417,917 5,672,481,136
Other monetary fund available for payment at any time - -
Unrestricted deposit in central bank - -
Deposits with banks and other financial institutions - -
Loans to and from banks and other financial institutions - -
II. Cash equivalents
Including: Bonds investment maturing within three months - -
III. Balance of cash and cash equivalents at the end of the period 3,148,987,372 5,673,847,001
Including: cash and cash equivalents restricted for use in parent company and
- -
subsidiaries
Other information:
□Applicable √Not applicable
69. 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 first half year and the adjustment amount:
□Applicable √Not applicable
70. Ownership or use right of assets subject to restriction
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending book value Restriction reason
Special funds collected for overseas project and deposited in overseas
Monetary fund 548,351,336
regulatory account, bank guarantee and L/C guarantee deposits
Notes receivable -
Inventories -
Fixed assets 5,270,355,777 Loan collateral
Intangible assets -
Long-term receivables 3,850,867,673 Loan collateral
Total 9,669,574,786 /
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 and
bank guarantee.
131
On Dec. 31, 2018, the vessel with the book value of RMB 4,940,559,588 Yuan (Dec. 31, 2017: RMB 3,687,007,865
Yuan) 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 financial leasing company, with the financing term of 3 to
11 years.
On Dec. 31, 2018, the long-term accounts receivable of “building-transfer” project with the book value of RMB
3,850,867,673 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: Yuan
Item Ending foreign currency balance Conversion exchange rate Ending equivalent RMB balance
Monetary fund
Including: USD 230,480,643 6.8632 1,581,834,749
EUR 49,058,155 7.8473 384,974,060
HKD 65,211,274 0.8762 57,138,118
SGD 2,569,564 5.0062 12,863,751
AUD 2,344,848 4.8250 11,313,892
OMR 606,629 17.4249 10,570,450
Yen 155,379,837 0.0619 9,618,012
GBP 846,677 8.6762 7,345,939
INR 33,893,781 0.0980 3,321,591
Ruble 4,727,787,201 0.0986 466,159,818
BRL 1,119,312 1.7742 1,985,883
AED 997,605 1.8679 1,863,426
KRW 157,390,367 0.0061 960,081
LKR 10,851,278 0.0380 412,349
ZAR 183,062 0.4735 86,680
NZD 625 4.5954 2,872
CAD 272 5.0381 1,370
MYR - - -
Accounts receivable
Including: USD 202,790,509 6.8632 1,391,791,821
EUR 50,839,953 7.8473 398,956,363
HKD 162,113 0.8762 142,043
Ruble 1,826,988,611 0.0986 180,141,077
GBP 12,015,844 8.6762 104,251,866
SGD 18,734,848 5.0062 93,790,396
QAR 20,257,390 1.8886 38,258,107
MYR 18,313,728 1.6479 30,179,192
132
Item Ending foreign currency balance Conversion exchange rate Ending equivalent RMB balance
CAD 4,860,024 5.0381 24,485,287
ZAR 29,070,672 0.4735 13,764,963
SAR 6,132,949 1.8287 11,215,324
KRW 1,402,775,643 0.0061 8,556,931
LKR 110,102,442 0.0380 4,183,893
AUD 312,721 4.8250 1,508,879
INR 7,711,999 0.0980 755,776
BRL 8,702 1.7742 15,439
Long-term borrowings
Including: USD 150,400,000 6.8632 1,032,225,280
EUR 22,770,000 7.8473 178,683,021
HKD - - -
Other receivables
USD 30,261,426 6.8632 207,690,219
EUR 12,115,656 7.8473 95,075,187
Ruble 36,896,471 0.0986 3,637,992
LKR 67,576,559 0.0380 2,567,909
SGD 339,137 5.0062 1,697,788
AUD 291,278 4.8250 1,405,416
HKD 562,294 0.8762 492,682
INR 3,685,547 0.0980 361,184
KRW 55,130,445 0.0061 336,296
BRL 150,590 1.7742 267,177
ZAR 387,503 0.4735 183,483
OMR 5,015 17.4249 87,386
Accounts payable
USD 122,986,455 6.8632 844,080,638
EUR 52,054,224 7.8473 408,485,112
GBP 1,032,925 8.6762 8,961,864
SGD 1,760,739 5.0062 8,814,612
ZAR 4,894,947 0.4735 2,317,757
KRW 310,011,525 0.0061 1,891,070
INR 13,157,480 0.0980 1,289,433
Yen 16,534,523 0.0619 1,023,487
HKD 1,028,299 0.8762 900,996
AUD 30,469 4.8250 147,013
CAD 22,295 5.0381 112,324
LKR 2,644,316 0.0380 100,484
133
Item Ending foreign currency balance Conversion exchange rate Ending equivalent RMB balance
BRL 27,992 1.7742 49,663
Ruble 9,202 0.0986 907
Other payables
USD 25,833,699 6.8632 177,301,843
EUR 2,937,497 7.8473 23,051,420
SGD 1,131,844 5.0062 5,666,237
Ruble 55,371,311 0.0986 5,459,611
LKR 78,956,219 0.0380 3,000,336
BRL 100,246 1.7742 177,856
KRW 8,978,922 0.0061 54,771
GBP 2,776 8.6762 24,085
AUD 972 4.8250 4,690
Short-term borrowings
USD 482,561,612 6.8632 3,311,916,855
EUR 110,711,331 7.8473 868,785,028
Yen 102,474,480 0.0619 6,343,170
Long-term borrowings maturing within one year
USD - - -
EUR - - -
Long-term payables maturing within one year
USD 79,252,111 6.8632 543,923,088
Long-term payables
USD 225,212,900 6.8632 1,545,681,175
(2) Description of the overseas business entities, including the disclosure of its overseas main business place, reporting
currency and selection for significant overseas business entity, as well as the reasons for changes in reporting currency
□Applicable √Not applicable
72. Hedging
□Applicable √Not applicable
73. Government subsidy
(1) Basic information on government subsidy
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Amount included in the
Category Amount Item
current profit or loss
Financial appropriations unrelated to daily activities / financial appropriations 2,346,812 2,346,812
Technological subsidy - -
Land compensation - -
134
(2) Particulars about government subsidy returned
□Applicable √Not applicable
74. Others
□Applicable √Not applicable
VIII Changes in the scope of consolidation
1. 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’s
Determination Acquiree’s net
Equity Proportion income from
Equity Acquisition basis of profit acquisition
Acquiree acquisition of equity Acquisition date acquisition date
acquisition date method acquisition date to the end of
cost acquired(%) to the end of
date reporting period
reporting period
ZMPC Hotel Co., Ltd. 100,000 100% Feb. 28, 2018 9,862,370 1,180,939
(2) Combination cost and goodwill
□Applicable √Not applicable
(3) Identifiable assts and liabilities of acquiree at acquisition date
√Applicable □Not applicable
Unit: Yuan Currency: RMB
ZMPC Hotel Co., Ltd.
Fair value at acquisition date Book value at acquisition date
Assets: 2,185,744 2,253,464
Monetary fund 886,317 886,317
Receivables 812,998 812,998
Other receivables 13,940 13,940
Inventories 328,361 328,361
Fixed assets 144,128 211,848
Liabilities: 2,085,744 2,085,744
Borrowings - -
Payables 1,617,974 1,617,974
Deferred income tax liabilities - -
Employee compensation
74,759 74,759
payable
Taxes and surcharges payable -282,498 -282,498
Other payables 675,509 675,509
Net assets 100,000 167,720
Less: minority interests - -
Net assets acquired 100,000 167,720
135
Other information:
Fair value on Feb. 28, 2018 Book value on Feb. 28, 2018
Monetary fund 886,317 886,317
Accounts receivable 812,998 812,998
Other receivables 13,940 13,940
Inventories 328,361 328,361
Fixed assets 144,128 211,848
Accounts payable (1,617,974) (1,617,974)
Employee compensation payable (74,759) (74,759)
Tax payable 282,498 282,498
Other payables (675,509) (675,509)
100,000 167,720
Goodwill arising from purchase -
100,000
The business performance and cash flows of ZPMC Hotel Co., Ltd. from the date of purchase to the end of the year are
listed below:
Mar. 1, 2018 to Dec. 31, 2018
Operating revenue 9,862,370
Net profit 1,180,939
Net cash flows 968,704
(4) Gains or losses of the previously held equity investment remeasured at fair value
Whether there is business combination until obtaining control step by step in multiple transactions during the reporting
period
□Applicable √Not applicable
(5) Explanation for unable reasonably to ascertain combination cost or the fair value of acquiree’s identifiable assets and
liabilities at the acquisition date or at the ending date of current financial period
□Applicable √Not applicable
(6) Other information
□Applicable √Not applicable
2. Business combination under common control
□Applicable √Not applicable
3. Reverse purchase
□Applicable √Not applicable
4. Disposal of subsidiaries
Disposing entity investment until losing control in one step
□Applicable √Not applicable
136
Other information:
□Applicable √Not applicable
Disposing entity investment until losing control step by step in multiple transactions
□Applicable √Not applicable
5. Changes in consolidation scope for other reasons
Specify the changes in consolidation scope (new subsidiary, liquidation of subsidiary, etc.) for other reasons and related
information:
√Applicable □Not applicable
On Mar. 13, 2018, the Company contributed RMB 4,000,000 Yuan in cash to jointly establish the controlling subsidiary
CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd. with CCCC Real Estate Group Co., Ltd., CCCC Urban Investment
Holding Company Limited and CCCC Highway Consultants Co. Ltd. On Dec. 31, 2018, the shareholding ratio of the Group
in that subsidiary was 40%. By signing the agreement for concerted action with CCCC Highway Consultants Co. Ltd. and
CCCC Equipment Manufacturing Marine Heavy Industry Division, the Company successively obtained 50% voting power
of the shareholders meeting and 60% voting power of the board of directors of that subsidiary. In accordance with the
regulations in the Articles of Association of the subsidiary, the Group had obtained its control rights, and thus the subsidiary
was in the consolidation scope of the Group.
On Mar. 22, 2018, the Company subscribed capital and established the wholly-owned subsidiary Terminexus Co., Ltd
with 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 industry
and commerce on Mar. 29, 2018.
The Company made capital contributions of 500,000 USD in cash and established the wholly-owned subsidiary
ZPMC Latin America Holding Corporation on July 9, 2018. On Dec. 31, 2018, the shareholding ratio of the Company in the
subsidiary was 100%.
On July 18, 2018, the Company, with the capital contributions of RMB 128,000,000 in cash, and CCCC First Highway
Engineering Group Co., Ltd. jointly established the holding subsidiary CCCC Yongjia Construction Development Co., Ltd. On
Dec. 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 the
administration for industry and commerce on Sept. 25, 2018.
6. Others
□Applicable √Not applicable
137
IX. Equity in Other Entities
1. Equity in subsidiaries
(1) Composition of enterprise group
√Applicable □Not applicable
Shareholding (%)
Name of subsidiary Main business place Registration place Business nature Acquisition method
Direct Indirect
Shanghai Zhenhua Port Machinery Machinery Establishment by
Chongming, Shanghai Chongming, Shanghai 94.76 -
Heavy Industry Co., Ltd. manufacture investing
Shanghai Zhenhua Port Machinery Establishment by
Hong Kong Hong Kong Shipping 99.99 -
(Hongkong) Co., Ltd. (Note 1) investing
Pudong New Area, Pudong New Area, Establishment by
Shanghai Zhenhua Shipping Co., Ltd. Shipping 55 -
Shanghai Shanghai investing
Nantong Zhenhua Heavy Industry Nantong City, Jiangsu Nantong City, Jiangsu Machinery Establishment by
100 -
Equipment Manufacturing Co., Ltd. Province Province manufacture investing
ZPMC Transmission Machinery Nantong City, Jiangsu Nantong City, Jiangsu Machinery Establishment by
100 -
(Nantong) Co., Ltd. Province Province manufacture investing
Electric equipment
Pudong New Area, Pudong New Area, Establishment by
ZPMC Electric Co., Ltd. research and 100 -
Shanghai Shanghai investing
development
Jiangyin Zhenhua Port Machinery
Jiangyin City, Jiangsu Jiangyin City, Jiangsu Machinery Establishment by
Steel Structure Manufacturing Co., 75 25
Province Province manufacture investing
Ltd.
