China State Construction Engineering Co., Ltd. 2015 Annual Report

Transcription

Stock Code: 601668
Abbreviation: China Construction
China State Construction Engineering Co., Ltd.
2015 Annual Report
Abstrat
Annual Report of China State Construction 2015
Important Notes
This report has been prepared by China State Construction Engineering Corporation
Limited (“CSCEC”) solely for use at the Results Presentation.
This report is mainly based on the Section 1-4 part of the CSCEC Annual report 2015.
In case of any discrepancy between the Chinese and English version,the Chinese
version shall prevail.
This report contains statements that reflect the current beliefs and expectations of
CSCEC about the future as of the date of this report.These forward-looking statements
are based on a number of assumptions about the operations of CSCEC and factors
beyond the control of CSCEC and are subject to significant risks and uncertainties.
Uncertainties include but are not limited to: industry competition; market risk; legal,
fiscal and regulatory changes; international economies and financial market conditions;
political risk and other risk factors beyond the control of CSCEC. Accordingly,
actual results may differ materially from these forward-looking statements.
No undue
reliance should be placed on these forward-looking statements.
Except for audited financial data, all business data contained in the Report are
compiled according to the statistical criteria set forth by the Company’s management.
Thank you for your attention.
1
A Message from the Chairman
Dear Shareholders:
The start of 2016 marks the strategic transition between the 12th and 13th “Five-year
Plans”. As we embark on the new national plan, investors will have a broader vision of the
exciting events in the years to come.
I. The Year 2015
In 2015, China State Construction Engineering Corporation (“CSCEC”) worked hard
toward its ambitions, driven and inspired by challenges and difficulties that we managed to
turn into motivation. The value of newly signed contracts executed in 2015 totaled RMB
1,674.0 billion, up 8.9% year-on-year (YoY); Our revenue reached RMB 880.6 billion, up
10.1% YoY; and net profit attributable to shareholders of listed companies rose 15.5% YoY
to RMB 26.06 billion. Highlights of business development in 2015 included: the value of
infrastructure construction contracts exceeded RMB 300.0 billion, up 26.7%; overseas
orders exceeded RMB 100.0 billion, up 42.2%. CSCEC made effort no only to stabilize
business growth, but also to promote corporate development through the adjusting business
structure in 2015.
II. The 12th “Five-year Plan” (2011-2015)
The 12th “Five-year Plan” period has proven to be a golden period of development for
CSCEC. During the five years, the company withstood all challenges and obtained newly
signed contracts value over RMB 6.6 trillion, Revenue of over RMB 3.4 trillion, net profit
attributable to shareholders of over RMB 98.0 billion, and cash dividends totaling RMB
22.0 billion. Its ranking in the Fortune 500 List rose from 187th to 37th, which means
CSCEC has become leader among construction investment conglomerates all around the
globe. Our business scale doubled within the space of five years. These remarkable
achievements are attributable to contributions made by our shareholders, On behalf of the
board of directors,as well as on the senior management team, I would like to take this
opportunity to express my sincere gratitude to our investors.
III. The 13th “Five-year Plan” (2016-2020)
CSCEC’s capabilities will experience new challenges during the transition toward
“the New Normal Economy” in the 13th “Five-year Plan” period. Our vision: Building the
company into a investment and construction group with the strongest global
competitiveness; our philosophy: Combining tradition with innovation; our goal: During
1
the 13th “Five-year Plan” period, the Company’s overall revenue will grow at an average
rate of 9%, to approximately RMB 1,330.0 billion by 2020. Going forward, we will give
top priority to investment, infrastructure construction and overseas businesses related the
“Belt and Road”, striving for greater success during the 13th “Five-year Plan” period.
IV. The Year 2016
The year 2016 marks the beginning of the 13th “Five-year Plan” period. Guided by the
general principle of “steady growth with improved development quality and efficiency”,
the Company will align its business operations to the “Three Major Development
Strategies” of the state, and implement tasks set out in the 13th “Five-year Plan”, seizing
opportunities created by supply-side structural reforms. In 2016, we will seek to increase
the value of newly signed contracts to more than RMB 1.6 trillion, and revenue to over
RMB 920.0 billion, thereby providing increased returns for our investors.
Chairman: Guan Qing
18 April, 2016
2
Section 1 Definitions
I. Definitions
Unless otherwise specified in the context, the listed terms below contained in the Report are defined as
follows:
Definitions of common words and phrases
China Construction /the
refers to
China State Construction Engineering Co., Ltd.
refers to
China State Construction Engineering Corp., the controlling
Company
China Construction Corp.
shareholder
China Construction 1st
refer to
China Construction 1st Building (Group) Corp., Ltd.;
Building (Group) Corp.,
China Construction 2nd Engineering Bureau Ltd.;
Ltd. - China Construction
China Construction 3rd Engineering Bureau Ltd.;
8th Engineering Division
China Construction 4th Engineering Division Corp., Ltd.;
Corp., Ltd.
CSCEC Fangcheng
refers to
China Construction Fangcheng Investment & Development
Co., Ltd.
CSCEC Development
refers to
China State Construction Development Co., Ltd.
China Overseas
refers to
China Overseas Holdings Ltd.
China Overseas Land &
refers to
China Overseas Land & Investment Ltd. (00688.HK)
refers to
China Overseas Grand Oceans Group Ltd. (00081.HK)
China Overseas Property
refers to
China Overseas Property Holdings Ltd. (02669.HK)
China Construction
refers to
China State Construction International Holdings Ltd.
Investment
China Overseas Grand
Oceans
International
(03311.HK)
Far East Global
refers to
Far East Global Group Ltd. (00830.HK)
China State Construction
refers to
Real estate businesses operated by China Construction
Land
except for those operated by China Overseas Land &
Investment
3
CSCEC Xinjiang
refers to
CSCEC Xinjiang Construction & Engineering (Group) Co.,
Ltd.
China West Construction
refers to
China West Construction Group Co., Ltd.（002302.SZ）
Articles of Association
refers to
Existing articles of association adopted by China State
Construction Engineering Co., Ltd.
The Reporting Period
refers to
1 January – 31 December, 2015
4
Section 2 Company Profile and Key Financial Indicators
I. Company Profile
Chinese name
中国建筑股份有限公司
Chinese abbreviation
中国建筑
China State Construction Engineering Corporation Limited
CSCEC
English name
English Acronym
Legal representative
Guan Qing (官庆)
II. Contact Details
Name
Meng Qingyu (孟庆禹)
Board Secretary
No. 15 Sanlihe Road, Haidian District, Beijing
010-88083288
010-88082678
[email protected]
Position
Correspondence address
Tel.
Fax
Email
III. Basic Information
Registered address
Postcode for registered address
Office address
Postcode for office address
Website
Email
100037
100037
www.cscec.com
[email protected]
IV. Information Disclosure and Filing Location
Press selected by the Company for
information disclosure
Website designated by CSRC for publishing
annual reports
Annual report filing location
China Securities Journal, Shanghai Securities News,
Securities Times, Securities Daily
www.sse.com.cn
Office of The Board of China Construction, No. 15
Sanlihe Road, Haidian District, Beijing
VI. Other Information
Name
Accounting firm (in
China) engaged by the
Company
Office address
Accountant (signatory)
5
PricewaterhouseCoopers Zhong Tian CPAs
(Special General Partnership)
Floor #11, PricewaterhouseCoopers Center, No.
202 Hubin Road, Shanghai
Huang Mingliu (黄鸣柳), Wang Lei (王磊)
V. Stock Profile
Type
Stock exchange
A share
Shanghai Stock
Exchange
Stock profile
Abbreviation
Stock code
China Construction
601668
Abbreviation before
alteration
N/A
VII. Main Accounting Data and Financial Indicators (2013-2015)
(i) Main accounting data
Unit: RMB ,000 Currency: RMB
Change
Main accounting data
2015
2014
2013
YoY (%)
Revenue
Net profit attributable to
880,577,134
800,028,753
10.1
681,792,424
26,061,898
22,569,967
15.5
20,398,512
25,108,195
20,933,504
19.9
18,632,553
54,603,641
24,906,341
119.2
2,678,228
shareholders of listed companies
after deducting non-recurring
gains and losses
Net cash flow from operating
activities
Change
End-2015
End-2014
YoY
End-2013
(%)
Net assets attributable to
167,977,392
139,019,458
20.8
118,036,755
1,074,904,899
919,106,215
17.0
784,108,707
30,000,000
30,000,000
/
30,000,000
Total assets
Closing total share capital (,000)
(ii) Key financial indicators
Change
Key financial indicators
2015
2014
YoY
2013
%)
Basic EPS (RMB/share)
0.84
6
0.75
12.0
0.68
Diluted EPS (RMB/share)
0.83
0.75
10.7
0.67
Basic EPS (RMB/share) after
0.80
0.70
14.3
0.62
16.00
17.70
1.7% less
18.60
15.39
16.42
1.03% less
16.99
deducting non-recurring gains
and losses
Weighted average return on net
assets (%)
Weighted average return on net
assets (%) after deducting
non-recurring gains and losses
Main accounting data and financial indicators in the three years before the end of the Reporting Period
None
VIII. Accounting discrepancies under Chinese and foreign accounting standards
(i) Differences in net profit and net assets attributable to shareholders of listed companies
disclosed in financial statements concurrently compiled according to international accounting
standards and Chinese accounting standards
□Applicable √N/A
(ii) Differences in net profit and net assets attributable to shareholders of listed companies
disclosed in financial statements concurrently compiled according to foreign accounting standards
and Chinese accounting standards
(iii) Discrepancies between foreign and Chinese accounting standards:
IX. Main financial data in 2015 by quarter
Revenue
Q3
Q4
(Jul-Sep)
(Oct-Dec)
Q1
(Jan-Mar)
Q2
(Apr-Jun)
193,767,299
219,966,588
197,607,844
269,235,403
5,624,837
8,108,000
5,310,715
7,018,346
5,645,056
8,145,144
5,106,562
6,211,433
7
after deducting non-recurring
gains and losses
(49,557,997)
20,211,349
13,811,899
70,138,390
activities
Note: Main quarterly financial data have not been audited.
Discrepancies between quarterly data and data disclosed in regular reports
X. Non-recurring items and amounts
√Applicable □N/A
Non-recurring gains and losses
2015
Non-revenue and expenditure
2014
/
/
Gains/losses on disposal of non-current assets
143,516
213,734
Government subsidies recognized as current
266,084
398,185
25,074
/
Other non-revenue and expenditure (net)
176,644
510,618
Non-revenue and expenditure (net)
611,318
1,122,537
(504,249)
(206,718)
Interest income from commissioned external loans
244,704
276,882
Reversal of impairment provision for receivables
660,233
493,058
3,667
307,712
/
290,687
1,015,673
2,284,158
gains/losses
Gains/losses from fair value of identifiable net
assets acquired from the acquiree below the
acquisition cost
Losses from changes in fair value and investment
losses from disposal of trading financial assets and
financial assets available for sale
in separate impairment tests
Investment income from disposal of long-term
equity investment
Revaluation gains on remaining equity after partial
disposal of subsidiaries
Subtotal
8
Effect of income tax
(320,542)
(519,578)
Subtotal
695,131
1,764,580
Effect of minority interests (after tax)
258,572
(128,117)
953,703
1,636,463
Total
XI. Items measured at fair value
Item
Financial assets measured at
Opening
balance
Effect on
Changes in
profit for the
2015
year
Closing
balance
1,037,762
1,130,227
92,465
138,533
2,193,264
2,632,519
439,255
145,609
19,441
-
(19,441)
19,441
4,973,477
5,967,372
993,895
(680,644)
8,223,944
9,730,118
1,506,174
(377,061)
fair value through profit or loss
Financial assets available for
sale (Note)
Financial liabilities measured at
fair value through profit or loss
Exchangeable bonds
Total
Note: Financial assets available for sale include bank financial products listed in financial statements as
other current assets.
9
Section 3 Business Overview
I. Main Businesses Operated by the Company during the Reporting Period
China Construction is one of the most integrated construction and real estate conglomerates in
China with the longest history of specialized operation and market-oriented management.During the
Reporting Period, core businesses of the Company (divided by business segment) included housing
construction, infrastructure construction &investment, and real estate development&investment, design
and survey. In addition, the Company as one of the largest international construction contractors in
China.has made active efforts to expand overseas businesses.
The Company is noted for its comprehensive and balanced business coverage, extensive
geographies and robust operations, and ranks among the market leaders in all of its core businesses. It
boasts absolute competitive advantages in housing construction, and top rankings in most sub-segments
of the infrastructure business, e.g. port, high-speed rail, subway, industrial base and power plant. Over
the years, it has focused its efforts on the development of Chinese inner land and overseas markets, and
consistently extended
its business presence to more than 50 countries and regions worldwide. The
Company currently has nine overseas marketing centers and set up over 30 country-specific teams,
covering virtually all major markets along the routes of the “Belt and Road”, with an extensive domestic
business network throughout China. Featuring “China Overseas Land & Investment” and “China State
Construction Land” as the main brands, it operates real estate projects in all major economic regions in
the country, and has acquired the largest land reserves among all Chinese real estate developers.
The Company is capable of fully integrated property design, construction and land development
throughout China, supported by a complete construction industry chain covering product research and
development, survey and design, project contracting, real estate development, equipment manufacturing
and property management.
It is the only fully accredited construction company in China licensed with qualifications at the
highest level to undertake the most extensive range of contracting businesses, and has been certified as a
premium general contractor for housing construction, road construction and municipal utilities projects,
covering construction and engineering general contracting and project management for construction,
road, railway, municipal utilities, ports and waterways, water conservancy and hydropower, mining,
metallurgy, petrochemical, electricity, etc. projects. The certificates will remain valid until 2021. During
the Reporting Period, the Company and its subsidiaries had a total of 787 business qualifications for
various construction, survey, design, construction supervision, construction cost and consulting, etc, and
21 among of them were qualified as premium general contractors.
10
Housing construction