Shanghai Zhenhua Marine Yangshan Bonded Port Yangshan Bonded Port Establishment by
Shipping 100 -
Engineering Service Co., Ltd. Area, Shanghai Area, Shanghai investing
ZPMC Machinery Equipment Pudong New Area, Pudong New Area, Technical Establishment by
100 -
Services Co., Ltd. Shanghai Shanghai consultancy investing
Establishment by
ZPMC Netherlands Coperatie U.A. Rotterdam, Netherlands Rotterdam, Netherlands Trade sales 100 -
investing
Establishment by
ZPMC Netherlands B.V. Rotterdam, Netherlands Rotterdam, Netherlands Trade sales 100 -
investing
Business combination
Machinery involving enterprises
Verspannen B.V. Rotterdam, Netherlands Rotterdam, Netherlands - 100
manufacture not under common
control
Establishment by
ZPMC Espana S.L. Los Barrios, Spain Los Barrios, Spain Trade sales - 100
investing
Establishment by
ZPMC GmbH Hamburg Hamburg, Germany Hamburg, Germany Trade sales 100 -
investing
ZPMC Lanka Company(Private) Establishment by
Colombo, Sri Lanka Colombo, Sri Lanka Trade sales 70 -
Limited investing
Establishment by
ZPMC North America Inc. Delaware, USA Delaware, USA Trade sales 100 -
investing
Establishment by
ZPMC Korea Co., Ltd. Pusan, Korea Pusan, Korea Trade sales 70 -
investing
Kwazulu-Natal
Kwazulu-Natal Province, Establishment by
ZPMC Engineering Africa (Pty) Ltd. Province, Republic of Trade sales 100 -
Republic of South Africa investing
South Africa
ZPMC Engineering (India) Private Maharashtra State, Establishment by
Maharashtra State, India Trade sales 100 -
Limited India investing
ZPMC Southeast Asia Holding Establishment by
Singapore Singapore Trade sales 100 -
Pte. Ltd. investing
ZPMC Engineering (Malaysia) Sdn. Establishment by
Malaysia Malaysia Trade sales - 70
Bhd. investing
New South Wales, New South Wales, Establishment by
ZPMC Australia Company (Pty) Ltd. Trade sales 100 -
Australia Australia investing
138
Shareholding (%)
Name of subsidiary Main business place Registration place Business nature Acquisition method
Direct Indirect
Business combination
ZPMC Port Machinery General Pudong New Area, Pudong New Area, Machinery involving enterprises
100 -
Equipment Co., Ltd Shanghai Shanghai manufacture under common
control
Business combination
Shanghai Port Machinery Heavy Pudong New Area, Pudong New Area, Machinery
- 74.02 under the common
Industries Co., Ltd. Shanghai Shanghai manufacture
control
Business combination
ZPMC Zhangjiagang Port Machinery Zhangjiagang City, Zhangjiagang City, Machinery involving enterprises
90 -
Co., Ltd. Jiangsu Province Jiangsu Province manufacture under common
control
Najing Ninggao New Channel Nanjing City, Jiangsu Nanjing City, Jiangsu Engineering Establishment by
100 -
Construction Co., Ltd. Province Province construction investing
Business combination
ZPMC Qidong Marine Engineering Nantong City, Jiangsu Nantong City, Jiangsu Machinery involving enterprises
67 -
Co., Ltd. Province Province manufacture not under common
control
Establishment by
Jiahua Shipping Co., Ltd. Hong Kong Hong Kong Shipping - 70
investing
Zhenhua Pufeng Wind Power (Hong Establishment by
Hong Kong Hong Kong Shipping - 51
Kong) Co., Ltd investing
ZPMC Brazil Servio Portuários Establishment by
Rio DE Janeiro, Brazil Rio DE Janeiro, Brazil Trade sales 80 -
LTDA investing
Establishment by
ZPMC Limited Liability Company Moscow, Russia Moscow, Russia Trade sales 85 -
investing
Establishment by
ZPMC NA East Coast lnc. Virginia Delaware, USA Trade sales - 100
investing
Establishment by
ZPMC NA Huston lnc. Texas Delaware, USA Trade sales - 100
investing
Business combination
CCCC Tianhe Mechanical Equipment Changshu City, Jiangsu Changshu City, Jiangsu Machinery involving enterprises
32.51 -
Manufacturing Co., Ltd. (Note 1) Province Province manufacture under common
control
CCCC Investment & Development Nantong City, Jiangsu Nantong City, Jiangsu Engineering Establishment by
47.5 -
Qidong Co., Ltd. (Note 2) Province Province construction investing
CCCC Liyang Urban Investment and Liyang City, Jiangsu Liyang City, Jiangsu Engineering Establishment by
48 -
Construction Co., Ltd.(Note 3) Province Province construction investing
Establishment by
ZPMC UK LD Cardiff, UK Cardiff, UK Trade sales 100 -
investing
Establishment by
ZPMC Middle East Fze Dubai, UAE Dubai, UAE Trade sales 100 -
investing
CCCC (Huaian) Construction Huaian City, Jiangsu Huaian City, Jiangsu Engineering Establishment by
- 77.01
Development Co., Ltd. Province Province construction investing
CCCC Zhenjiang Investment
Zhenjiang City, Jiangsu Zhenjiang City, Jiangsu Engineering Establishment by
Construction Management 70 -
Province Province construction investing
Development Co., Ltd
CCCC Yongjia Construction Wenzhou City, Zhejiang Wenzhou City, Zhejiang Engineering Establishment by
80 -
Development Co., Ltd. Province Province construction investing
CCCC Zhenhua Lvjian Technology Ningbo City, Zhejiang Ningbo City, Zhejiang Engineering Establishment by
40 -
(Ningbo) Co., Ltd. (Note 4) Province Province construction investing
Business combination
Pudong New Area, Pudong New Area, involving enterprises
ZPMC Hotel Co., Ltd. Hotel and catering - 100
Shanghai Shanghai not under common
control
CCCC Rudong Construction Rudong City, Jiangsu Rudong City, Jiangsu Engineering Establishment by
7.73 55.19
Development Co., Ltd. Province Province construction investing
ZPMC Latin America Holding Establishment by
Panama Panama Trade sales 100 -
Corporation investing
139
Shareholding (%)
Name of subsidiary Main business place Registration place Business nature Acquisition method
Direct Indirect
Technical Establishment by
Terminexus Co.,Ltd. Hong Kong Hong Kong - 100
consultancy investing
Business combination
Greenland Heavylift (Hong Kong) involving enterprises
Hong Kong Hong Kong Shipping - 50
Limited (Note5) not under common
control
Business combination
involving enterprises
GPO Grace Limited Marshall Islands Marshall Islands Shipping - 100
not under common
control
Business combination
involving enterprises
GPO Amethyst Limited Marshall Islands Marshall Islands Shipping - 100
not under common
control
Business combination
involving enterprises
GPO Sapphire Limited Marshall Islands Marshall Islands Shipping - 100
not under common
control
Business combination
involving enterprises
GPO Emerald Limited Marshall Islands Marshall Islands Shipping - 100
not under common
control
Business combination
involving enterprises
GPO Heavylift Limited Cayman Islands Cayman Islands Shipping - 60
not under common
control
Business combination
involving enterprises
GPO Heavylift AS Oslo, Norway Oslo, Norway Shipping - 100
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 of
the board of directors from the Company via amendment of Articles of Association of CCCC Tianhe Mechanical Equipment
Manufacturing Co., Ltd., reconstruction of the board of directors and signing the agreement for concerted action with China
Communications Corporation (one of the shareholders of CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd.). In
accordance with the regulations in the Articles of Association o the company, the Group had obtained the control rights of the
company, 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 obtained
95% voting power of the shareholders meeting and 100% voting power of the board of directors. In accordance with the
regulations in the Articles of Association of the company, the Group had obtained the control rights of the company, and thus
the 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 China
Investment Co., Ltd., the Group had obtained 76% voting power of the shareholders meeting and 71% voting power of the
board of directors. In accordance with the regulations in the Articles of Association of the company, the Group had obtained
the 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 Equipment
Manufacturing Marine Heavy Industry Division, the Group obtained the accumulated 50% voting power of the shareholders
meeting and 60% voting power of the board of directors of the company. In accordance with the regulations in the Articles
of Association of the company, the Group had obtained the control rights of the company, and thus the company was in the
consolidation 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 of
the company, including chairman of the board. As stipulated in the Articles of Association of the company, the chairman of
the board has super voting power when the voting of the board is deadlocked. In addition, Group also has the right to buy its
1% stock equity at 1 USD at any time in the future. Therefore, the Group has substantial control over the company and the
company was included in the consolidation scope of the financial statement of the Group.
140
(2) Significant non-wholly owned subsidiary
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Profit or loss
Shareholding Dividends Withdrawal of
attributable to Ending balance
ratio of declared to special reserves
Name of subsidiary the minority of the minority
minority minority interests for minority
shareholder for interests
shareholder for current period shareholders
current period
CCCC Tianhe Mechanical Equipment
67.49 39,565,707 -635,573 -413 642,352,963
Manufacturing Co., Ltd.
CCCC Zhenjiang Investment,
Construction, Management and 30 15,949,306 - - 335,763,428
Development Co, Ltd.
Greenland Heavylift (Hong Kong) Limited 50 -12,996,502 - - 295,996,240
Notes to the shareholding different from the voting proportion of the minority shareholder of subsidiary:
□Applicable √Not applicable
Other information:
√Applicable □Not applicable
2018
Capital Profit or loss Withdrawal of
Shareholding Dividend paid Accumulated
invested attributable special reserves
ratio of minority to minority minority equity at
by minority to minority for minority
shareholder % shareholder the end of year
shareholder shareholder shareholder
CCCC Tianhe Mechanical
Equipment Manufacturing 67.49 - 39,565,707 (635,573) (413) 642,352,963
Co., Ltd.
CCCC Zhenjiang
Investment, Construction,
30.00 - 15,949,306 - - 335,763,428
Management and
Development Co, Ltd.
Greenland Heavylift (Hong
50.00 - (12,996,502) - - 295,996,240
Kong) Limited
2017
Profit or loss Withdrawal of
Shareholding Capital invested Accumulated
attributable special reserves
ratio of minority by minority minority equity at
to minority for minority
shareholder % shareholder the end of year
shareholder shareholder
CCCC Tianhe Mechanical
Equipment Manufacturing Co., 67.49 - 39,217,954 2,562,277 603,423,242
Ltd.
CCCC Zhenjiang Investment,
Construction, Management and 30.00 60,000,000 16,811,568 - 319,814,122
Development Co, Ltd.
Greenland Heavylift (Hong Kong)
50.00 309,405,935 (413,193) - 308,992,742
Limited
141
(3) Main financial information of significant non-wholly owned subsidiary
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Name of subsidiary
Non-current Current Non-current Non-current Current Non-current
Current asset Total assets Total liabilities Current asset Total assets Total liabilities
asset liabilities liabilities asset liabilities liabilities
CCCC Tianhe Mechanical
Equipment Manufacturing 2,683,768,533 2,250,708,205 4,934,476,738 -3,405,276,767 -577,400,904 -3,982,677,671 2,313,171,638 1,869,127,907 4,182,299,545 -2,460,195,680 -828,278,015 -3,288,473,695
Co., Ltd.
CCCC Zhenjiang
Investment, Construction,
114,313,970 1,045,638,449 1,159,952,419 -40,740,990 - -40,740,990 13,909,597 1,074,783,059 1,088,692,656 -22,645,579 - -22,645,579
Management and
Development Co, Ltd.
Greenland Heavylift (Hong
60,153,796 1,436,258,433 1,496,412,229 -87,059,172 -818,181,971 -905,241,143 47,188,656 790,083,887 837,272,543 -218,380,034 - -218,380,034
Kong) Limited
Current amount Prior amount
Name of subsidiary Total Cash flow Total
Operating Operating Cash flow form
Net profit comprehensive form operating Net profit comprehensive
revenue revenue operating activities
income activities income
CCCC Tianhe Mechanical Equipment
1,230,112,617 58,624,548 58,624,548 -61,417,339 1,152,898,050 58,140,097 58,140,097 49,468,222
Manufacturing Co., Ltd.
CCCC Zhenjiang Investment,
Construction, Management and - 53,164,353 53,164,353 -102,681,078 5,241,278 56,038,562 56,038,562 -
Development Co, Ltd.
Greenland Heavylift (Hong Kong)
106,628,409 -60,006,966 -49,950,762 -72,567,613 85,079,934 17,523,291 -2,977,632 31,723,925
Limited
Other information:
None
(4) Material limitation of using assets and paying off liabilities of the Group
□Applicable √Not applicable
(5) Providing financial support or other supports for the structured entity included in the scope of consolidated financial
statements
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
2. Transactions that causes changes in the shares of owners’ equity in subsidiaries but still control the subsidiaries
□Applicable √Not applicable
142
3. Equity in joint ventures and associates
√Applicable □Not applicable
(1) Important joint ventures or associates
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Shareholding ratio (%) Accounting treatment
Name of joint venture or associated Main business Registration for investment in joint
Business nature
enterprise place place Direct Indirect venture or associated
enterprise
Jiangsu Longyuan Zhenhua Marine Marine engineering
Nantong, Jiangsu Nantong, Jiangsu 50 - Equity method
Engineering Co., Ltd. construction
ZPMC Mediterranean Liman Technical service for port
Istanbul, Turkey Istanbul, Turkey 50 - Equity method
Makinalari Ticaret Anonim Sirketi equipment
Zhenhua Marine Energy (Hong Kong)
Hong Kong Hong Kong Shipping - 51 Equity method
Co., Ltd. (Note 1)
Technical service for port
Cranetech Global Sdn. Bhd. Malaysia Malaysia - 49.99 Equity method
equipment
ZPMC-OTL MARINE CONTRACTOR
Hong Kong Hong Kong Shipping - 50 Equity method
LIMITED
CCCC Tianhe Xi’an Equipment
Xi’an Shaanxi Xi’an Shaanxi Machinery manufacture - 50 Equity method
Manufacturing Co., Ltd.
Marine technology
CCCC Marine Engineering & Pudong, Pudong,
development and 25 - Equity method
Technology Research Center Co., Ltd. Shanghai Shanghai
consulting
CCCC Real Estate Yinxing Co., Ltd. Wuxi,Jiangsu Wuxi,Jiangsu Real estate development 20 - Equity method
Changzhou, Changzhou,
ZPMC Changzhou Coatings Co., Ltd. Paint manufacture 20 - Equity method
Jiangsu Jiangsu
Pudong, Pudong,
CCCC Financial Leasing Co., Ltd. Financial leasing 30 - Equity method
Shanghai Shanghai
CCCC Yancheng Construction and Yancheng, Yancheng, Engineering project
25 - Equity method
Development Co., Ltd. Jiangsu Jiangsu construction
Suzhou Chuanglian Electric Drive Co., Electrical equipment
Suzhou, Jiangsu Suzhou, Jiangsu 20 - Equity method
Ltd. manufacturing
China Communications Construction Port, channel highway and
USA USA 24 - Equity method
USA Inc. bridge construction
CCCC South American Regional Port, channel highway and
USA USA 17 - Equity method
Company SARL(Note 2) bridge construction
ZPMC Southeast Asia Pte. Ltd Singapore Singapore Trade sales - 40 Equity method
Note 1: On May 5, 2014, the subsidiary of the Company and the partner jointly invested to establish Zhenhua Marine
Energy (Hong Kong) Co., Ltd. The registered capital was 5,969,998 USD and the subsidiary of the Company contributed
3,044,699 USD, holding 51% of the shares. The company focused on the vessel transportation business. Based on
the 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 of
CCCC South American Regional Company SARL. On Dec. 31, 2018, the registered capital was 179,988,158 USD and
the shareholding ratio of the Company was 17%. The company is mainly engaged in port construction business. Based on
the regulations of the articles of association of that company, the Company has the right to designate one director to that
company and to implement significant impact on that company.
143
(2) Main financial information of important joint ventures
□Applicable √Not applicable
(3) Main financial information of important associates
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance/ Current amount Beginning Balance/ Prior amount
CCCC Financial CCCC Financial CCCC Financial CCCC Financial
Leasing Co., Ltd. Leasing Co., Ltd. Leasing Co., Ltd. Leasing Co., Ltd.
Current assets 16,819,852,506 14,519,134,477
Non-current assets 14,386,974,050 12,061,010,402
Total assets 31,206,826,556 26,580,144,879
Current liabilities 14,391,112,371 8,365,784,476
Non-current liabilities 9,282,803,916 11,116,733,773
Total liabilities 23,673,916,287 19,482,518,249
Minority shareholders’ equity 1,794,759,090 1,502,458,020
Difference in the accounting policies of
- -
associated enterprise (Note 1)
Shareholders’ equity attributable to parent
5,738,151,179 5,595,168,610
company
Net asset shares based on the shareholding
1,721,445,354 1,678,550,583
ratio
Adjusting items - -
--Goodwill - -
--Unrealized profit of internal trading - -
--Others - -
Book value of equity investment in associates 1,721,445,354 1,678,550,583
Fair value of equity investment in associates
- -
with quoted market price
Operating income 1,693,357,297 1,173,817,052
Financial expenses – interest income 14,581,320 11,277,025
Financial expenses – interest expenditure 11,983,472 23,808,003
Income tax expenses 114,094,285 89,532,048
Net profit 351,695,926 272,052,060
Net profit for discontinued operations - -
Other comprehensive income 2,159,463 -848,960
Total comprehensive income 353,855,387 271,097,816
Dividends from associates for the current year 150,000,000 -
144
(4) Summary of financial information of insignificant joint ventures and associates
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance/ Beginning Balance/
Current amount Prior amount
Joint venture:
Book value of total investments 287,691,938 268,510,756
Total amount calculated by shareholding ratio
-- Net profit 9,181,182 35,324,167
-- Other comprehensive income - -
-- Total comprehensive income 9,181,182 35,324,167
Associate:
Book value of total investments 766,664,469 373,409,182
Total amount calculated by shareholding ratio - -
-- Net profit 458,218 -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 applicable
4. Significant joint operations
□Applicable √Not applicable
5. Equity in the structured entities not included in the scope of consolidated financial statements
Notes to the structured entities not included in the scope of consolidated financial statements:
□Applicable √Not applicable
6. Others
□Applicable √Not applicable
145
X. Risks Related to Financial Instruments
√Applicable □Not applicable
1. Classification of financial instruments
The book values of various financial instruments on balance sheet date are as follows:
Dec. 31, 2018
Financial assets
Financial assets
measured at fair value Loans and accounts Other available-for-
Total
through the current receivable sale financial assets
profit or loss
Monetary fund - 3,697,338,708 - 3,697,338,708
Financial assets measured at fair
52,920,084 - - 52,920,084
value through the current profit or loss
Notes receivables and accounts
- 5,221,919,846 - 5,221,919,846
receivables
Other receivables - 680,776,372 - 680,776,372
Non-current assets maturing within
- 894,638,424 - 894,638,424
one year
Available-for-sale financial assets - - 1,214,533,554 1,214,533,554
Long-term receivables - 5,188,341,089 - 5,188,341,089
52,920,084 15,683,014,439 1,214,533,554 16,980,468,077
Financial liabilities
Other financial liabilities
Short-term borrowings 16,554,687,487
Notes payable and accounts payable 9,769,273,923
Other payables 952,110,434
Non-current liabilities maturing within one year 4,209,532,510
Long-term borrowings 15,097,725,259
Long-term payables 1,967,461,119
48,550,790,732
Dec. 31, 2017
Financial assets
Financial assets measured Loans and Other available-
at fair value through the accounts for-sale financial Total
current profit or loss receivable assets
Monetary fund - 5,770,227,369 - 5,770,227,369
Financial assets measured at fair value through
8,438,278 - - 8,438,278
the current profit or loss
Notes receivable and accounts receivable - 4,400,803,623 - 4,400,803,623
Other receivables - 627,877,201 - 627,877,201
Non-current assets maturing within one year - 1,896,475,472 - 1,896,475,472
Available-for-sale financial assets - 1,304,203,905 1,304,203,905
Long-term receivables - 4,238,704,827 - 4,238,704,827
8,438,278 16,934,088,492 1,304,203,905 18,246,730,675
146
Financial liabilities
Other financial liabilities
Short-term borrowings 25,468,980,401
Notes payable and accounts payable 8,780,825,653
Other payables 843,207,676
Non-current liabilities maturing within one year 2,198,931,219
Long-term borrowings 6,664,914,383
Long-term payables 1,884,986,333
45,841,845,665
2. Transfer of financial assets
Transferred financial assets derecognized as a whole but involved continuously
On December 31, 2018, the book value of the bank acceptance bill that the Group had endorsed to the supplier for
clearing the accounts payable was RMB 364,908,608 Yuan (Dec. 31, 2017: RMB 1,519,002,534 Yuan), with the maturity
term of 1~12 months. In accordance with the relevant provisions of the Negotiable Instruments Law, if the acceptance bank
refuses to pay, its holder is entitled to recourse to the Group (“continue to be involved”).The Group considers that the Group
has transferred almost all of its risks and rewards and therefore terminates the book value of its settled accounts payable in
connection with it. The maximum losses and undiscounted cash flows that continue to be involved are equal to their book
value. 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 financial
assets. The Group had no income or expense recognized in current year or accumulatively due to overall termination of
recognition but continuous involvement. The endorsement of bank acceptance bill was roughly balanced in current year.
3. Risks of financial instruments
Major financial instruments of the Group include bank loans, mortgage loan formed from sale and lease-back, other
interest-bearing borrowings and monetary fund, and the like. The main purpose of these financial instruments is to finance
for the operation of the Group. The Group has various other financial assets and liabilities directly arising from operations,
such as accounts receivable, long-term receivables and accounts payable, etc.
The Group’s operations face various financial risks: credit risk, liquidity risk and market risk (mainly exchange rate risk
and interest rate risk). The Group’s overall risk management plan addresses the unpredictability of financial markets and
seeks to reduce the potential adverse impact on the Group’ s financial performance.
Credit risk
The Group manages the credit risks by category based on portfolio. Credit risks mainly originate from notes and
accounts receivable, other receivables, available-for-sale financial assets and long-term receivables etc.
Other financial assets of the Group include monetary fund, available-for-sale financial assets and other receivables,
whose credit risks arise from that the counterparty default and the maximum exposure is equal to the carrying amount of
these instruments.
Since the Group is trading only with a recognized and credibility third party, the credit risks shall be managed in
centralized manner according to the customer/counterparty, geographic region and industry. Since the Group’s customers
of accounts receivable and long-term receivables are widely dispersed across sectors and industries, there is no significant
credit risk concentration within the Group. The Group does not hold any collateral or other credit enhancements to the
balance 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-sized
listed banks. The Group held that there was no significant 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 Group
has established related policies to control the credit risks exposure. The Group evaluates the clients’ credit qualification and
sets corresponding credit terms on the basis of clients’ financial 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
147
basis. When client is found with bad credit record, the Group will send out written calls, shorten credit terms or cancel credit
terms, 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 as
follows:
2018
Overdue
Not overdue
Total 3 years and
No depreciation Within 1 year 1~2 years 2~3 years
above
Monetary fund 3,697,338,708 3,697,338,708 - - - -
Notes receivable and
3,390,661,921 2,888,371,190 153,982,269 120,227,018 102,862,164 125,219,280
accounts receivable
Other receivables 1,137,887,691 1,137,887,691 - - - -
Non-current assets
894,638,424 894,638,424 - - - -
maturing within one year
Long-term receivables 5,188,341,089 5,188,341,089 - - - -
2017
Overdue
Not overdue
Total 3 years and
No depreciation Within 1 year 1~2 years 2~3 years
above
Monetary fund 5,770,227,369 5,770,227,369 - - - -
Notes receivable and
2,944,886,111 2,649,977,252 17,223,670 139,468,191 12,056,612 126,160,386
accounts receivable
Other receivables 981,986,979 981,986,979 - - - -
Non-current assets
1,896,475,472 1,896,475,472 - - - -
maturing within one year
Long-term receivables 4,238,704,827 4,238,704,827 - - - -
On December 31, 2018, the accounts receivable not overdue or impaired were related to a large number of
decentralized customers who had no default record recently.
On December 31, 2018, the accounts receivable overdue but not impaired were related to a large number of
independent customers bearing good transaction records with the Group. Based on past experiences, the Group considered
that no provision for impairment was required since the credit quality had not changed significantly and the accounts
receivable were still considered to be recoverable in full.
Liquidity risk
Subsidiaries within the Group are responsible for their own prediction of cash flow. The financial section of the head
office continues to monitor the capital demand for short-term and long-term capital at the group level after collecting all
predictions of subsidiaries, to ensure sufficient cash reserve and cashable securities. Meanwhile, the financial section of the
head office continues to monitor the financial and non-financial factors prescribed in credit agreements and loan agreements,
to ensure the Group to get sufficient line of credit from key financial institutions to satisfy the short-term and long-term capital
demand of the subsidiaries of the Group.
148
On Dec. 31, 2018, the various financial liabilities of the Group are listed as follows by due dates in undiscounted
contracted cash flow (principal and interest included):
2018
Within 1 year 1~2 years 2~5 years 5 years and above Total
Short-term borrowings 16,831,239,955 - - - 16,831,239,955
Notes payable and accounts payable 9,769,273,923 - - - 9,769,273,923
Other payables 1,098,580,447 - - - 1,098,580,447
Non-current liabilities maturing within
4,383,617,609 - - - 4,383,617,609
one year
Long-term borrowings 7,708,456,612 7,771,884,597 509,025,150 15,989,366,359
Long-term payables 1,013,791,584 524,739,421 505,113,074 2,043,644,079
32,082,711,934 8,722,248,196 8,296,624,018 1,014,138,224 50,115,772,372
On Dec. 31, 2017, the various financial liabilities of the Group are listed as follows by due dates in undiscounted
contracted cash flow (principal and interest included):
2017
Within 1 year 1~2 years 2~5 years 5 years and above Total
Short-term borrowings 25,899,118,580 - - - 25,899,118,580
Notes payable and accounts payable 8,784,041,985 - - - 8,784,041,985
Other payables 844,125,043 - - - 844,125,043
Non-current liabilities maturing within
2,607,918,346 - - - 2,607,918,346
one year
Long-term borrowings - 3,068,866,936 3,639,532,692 410,067,125 7,118,466,753
Long-term payables - 969,702,730 962,927,475 - 1,932,630,205
38,135,203,954 4,038,569,666 4,602,460,167 410,067,125 47,186,300,912
Market risk
Interest rate risk
The interest rate risks of the Group mainly originate from long-term interest-bearing liabilities including long-term bank
loans and long-term payables. Financial liabilities with floating rate confront the Group with cash flow interest rate risks,
while financial liabilities with fixed rates put the Group against fair value interest rate risks. The Group determines the relative
proportion of contracts with fixed rates and those with floating rates based on corresponding market environment. On Dec.
31, 2018, the Group’s long-term interest-bearing liabilities mainly included the contracts with floating rates priced in USD and
contracts with fixed rates priced in RMB.
The risk of market interest rate changes which the Group faces is mainly related to the long-term liabilities bearing the
interest at floating rate.
The financial division of the Group headquarters keeps close watch over the interest rates level of the Group. Since
the rise in interest rates will increase the cost of newly added liabilities with interests, interest expenses on unpaid liabilities
with interests priced in flexible rates, and will significantly and adversely impact the financial results of the Group, so the
management will control the rate risks via swap contracts based on the latest market status. In 2017 and 2018, the Group
had no such swap arrangements.
The following table shows the sensitivity analysis of the interest rate risk, reflecting the effect of the reasonable and
possible changes in the interest rate on net profits and losses (through the impact on loan with floating rate) and the net
amount of other comprehensive income after tax based on the assumption of no change in other variables.
149
2018
Net amount of other
Base point Net profits and losses Total shareholders’ equity
comprehensive income after tax
Increase/(decrease) Increase/(decrease) Increase/(decrease)
Increase/(decrease)
RMB 100 (48,269,201) - (48,269,201)
RMB (100) 48,269,201 - 48,269,201
2017
Net amount of other
Base point Net profits and losses Total shareholders’ equity
comprehensive income after tax
Increase/(decrease) Increase/(decrease) Increase/(decrease)
Increase/(decrease)
RMB 100 (40,838,071) - (40,838,071)
RMB (100) 40,838,071 - 40,838,071
Exchange rate risk
The Group is exposed to transactional exchange rate risk. Such risks are due to sales or purchases made by the
operating entity in currencies other than its currency. The Group’s main production is located in China, but the main
business is settled in USD and EUR. Therefore, the foreign currency assets and liabilities recognized by the Group and the
future foreign currency transactions (foreign currency assets and liabilities and the pricing currency denominated in foreign
currency transactions are mainly USD and EUR). The Financial Department of the Group’s headquarters is responsible for
monitoring the size of the Group’ s foreign currency transactions and foreign currency assets and liabilities to minimize the
exposure to foreign currency risks. In the reporting year, the Group adopted forward foreign exchange contract with Ruble to
USD to offset the exchange rate risk of sales transactions in Ruble.
The following table shows the sensitivity analysis of the exchange rate risk, reflecting the impact of reasonable and
possible changed in USD exchange rate on net profit and loss (due to changes in the fair value of monetary assets and
monetary liabilities) and net amount of other comprehensive income after tax (due to changes in the fair value of forward
exchange contracts) based on the assumption of no change in other variables.
2018
Net amount of other
Total shareholders’
USD Exchange rate Net profits and losses comprehensive income
equity
Increase/(decrease) Increase/(decrease) after tax
Increase/(decrease)
Increase/(decrease)
Appreciation of RMB against USD 1% 35,226,305 - 35,226,305
Depreciation of RMB against USD (1%) (35,226,305) - (35,226,305)
2017
Net amount of other
Total shareholders’
USD Exchange rate Net profits and losses comprehensive income
equity
Increase/(decrease) Increase/(decrease) after tax
Increase/(decrease)
Increase/(decrease)
Appreciation of RMB against USD 1% 32,343,556 - 32,343,556
Depreciation of RMB against USD (1%) (32,343,556) - (32,343,556)
Capital management
The objective of the Group’s capital management policy is to ensure that the Group is able to operate on a continuous
basis to provide returns to shareholders and to benefit other shareholders while maintaining the best capital structure to
reduce capital costs.
150
To maintain or adjust the capital structure, the Group may adjust the dividend amount paid to shareholders, return
capital 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 not
subject to mandatory external capital requirements and utilizes debt ratio to monitor capital. This ratio is calculated by the
net debt divided by total capital.The net debt is the total borrowing (including Short-term borrowings listed in the consolidated
balance sheet, other non-current liabilities due within one year, Long-term borrowings, other payables and interest-bearing
liabilities in long-term payables) minus cash and cash equivalents. The total capital is the total shareholders’ equity plus net
debt.