Healthcare
Education and training
Sports venues
Defense projects
Airport terminals and
outbuildings
Super high-rises above
300m
Exhibition and cultural
centers
Industrial
informatization
and
scientific research
The largest housing
property contractor in
the world, and the
largest
housing
construction contractor
in China
Infrastructure construction
& investment

Roads, bridges and
tunnels

Railway and urban rail
transit

Nuclear power, thermal
power,
hydropower,
wind power plants

Municipal
utilities,
water
resources
projects

Achieved
top
rankings in most
sub-segments of the
infrastructure
business, e.g. port,
high-speed
rail,
subway, industrial
base and power
plant
Real estate development &
investment

High-end commercial
housing

Office buildings

Upscale hotel

Affordable housing

“China Overseas Land
& Investment” and
“China
State
Construction
Land”
are the two main
brands under China
Construction
Design, survey, etc.





Architectural design
Municipal Engineering
design
Project management
Construction general
contracting
China
Construction
Engineering
Design
Group ranked 44 in
ENR152 2015, the
highest ranking among
Chinese architectural
design companies
In early 2016, the Company’s Board of Directors adopted the 13th “Five-year Plan” corporate
development strategy after deliberation, and construction survey and design, construction, investment
and new businesses were defined as the four priority business segments for the Company going forward.
Please refer to “Discussions and Analyses on Future Development” under the fourth section
“Management Discussions and Analyses” for further details.
II. Major Changes in the Company’s Main Assets During the Reporting Period
No major changes occurred to any of the Company’s main assets during the Reporting Period.
Please refer to “Assets and Liabilities Analyses” under the fourth section “Management Discussions and
Analyses” for details regarding changes in main operating assets.
Where: foreign assets were 1,231 (unit: RMB 100mn; currency: RMB), accounting for ~11.5% of
total assets.
Foreign assets data above have not been audited.
11
III. Core Competitiveness Analysis for the Reporting Period
Market-oriented operating mechanism. The Company has always adhered to market-oriented
operating mechanisms, and consistently improved its market maneuvering while respecting, abiding by
and adapting itself to the market rules. In the face of an increasingly competitive marketplace, we won
the trust of existing clients and attracted new ones with high quality products and value added services.
In line with our pursuit of profitability-based business expansion, we continue to improve the efficiency
of asset turnover and achieved high returns on assets above the industry average through highly efficient
resource operations. Our market share has been consistently increased through steady business growth.
Business internationalization. While basing our business operations in the Chinese market, we
made active efforts to break into overseas markets, aiming to establish the Company as an efficient
multinational capable of mobilizing resources on a global scale. Business internationalization has led to
increased revenues and profits. More importantly, it enabled us to enhance management standard and
staff expertise by competing directly with global leaders.
Relevant diversification and vertically integrated business expansion. The Company adopts a
relevant diversification approach to product (or service) selection based on its existing technical and
marketing advantages. On the back of our traditional advantages in construction survey and design,
housing construction and real estate development, we actively increased business coverage to include
infrastructure investment and construction, and horizontally toward water supply and environmental
protection businesses. Furthermore, the Company strives for vertical business expansion integrating
investment, design, construction, operation and service operations, and established a fully-developed
investment and risk management system. We accumulated extensive experiences in investment and
financing management, and have one of the largest teams of investment operation management
professionals. In addition, we have set up a financial business platform and fostered close ties with banks,
insurance, trust and fund companies, allowing us to carry out financial intermediation on multiple levels
and through multiple channels.
High quality, cost-effective and differentiation-based competitive strategy. The Company has
always committed itself to providing the public with high quality and cost-effective products and
services. We ensure high product quality relying on our technical, talent and management advantages;
we ensure cost effectiveness through our integrated operating model, scale effect and economies of
speed. We will continue to deepen and optimize our marketing strategy oriented toward “Big Markets,
Big Clients, Big Projects”, with the focus placed on the high-end market. This is the differentiator that
sets us apart from our competitors.
12
Strong overall competitiveness with a clear advantage in technology. The Company is a leader
in technology research and development and construction technology integration and innovation, and
boasts world-class core competitiveness in more than 10 business sectors such as the design,
construction and installation of large-span steel structures for super high-rises and in complex spaces.
We are the leader in information technology application among Chinese construction companies, with
decisive advantages especially in corporate and project information management technology, virtual
construction technology, etc. We pioneered BIM application in the construction industry in China, and
took the lead in the formulation of the national “Building Information Model Application Standards for
Construction Projects”. We have developed several proprietary technologies for “construction
industrialization”, including “China Construction” MCB fabricated shear wall structure developed with
independent intellectual property right.
13
IV. Branding, Credit Standing and Honors Received during the Reporting Period
The Company’s brand value, reputation and influence were further improved during the Reporting
Period. It ranked 37th in Fortune “Global Top 500” in 2015, the highest ranking among construction and
real estate companies worldwide; it ranked 17th of the top-250 global international contractors in ENR.
(international business category); the Company was assigned with the highest credit rating, i.e. A (S&P)
/ A2 (Moody's) / A (Fitch), by all three leading global credit rating agencies, with a stable rating outlook.
During the Reporting Period, we won the “Outstanding Board Construction Contributor” and
“Outstanding Board Secretary” awards (Gold Prize of Round Table); “100 Listed Companies Most
Respected by Investors 2015” award presented by China Association for Public Companies; and
“Greater China Investor Relations Excellence Award 2015” presented by the world-renowned
IRMagazine.
During the Reporting Period, we received 23 Luban Awards for Chinese construction projects, with
awards received for all projects submitted; 40 National Quality Project Award; seven Zhan Tianyou
Civil Engineering Awards – “New York Hamilton Bridge” was the first foreign construction project that
won the Zhan Tianyou Award; and 872 provincial/ministerial-level quality awards.
During the Reporting Period, we won three National Science and Technology Progress Awards
from the State Council – in particular, “Performance-based Construction Structure Seismic Design
Theory, Methodology and Applications” was the first construction design theory to win the first prize of
the award; 55 Science and Technology Awards of China Association of Construction Enterprise
Management; and 239 provincial/ministerial-level science and technology awards in steel structure,
installation, decoration, etc. categories.
During the Reporting Period, we won 43 national awards for construction survey and design
companies; China Construction Engineering Design Group Corporation ranked No. 44 among ENR’s
top-150 design companies worldwide, the highest ranking among all Chinese construction design
enterprises; the Company received 188 provincial/ministerial survey and design awards in full-year
2015.
During the Reporting Period, 108 of our projects were accredited as state-level AAA-grade building
sites for work safety, civility, integrity and standardization, accounting for 22% of the total number of
AAA-grade construction projects in the country, outperforming all other Chinese construction
companies in three consecutive years; a number of our subsidiaries won 13 national civilized
organization and outstanding national construction enterprise awards.
During the Reporting Period, the Company won 31 National Star Green Building Design titles
awarded by the Ministry of Housing and Urban-rural Development; 16 certificates of the US Green
14
Building LEED, and over 100 national awards for classic housing planning, green construction
demonstration projects and intelligent building quality.
During the Reporting Period, the brand value of “China Overseas Land & Investment” (affiliated
with one of the Company’s subsidiaries) grew to RMB 39.759 billion. China Overseas Land &
Investment has been ranked as the most influential brand in the field for many years, and remained the
winner of the “Leading Real Estate Brand in China” award in 12 consecutive years.
As shown in the “Top 500 Global Brands 2016” rankings released in March 2016 by one of the
world’s leading brand rating agencies, UK-based Brand Finance, the brand value of “China
Construction” increased substantially from US$ 10.806 bn to US$ 20.214 bn, up 87% YoY; our ranking
also improved to 44th (up 71), the biggest jump among the Top 500 brands.
15
V. Summary of Earnings Results During the Reporting Period
(i) Business data
Item
Unit
2015
2014
Growth YoY %③
I. Construction
(1) Value of new contracts
RMB 100
15,190
14,190
7.1
11,962
11,614
3.0
3,140
2,478
26.7
88
98
(10.2)
/
/
/
1. Total construction area
100,624
92,181
9.2
2. Total area of new starts
22,803
29,320
(22.2)
13,441
9,925
35.4
/
/
/
executed in the period
mn
1. Housing construction
2. Infrastructure
3. Design & survey
(2) Housing construction
0,000 m2
business volume
3. Total completed construction
area
(3) Infrastructure business
volume
1. Roads (new projects in China)
Km
1341
762
76.0
2. Area (new projects in China)
0,000m2
805
439
83.4
1,550
1,203
28.8
1,254
988
26.9
1,344
1,036
29.7
1,021
776
31.6
70
68
/
11,529
11,618
(0.8)
6,656
6,800
(2.1)
4,144
3,735
11.0
II. Real estate
(1) Contract sales
Where: China Overseas Land &
RMB 100
mn
Investment①
(2) Contract sales area
0,000m2
Investment
(3) Subscription sales (end-2015)
RMB
100mn
(4) Average selling price
RMB/m2
(5) Land reserve at end-2015②
0,000m2
(total)
16
Investment
(6) Land reserves acquired (total)
0,000m2
1,260
1,276
(1.3)
596
904
(34.1)
15,621
14,606
6.9
1,119
787
42.2
Investment
III. By region
executed in China
RMB 100
mn
executed outside China
Notes: ① “China Overseas Land & Investment” refers to real estate businesses operated by China Overseas
Land & Investment and its affiliates, excluding China Overseas Grand Oceans;
② Land reserve at end-2015 = land reserve as of the end of the previous year + newly acquired land
reserves – completed construction area during the Reporting Period +/- project area adjustments;
③ Change YoY is calculated directly based on relevant data (unit: RMB 100 mn).
17
(ii) Business highlights
Unit: RMB 100 mn
Currency: RMB
Value of new construction contracts
Value of new real estate contracts
Revenue
Net profit attributable to shareholders of listed
companies
18
(iii) Business structure
Unit: RMB 100 mn Currency: RMB
Breakdown of contract value
Revenue by segment
Gross margin breakdown by segment
Gross margin by segment
Note: Denominator in the breakdown by business is the arithmetic sum of the results of the four main
business segments (i.e. housing construction, infrastructure, real estate and construction design).