The debt ratio of the Group as at Dec. 31, 2018 and Dec. 31, 2017 was listed below:
Dec. 31, 2018 Dec. 31, 2017
Debt ratio 66% 65%
XI. Disclosure of Fair Value
1. Ending fair value of the assets and liabilities measured at fair value
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending fair value
Item Measurement
Measurement of fair Measurement of fair
of fair value by Total
value by Level 1 value by Level 2
Level 3
I. Recurring fair value measurement 1,171,539,394 44,481,806 8,438,278 1,224,459,478
(I) Financial assets measured at fair value
- 44,481,806 8,438,278 52,920,084
through the current profit or loss
1. Financial assets held for trading - 44,481,806 8,438,278 52,920,084
(1) Debt instrument investment - - - -
(2) Equity instrument investment - - 8,438,278 8,438,278
(3) Derivative financial assets - 44,481,806 44,481,806
2. Designated financial assets measured at fair
- - - -
value through the current profit or loss
(1) Debt instrument investment - - - -
(2) Equity instrument investment - - - -
(II) Available-for-sale financial assets 1,171,539,394 - - 1,171,539,394
(1) Debt instrument investment - - - -
(2) Equity instrument investment 1,171,539,394 - - 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 after
- - - -
appreciation
(IV) Biological assets - - - -
1. Consumable biological assets - - - -
2. Productive biological assets - - - -
Total assets of recurring fair value measurement 1,171,539,394 44,481,806 8,438,278 1,224,459,478
(V) Financial liabilities held for trading - - - -
Including: Trading bonds issued - - - -
151
Ending fair value
Item Measurement
Measurement of fair Measurement of fair
of fair value by Total
value by Level 1 value by Level 2
Level 3
Derivative financial liabilities - - - -
Others - - - -
(VI) Financial liabilities designated upon initial
recognition as measured at fair value through - - -
the current profit 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 value
- - - -
measurement
Total liabilities of non-recurring fair value
- - - -
measurement
2. Determination basis of market price for recurring and non-recurring items in Level 1 for fair value measurement
□Applicable √Not applicable
3. For recurring and non-recurring items in Level 2 for fair value measurement, the adopted valuation techniques
and 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 of
the transfer among the levels. There was no transfer among the levels in this year.
As for the financial instrument traded on active market, the Group would determine its fair value based on the quoted
price on active market; as for the financial instrument not traded on active market, the Group would determine its fair value
with valuation technique. The valuation model shall be the cash flow discount model. The input values of valuation technique
included the risk-free interest rate and forward exchange rate.
Information on Level 2 for fair value measurement is as follows:
Dec. 31, 2018 Observable input value
Valuation technique
Fair value Name Scope
Financial assets measured at fair value
through the current profit or loss
Cash flow discount Ruble to USD
- Forward exchange contract in Ruble 44,481,806 64.7530~66.4903
model forward exchange
The important unobservable input values of Level 3 for fair value measurement are as follows:
Dec. 31, 2018 Unobservable input value
Valuation technique
Fair value Name Weighted average
Financial assets measured at fair value
through the current profit or loss
Financial assets held for trading - equity Cash flow discount Weighted average
8,438,278 11%
instruments investment model capital cost
152
4. For recurring and non-recurring items in Level 3 for fair value measurement, the adopted valuation techniques
and qualitative and quantitative information of important parameters
□Applicable √Not applicable
5. For recurring items in Level 3 for fair value measurement, the adjustment between beginning and ending book
value and the sensitivity analysis of unobservable parameters
□Applicable √Not applicable
6. If there are transfers of recurring items for fair value measurement among levels in current period, disclose the
reason for those transfers and policies for transfer timing-point determination
□Applicable √Not applicable
7. Changes in evaluation technique in current period and the reasons
□Applicable √Not applicable
8. Particulars about the fair value of financial 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, notes
receivable and receivables, long-term receivables, non-current assets due within one year, Short-term borrowings, notes and
accounts 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 accounts
payable, 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 floating rate, and the difference between the book value
and fair value is small.
As for the Long-term borrowings and long-term payables, the fair value shall be determined by the future cash flow
specified in the contract after discounting according to the interest rate which has comparable credit rating on the market and
provides almost the same cash flow under the same conditions, and the difference between the book value and such fair
value is small.
9. Others
□Applicable √Not applicable
XII. Related Parties and Related Party Transactions
1. Particulars about the parent company of the Company
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Shareholding ratio of Voting proportion of
Registration Registered
Name of parent company Business nature parent company in parent company in
place capital
this company (%) this company (%)
Port project contracting
CCCC Beijing City 5,855,423,830 46.229 46.229
and related business
China Communications
Port project contracting
Construction Company Beijing City 16,174,735,425 16.239 16.239
and related business
Limited
Other information:
On July 18, 2017, the board of directors of China Communications Construction Company Ltd. deliberated and
passed the Proposal for Transfer of Some Shares of Shanghai Zhenhua Heavy Industries Co., Ltd through Agreement and
153
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. The
transfer and registration of shares was accomplished on Dec. 27, 2017. On the date of the transfer of shares, CCCC 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 (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 for
16.239% 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 Construction
Company 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 current
period or having associated transactions with the Company and forming balance in prior period are as follows
□Applicable √Not applicable
Other information
□Applicable √Not applicable
4. Particulars about other related parties
√Applicable □Not applicable
Relationship between other related party with
Name of other related party
the enterprise
Friede & Goldman, Llc. Holding subsidiary of the parent company
China Communications Construction Company Limited Holding subsidiary of the parent company
Zhen Hwa Harbour Construction Co., Ltd. Holding subsidiary of the parent company
Hainan CCCC Fourth Harbor Construction Co., Ltd. Holding subsidiary of the parent company
Road & Bridge International Co., Ltd. Holding subsidiary of the parent company
CCCC Nanjing Weisanlu River Tunnel Co., Ltd Holding subsidiary of the parent company
Shanghai Jiangtian Industrial Co., Ltd Holding subsidiary of the parent company
Shanghai Communications Construction Contracting Co., Ltd. Holding subsidiary of the parent company
Zhenhua Engineering Co., Ltd. Holding subsidiary of the parent company
Yueyang Chenglingji New Port Co., Ltd. Holding subsidiary of the parent company
China Harbor Engineering Co., Ltd Holding subsidiary of the parent company
China Communications Materials & Equipment Co., Ltd Holding subsidiary of the parent company
China Road & Bridge Corporation Holding subsidiary of the parent company
Chuwa Bussan Co. Ltd. Holding subsidiary of the parent company
CCCC Finance Company Ltd. Holding subsidiary of the parent company
CCCC Second Highway Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC Second Highway Consultants Co., Ltd. Holding subsidiary of the parent company
CCCC Second Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Third Highway Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC Third Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
154
Relationship between other related party with
Name of other related party
the enterprise
CCCC Third Harbor Consultants Co., Ltd. Holding subsidiary of the parent company
CCCC Fourth Highway Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC Fourth Harbor Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC-FHDI Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC First Highway Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC First Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC First Harbor Consultants Co., Ltd. Holding subsidiary of the parent company
CCCC - SHEC Second Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC - SHEC Third Highway Engineering Co. Ltd. Holding subsidiary of the parent company
The Fourth Engineering Co., Ltd. of CCCC Second Highway Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC - SHEC First Highway Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC - SHEC Railway Engineering Co. Ltd. Holding subsidiary of the parent company
No.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
China Communications Second Navigational Bureau Second Engineering Co., Ltd. Holding subsidiary of the parent company
China Communications Second Navigational Bureau Third Engineering Co., Ltd. Holding subsidiary of the parent company
No.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Highway Bridges National Engineering Research Centre CO., Ltd. Holding subsidiary of the parent company
CCCC Guangzhou Dredging Co. Ltd. Holding subsidiary of the parent company
CCCC Marine Construction and Development Co. Ltd. Holding subsidiary of the parent company
CTTIC Shanghai Co., Ltd. Holding subsidiary of the parent company
CCCC East China Investment Co., Ltd. Holding subsidiary of the parent company
CCCC Electrical and Mechanical Engineering Co., Ltd. Holding subsidiary of the parent company
Road & Bridge South China Engineering Co., Ltd. Holding subsidiary of the parent company
Road & Bridge International Co., Ltd. Holding subsidiary of the parent company
CCCC Nanjing Traffic Engineering Management Co., Ltd. Holding subsidiary of the parent company
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
No.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
XING AN JI Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Shanghai Dredging Co., Ltd Holding subsidiary of the parent company
CCCC Shanghai Equipment Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Dredging (Group) Co., Ltd. Holding subsidiary of the parent company
CCCC Water Transportation Planning and Design Institute Co., Ltd. Holding subsidiary of the parent company
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Tunnel Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Tianjin Dredging - Binhai Environmental Protection Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Tianjin Port Waterway Prospection & Design Research Institute Co., Ltd. Holding subsidiary of the parent company
CCCC Tianjin Industry and Trade Co., Ltd. Holding subsidiary of the parent company
CCCC Tianjin Dredging Co., Ltd. Holding subsidiary of the parent company
CCCC WuHan Harbour Engineering Design and Research Co. Ltd Holding subsidiary of the parent company
The Sixth Engineering Co., Ltd. of CCCC First Highway Engineering Co., Ltd. Holding subsidiary of the parent company
Installation Engineering Co., Ltd. of CCCC First Harbor Engineering Co. Ltd. Holding subsidiary of the parent company
CCCC-FHEC Urban Traffic Engineering Co., Ltd. Holding subsidiary of the parent company
155
Relationship between other related party with
Name of other related party
the enterprise
No.2 Engineering Company, Ltd. of CCCC First Harbor Engineering Company Ltd. Holding subsidiary of the parent company
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Leasing Jiahua No.2 Co. Ltd. Holding subsidiary of the parent company
CCCC Leasing Jiahua No.1 Co. Ltd. Holding subsidiary of the parent company
The Third Engineering Co., Ltd. of The First Highway Engineering Bureau of CCCC Holding subsidiary of the parent company
CCCC First Highway Fifth Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Guidu Highway Construction Co. Ltd. Holding subsidiary of the parent company
CCCC (Tianjin) Eco-environmental Protection Design & Research Institute Co., Ltd. Holding subsidiary of the parent company
CCCC Guangzhou Logistics Co., Ltd. Holding subsidiary of the parent company
CCCC SHEC Chengdu Urban Construction Engineering Co., Ltd. Holding subsidiary of the parent company
Hong Kong Marine Construction Co., Ltd. Holding subsidiary of the parent company
CCCC-FHEC Bridge and Tunnel Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC Infrastructure Maintenance Group Co., Ltd. Holding subsidiary of the parent company
CCCC Yancheng Construction and Development Co., Ltd. Holding subsidiary of the parent company
CCCC Chengdu Rail Transit Investment and Construction Co., Ltd. Holding subsidiary of the parent company
CCCC Shanghai Channel Equipment Industry Co., Ltd. Holding subsidiary of the parent company
Engineering Materials Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Holding subsidiary of the parent company
CNPC & CCCC Petroleum Sales Co., Ltd. Holding subsidiary of the parent company
CCCC Tianjin Dredging Co., Ltd. Holding subsidiary of the parent company
Shanghai Zhensha Longfu Machinery Co., Ltd. Holding subsidiary of the parent company
Road & Bridge East China Engineering Co., Ltd. Holding subsidiary of the parent company
CCCC National Engineering Research Center of Dredging Technology and Equipment Holding subsidiary of the parent company
CCCC Xi’an Road Construction Machinery Co., Ltd. Holding subsidiary of the parent company
CCCC Highway Consultants Co. Ltd. Holding subsidiary of the parent company
5. Related transactions
(1) Purchase and sales of goods, rendering of and receiving labor service
Statement of purchase of goods/receiving labor service
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Contents of related Current
Related party Prior amount
transaction amount
CCCC Shanghai Equipment Engineering Co., Ltd. Purchase of goods 210,238,846 131,400,593
ZPMC Changzhou Coatings Co., Ltd. Purchase of goods 108,484,161 88,611,099
Shanghai Jiangtian Industrial Co., Ltd Purchase of goods 65,858,536 15,435,145
Chuwa Bussan Co. Ltd. Purchase of goods 19,663,204 42,752,896
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd Purchase of goods 10,643,590 -
CNPC & CCCC Petroleum Sales Co., Ltd. Purchase of goods 1,487,613 -
156
Contents of related Current
Related party Prior amount
transaction amount
CCCC National Engineering Research Center of Dredging Technology and
Purchase of goods 1,245,211 -
Equipment
CCCC Shanghai Channel Equipment Industry Co., Ltd. Purchase of goods 302,564 -
China Communications Construction Company Limited Purchase of goods 258,621 -
CCCC Water Transportation Planning and Design Institute Co., Ltd. Purchase of goods 237,931 -
China Communications Materials & Equipment Co., Ltd Purchase of goods 209,106 5,989,665
CCCC Fourth Highway Engineering Co. Ltd. Purchase of goods - 4,868,840
CCCC Nanjing Weisanlu River Tunnel Co., Ltd Purchase of goods - 418,291
CCCC Tianjin Industry and Trade Co., Ltd. Purchase of goods - 22,846
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Receiving labor service 435,493,711 10,427,350
CCCC Second Harbor Engineering Co., Ltd. Receiving labor service 319,635,901 161,465,657
CCCC Electrical and Mechanical Engineering Co., Ltd. Receiving labor service 183,813,849 -
CCCC Fourth Highway Engineering Co. Ltd. Receiving labor service 180,145,846 96,055,525
CCCC Third Harbor Engineering Co., Ltd. Receiving labor service 171,166,061 134,235,980
CCCC Tianjin Dredging Co., Ltd. Receiving labor service 119,241,651 462,492,064
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering Co., Ltd. Receiving labor service 58,238,659 28,312,923
CCCC - SHEC Second Engineering Co. Ltd. Receiving labor service 51,067,364 112,198,187
CCCC Shanghai Dredging Co., Ltd Receiving labor service 44,255,071 1,727,336
CCCC Shanghai Equipment Engineering Co., Ltd. Receiving labor service 31,619,960 -
CCCC Third Highway Engineering Co. Ltd. Receiving labor service 26,704,324 -
CCCC First Harbor Consultants Co., Ltd. Receiving labor service 26,259,626 5,858,503
CCCC First Harbor Engineering Co., Ltd. Receiving labor service 24,659,835 26,777,335
CCCC Second Highway Consultants Co., Ltd. Receiving labor service 22,139,413 30,059,257
CCCC Leasing Jiahua No.2 Co. Ltd. Receiving labor service 17,399,943 -
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. Receiving labor service 16,698,341 63,578,055
China Communications Second Navigational Bureau Third Engineering Co.,
Receiving labor service 13,181,025 -
Ltd.