19
Section 4 Management Discussions and Analyses
I. The Macro Environment and Industry Trends
With the advent of “the New Normal Economy”, the Chinese economy is expected to gear down
from rapid growth to a medium- to –high growth speed in the near future. It will change the original
trajectory of economic development in China, as well as the inherent growth momentum in the
construction market.
Statistics show that China’s total fixed asset investment growth slowed down from the average 26%
in the past three decades to ~10% in 2015; during the past 10 years, the total output of the construction
industry as a percentage of fixed asset investment from 46% to 33% by the year 2015, marking a
long-term transition in the construction market from high growth toward moderate growth. In 2015, the
development indicators of the construction industry hit a new low record, with the national construction
output grew 2.3% YoY, two percentage points lower compared with the growth rate in mid-2015. A
research institute estimates that the growth of national fixed asset investment may dip further in 2016,
and all construction companies will be under considerable downside pressure over the near term.
From a medium/long-term perspective, however, the construction industry will see more
opportunities than challenges. Urbanization is the biggest driving force behind economic development in
China, and construction businesses will enjoy broad space for development in the future, because:
Urbanization will continue to develop rapidly. The demand for urban construction remains
unchanged on the whole. It is estimated that the urbanization rate in China will grow approximately 13
percentage points by 2030. Empirical data suggest that every one unit of urbanization growth leads to
3.7 units of investment growth (i.e. 1:3.7 ratio). Accordingly, fixed asset investment and the Chinese
government’s expenditure on the urbanization of farming population will amount to RMB1,000 trillion,
and the construction industry will continue to grow driven by urban residents’ demands for products and
services of housing, transportation, leisure, entertainment, etc.
The New Normal will create new opportunities for the construction market. In the future, the
government will increase investments in public service facilities, focusing on shantytown transformation,
“agriculture, rural areas and farmers” projects, small and micro businesses, energy conservation,
production services, public services such as pension and health and aged care, urban infrastructure,
consumption stimulation and other key initiatives facilitating the economic restructuring and improving
people’s livelihood.
Highlights in infrastructure investment. Increasing effective investment is at the core of
supply-side structural reforms and economic growth stabilization. According to investment plans
released by Chinese province in early 2016, investments in major projects during the 13th “Five-year
20
Plan” period will exceed RMB 21 trillion, of which over RMB 2 trillion will be invested in 2016. Most
of the projects are infrastructure investment.
Multi-dimensional urban construction will bring about new development opportunities. In the
future, our cities will become increasingly “three-dimensional” combining flyovers, roads, subways and
other underground facilities. Building amenities in multi-level spaces will be the general trend for urban
development going forward.
Construction industrialization is about to see explosive growth. The transition toward ecological
construction and environmental protection dictate that the construction industry must transform itself
toward intensive industrial production. After many years of exploratory efforts made in the past with the
backing of the government, construction industrialization is expected to bear fruit during the 13th
“Five-year Plan” period.
The real estate market enters the “silver decade” (a slowdown in development relative to the
previous “gold decade”). The real estate market will be characterized by fragmentation and corrections.
From a long-term perspective, urbanization is set to move ahead as a natural concomitant of China’s
modernization, and demand will remain strong for housing properties and public amenities. Therefore,
the development outlook for the construction industry is still positive.
The “Belt and Road” boosts overseas business growth. According to incomplete statistics,
~US$1.36 trillion of investment has been delivered for the “Belt and Road” projects so far, and
additional tens of millions of dollars have been pledged in framework agreements of unpublicized
projects. The “Belt and Road” strategy laid the groundwork for Chinese construction companies
launching out into overseas markets, where the top priority should be given to infrastructure
interconnection.
21
II. Main Earnings Results for the Reporting Period
During the Reporting Period, the Company focused its efforts on quality and efficiency
improvement, and stepped up business restructuring and upgrade. Steady development has been
maintained in all main business indicators, and our performance targets were successfully fulfilled in
2015.
During the Reporting Period, the amount of new construction contracts reached RMB 1,519 billion,
up 7.1% YoY. As of the end of the period, Executory contract was about RMB 2.3 trillion which was 2.7
times over the same period income, of which 20% was contributed by the infrastructure business. The
real estate business segment generated contract sales of RMB 155.0 billion, up 28.8% YoY; contract
sales area totaled 13.44 million square meters, up 29.7% YoY.
During the period, the Company posted an revenue of RMB 880.6 billion, up 10.1% YoY.
Specifically, revenue from the housing construction business was RMB 588.3 billion, up 6.0% YoY;
revenue of the infrastructure business was RMB 141.4 billion, up 19% YoY; and that of the real estate
business was RMB 142.4 billion, up 15% YoY. The three segments respectively made up 67%, 16% and
16% of the total income, indicating that the Company’s businesses have been restructured in line with
our strategic objectives. Our consolidated gross profit was RMB 109.5 billion, up 8.8% YoY, with an
operating margin of 12.4%, at roughly the same level as in the previous year.
During the period, the Company registered net profit attributable to shareholders of listed
companies of RMB 26.06 billion, up 15.5% YoY. Business operations have been further stabilized and
improved. Gross margins in housing construction, infrastructure and real estate businesses were 7.8%,
11.0% and 31.3%, respectively. The Company maintained its leading position in terms of profitability in
the three core businesses.
We attached great importance to cash flow management, and ramped up payment collection for
construction projects through multiple measures. The Company realized net cash inflow of RMB 64.0
billion in full-year 2015, up RMB35.8 billion YoY. Net operating cash inflow hit an all-time high at
RMB 54.6 billion, up RMB 29.7 billion YoY – substantial net cash inflow was achieved in two
consecutive years. As of the end of the Reporting Period, monetary capital available at the Company was
RMB 216.4 billion, and the asset-liability ratio was kept below 77.8%, down 0.8% YoY. Once
large-sum payables and prepayments (that do not cause debt pressure in practice) are deducted, the
asset-liability ratio will be reduced further by ~10-15 percentage points, meaning that financial risks
were kept within the controllable range overall.
We attached equal emphasis on traditional and innovative financing operations, and kept increasing
relevant resource inputs and reserves. During the period, the Group obtained a total of RMB 850.0
22
billion worth of credit from banks, and issued various bonds totaling ~RMB 30 billion. The financing
structure was further optimized accordingly. The first 5-year bonds of US$ 500 million was issued at a
fixed price, marking the lowest coupon rate and yield in the history of the Chinese bond market. The
Company issued RMB 15.0 billion of preferred shares – the first issue of preferred shares ever launched
by a state-owned enterprise under the central government; structured financial businesses, e.g. funds and
trusts, were developed in a bid to boost business restructuring and upgrade at the Company.
As a champion of “internet thinking”, we made active efforts to promote business standardization
and applications of information technology. During the Reporting Period, the Company pushed ahead
with the “Smart Building Site” campaign applying mobile internet and Internet of Things (IoT) in
on-site project management, which led to significant improvements in project management and control
standards and operating efficiency.
Supply chain integration and centralized procurement were conducted as an important measure to
enhance management quality and efficiency. During the period, RMB 367.9 billion of purchases were
completed via the Company’s centralized procurement platform, and the platform was upgraded to a
“Cloud Construction Marketplace” developed on Ecommerce Platform v1.0. In addition, the
“platform-based overseas project procurement” model was implemented on a full scale; the innovative
cooperation model integrating “internet + construction + finance” was introduced, and a vertical
construction ecommerce platform was developed jointly with the Industrial and Commercial Bank of
China (ICBC) based on the online supply chain finance model.
The Company tightened up work safety accountability. As a result, no major work safety incident
was occurred in any building site during the period.
(i) Core business analysis
Analysis of changes in the profit statement and cash flow statements
Item
Revenue
Operating cost
Sales expenses
Administrative expenses
Finance costs - net
activities
Net cash flows from investing
activities
Closing balance in
Reporting Period
880,577,134
(771,038,770)
(2,370,307)
(17,186,333)
(8,425,866)
54,603,641
(17,993,823)
23
Closing balance
Change
in prev. year
proportion (%)
800,028,753
10.1
(699,364,000)
10.2
(2,098,826)
12.9
(15,605,773)
10.1
(7,429,397)
13.4
24,906,341
119.2
(15,466,747)
16.3
Net cash flow
activities
R&D expenses
from
financing
26,950,438
18,194,575
48.1
8,191,526
5,680,341
44.2
1. Income and cost analysis
(1) Core business operations by industry and region
Segment
Housing
construction
projects
Infrastructure
Construction
& investment
Real estate
development
& investment
Survey &
design
Other
Inter-branch
consolidation
Core business operations by segment
Revenue
Operating
Operating
GM
GM growth
Revenue
growth
cost growth
cost
(%)
YoY (%)
YoY (%)
YoY (%)
588,267,187 (542,282,880)
7.8
6.0
5.7 + 0.3
141,394,421
(125,797,762)
11.0
18.9
19.2
- 0.2
142,359,570
(97,869,984)
31.3
14.5
18.7
- 2.4
6,510,683
(5,295,690)
18.7
(8.5)
(6.2)
- 2.0
13,657,573
(11,612,300)
(10,748,996)
10,956,542
21.3
/
87.0
/
113.0
/
- 9.6
/
In China
Core business operations by region
Revenue
Operating
GM
Revenue
growth
cost
(%)
YoY (%)
819,498,776 (715,521,268)
12.7
9.5
Operating
cost growth
YoY (%)
9.5
Outside China
Total
61,078,358
880,577,134
Region
(55,517,502)
(771,038,770)
9.1
12.4
18.5
10.1
GM growth
YoY (%)
Unchanged
20.2
10.2
- 1.3
- 0.1
Revenue breakdown in the previous three years
Segment
projects
Infrastructure
construction &
investment
Real estate
development &
investment
Survey & design
588,267,187
66.7
554,894,920
69.4
2013
(Restated)
492,937,948
141,394,421
16.1
118,906,581
14.9
98,100,146
14.4
142,359,570
16.2
124,363,882
15.5
88,728,282
13.0
6,510,683
0.7
7,115,410
0.9
6,862,076
1.0
2015
%
2014
24
%
%
72.3
Other
Inter-branch
consolidation
Total
13,657,573
1.6
7,305,128
0.9
6,552,812
1.0
(11,612,300)
(1.3)
(12,557,168)
(1.6)
(11,388,840)
(1.7)
880,577,134
100.0
800,028,753
100.0
681,792,424
100.0
Descriptions of core business operations by segment and region
In recent years, the Company actively restructured the housing construction, infrastructure and real
estate businesses according to the business ratio of 5:3:2, with significant progresses achieved in
infrastructure, real estate and overseas business development.

During the Reporting Period, the housing construction registered an revenue of RMB 588.3 billion,
up 6.0% YoY; gross profit of RMB 45.98 billion, up 10.3% YoY; and a gross margin of 7.8%, up 0.3%
YoY.
The Company’s core clientele developed steadily despite the slowdown in demand growth in
China’s housing construction market. On the basis of its expanding client base, the Company continued
to gain a technical competitive edge in the latest high-end, sophisticated businesses, and expedited the
upgrade and transition in its housing construction operations toward upscale, green building and BIM
technology applications, providing clients with high-tech value-added services. In the meanwhile,
management has been tightened up to ensure project compliance, quality and safety standards. In doing
so, our business management philosophy was reinforced, and project profitability further improved.
As the backbone of business operations at the building corporations under China Construction,
housing construction accounted for nearly 90% of the total business volume in some subsidiaries. As of
the end of the Reporting Period, the value of contracts executed for impending housing construction
projects exceeded RMB 1.8 trillion. Construction volume was maintained at a high level throughout
2015, and totaled 1 billion square meters, accounting for 66.8% of the total revenue. Furthermore,
mega-scale projects undertaken by the Company in recent years (e.g. West China International Expo
City, Ping An International Financial Center (Shenzhen) and Donghu Corridor) entered the peak
construction period in 2015, resulting in a surge in project account settlement.