CCCC - SHEC Third Highway Engineering Co. Ltd. Receiving labor service 12,990,744 -
No.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd. Receiving labor service 10,326,479 17,743,903
CCCC Water Transportation Planning and Design Institute Co., Ltd. Receiving labor service 9,564,649 12,105,094
ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi Receiving labor service 8,502,537 3,548,020
Chuwa Bussan Co. Ltd. Receiving labor service 7,063,023 -
Installation Engineering Co., Ltd. of CCCC First Harbor Engineering Co. Ltd. Receiving labor service 5,974,138 5,989,401
CCCC Tunnel Engineering Co., Ltd. Receiving labor service 4,536,422 -
China Communications Construction Company Limited Receiving labor service 3,701,020 -
CCCC Marine Engineering & Technology Research Center Co., Ltd. Receiving labor service 3,425,753 -
Shanghai Jiangtian Industrial Co., Ltd Receiving labor service 2,594,773 -
157
Contents of related Current
Related party Prior amount
transaction amount
Shanghai Communications Construction Contracting Co., Ltd. Receiving labor service 1,254,523 61,115,756
China Communications Materials & Equipment Co., Ltd Receiving labor service 318,966 -
CCCC Third Harbor Consultants Co., Ltd. Receiving labor service 85,470 142,383
CCCC First Highway Engineering Co., Ltd. Receiving labor service - 137,930,629
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd Receiving labor service - 21,662,715
CCCC Highway Bridges National Engineering Research Centre CO., Ltd. Receiving labor service - 1,777,778
CTTIC Shanghai Co., Ltd. Receiving labor service - 929,915
Statement of sales of goods/rendering of labor service
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Contents of related Current
Related party Prior amount
transaction amount
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd Rendering of service 24,438,319 1,619,314
CCCC First Harbor Engineering Co., Ltd. Rendering of service - 47,170
China Communications Construction Company Limited Rendering of service 70,216,049 39,664,882
CCCC Third Harbor Engineering Co., Ltd. Rendering of service 24,710,083 -
CCCC Second Highway Engineering Co. Ltd. Rendering of service 7,547 -
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. Rendering of service - 14,151
ZPMC Changzhou Coatings Co., Ltd. Rendering of service 1,396,226 -
CCCC Fourth Highway Engineering Co. Ltd. Rendering of service 13,801,887 -
CCCC Guangzhou Dredging Co. Ltd. Rendering of service 4,664,101 1,949,573
CCCC First Highway Fifth Engineering Co., Ltd. Rendering of service 7,500,000 -
CCCC First Highway Engineering Co., Ltd. Rendering of service 4,000,000 -
CCCC Tunnel Engineering Co., Ltd. Rendering of service - 3,301,887
ZPMC-OTL MARINE CONTRACTOR LIMITED Rendering of service 30,377,284 -
CCCC Second Highway Consultants Co., Ltd. Rendering of service 12,905,660 -
CCCC (Tianjin) Eco-environmental Protection Design & Research Institute
Rendering of service 207,547 -
Co., Ltd.
CCCC Guangzhou Logistics Co., Ltd. Rendering of service 56,604 -
China Harbor Engineering Co., Ltd Selling goods 22,231,105 232,091,723
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd Selling goods 110,250,125 438,106,948
No.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. Selling goods 19,181,054 57,742,023
CCCC Tianjin Dredging Co., Ltd. Selling goods 137,098,857 471,642,717
Friede & Goldman, Llc. Selling goods 2,673,016 -
CCCC Electrical and Mechanical Engineering Co., Ltd. Selling goods 187,488,462 56,423,470
CCCC First Harbor Engineering Co., Ltd. Selling goods 70,466,403 311,626,339
CCCC Financial Leasing Co., Ltd. Selling goods 502,962,177 728,945,753
158
Contents of related Current
Related party Prior amount
transaction amount
CCCC - SHEC Second Engineering Co. Ltd. Selling goods 7,727 1,729,907
China Communications Construction Company Limited Selling goods 248,519,083 182,048,428
CCCC Third Harbor Engineering Co., Ltd. Selling goods 100,341,951 23,994,666
Hainan CCCC Fourth Harbor Construction Co., Ltd. Selling goods 13,248 7,710,256
CCCC Second Harbor Engineering Co., Ltd. Selling goods 101,372,715 62,392,577
Road & Bridge International Co., Ltd. Selling goods 105,144,086 97,734,474
CCCC Fourth Harbor Engineering Co. Ltd. Selling goods - 5,805,005
China Road & Bridge Corporation Selling goods 358,243,636 23,045,665
Road & Bridge South China Engineering Co., Ltd. Selling goods 16,524,972 44,066,592
No.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. Selling goods 24,459,644 36,707,819
China Communications Second Navigational Bureau Third Engineering Co.,
Selling goods 117,230,621 28,130,115
Ltd.
CCCC - SHEC Third Highway Engineering Co. Ltd. Selling goods 1,057,048 15,152,103
CCCC Second Highway Engineering Co. Ltd. Selling goods 63,557,612 51,535,600
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. Selling goods 5,264,957 -
CCCC Third Harbor Consultants Co., Ltd. Selling goods 5,018,319 -
CCCC-FHDI Engineering Co., Ltd. Selling goods - 5,058,462
Shanghai Communications Construction Contracting Co., Ltd. Selling goods 34,589,744 -
CCCC First Harbor Consultants Co., Ltd. Selling goods 9,654,872 27,435,897
ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi Selling goods 4,262,198 4,167,390
CCCC Highway Consultants Co. Ltd. Selling goods 65,517 -
CCCC Tianjin Industry and Trade Co., Ltd. Selling goods 674,414 -
Chuwa Bussan Co. Ltd. Selling goods 2,023,654 20,992,826
CCCC First Highway Engineering Co., Ltd. Selling goods 30,000,000 -
CCCC Tunnel Engineering Co., Ltd. Selling goods 57,261,136 93,172,932
The Third Engineering Co., Ltd. of The First Highway Engineering Bureau of
Selling goods 6,550,315 -
CCCC
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 assets
Table of the trust and contract in of assets of the Company:
□Applicable √Not applicable
Notes to trust/contract in of assets
□Applicable √Not applicable
Table of the trust and contract out of assets of the Company
□Applicable √Not applicable
159
Notes to associated management and contract out of assets
□Applicable √Not applicable
(3) Particulars about lease with related party
The Company as the leasor:
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Rental income Rental income
Type of leased
Leasee recognized for recognized for
asset
current period prior period
CCCC Tunnel Engineering Co., Ltd. Shield machine 34,392,257 -
CCCC Second Highway Engineering Co. Ltd. Shield machine 26,075,675 6,727,590
CCCC First Highway Engineering Co., Ltd. Shield machine 17,393,504 -
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd Vessel 17,133,962 27,414,329
CCCC Tianjin Dredging - Binhai Environmental Protection Engineering Co., Ltd. Vessel 16,810,345 -
China Communications Second Navigational Bureau Third Engineering Co., Ltd. Shield machine 15,756,410 -
CCCC First Harbor Engineering Co., Ltd. Shield machine 12,181,009 895,138
China Communications Second Navigational Bureau Third Engineering Co., Ltd. Vessel 8,909,091 -
CCCC - SHEC First Highway Engineering Co. Ltd. Shield machine 7,304,022 1,336,752
CCCC Third Highway Engineering Co. Ltd. Shield machine 5,617,718 2,928,360
Road & Bridge International Co., Ltd. Shield machine 4,909,838 3,499,733
The Fourth Engineering Co., Ltd. of CCCC Second Highway Engineering Co., Ltd. Shield machine 2,949,470 1,841,219
China Communications Construction Company Limited Vessel 358,225 2,162,605
Zhenhua Marine Energy (HK) Co., Ltd. Vessel - 158,746,932
CCCC-FHEC Urban Traffic Engineering Co., Ltd. Shield machine - 26,525,385
The Company as leasee:
□Applicable √Not applicable
Notes to lease with related party
□Applicable √Not applicable
(4) Related party guarantee
The Company as guarantor
□Applicable √Not applicable
The Company as guarantee
□Applicable √Not applicable
Notes 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
160
(7) Remuneration of key management personnel
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Remuneration of key management personnel 11,074,400 10,855,200
There were 25 persons as the key management of the Group in 2018 (2017: 26 persons). The remuneration of new
staff and resigned staff would be calculated according to the employment duration, while the remuneration of others were
calculated by year.
(8) Other related transactions
√Applicable □Not applicable
Dividend paid to related party
2018 2017
China Communications Construction Company Limited 63,281,892 126,563,785
Zhenhua Engineering Co., Ltd. 37,434,197 74,967,750
Zhen Hwa Harbour Construction Co., Ltd. 763,963 1,428,570
101,480,052 202,960,105
Drawing money from related party
2018 2017
CCCC 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
2018 2017
CCCC Finance Company Ltd. 350,000,000 1,150,000,000
CCCC Leasing Jiahua No.1 Co. Ltd. - 991,005,000
CCCC Financial Leasing Co., Ltd. - 43,000,000
350,000,000 2,184,005,000
Interest collected from related party
2018 2017
CCCC Finance Company Ltd. 1,015,732 1,527,782
China Communications Construction Company Limited 341,322 143,106
1,357,054 1,670,888
161
Interest paid to related party
2018 2017
CCCC Leasing Jiahua No.1 Co. Ltd. 61,347,010 18,155,201
CCCC Financial Leasing Co., Ltd. 27,841,630 61,295,275
CCCC Finance Company Ltd. 26,374,292 22,784,195
CCCC Leasing Jiahua No.2 Co. Ltd. 19,035,746 18,155,201
134,598,678 120,389,872
6. Receivables from and payables to related party
(1) Receivables
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Related party Provision for Provision for
Book balance Book balance
bad debts bad debts
Notes receivable and accounts receivable China Road & Bridge Corporation 167,321,390 - - -
Notes receivable and accounts receivable CCCC First Harbor Engineering Co., Ltd. 164,008,643 - 292,038,117 -
Notes receivable and accounts receivable CCCC Second Harbor Engineering Co., Ltd. 141,951,335 - 55,342,226 -
Notes receivable and accounts receivable Hong Kong Marine Construction Co., Ltd. 137,133,578 - - -
Notes receivable and accounts receivable CCCC Tunnel Engineering Co., Ltd. 109,822,612 - 62,548,820 -
Jiangsu Longyuan Zhenhua Marine
Notes receivable and accounts receivable 101,223,377 - 40,731,949 -
Engineering Co., Ltd
No.1 Engineering Co., Ltd. of CCCC First
Notes receivable and accounts receivable 85,793,713 - - -
Harbor Engineering Co., Ltd.
China Communications Second
Notes receivable and accounts receivable Navigational Bureau Third Engineering Co., 84,077,626 - 36,245,810 -
Ltd.
CCCC Second Highway Engineering Co.
Notes receivable and accounts receivable 63,391,227 - 11,311,717 -
Ltd.
ZPMC-OTL MARINE CONTRACTOR
Notes receivable and accounts receivable 49,354,814 - - -
LIMITED
Notes receivable and accounts receivable CCCC Third Harbor Engineering Co., Ltd. 48,250,022 - 27,387,519 -
Notes receivable and accounts receivable Road & Bridge International Co., Ltd. 39,658,009 - 11,429,413 -
Notes receivable and accounts receivable Road & Bridge International Co., Ltd. 36,341,930 - 4,544,688 -
China Communications Construction
Notes receivable and accounts receivable 34,063,397 - 34,548,987 -
Company Limited
Road & Bridge South China Engineering
Notes receivable and accounts receivable 26,581,168 - 11,279,627 -
Co., Ltd.
Notes receivable and accounts receivable CCCC Third Highway Engineering Co. Ltd. 22,746,125 - 11,901,177 -
ZPMC Mediterranean Liman Makinalari
Notes receivable and accounts receivable 17,250,552 - 11,000,668 -
Ticaret Anonim Sirketi
Notes receivable and accounts receivable Friede & Goldman, Llc. 15,970,344 - 16,205,750 -
162
Ending Balance Beginning Balance
Item Related party Provision for Provision for
Book balance Book balance
bad debts bad debts
Accounts receivable CCCC Financial Leasing Co., Ltd. 14,850,000 - 33,507,250 -
Notes receivable and accounts receivable CCCC-FHDI Engineering Co., Ltd. 12,592,000 - 29,592,000 -
Notes receivable and accounts receivable CCCC Fourth Harbor Engineering Co. Ltd. 12,000,000 - 12,000,000 -
Notes receivable and accounts receivable Zhenhua Marine Energy (HK) Co., Ltd. 11,818,430 - 27,901,034 -
Notes receivable and accounts receivable China Harbor Engineering Co., Ltd 8,779,024 - - -
China Communications Second
Notes receivable and accounts receivable Navigational Bureau Second Engineering 7,808,358 - 12,761,828 -
Co., Ltd.
The Fourth Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable 7,755,561 - 4,384,226 -
Second Highway Engineering Co., Ltd.
Hainan CCCC Fourth Harbor Construction
Notes receivable and accounts receivable 6,200,000 - - -
Co., Ltd.
The Sixth Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable 6,098,300 - 6,098,300 -
First Highway Engineering Co., Ltd.
CCCC - SHEC Third Highway Engineering
Notes receivable and accounts receivable 5,548,004 - 7,422,819 -
Co. Ltd.
No.2 Engineering Company, Ltd. of CCCC
Notes receivable and accounts receivable 5,019,557 - 5,219,557 -
First Harbor Engineering Company Ltd.
CCCC - SHEC Second Engineering Co.
Notes receivable and accounts receivable 4,817,096 - 1,438,507 -
Ltd.
Notes receivable and accounts receivable CCCC First Highway Engineering Co., Ltd. 4,694,962 - - -
CCCC-FHEC Urban Traffic Engineering
Notes receivable and accounts receivable 3,415,780 - 15,268,940 -
Co., Ltd.
No.1 Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable 2,750,000 - - -
Second Harbor Engineering Co., Ltd.
Installation Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable 1,197,764 - 253,297 -
First Harbor Engineering Co. Ltd.