Infrastructure construction and investment
During the Reporting Period, the infrastructure construction and investment business registered an
revenue of RMB 141.4 billion, up18.9% YoY; gross profit of RMB 15.6 billion, up 16.6% YoY; and a
gross margin of 11.0%, down 0.2 percentage point YoY.
Infrastructure is the fastest growing business segment at the Company, as well as the area where
breakthroughs are most urgently needed. Given the urbanization drive launched by the state, increasing
25
infrastructure market investment will prove the general trend going forward. Therefore, the Company
started to divert its business focus toward the infrastructure segment: we focused relevant business
operations on municipal utilities and urban rail transit, railways and highways, nuclear power, ports,
petrochemical and urban sewage treatment projects; as far as financing is concerned, we promoted the
public-private partnership (PPP) model, aiming to establish the Company as a professional infrastructure
investment and development operator with core competitiveness in construction financing and
investment.
Our infrastructure construction capacity kept growing substantially through continuous
infrastructure professional team building, and many relevant national and provincial/ministerial licenses
have been obtained. In addition, we improved cost and benefit accounting to ensure effective compliance
management, ramped up branding and credit building efforts, and innovated existing financing
construction models. The gross margin of the infrastructure segment has remained stable, and relevant
businesses continued to grow as a result.

Real estate development and investment
During the Reporting Period, the real estate business registered an revenue of RMB 142.4 billion,
up14.5% YoY; gross profit of RMB 44.49 billion, up 6.2% YoY; and a gross margin of 31.3%, down
2.4 percentage point YoY.
As the real estate market has become increasingly polarized, the Company seized the opportunity
windows arising from government policies and market development to speed up destocking and business
turnover, and expedited payment collections. Real estate projects directly operated by China
Construction have been integrated with China Overseas Land & Investment in an effort to accelerate
business restructuring in the real estate sector.
The Company’s real estate revenues mainly came from China Overseas, which accounted for ~84%
of the total real estate revenue. The increase in income was chiefly attributable to the large number of
new real estate projects launched in the mainland, Hong Kong and Macau and the resultant increase in
sales revenues. The brand value of China Overseas Land & Investment outshined most of our
competitors, attesting to our effective overseas market development in the UK and the US.

Survey and design
During the Reporting Period, the construction survey and design business registered an revenue of
RMB 6.5 billion, up 8.5 % YoY; gross profit of RMB 1.21 billion, down 17.7% YoY; and a gross
margin of 18.7%, down 2.0 percentage point YoY.
The Company’s construction survey and design revenues mainly came from China Construction
Engineering Design Group Corporation, which accounted for ~76% of the total revenue in the business
26
segment. Competition in the survey and design market intensified due to changes in external operating
conditions, a slowdown in the progress of construction design in certain projects has led to a drop in
revenue and gross margin relative to the previous year. The Company will optimize resource sharing and
compliance-related interactions between the survey/design and housing construction segments. The
focus will be placed on original design featuring Chinese cultural elements, bolstering “cultural identity”
of the Company.

Other businesses
Other business revenues are mostly generated from primary land development, building materials
(e.g. steel) sales and property management. During the Reporting Period, other businesses registered an
revenue of RMB 13.7 billion, up 87.0 % YoY; gross profit of RMB 2.91 billion, up 28.8 % YoY; and a
gross margin of 21.3 %. The rise in revenue was achieved following the establishment of CSCEC
Fangcheng last year, as its subsidiaries continuously scaled up primary land development and integrated
urban development businesses.