CCCC Marine Engineering & Technology
Notes receivable and accounts receivable 1,100,000 - 1,100,000 -
Research Center Co., Ltd.
CCCC Shanghai Equipment Engineering
Notes receivable and accounts receivable 844,000 - 52,777 -
Co., Ltd.
No.2 Engineering Co., Ltd. of CCCC Fourth
Notes receivable and accounts receivable 564,537 - 24,901,085 -
Harbor Engineering Co., Ltd.
XING AN JI Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable 331,860 - - -
Third Harbor Engineering Co., Ltd.
CCCC SHEC Chengdu Urban Construction
Notes receivable and accounts receivable 277,527 - - -
Engineering Co., Ltd.
CCCC Electrical and Mechanical
Notes receivable and accounts receivable 250,000 - - -
Engineering Co., Ltd.
CCCC (Tianjin) Eco-environmental
Notes receivable and accounts receivable Protection Design & Research Institute Co., 220,000 - - -
Ltd.
Notes receivable and accounts receivable CCCC Third Harbor Consultants Co., Ltd. 150,000 - 150,000 -
163
Ending Balance Beginning Balance
Item Related party Provision for Provision for
Book balance Book balance
bad debts bad debts
Notes receivable and accounts receivable Yueyang Chenglingji New Port Co., Ltd. 84,660 - 44,900 -
CCCC Guidu Highway Construction Co.
Notes receivable and accounts receivable 79,332 - - -
Ltd.
Notes receivable and accounts receivable CCCC Guangzhou Logistics Co., Ltd. 60,000 - - -
No.4 Engineering Co., Ltd. of CCCC
Notes receivable and accounts receivable - - 61,000,000 -
Second Harbor Engineering Co., Ltd.
Notes receivable and accounts receivable CCCC First Harbor Consultants Co., Ltd. - - 17,736,000 -
Notes receivable and accounts receivable CCCC Tianjin Industry and Trade Co., Ltd. - - 56,700 -
CCCC - SHEC Railway Engineering Co.
Notes receivable and accounts receivable - - 26,297 -
Ltd.
Other receivables CCCC Financial Leasing Co., Ltd. 176,800,000 - 176,800,000 -
Other receivables Zhenhua Marine Energy (HK) Co., Ltd. 164,124,678 164,124,678 164,124,678 164,124,678
China Communications Construction
Other receivables 54,620,094 - 62,004,518 -
Company Limited
CCCC Nanjing Traffic Engineering
Other receivables 6,789,498 - 6,500,000 -
Management Co., Ltd.
CCCC Second Highway Consultants Co.,
Other receivables 3,180,000 - - -
Ltd.
Other receivables CCCC 1,350,000 - - -
CCCC Second Highway Engineering Co.
Other receivables 1,000,000 - - -
Ltd.
Road & Bridge East China Engineering Co.,
Other receivables 800,000 - - -
Ltd.
China Communications Second
Other receivables Navigational Bureau Second Engineering 800,000 - - -
Co., Ltd.
CCCC Yancheng Construction and
Other receivables 750,908 - - -
Development Co., Ltd.
Other receivables CCCC Third Highway Engineering Co. Ltd. 732,473 - - -
Installation Engineering Co., Ltd. of CCCC
Other receivables 300,000 - - -
First Harbor Engineering Co. Ltd.
Other receivables CCCC Third Harbor Consultants Co., Ltd. 250,000 - - -
CCCC Tianhe Xi’an Equipment
Other receivables 164,787 - - -
Manufacturing Co., Ltd.
CCCC Chengdu Rail Transit Investment
Other receivables 164,787 - - -
and Construction Co., Ltd.
CCCC Infrastructure Maintenance Group
Other receivables 157,018 - - -
Co., Ltd.
CCCC-FHEC Bridge and Tunnel
Other receivables 100,000 - - -
Engineering Co., Ltd.
Shanghai Zhensha Longfu Machinery Co.,
Other receivables 21,503 - - -
Ltd.
164
Ending Balance Beginning Balance
Item Related party Provision for Provision for
Book balance Book balance
bad debts bad debts
Advances to suppliers Chuwa Bussan Co. Ltd. 7,141,035 - 6,680,981 -
China Communications Construction
Advances to suppliers 1,423,515 - - -
Company Limited
CCCC Shanghai Channel Equipment
Advances to suppliers 354,000 - - -
Industry Co., Ltd.
Advances to suppliers CCCC First Harbor Engineering Co., Ltd. - - 10,000,000 -
Advances to suppliers CCCC Fourth Highway Engineering Co. Ltd. - - 6,000,003 -
No.2 Engineering Co., Ltd. of CCCC Fourth
Advances to suppliers - - 5,000,000 -
Harbor Engineering Co., Ltd.
Advances to suppliers CCCC Third Harbor Engineering Co., Ltd. - - 5,000,000 -
(2) Payables
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Beginning
Item Related party
book value book value
Accounts payable and notes payable Chuwa Bussan Co. Ltd. 272,058,371 254,526,575
Accounts payable and notes payable CCCC Fourth Highway Engineering Co. Ltd. 145,983,998 97,685,283
Accounts payable and notes payable CCCC Third Harbor Engineering Co., Ltd. 142,373,233 148,448,390
Accounts payable and notes payable CCCC Second Harbor Engineering Co., Ltd. 140,174,674 178,914,819
Accounts payable and notes payable CCCC - SHEC Second Engineering Co. Ltd. 125,227,201 184,712,479
Accounts payable and notes payable CCCC First Highway Engineering Co., Ltd. 95,538,686 109,392,836
China Communications Second Navigational Bureau Third
Accounts payable and notes payable 84,371,458 134,081,469
Engineering Co., Ltd.
Accounts payable and notes payable CCCC Tianjin Dredging Co., Ltd. 69,699,557 181,111,928
Accounts payable and notes payable CCCC Tianjin Industry and Trade Co., Ltd. 62,576,979 -
Accounts payable and notes payable CCCC Shanghai Equipment Engineering Co., Ltd. 54,219,210 34,449,016
Accounts payable and notes payable CCCC First Harbor Engineering Co., Ltd. 45,054,549 -
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering
Accounts payable and notes payable 42,885,407 15,626,120
Co., Ltd.
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co.,
Accounts payable and notes payable 39,691,618 25,348,030
Ltd.
Accounts payable and notes payable CCCC Third Highway Engineering Co. Ltd. 30,977,016 -
Accounts payable and notes payable CCCC Shanghai Dredging Co., Ltd 30,964,342 2,020,983
Accounts payable and notes payable CCCC First Harbor Consultants Co., Ltd. 24,254,176 1,367,890
Accounts payable and notes payable CCCC Finance Company Ltd. 20,600,000 -
Accounts payable and notes payable CCCC - SHEC Third Highway Engineering Co. Ltd. 19,811,475 -
Accounts payable and notes payable Shanghai Jiangtian Industrial Co., Ltd 17,535,832 9,942,274
Accounts payable and notes payable CCCC Second Highway Consultants Co., Ltd. 17,087,478 41,215,576
165
Ending Beginning
Item Related party
book value book value
Engineering Materials Co., Ltd. of CCCC Third Harbor Engineering
Accounts payable and notes payable 16,067,701 -
Co., Ltd.
Accounts payable and notes payable Shanghai Communications Construction Contracting Co., Ltd. 16,046,390 47,138,300
Accounts payable and notes payable ZPMC Changzhou Coatings Co., Ltd. 15,543,890 17,929,841
Accounts payable and notes payable Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd 10,532,751 2,079,751
CCCC Marine Engineering & Technology Research Center Co.,
Accounts payable and notes payable 10,118,782 9,363,830
Ltd.
XING AN JI Engineering Co., Ltd. of CCCC Third Harbor
Accounts payable and notes payable 10,051,352 10,051,352
Engineering Co., Ltd.
Accounts payable and notes payable CCCC Water Transportation Planning and Design Institute Co., Ltd. 9,547,891 14,162,960
No.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,
Accounts payable and notes payable 7,815,018 13,760,366
Ltd.
Accounts payable and notes payable China Communications Construction Company Limited 4,388,938 4,388,938
CCCC Tianjin Port Waterway Prospection & Design Research
Accounts payable and notes payable 4,408,336 2,999,400
Institute Co., Ltd.
CCCC National Engineering Research Center of Dredging
Accounts payable and notes payable 2,986,050 -
Technology and Equipment
Accounts payable and notes payable CNPC & CCCC Petroleum Sales Co., Ltd. 2,660,621 -
Accounts payable and notes payable CCCC Tunnel Engineering Co., Ltd. 2,477,307 14,678,757
Accounts payable and notes payable CCCC Xi’an Road Construction Machinery Co., Ltd. 2,122,471 -
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,
Accounts payable and notes payable 1,600,000 5,000,000
Ltd.
Accounts payable and notes payable ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi 1,217,089 -
Accounts payable and notes payable CTTIC Shanghai Co., Ltd. 1,088,000 1,088,000
Installation Engineering Co., Ltd. of CCCC First Harbor Engineering
Accounts payable and notes payable 1,067,599 7,007,599
Co. Ltd.
Accounts payable and notes payable CCCC WuHan Harbour Engineering Design and Research Co. Ltd 700,000 700,000
Accounts payable and notes payable CCCC Tianhe Xi’an Equipment Manufacturing Co., Ltd. 304,798 -
Accounts payable and notes payable China Communications Materials & Equipment Co., Ltd 242,563 -
Accounts payable and notes payable CCCC Third Harbor Consultants Co., Ltd. 100,000 -
Accounts payable and notes payable CCCC Second Highway Engineering Co. Ltd. - 23,175,061
CCCC Tianjin Dredging - Binhai Environmental Protection
Advances from customers 70,058,100 65,257,080
Engineering Co., Ltd.
Advances from customers CCCC Tunnel Engineering Co., Ltd. 30,250,993 45,095,030
China Communications Second Navigational Bureau Third
Advances from customers 8,917,608 -
Engineering Co., Ltd.
No.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co.,
Advances from customers 1,891,307 -
Ltd.
Advances from customers China Harbor Engineering Co., Ltd 736,500 -
Advances from customers ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi 558,589 -
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co.,
Advances from customers 487,482 -
Ltd.
Advances from customers China Communications Construction Company Limited 182,513 -
166
Ending Beginning
Item Related party
book value book value
Advances from customers Yueyang Chenglingji New Port Co., Ltd. 35,980 -
Advances from customers CCCC First Highway Engineering Co., Ltd. - 15,614,964
Advances from customers CCCC - SHEC Railway Engineering Co. Ltd. - 9,564,373
Advances from customers CCCC Second Highway Engineering Co. Ltd. - 1,000,000
Advances from customers Cranetech Global Sdn. Bhd. - 218,242
Advances from customers CCCC Shanghai Dredging Co., Ltd - 13,690
Other payables China Communications Construction Company Limited 101,209,468 102,784,486
Other payables CCCC Dredging (Group) Co., Ltd. 88,219,383 88,219,383
Other payables Road & Bridge International Co., Ltd. 45,840,000 -
Other payables CCCC Tianjin Dredging Co., Ltd. 27,079,494 27,941,338
Other payables CCCC Marine Construction and Development Co. Ltd. 17,472,600 17,472,600
Other payables CCCC Third Harbor Engineering Co., Ltd. 12,285,000 12,285,000
Other payables Chuwa Bussan Co. Ltd. 6,269,873 6,269,873
Other payables Shanghai Jiangtian Industrial Co., Ltd 4,586,085 4,586,085
Other payables CCCC Tunnel Engineering Co., Ltd. 4,000,000 -
Other payables China Harbor Engineering Co., Ltd 3,625,000 3,625,000
Other payables China Communications Construction Company Ltd. 1,672,705 -
Other payables CCCC Third Highway Engineering Co. Ltd. 1,286,596 1,172,612
Other payables CCCC Leasing Jiahua No.1 Co. Ltd. 1,141,960
The Fourth Engineering Co., Ltd. of CCCC Second Highway
Other payables 1,000,000 -
Engineering Co., Ltd.
Other payables CCCC Tianjin Dredging Co., Ltd. 871,856 -
Other payables CCCC Finance Company Ltd. 537,708 869,396
Other payables Road & Bridge East China Engineering Co., Ltd. 525,186 -
Other payables Zhenhua Engineering Co., Ltd. 346,005 346,005
Other payables CCCC Water Transportation Planning and Design Institute Co., Ltd. 319,340 199,812
Other payables Shanghai Zhensha Longfu Machinery Co., Ltd. 146,558 -
Other payables Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd 143,395 143,395
Other payables ZPMC Changzhou Coatings Co., Ltd. 108,583 100,000
Other payables CCCC Shanghai Equipment Engineering Co., Ltd. 89,000 89,000
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering
Other payables 11,400 11,401
Co., Ltd.
Other payables Zhen Hwa Harbour Construction Co., Ltd. 6,593 6,593
Other payables CCCC First Harbor Engineering Co., Ltd. - 87,893
Other payables CCCC Financial Leasing Co., Ltd. - 39,547,004
Other payables CCCC Nanjing Weisanlu River Tunnel Co., Ltd - 306,974
Short-term borrowings CCCC Finance Company Ltd. 50,000,000 350,000,000
167
Ending Beginning
Item Related party
book value book value
Long-term borrowings CCCC Finance Company Ltd. 500,000,000 500,000,000
Non-current liabilities maturing within
CCCC Financial Leasing Co., Ltd. 407,455,030 407,455,030
one year
Non-current liabilities maturing within
CCCC Leasing Jiahua No.1 Co. Ltd. 405,909,257 387,778,932
one year
Non-current liabilities maturing within
CCCC Leasing Jiahua No.2 Co. Ltd. 62,749,257 59,741,257
one year
Long-term payables CCCC Leasing Jiahua No.1 Co. Ltd. 535,329,601 896,118,857
Long-term payables CCCC Financial Leasing Co., Ltd. 203,727,814 556,387,041
Long-term payables CCCC Leasing Jiahua No.2 Co. Ltd. 192,169,601 242,698,858
Long-term payables CCCC Tianjin Dredging Co., Ltd. 131,402,483 108,466,881
Long-term payables CCCC Second Harbor Engineering Co., Ltd. 82,663,041 -
Long-term payables CCCC Third Harbor Engineering Co., Ltd. 16,923,594 -
No.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering
Long-term payables 7,788,241 -
Co., Ltd.