Overseas business
During the Reporting Period, our overseas business registered an revenue of RMB 61.1 billion, up
18.5 % YoY; gross profit of RMB 5.56 billion, down 3.7% YoY; and a gross margin of 9.1%, down 1.3
percentage point YoY.
“Overseas” refers to regions outside mainland China; similarly hereinafter.
Refer to “Overseas Business Development” of “Business Development Analysis” in This Section.
(2) Cost analysis
Cost by segment
Segment
Cost items
2015
Housing
construction
projects
Infrastructure
construction &
investment
Real estate
development &
investment
Survey & design
Raw materials,
subcontracting costs,
labor costs, etc.
Raw materials,
subcontracting costs,
labor costs, etc.
Construction and
installation costs, land
costs, labor costs, etc.
Labor costs, equipment
rental
Labor costs, equipment
542,282,880
70.3
513,205,080
73.4
Growth
YoY
(%)
5.7
125,797,762
16.3
105,535,529
15.1
19.2
97,869,984
12.7
82,485,688
11.8
18.7
5,295,690
0.7
5,645,346
0.8
(6.2)
10,748,996
1.4
5,047,308
0.7
113.0
Other
27
%
2014
%
Inter-branch
consolidation
Total
rental
/
(10,956,542)
(1.4)
(12,554,951)
(1.8)
/
/
771,038,770
100.0
699,364,000
100
10.2
Cost breakdown
Segment
Housing
construction
projects
Infrastructure
construction &
investment
Real estate
investment &
development
Survey & design
Other
Inter-branch
consolidation
Cost item
Product sales cost
Subcontracting costs
Raw materials
Payroll
Other costs
Subtotal
Product sales cost
Subcontracting costs
Raw materials
Staff costs
Other costs
Subtotal
Real estate
development products
carried forward
Payroll
Other costs
Subtotal
Subtotal
Subtotal
/
Total
%
1.2
29.5
21.0
2.4
16.2
70.3
0.0
7.6
4.3
0.6
3.8
16.3
12.4
2014
9,167,857
195,585,731
177,989,604
15,623,512
114,838,376
513,205,080
0
50,368,545
30,115,737
4,014,785
21,036,462
105,535,529
80,928,841
%
1.3
28.0
25.5
2.2
16.4
73.4
0.0
7.2
4.3
0.6
3.0
15.1
11.6
Growth
YoY
(%)
4.9
16.4
(9.2)
19.0
8.7
5.7
0.0
16.1
10.4
19.5
38.2
19.2
18.0
(10,956,542)
0.0
0.3
12.7
0.7
1.4
(1.4)
56,728
1,500,119
82,485,688
5,645,346
5,047,308
(12,554,951)
0.0
0.2
11.8
0.8
0.7
(1.8)
74.9
51.6
18.7
(6.2)
113.0
/
771,038,770
100.0
699,364,000
100.0
10.2
2015
9,615,471
227,688,571
161,591,143
18,595,123
124,792,573
542,282,881
210,357
58,468,011
33,250,827
4,797,518
29,071,049
125,797,762
95,496,658
99,233
2,274,093
97,869,984
5,295,690
10,748,995
Cost analysis statements
During the Reporting Period, guided by the operating principle of “improving quality and
efficiency”, the Company pushed forward LEAN management, and enhanced the standard of its cost
management and control operations. Its operating cost was RMB 771.0 billion, up 10.2% YoY, in line
with revenue growth.
Judging by cost breakdown, operating cost in housing construction was RMB 542.3 billion,
accounting for 70.3% of total operating cost, up 5.7% YoY; operating cost in the infrastructure business
was RMB 125.8 billion, accounting for 16.3% of the total, up 19.2% YoY; operating cost in the real
estate business was RMB 97.9 billion, accounting for 12.7% of the total, up 18.7% YoY; operating cost
in the survey and design business was RMB 5.3 billion, accounting for 0.7% of the total, down 6.2%
28
YoY. We reinforced the business philosophy revolving around “low cost competition and high
management quality”, and placed great emphasis on construction quality, progress and safety assurance
in the face of increasing market competition, to ensure project quality, efficiency and low cost
competition.
Please refer to Financial Statements Appendix 4 (47), “Revenue and Operating Cost”, Appendix 4
(52), “Cost Breakdown by Business” and Appendix 8, “Branch Information” of the “Financial Report”
in this Report for further details.
2. Costs
During the Reporting Period, the Company’s sales expenses were RMB 2.37 billion, up 12.9%
YoY. The increase was mainly attributable to the recruitment of new sales staff and the resultant
increase in performance bonus. Sales expenses accounted for 0.27% of revenue, up 0.01 percentage
point from the previous year.
During the period, the Company’s administrative cost was RMB 17.19 billion, up 10.1% YoY. It
was mainly attributable to a substantial decrease in office expenses. Administrative cost accounted for
1.95% of revenue, i.e. RMB1.95 of cost was incurred for every RMB100 of income generated (roughly
at the same level as in the previous year). Fruitful results were achieved in cost control, and the
Company remained as an industry leader in this respect.
As of the end of the Reporting Period, the Company’s net financial expenses were RMB 8.43
billion, up 13.4% YoY. Financial expenses were mostly caused by China Overseas’ USD and EUR
borrowings and bonds. The year 2015 saw a significant rise in foreign exchange losses due to the
devaluation of Chinese Yuan and HK dollar against the EUR and USD. Financial expenses accounted
for 0.96% of revenue, up 0.03 percentage point from the previous year.
Please refer to Financial Statements Appendix 4 (49), “Sales Expenses”, Appendix 4 (50),
“Administrative Costs” and Appendix 4 (50), “Finance Costs” of the “Financial Report” in this Report
for further details.
3. R&D expenses
R&D investment
R&D investments in the period
8,191,526
recognized as expenses
R&D investments in the period
/
29
recognized as capital expenditure
Total R&D investment
8,191,526
Total R&D investment as a percentage of
0.9%
revenue (%)
No. of R&D staff members
8,566
No. of R&D staff as a percentage of total
3.5%
headcount (%)
Descriptions
During the Reporting Period, the Company consistently increased R&D inputs adhering to the
overall objective of “green construction, digital construction and construction industrialization”. In 2015,
a total of 57 R&D projects (topics) were filed covering infrastructure engineering, overseas business
support, construction industrialization, green construction, BIM technology application, professional
design integration and generic construction engineering technology, facilitating business expansion into
new areas as well as the development of existing core businesses. In addition, we strengthened
integration between industry, research and technology application, and more research findings (e.g. BIM,
aluminum template technology, robotic welding and IoT) have been applied in practical operations to
improve operation efficiency and quality.
During the period, the Company was awarded with 33 national grade normalized construction
methods, 2,723 patents, 26 national and industry standards and 191 accredited scientific and
technological research achievements, ranking it among the leading contributors to construction
technology research in China.
4. Cash flow
During the Reporting Period, the Company consistently enhanced its cash flow management, and
ramped up debt and payment collection efforts to accelerate cash flow, with positive results achieved
and operation quality improved. During the period, net cash inflow was RMB 64.0 billion, marking a
sharp increase of RMB 35.8 billion YoY.
The Company’s net cash flow from operating activities was RMB 54.6 billion, representing a
substantial increase of RMB 29.69 billion year-on-year in net cash inflow, up 119.2%. Specifically, net
cash flow generated from core construction businesses increased RMB 1.9 billion YoY to RMB 32.2
billion. The Company introduced an innovative restraint and incentive mechanism characterized by
profit corrections based on cash flow indicators. Furthermore, quarterly special appraisals and process
monitoring were implemented, with core construction businesses serving as a reliable source of cash
30
flow; in 2015, the Company posted strong real estate sales, where net cash inflow grew from the
negative territory to RMB 23.8 billion, up RMB 28.8 billion; driven by BT and investment and financing
businesses, the net cash inflow in general contracting was RMB 1.2 billion, up RMB 1.4 billion YoY.
Investment risks were kept in check overall.
A net cash outflow of RMB 18.0 billion was recorded in the Company’s investment activities,
marking an increase of 16.3% YoY, as a result of the rise in cash payment for the Company’s
investments.
The net cash inflow from funding activities conducted by the Company was RMB 26.95 billion, up
48.1% YoY. It was largely attributable to an increase in cash receipts from preferred stock and bond
issues and borrowings.
Please refer to Financial Statements Appendix 4 (61), “Notes to Cash Flow Statement” of the
“Financial Report” in this Report for further details.
5. Information about main clients and suppliers
During the Reporting Period, revenue generated from the Company’s top-5 clients totaled RMB
22.99 billion, up 36.1% YoY. It accounted for 2.6% of the total revenue, up 0.5 percentage point.
During the period, the combined purchase spending on the Company’s top-5 suppliers made up less
than 1% of the total operating cost. The Company’s suppliers come from a broad range of industries
with a low degree of business concentration, due to its extensive business scale and highly diversified
business coverage. Therefore, we do not rely on any individual suppliers.
6. Financing activities during the Reporting Period
During the Reporting Period, the Company and its subsidiaries issued par value of bonds worth
RMB 26.3 billion, and short-term financing bills worth RMB 4.2 billion, which met its funding needs
arising from rapid business growth and business restructuring. The financing structure has thus been
further optimized.
In April 2015, the Company completed the first issue of 2015 medium-term bills of RMB 3 billion,
with a maturity of five years and a coupon rate of 4.65%; in November 2015, we completed the second
issue of 2015 medium-term bills of RMB 2 billion, with a maturity of five years and a coupon rate of
3.69%.
In November 2015, we issued the 5-year bonds of US$ 500 million, with a coupon rate of 2.95%
and yield to maturity of 3.178%, marking the lowest coupon rate and yield to maturity in the history of
the Chinese bond market.
31
Please refer to Section 7 “Information of Preferred Stock” of this Report for further details
regarding the preferred shares issued by the Company.
As of the end of the Reporting Period, the Company’s interest-bearing liabilities in 2015 totaled
RMB 277.2 billion, up RMB 41.4 billion and 17.6% compared with the beginning of the year.
Specifically, short-term liabilities were RMB 69.8 billion, down 6.5% compared with the beginning of
the year; long-term liabilities were RMB 199.5 billion, up 17.7% compared with the beginning of the
year. The ratio of short-term liabilities to long-term liabilities was 1:2.9.