7. Commitments in relation to related parties
√Applicable □Not applicable
On balance sheet date, the commitments relating to related parties, contracted by the Group but not necessarily listed
on balance sheet, are as follows:
Labor service provided to the Group by related party 2018 2017
CCCC Third Harbor Engineering Co., Ltd. 1,150,776,369 326,513,794
CCCC Tianjin Dredging Co., Ltd. 770,500,180 927,318,851
CCCC Fourth Highway Engineering Co. Ltd. 544,767,057 734,725,379
CCCC First Highway Engineering Co., Ltd. 449,685,317 590,349,313
CCCC Shanghai Dredging Co., Ltd 73,170,956 -
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. 56,568,996 74,178,156
CCCC Second Highway Consultants Co., Ltd. 1,766,362 10,832,844
CCCC Tunnel Engineering Co., Ltd. 158,070 5,265,067
3,047,393,307 2,669,183,404
Leasing assets to related party 2018 2017
Zhenhua Marine Energy (Hong Kong) Co., Ltd. 1,206,719,318 1,363,334,924
168
Selling goods/rendering of labor service to the related parties
2018 2017
China Road & Bridge Corporation 1,594,741,615 4,521,227
CCCC Financial Leasing Co., Ltd. 520,893,238 558,387,580
China Communications Construction Company Limited 431,794,106 114,814,493
CCCC Second Harbor Engineering Co., Ltd. 333,337,005 47,304,779
CCCC First Harbor Engineering Co., Ltd. 215,550,525 25,180
China Harbor Engineering Co., Ltd 85,809,151 52,196,041
Road & Bridge International Co., Ltd. 46,506,516 43,462,687
CCCC Third Harbor Engineering Co., Ltd. 26,223,595 9,069,488
CCCC Electrical and Mechanical Engineering Co., Ltd. 22,754,735 210,243,196
CCCC Tunnel Engineering Co., Ltd. 22,489,719 50,732,292
Friede & Goldman, Llc. 19,160,384 -
The Third Engineering Co., Ltd. of The First Highway Engineering Bureau of CCCC 7,992,240 -
CCCC Second Highway Engineering Co. Ltd. 7,482,377 70,783,170
Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd 6,361,922 46,426,694
Chuwa Bussan Co. Ltd. 2,420,013 4,443,667
China Communications Second Navigational Bureau Third Engineering Co., Ltd. 14,538 117,245,158
No.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. 12,236 24,471,879
Road & Bridge South China Engineering Co., Ltd. 6,060 16,531,032
CCCC - SHEC Third Highway Engineering Co. Ltd. 3,242 1,060,291
CCCC Tianjin Dredging Co., Ltd. - 23,885,509
No.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd. - 19,181,054
CCCC Water Transportation Planning and Design Institute Co., Ltd. - 6,672,629
No.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd. - 5,264,957
CCCC Third Harbor Consultants Co., Ltd. - 4,130,393
CCCC Third Highway Engineering Co. Ltd. - 80,867
Hainan CCCC Fourth Harbor Construction Co., Ltd. - 13,248
CCCC - SHEC Second Engineering Co. Ltd. - 7,727
3,343,553,217 1,430,955,238
Standby leasing agreement signed with the related parties
On 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 of
the Company and CCCC Jiahua couldn’t be performed normally. On Dec. 31, 2018, the maximum payment amount of the
contract was RMB 509,837,715 Yuan (Dec. 31, 2017: RMB 604,861,711 Yuan).
8. Others
□Applicable √Not applicable
169
XIII.Share-based payment
1. General information of share-based payment
□Applicable √Not applicable
2. Particulars about the equity- settled share-based payment
□Applicable √Not applicable
3. Particulars about the share-based payment settled in cash
□Applicable √Not applicable
4. Modification and termination of share-based payment
□Applicable √Not applicable
5. Others
□Applicable √Not applicable
XIV. Commitments and Contingencies
1. 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 sheet
on balance sheet date:
Dec. 31, 2018 Dec. 31, 2017
Housing, buildings and machinery equipment 136,573,381 89,659,929
Operating leasing commitments
In accordance with the signed and irrevocable operating leasing contract, the minimum rental payable by the Company
in the future is summarized as follows:
Dec. 31, 2018 Dec. 31, 2017
Within 1 year 58,661,868 59,932,787
1-2 years 18,859,930 58,309,091
2-3 years 8,864,867 23,591,704
Over 3 years 4,849,513 37,717,614
91,236,178 179,551,196
L/C commitments
The 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
170
3. Others
□Applicable √Not applicable
XV. Post balance sheet events
1. Important non-adjustment events
□Applicable √Not applicable
2. Profit distribution
□Applicable √Not applicable
3. Sales return
□Applicable √Not applicable
4. 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 SHIPPING
HOLDINGS”) signed the Share Subscription Agreement for Private Placement of Shares Between COSCO Shipping
Holdings Co., Ltd. and Shanghai Zhenhua Heavy Industries Co., Ltd., and the Company subscribed 111,111,111 A-shares
where 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 events
1. Correction of accounting errors in prior years
(1) Retrospective restatement method
□Applicable √Not applicable
(2) Prospective application method
□Applicable √Not applicable
2. Debt restructuring
□Applicable √Not applicable
3. Asset swap
(1) Non-monetary assets swap
□Applicable √Not applicable
(2) Other asset swap
□Applicable √Not applicable
4. Pension plan
□Applicable √Not applicable
5. Termination of operation
□Applicable √Not applicable
6. Segment information
(1) Determination basis and accounting policies of reportable segment
√Applicable □Not applicable
171
The Group determined the operating segment based on the internal organizational structure, management requirements
and internal report system, and determine the reportable segment based on operating segment and disclosed the information
of the segment.
Operating segment refers to the component part of the Group that meet the following requirements: (1) it can generate
income and expenses in daily activities; (2) the management of the Group can regularly evaluate its operating results
to determine its allocation of resources and to evaluate its performance; (3) the Group is able to obtain its accounting
information regarding financial position, operating results and cash flows, etc. Two or more operating segments, with the
same economic characteristics and meeting certain requirements, can be integrated to one.
The Group identified the business as an operating segment for analysis and assessment based on internal organization
structure, 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 reportable
segment, please specify the reason
□Applicable √Not applicable
(4) Other information
√Applicable □Not applicable
Products and labor service
Revenue from external transaction
2018 2017
Port machinery 14,983,974,898 14,736,363,747
Heavy equipment 2,746,107,406 3,384,886,419
Building-transfer project 1,221,194,799 1,549,820,489
Steel structure and related income 1,558,778,586 1,520,119,032
Shipping and others 1,071,458,397 451,081,492
Sales of materials 64,386,030 58,465,010
Equipment leasing and others 166,489,528 158,077,811
21,812,389,644 21,858,814,000
Geographic information
Revenue from external transaction
2018 2017
Chinese Mainland 10,273,382,617 10,358,861,169
Asia (excluding Chinese Mainland) 4,204,353,552 5,410,267,855
North America 2,029,837,441 1,703,209,759
Africa 1,508,172,239 1,384,873,367
Europe 1,560,574,842 462,606,586
South America 1,040,540,883 845,507,562
Chinese Mainland (export sales) 664,121,407 1,372,828,183
Oceania 531,406,663 320,659,519
21,812,389,644 21,858,814,000
172
The revenue from external transaction is attributable to where the customer is located.
Total non-current assets
2018 2017
Chinese Mainland 19,922,533,912 18,215,467,783
Asia (excluding Chinese Mainland) 5,774,343,229 5,114,032,367
Others 38,609,208 40,991,302
25,735,486,349 23,370,491,452
The Non-current assets are attributable to where they are located, excluding financial assets, long-term equity
investment, 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 applicable
8. Others
√Applicable □Not applicable
Due to the changes in the presentation of the Notes receivable and accounts receivable, other receivables, notes and
accounts payable, other payables, financial expenses and general and administrative expenses, the accounting disposal
and statements for several items as well as the amount in the financial presentation had been modified to meet the new
requirements. Because the capital reserve was converted into share capital in this year, the earnings per share would be
calculated based on the shares after adjustment. Correspondingly, the comparative data had been restated to conform to the
presentation requirements for current year.
XVII. Notes to main items in the financial statements of parent company
1. Notes receivable and accounts receivable
Particulars about summary statement
(1) Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Notes receivable 75,801,953 413,779,017
Accounts receivable 7,136,766,887 6,547,864,759
Total 7,212,568,840 6,961,643,776
Other information:
□Applicable √Not applicable
Notes receivable
(2) Presentation of notes receivable by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Bank acceptance bill 75,801,953 413,779,017
Commercial acceptance bill - -
Total 75,801,953 413,779,017
173
(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 sheet
date
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending amount of recognition terminated Ending amount of recognition not terminated
Bank acceptance bill 259,768,814 -
Commercial acceptance bill - -
Total 259,768,814 -
(5) Notes transferred to accounts receivable by the Company due to non-performance of the drawer at the end of the
period
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Accounts receivable
(1) Disclosure of accounts receivable by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Accounts receivable that are
individually significant and for which
588,585,831 7 440,054,331 75 148,531,500 182,649,892 2 182,649,892 100 0
bad debt provision is individually
assessed
Accounts receivable for which bad
debt provision is assessed on the 7,919,653,562 92 931,418,175 12 6,988,235,387 7,456,139,284 95 908,274,525 12 6,547,864,759
basis of credit risk portfolio
Accounts receivable that are
individually insignificant and
125,247,401 1 125,247,401 100 0 216,121,534 3 216,121,534 100 0
for which bad debt provision is
individually assessed
Total 8,633,486,794 100 1,496,719,907 17 7,136,766,887 7,854,910,710 100 1,307,045,951 17 6,547,864,759
Accounts receivable that are individually significant and for which bad debt provision is individually assessed:
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance
Accounts receivable (by unit)
Accounts receivable Provision for bad debts Provision proportion (%) Reason
Accounts receivable 1 183,703,331 183,703,331 100 Contract disputes
Accounts receivable 2 297,063,000 148,531,500 50 Contract disputes
Counter-party in
Accounts receivable 3 107,819,500 107,819,500 100
capital shortage
Total 588,585,831 440,054,331 / /
174
In the portfolio, accounts receivable with for which bad debt provision is assessed with the aging analysis method:
□Applicable √Not applicable
Unit: Yuan Currency: RMB
Ending Balance
Aging
Accounts receivable Provision for bad debts Provision proportion (%)
Within 1 year
Including: sub-items within 1 year
Within 6 months 1,069,737,753 - -
7~12 months 854,283,993 8,542,840 1
Subtotal of those within 1 year 1,924,021,746 8,542,840 0.4
1~2 years 501,366,593 75,204,989 15
2~3 years 321,730,519 96,519,155 30
Over 3 years
3~4 years 188,175,889 94,087,945 50
4~5 years 76,423,977 57,317,983 75
Over 5 years 599,745,263 599,745,263 100
Total 3,611,463,987 931,418,175 26
In the portfolio, accounts receivable for which bad debt provision is assessed with the balance percentage method:
□Applicable √Not applicable
In the portfolio, accounts receivable for which bad debt provision is assessed with the other methods:
√Applicable □Not applicable
On Dec. 31, 2018, the accounts receivable that are individually insignificant and for which bad debt provision is
individually assessed are as follows:
Book balance Provision for bad debts Provision proportion % Reason
Accounts receivable 1 50,365,000 50,365,000 100 Counter-party in capital shortage
Accounts receivable 2 27,452,868 27,452,868 100 Contract disputes
Accounts receivable 3 14,854,467 14,854,467 100 Contract disputes
Accounts receivable 4 10,792,605 10,792,605 100 Contract disputes
Accounts receivable 5 7,847,300 7,847,300 100 Contract disputes
Accounts receivable 6 7,342,286 7,342,286 100 Contract disputes
Accounts receivable 7 3,524,112 3,524,112 100 Contract disputes
Accounts receivable 8 2,187,988 2,187,988 100 Contract disputes
Accounts receivable 9 880,775 880,775 100 Contract disputes
125,247,401 125,247,401
(2) Particulars about the provision for bad debts made, recovered and carried back in current period
The amount of provision for bad debts made in current period was RMB 385,413,154 Yuan; the provision for bad debts
recovered 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
175
(3) Particulars about the actual accounts receivable written off for the reporting period
□Applicable √Not applicable
Particulars about the cancellation of important accounts receivable after verification
□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 is
summarized and analyzed as follows:
Amount of provision for bad Proportion in total accounts
Amount
debts receivable balance
Total accounts receivable of Top 5 balances 3,680,578,755 18,169,279 43%
(5) Accounts receivable derecognized due to the transfer of financial assets
□Applicable √Not applicable
(6) The amount of assets or liabilities arising from accounts receivable transferred with continuing involvement
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
2. Other receivables
Particulars about summary statement
(1)Presentation by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Interest receivable - -
Dividend receivable - 665,346
Other receivables 13,955,146,640 13,665,850,616
Total 13,955,146,640 13,666,515,962
Other information:
□Applicable √Not applicable
Interest receivable
(2) Classification of interest receivable
□Applicable √Not applicable
(3) Significant overdue interest
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
176
Dividends receivable
(4) Dividends receivable
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Project (or Invested entity) Ending Balance Beginning Balance
Jiangxi Huawu Brake Co., Ltd. - 665,346
Total - 665,346
(5) Important dividends receivable with an age over 1 year
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
Other receivables
(1) Disclosure of other receivables by category
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Provision Book value Provision Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Other receivables that are
individually significant and for
- - - - - 150,327,138 1 150,327,138 100 -
which the provision for bad debts is
individually made
Other receivables for which the
provision for bad debts is made
13,958,736,336 100 3,589,696 - 13,955,146,640 13,669,440,382 99 3,589,766 - 13,665,850,616
by portfolio with the credit risk
characteristics
Other receivables that are
individually insignificant and for
9,722,555 0 9,722,555 100 0 9,722,555 - 9,722,555 100 -
which the provision for bad debts is
individually made
Total 13,968,458,891 100 13,312,251 - 13,955,146,640 13,829,490,075 100 163,639,459 1 13,665,850,616
Other receivables that are individually significant and for which provision for bad debts is individually made at the end of
the 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: RMB
Ending Balance
Aging
Other receivables Provision for bad debts Provision proportion (%)
Within 1 year
Including: sub-items within 1 year
Within 6 months 13,644,611,754 - -
7~12 months 1,612,892 16,129 1
Subtotal of those within 1 year 13,646,224,646 16,129 -
1~2 years 183,041 27,456 15
2~3 years 41,810 12,543 30
Over 3 years
177
Ending Balance
Aging
Other receivables Provision for bad debts Provision proportion (%)
3~4 years 20,847 10,424 50
4~5 years 100,304 75,228 75
Over 5 years 3,447,916 3,447,916 100
Total 13,650,018,564 3,589,696 -
In the portfolio, other receivables for which the provision for bad debts is made with the balance percentage method:
□Applicable √Not applicable
In the portfolio, other receivable for which provision for bad debts is made with other method:
√Applicable □Not applicable
On Dec. 31, 2018, the other receivables that are individually insignificant and for which the provision for bad debts is
individually made are as follows:
Provision proportion
Book balance Provision for bad debts Reason
(%)
Other receivables 1 3,037,042 3,037,042 100 Contract cancellation
Other receivables 2 1,692,765 1,692,765 100 Contract cancellation
Other receivables 3 1,170,282 1,170,282 100 Contract cancellation
Others 3,822,466 3,822,466 100
9,722,555 9,722,555 100
(2) Particulars about classification by nature of payment
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Nature of payment Ending book value Beginning book value
Account current of subsidiary 13,391,496,986 13,097,601,236
Bid and performance bond 171,149,432 298,716,662
Taxes on outstanding payment receivable 181,205,119 198,696,002
Money on call of onsite product service 46,372,659 68,190,281
Staff loan receivable 27,854,145 33,553,284
Lease payment receivable 33,434,668 33,434,668
Customs deposit 63,341,536 4,269,756
Others 53,604,346 95,028,186
Total 13,968,458,891 13,829,490,075
(3) Particulars about the provision for bad debts made, recovered and carried back in current period
The provision for bad debt made in current period was RMB 0 Yuan; the provision for bad debt recovered or carried
back 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
178
(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: RMB
Ending
Proportion in total
balance of
Name of entity Nature Ending Balance Age ending balance of
Provision for
other receivables (%)
bad debts
Other receivables 1 Account current of the subsidiary 5,620,231,055 Within 1 year 40
Other receivables 2 Account current of the subsidiary 1,705,364,678 Within 1 year 12 -
Other receivables 3 Account current of the subsidiary 1,589,824,451 Within 1 year 11 -
Other receivables 4 Account current of the subsidiary 1,339,983,013 Within 1 year 10 -
Other receivables 5 Account current of the subsidiary 1,232,207,999 Within 1 year 9 -
Total / 11,487,611,196 / 82 -
(6) Receivables involving government subsidies
□Applicable √Not applicable
(7) Other receivables derecognized due to the transfer of financial assets
□Applicable √Not applicable
(8) The amount of assets or liabilities arising from other receivables transferred with continuing involvement
□Applicable √Not applicable
Other information:
□Applicable √Not applicable
3. Long-term entity investment
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Investment in subsidiaries 5,909,665,076 - 5,909,665,076 6,634,723,602 - 6,634,723,602
Investment in associated
2,726,353,648 - 2,726,353,648 2,287,477,224 - 2,287,477,224
enterprise and joint venture
Total 8,636,018,724 - 8,636,018,724 8,922,200,826 - 8,922,200,826
(1) Investment in subsidiaries
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Provision for Ending
Increase Decrease
Beginning Ending impairment balance of
Invested entity in current in current
Balance Balance in current depreciation
period period
period reserves
Shanghai Zhenhua Port Machinery Heavy Industry
9,964,200 - - 9,964,200 - -
Co., Ltd.
Shanghai Zhenhua Port Machinery (Hongkong) Co.,
- - - - - -
Ltd. (Note 1)
179
Provision for Ending
Increase Decrease
Beginning Ending impairment balance of
Invested entity in current in current
Balance Balance in current depreciation
period period
period reserves
Shanghai 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 Manufacturing
854,936,900 - - 854,936,900 - -
Co., Ltd.
ZPMC Jiangyin Steel Structure Manufacturing Co.,
579,983 - - 579,983 - -
Ltd.
ZPMC Port Machinery General Equipment Co., Ltd 2,201,086,744 - - 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 Hamburg 207,940 - - 207,940 - -
ZPMC Netherlands Cooperatie V.A. 26,662,579 2,703,505 - 29,366,084 - -
ZPMC Netherlands B.V. - - - -
Verspannen B.V. - - -
Shanghai Zhenhua Marine Engineering Service Co.,
100,000,000 - - 100,000,000 - -
Ltd.
ZPMC Machinery Equipment Services Co., Ltd. 7,000,000 - - 7,000,000 - -
ZPMC Lanka Company(Private)Limited 6,183,978 - - 6,183,978 - -
Nanjing Ninggao New Channel Construction Co.,
1,098,000,000 - 998,000,000 100,000,000 - -
Ltd.
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 Limited 2,953,200 - - 2,953,200 - -
ZPMC Australia Company (Pty) Limited 2,708,500 - - 2,708,500 - -
ZPMC North America Inc. 18,564,520 - - 18,564,520 - -
ZPMC Southeast Asia Holding Pte. Ltd. 3,875,949 8,637,165 - 12,513,114 - -
ZPMC Brazil Servio Portuários LTDA 2,936,771 - - 2,936,771 - -
ZPMC Limited Liability Company 7,211,416 2,960,654 - 10,172,070 - -
CCCC Liyang Urban Investment and Construction
183,000,000 60,000,000 - 243,000,000 - -
Co., Ltd.
CCCC Tianhe Mechanical Equipment Manufacturing
242,542,999 - - 242,542,999 - -
Co., Ltd.
CCCC Investment & Development Qidong Co., Ltd. 147,500,000 45,000,000 - 192,500,000 - -
CCCC Zhenjiang Investment Construction
707,000,000 - - 707,000,000 - -
Management Development Co., Ltd
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 - -
180
Provision for Ending
Increase Decrease
Beginning Ending impairment balance of
Invested entity in current in current
Balance Balance in current depreciation
period period
period reserves
ZPMC Middle East Fze 5,271,120 - - 5,271,120 - -
ZPMC UK LD 2,797,921 - - 2,797,921 - -
Total 6,634,723,602 272,941,474 998,000,000 5,909,665,076 - -
(2) Investment in associated enterprise and joint venture
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Changes in current period
Profits or
losses on Payment of Ending balance
Beginning Adjustment of other Other
Investing entity Additional Negative investment cash divided Provision for Ending balance of provision for
balance comprehensive changes in Others
investment investment recognized or profit impairmentd impairment
income equity
under equity declared
method
I. Joint ventures
Jiangsu Longyuan
Zhenhua Marine 231,309,282 - - 12,955,931 - - - - - 244,265,213 -
Engineering Co., Ltd
ZPMC Mediterranean
LimanMakinalari Ticaret 3,775,146 - - 999,397 - - - - - 4,774,543 -
AnonimSirketi
Subtotal 235,084,428 - - 13,955,328 - - - - - 249,039,756 -
II. Associateds
CCCC Marine
Engineering &
15,849,544 - - 402,730 - - - - - 16,252,274 -
Technology Research
Center Co., Ltd.
ZPMC Changzhou
16,467,125 - - 1,191,077 - - 862,238 - - 16,795,964 -
Coatings Co., Ltd.
CCCC Real Estate
178,099,707 - - 2,552,966 - - - - 180,652,673 -
Yinxing Co., Ltd.
CCCC Financial Leasing
1,678,550,583 - - 87,246,932 647,839 - 45,000,000 - - 1,721,445,354 -
Co., Ltd.
CCCC Yancheng
Construction and - 289,050,000 - 330,523 - - - - 289,380,523 -
Development Co., Ltd.
China Communications
67,230,450 - - -8,536,568 3,028,239 - - - - 61,722,121 -
Construction USA Inc.
CCCC South American
Regional Company 96,195,387 99,912,976 - 3,288,529 -8,331,909 - - - - 191,064,983 -
SARL
Subtotal 2,052,392,796 388,962,976 - 86,476,189 -4,655,831 - 45,862,238 - - 2,477,313,892 -
Total 2,287,477,224 388,962,976 - 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: RMB
Current amount Prior amount
Item
Revenue Cost Revenue Cost
Main business 18,070,463,753 15,061,380,936 17,846,043,724 14,996,960,714
Other business 1,316,224,251 1,220,964,790 1,136,241,004 1,065,401,225
Total 19,386,688,004 16,282,345,726 18,982,284,728 16,062,361,939
Other information:
181
2018 2017
Main business revenue Main business cost Main business revenue Main business cost
Port machinery 14,576,864,135 11,382,215,682 14,193,972,311 11,462,619,170
Heavy equipment 1,651,058,229 1,675,938,342 2,118,361,222 2,020,870,244
Steel structure and related income 1,527,592,932 1,712,519,900 1,482,802,059 1,468,620,910
“Building-transfer” project 70,313,030 61,946,229 50,908,132 44,850,390
Shipping and other 244,635,427 228,760,783 - -
18,070,463,753 15,061,380,936 17,846,043,724 14,996,960,714
The other business income and cost are listed below:
2018 2017
Other business revenue Other business cost Other business revenue Other business cost
Sales of materials 1,044,182,505 1,046,418,417 877,119,802 868,901,948
Equipment leasing and others 272,041,746 174,546,373 259,121,202 196,499,277
1,316,224,251 1,220,964,790 1,136,241,004 1,065,401,225
5. Investment income
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Current amount Prior amount
Income from long-term equity investment under cost method - 58,570,536
Income from long-term equity investment under equity method 100,431,517 94,574,906
Investment income from the disposal of long-term equity investment - -
Investment income from the financial assets measured at fair value through the
- -
current profit or loss included in the current profit or loss during holding period
Investment income from the disposal of financial assets measured at fair value
- -
through the current profit or loss included in the current profit 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 financial assets during holding period 667,732 3,356,632
Investment income for the disposal of available-for-sale financial assets - -
Gains from the re-measurement of remaining equity at fair value after the loss
- -
of control
Total 101,099,249 156,502,074
6. Others
□Applicable √Not applicable
182
XVIII. Supplementary information
1. Statement of non-recurring profits and losses in current period
√Applicable □Not applicable
Unit: Yuan Currency: RMB
Item Amount Notes
Profits and losses on disposal of non-current assets 155,557,716
Unauthorized examination and approval, or lack of official approval documents, or occasional tax revenue
return and abatement
Government subsidies included in the current profit or loss (except for the one closely related to the normal
operation of the Company and gained constantly at a fixed amount or quantity according to 114,412,517
certain standard based on state policies)
Capital occupation fees charged to the non-financial enterprises and counted into the current profit and loss
Gains when the investment cost of acquiring a subsidiary, affiliated company and joint venture by the
Company is less than the fair value of identifiable net assets of the invested unit
Profit and loss from non-monetary assets exchange
Profit and loss from entrusting others for investment or assets management
Retained assets impairment provisions arising from force majeure such as natural disasters
Profit and loss from debt reorganization
Enterprise reorganization fee, such as staffing expenses and integration fees
Profit and loss in excess of the fair value in transaction with unfair price
Current net profit and loss of the subsidiaries established by merger of enterprises under common control
from the beginning of the period to the merger day
Profit and loss on contingency that has no relation with the normal operation of the Company
Profit or loss from changes in fair value by holding tradable financial assets and liabilities, and earnings
on investment from disposal of tradable financial assets and liabilities as well as salable financial assets, 74,200,750
excluding the effective hedging business related with the normal operation of the Company
Switch-back of impairment provisions of accounts receivable that have undergone impairment test alone 150,327,138
Profit and loss from outward entrusted loaning
Profit and loss from the changes in the fair value of investment property by follow-up measurement in the
fair value mode
Impact on current profit and loss due to one-off adjustment to the current profit and loss according to the
requirements of the tax as well as accounting laws and rules
Custody fees of entrusted operation
Other non-operating income and expenses besides the aforementioned items -67,069,856
Other profit and loss items that conform to the definition of non- recurring profit and loss
Amount of income tax affected -74,850,113
Amount of minority shareholders’ interest affected -30,908,588
Total 321,669,564
As for the non-recurring profit and loss items defined in accordance with Announcement No. 1 on Information Disclosure
for Companies Offering Their Securities to the Public – Non-recurring Profit and Loss and the recurrent profit and loss
items defined from the non-recurring profit and loss items listed in the Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public – Non-recurring Profit and Loss, please specify the reason.
□Applicable √Not applicable
183
2. Net return on assets and earnings per share
√Applicable □Not applicable
Earning per share
Weighted average
Profit during the reporting period Basic earnings Diluted earnings
return on assets (%)
per share per share
Net profit attributable to the common shareholders of the Company 2.92 0.08 0.08
Net profit attributable to the common shareholders of the Company after
0.80 0.02 0.02
deducting the non-recurring profit and loss
3. Accounting data differences under domestic and foreign accounting standards
□Applicable √Not applicable
4. Others
√Applicable □Not applicable
Reconciliation of net profit to cash flow from operating activities:
2018 2017
Net profit 782,185,825 154,209,887
Plus: Provision for assets depreciation (carried back)/retained (25,476,619) 619,199,093
Depreciation of investment properties and fixed assets 466,954,562 499,700,815
Amortization of intangible assets 53,202,552 53,126,664
Net income from the disposal of fixed assets and intangible assets (69,575,485) (1,303,038)
(Profit)/loss from changes in fair value (44,481,806) 4,615,775
Financial cost 1,410,797,106 882,094,629
Income 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 payment 1,028,657,153 (1,332,273,798)
Change in operating receivables (2,198,475,931) 435,650,557
Change in operating payables 829,204,147 (434,780,054)
Net cash flow from operating activities 638,290,440 41,167,876
Net changes in cash and cash equivalents:
2018 2017
Ending balance of cash 1,930,451,140 3,301,302,585
Less: Beginning balance of cash 3,301,302,585 1,872,410,585
Change in cash and cash equivalents (1,370,851,445) 1,428,892,000
184
Section XII Contents of Reference Files
Financial statements signed and sealed by the legal representative, the responsible person for
Contents of Reference Files
accounting and the person in charge of accounting organ.
The originals of audit report with the seal of accounting firm, and signed and stamped by certified
Contents of Reference Files
public accountants.
The originals of all corporate documents and announcements that are disclosed to the public via
Contents of Reference Files
newspaper designated by CSRC during the reporting period.
Chairman of the Board: Zhu Lianyu
Date of submission upon approval by the board of directors:
Mar. 29, 2019
Revision
□Applicable √Not applicable
185