During the Period, interest payment/redemption concerning the Company’s bonds and debt
financing instruments is summarized as follows:
Type
Medium-term bills
Medium-term bills
Medium-term bills
Debt financing
instruments issued
through private
placement
Debt financing
instruments issued
through private
placement
Medium-term bills
Medium-term bills
Medium-term bills
Medium-term bills
Abbreviation
Issued on
10 CSCEC
MTN001
11 CSCEC
MTN001
11 CSCEC
MTN002
2010-09-06
2011-03-07
2011-07-19
Interest
Mature on
Amount
payment/
redemption
Interest
2020-09-08
100
payment
Interest
2018-03-09
60
payment
Interest
2016-07-20
40
payment
12 CSCEC
PPN001
2012-05-18
2015-05-18
30
Interest
payment &
redemption
13 CSCEC
PPN001
2013-08-09
2016-08-12
30
Interest
payment
2014-04-22
2019-04-22
30
2014-09-04
2019-09-04
20
2015-04-24
2020-04-28
30
2015-11-05
2020-11-09
20
14 CSCEC
MTN001
14 CSCEC
MTN002
15 CSCEC
MTN001
15 CSCEC
MTN002
Interest
payment
Interest
payment
Interest
payment
Interest
payment
During the Period, bonds issued by the Company’s subsidiaries are listed as follows:
Bond
15 CSCEC 3rd
Engineering Bureau
MTN001
th
15 CSCEC 5
Issued on
Matu
rity
Amount
Closing
balance
2015-05-21
3
years
500,000
500,000
2015-01-16
1 year
800,000
800,000
32
Issued by
China Construction 3rd
Engineering Bureau Ltd.
China Construction 5th
Engineering Division
Corp CP001
15 CSCEC 7th
Corp PPN001
15 CSCEC 7th
Corp MTN001
15 CSCEC 8th
Corp CP001
Engineering Division Corp.,
Ltd.
2015-01-23
3
years
2015-04-24
5
years
500,000
500,000
Ltd.
100,000
100,000
Ltd.
1 year
15 CSCEC 8th
Corp MTN001
2015-04-29
5
years
100,000
100,000
15 CSCEC Installation
CP001
2015-05-21
8
month
s
600,000
600,000
2015-06-16
1 year
300,000
300,000
2015-12-21
5
years
600,000
600,000
15 CSCEC 8th
Corp MTN002
2015-08-17
5
years
1,600,000
1,600,000
CSCEC FN N2011
2015-11-19
5
years
US$ 500,0
00
500,000
CSCEC Capital (Hong Kong)
Limited
2015-07-15
4
years
EUR
600,000
600,000
2015-11-06
4
years
EUR
400,000
400,000
7,000,000
7,000,000
1,000,000
1,000,000
400,000
399,670
China Construction 1st Building
(Group) Corp., Ltd.
15 CSCEC Installation
Engineering CP002
15 CSCEC 1st Building
Corp MTN001
EUR 600,000,000
Guaranteed notes
payable, listed in
Ireland
EUR 400,000,000
Guaranteed notes
payable, unlisted
6
years
7
years
9
month
s
500,000
500,000
Ltd.
2015-04-14
15 China Overseas 01
2015-11-19
15 China Overseas 02
2015-11-19
Corp SCP001
2015-10-13
Corp CP001
2015-12-24
1 year
700,000
700,000
15 CSCEC Strait CP001
2015-08-18
1 year
400,000
400,000
15 CSCEC West
Construction CP001
2015-09-19
1 year
500,000
500,000
Ltd.
China Construction Installation
Engineering
Engineering
(Group) Corp., Ltd.
Ltd.
(Group) Corp., Ltd.
CSCEC Strait Construction and
Development
Please refer to Financial Statements Appendix 4 (33) “Other Current Liabilities”, and Appendix 4
(35) “Bonds Payable” of the “Financial Report” in this Report for further details.
33
(ii) Significant changes in profit arising from non-core businesses
(iii) Assets and liabilities analysis
Assets and liabilities
Item
Monetary capital
Accounts receivable
Inventory
Where: Completed projects
pending settlement
Total current assets
Long-term receivables
Total non-current assets
Accounts payable
Unearned revenue
Total current liabilities
Long-term borrowings
Bonds payable
Total non-current liabilities
Undistributed profit
Shareholders'
equity
attributable to the parent
company (total)
Total shareholders' equity
End-2015
%
216,409,816
115,556,903
387,589,435
137,843,236
20.1
10.8
36.1
12.8
Growth
End-2014
%
YoY
Remarks
(%)
154,069,259
16.8
40.5 Note 1
118,430,369
12.9
(2.4) Note 2
348,273,350
37.9
11.3 Note 3
95,701,833
10.4
44.0 /
832,466,607
125,376,445
242,438,292
320,001,082
114,519,512
610,250,977
98,324,864
101,172,467
225,871,201
92,705,780
167,977,392
77.4
11.7
22.6
29.8
10.7
56.8
9.1
9.4
21.0
8.6
15.6
717,376,571
100,069,116
201,729,644
268,431,620
106,344,576
544,638,513
76,124,678
80,064,763
177,554,222
73,752,867
139,019,458
78.1
10.9
21.9
29.2
11.6
59.3
29.2
26.4
19.3
8.0
15.1
16.0
25.3
20.2
19.2
7.7
12.0
29.2
26.4
27.2
25.7
20.8
/
Note 4
/
Note 5
Note 6
/
Note 7
Note 8
/
/
/
238,782,721
22.2
196,913,480
21.4
21.3
/
Note 1: The increase in monetary capital was mainly attributable to the net increase of ~RMB 64.0
billion in the Company’s total cash and cash equivalents during the Reporting Period.
Note 2: The decrease in accounts receivable was mainly attributable to the Company’s increased effort
in debt collections and remnant asset liquidation through innovative businesses, e.g. factoring and asset
securitization. In addition, offsetting of accounts payable and receivable and repossessed assets also led
to a decline in accounts receivable. Of all types of accounts receivable, those payable by government
investment and financing vehicles and state-owned real estate enterprises have a relatively reasonable
aging structure – most of them are less than one year old and therefore involve limited default risks.
Note 3: The increase in inventory was mainly attributable to i) as a large number of real estate
development projects were completed during the period, a substantial sum was transferred from real
estate development cost to real estate products; ii) as business continued to scale up by the year, so did
34
the number of completed projects pending settlement, of which approximately 97% are less than one
year old – the majority being individual settlement items that have not reached the settlement period.
Note 4: The increase in long-term receivables was mainly attributable to sharp increases in project
quality deposits, BT receivable and infrastructure project payments receivable in the year.
Note 5: The increase in accounts payable was mainly attributable to the business expansion at the
Company, a large number of materials purchases, and increases in accounts payable for construction
work and real estate development, purchase payments and labor costs.
Note 6: The increase in unearned revenue was mainly attributable to an increase in the number of
settled but unfinished projects and advances, as the Company ramped up construction project settlement
management and marketing quality management.
Note 7: The increase in long-term borrowings was mainly attributable to the fact that the Company’s
demand for long-term funding continued to grow to support project operations, as a result of the
business scale-up and investment and financing operations.
Note 8: The increase in bonds payable was mainly attributable to the fact that the Company issued
several new bonds at a competitive cost taking advantage of the bond issuance window.
35
(iv) Analysis of operational information in the construction industry
1. Projects completed and accepted during the Reporting Period
Housing
Infrastructure
Special
Building
construction
construction
projects
decoration
Segment
Other
No. of
Total
8,435
944
/
/
/
9,379
7,263
1,196
/
/
/
8,459
projects
Sum
Region
Within China
Outside China
Total
No. of projects
9,265
114
9,379
Sum
8,239
220
8,459
Description
Projects listed above have been completed and settled.
2. Projects under construction during the Reporting Period
Housing
Infrastructure
Special
Building
construction
construction
projects
decoration
Segment
No. of
Other
Total
11,528
1,924
/
/
/
13,452
28,110
7,840
/
/
/
35,950
projects
Sum
Region
Within China
Outside China
Total
No. of projects
13,174
278
13,452
Sum
34,417
1,533
35,950
3. Major ongoing projects
36
Description
4. Information of overseas projects during the Reporting Period
Region
No. of projects
Sum
Hong Kong and Macao
102
820
South East Asia
102
278
the Middle East
58
342
North Africa
283
1,127
Central and southern Africa
121
533
Americas
66
278
Europe
16
22
Other
60
117
Total
808
3,517
Description
Status of projects listed above include: completed and settled; completed and pending settlement; under
construction; other.
In the case of overseas projects, contract value is converted from foreign currencies to Chinese Yuan
according to the exchange rates specified in the respective contracts, or the exchange rates effective at
the time of contract execution.
5. Completed projects pending settlement included in inventory
Item
Aggregate
cost
incurred
Gross profit
recognized
Projected
loss
26,456
2,469
(20)
Amount
Outstanding
Settlement
Account
payment for
balance for
settled
completed
unfinished
projects
projects
27,790
1,378
2,63
6. Description
“Sum” refers to summary calculation of the value of contracted projects.
Pursuant to relevant national standards, taking into account its business characteristics and
structural development needs, the Company set the coverage of different business segments as follows:
37
housing construction projects – general contracting and special contracting (foundation, steel structure,
construction and installation, building decoration, etc.); infrastructure construction – transport
construction engineering (roads, municipal roads, railways, urban rail transit, airports, ports and docks,
car parks, tunnels, bridges, waterways, etc.), energy engineering, petrochemical engineering, water
supply and treatment works, environmental engineering, telecommunications engineering, defense,
disaster prevention engineering, hydraulic engineering and other construction projects (outdoor sports,
outdoor recreation facilities, land reclamation, artificial island, underground pipeline network, pipe
network, etc.).
38
(v) Business development analysis
During the Reporting Period, as well as consolidating the housing construction business, the
Company swiftly scaled up the infrastructure business, steadily pushed forward investment business
development, and actively expanded overseas operations to further optimize the business structure, in
response to complex changes in the economic environment.
1. Development of construction survey and design businesses
Positioned in the upstream sector of the construction industry, survey and design businesses have
been affected by changes in macroeconomic conditions. The value of newly signed survey and design
contracts was RMB 8.8 billion, down 10.2% YoY. In response to these changes, architectural design
institutes under the Company aligned their operations to the investment direction of the state, and
focused on the development of “differentiator” businesses. We won a large number of tenders for
high-profile construction projects such as the new airport in Chengdu (master planning and terminal
design) and seven of the ten cultural landmark projects in Shannxi Province. Furthermore, we stepped up
design business development on overseas markets, and successfully bid for several international projects
including the resort hotel in Jamaica, Town of Kham in Yangon (Myanmar) and Algeria highways. As a
result, the value of overseas contracts grew significantly to RMB 110 million. China Construction
Engineering Design Group Corporation ranked 44th in the ENR Global 150 (2015) leading architectural
firms, up three places from the previous year.
The Company pushed ahead with the specialization oriented development strategy in line with the
latest market trends. China Construction Engineering Design Group Corporation set up a new subsidiary
– China Construction Engineering Infrastructure Survey and Design Co., Ltd. – to facilitate business
restructure and upgrade. Drawing on the comparative advantages of the architectural design institutes,
we introduced technology integration research topics such as “traditional Tang Dynasty architecture,
stadium construction, underground commercial space building, construction for the elderly and high
turbidity water treatment technology. “China Construction Design and Survey CAD Drawing Standards
(2015 Version)” were compiled and launched online, and relevant custom software centralized
purchasing was conducted to lay the groundwork for the development of the Company’s survey and
design ERP and collaborative design system.
39
2. Construction business development
A high-end orientation in housing construction business
Over the years, the Company adhered to the “building site-based marketing” principle and the
“three overriding” marketing strategies, and strengthened construction compliance, quality and safety
assurance management. During the Reporting Period, the Company managed to buck the trend of the
general market downturn and executed new housing construction contracts worth a total of RMB 1,196.2
billion, up 3.0% YoY.
The housing construction business segment grew steadily during the Period. (1) Deepening upscale
marketing, and implementing the “headquarters-to-headquarters” cooperation model to lock in a leading
position in the high-end market. We signed strategic cooperation agreements with 22 companies in
full-year 2015, and the total number of our strategic clients increased to 114, with key accounts making
up 60% of the total contract value; (2) 308 mega-scale projects (above RMB 1 billion) were executed,
accounting for nearly 60% of the total contract value realized in the year. We secured eight super
high-rise (above 300 meters) projects including Baoneng Shenyang Global Financial Center and Raffles
City (Chongqing), attesting to our distinct advantage in the super high-rise construction market; (3)
Businesses became increasingly concentrated, with the three main regional markets (i.e. East, South and
Central China) accounting for over 60% of the total contract value; (4) Public construction (e.g.
education, healthcare and industrial plants) projects grew by more than 20% on average, in line with the
latest investment trends in the marketplace.
Rapid growth in the infrastructure business
The Company continued to enhance its infrastructure investment, construction and operation
standards through high-end integration, investment/financing and business model innovations, revolving
around the three major national strategies, i.e. the “Belt and Road”, “Jing-Jin-Ji Integrated
Development” and “Yantze River Economic Belt”. During the Reporting Period, the value of newly
executed infrastructure contracts exceeded RMB300 billion for the first time and hit RMB 314.0 billion,
up 26.7% YoY. Nearly half of the amount was generated by projects worth over RMB 2 billion. Thanks
to effective client relationship management, we were selected as the contractor for Wuhan Fourth Ring
Road, Shenzhen Metro Line 9 (west extension) and Wuhan-Shiyan High Speed Rail projects, by
deepening cooperation with existing clients and improving service quality; we also succeeded in gaining
new and potential clients, which enabled us to win the bids for a large number of key rail transit projects,
e.g. Changsha Metro Line 4 and Line 5.
During the Period, we aligned operations at the Company to the state’s strategic investment
objectives, and newly signed infrastructure contracts in Jing-Jin-Ji and Yantze River Economic Belt
40
amounted to RMB 19.7 billion and RMB 114.7 billion respectively, up 8.7% and 16.4% YoY. From a
business-specific perspective, our marketing operations were focused on highways, rail transportation,
municipal roads, airports and railways. Of them, the rail transportation sub-segment achieved the highest
growth rate; in terms of business coverage expansion, the Company executed new rail transport
contracts worth RMB 30.3 billion in full-year 2015, marking a 1.4-fold increase YoY; and more than
80% new airport terminals measuring more than 100,000 square meters were contracted to us.
Throughout the period, we continuously increased supports for the infrastructure business – 52
infrastructure investment projects were approved in 2015, corresponding to over RMB 160 billion in
general contracting revenue, with each project contributing an average of over RMB 3 billion to the total
contracting revenue.
3. Investment and development businesses
During the Reporting Period, the Company invested a total of RMB 156.3 billion, up 3.2% YoY;
returns on investment totaled RMB 171.3 billion. Therefore, positive net cash inflow was achieved with
the investment/income ratio standing at 110%. A solid development was successfully maintained. As of
the end of the period, planned investments in projects under construction totaled RMB 1,232.6 billion, of
which an aggregate (cumulative investment since project commencement) of RMB 774.5 billion had
already been delivered.
Item
Investment during the
period
%
Growth YoY (%)
1,017
65.1
0.1
383
24.5
9.1
116
7.4
57.0
47
3.0
(37.2)
Continued investment
projects
1,243
79.5
13.0
New projects in 2015
320
20.5
(22.8)
1,563
100.0
3.2
By project
Real estate development
Construction
financing/investment
Integrated urban
construction
Fixed assets and other
investments
By project duration
Total
Note: Projects are categorized according to common practices and the Company’s internal management
objectives. Project categorization is subject to adjustments based on actual project development.
The YoY growth of items affected will be adjusted retrospectively.
41
Real estate development
The Company seized a window of policy and market opportunities to speed up real estate
destocking. During the Reporting Period, contracted real estate sales totaled RMB 155.0 billion, and
contracted sales area reached 13.44 million square meters, both rising nearly 30% YoY. We took the
lead among Chinese real estate companies in stepping up real estate turnover through project
development acceleration.
During the period, the Company completed investments of RMB 101.7 billion in real estate
development projects, staying roughly at the same level as the previous year; as of the end of the Period,
there were 291 real estate projects under construction; planned investment and completed investment
were RMB 840.0 billion and RMB 567.9 billion, respectively; and sales payment collections totaled
RMB 550.4 billion.
During the period, the Company acquired 40 parcels of lands in 18 Chinese cities and North
America. The planned gross floor area of the lands was 12.6 million square meters, of which 12.08
million was recognized as occupancy floor area, with an occupancy ratio of 96%. As of the end of the
Period, the Company’s land reserves stood at ~66.56 million square meters.
During the period, real estate new starts measured 10.67 million square meters, down 18.7% YoY;
the total area of completed properties was 15.41 million square meters, up 15.9% YoY; and the area of
in-progress projects was 25.11 million square meters, down 17.4% YoY. In line with our commitment to
corporate social responsibility, we developed affordable housing projects in many cities, with new starts
totaling 3.26 million square meters. The total floor area completed within the year was ~810,000 square
meters, a 1.1-fold increase compared with the previous year.
Please refer to “Real Estate Development Costs” and “Real Estate Development Products” of
Financial Statements Appendix 4 (8) “Inventory”, and Appendix 4 (26) “Unearned Revenue” of the
“Financial Report” in this Report for further details.
Construction financing/investment business
During the period, the Company completed construction financing and investment totaling RMB
38.3 billion, up 9.1% compared with the same period in the previous year. There were 157 construction
financing and investment projects as of the end of the period; the total planned investment was RMB
261.0 billion, of which RMB 161.2 billion was already delivered; and investment project repurchase
payments totaled RMB 74.5 billion. As of the end of the period, RMB 240 billion worth of general
contracting contracts were secured through construction financing and investment operations.
Specifically, infrastructure contracts accounted for RMB 170.0 billion (71%), indicating that
42
construction financing and investment facilitated the business transition toward infrastructure
construction.
In view of the fact that public-private partnership (PPP) has become a prevalent business model in
the construction market, the Company introduced relevant supporting measures and systems, and
approved 38 PPP projects in full-year 2015 through various innovation and optimization measures. It is
estimated that the total value of general contracting contracts will exceed RMB 100 billion. Effective
risk prevention was implemented to safeguard successful model innovations. An input-output
closed-loop mechanism was established to ensure sustainable development of investment projects, and
well-defined exit mechanisms have been set up for certain PPP projects. During the period, the
Company successfully bid for a number of major projects including the Taizhouwan Bridge project and
Jimo FAW-Volkswagen Industrial Park, and pioneered equity investment and “sustainable subway
operation based on land resources” in Jinan-Qingdao High-speed Rail construction. Furthermore, we
capitalized on urban underground utility pipeline investment, construction and operations, and secured
underground utility pipeline construction projects in Shiyan, Liupanshui and several other pilot cities.
Integrated urban construction and urban-rural development
During the Period, RMB 11.6 billion was invested in integrated urban construction and urban-rural
development projects, up 57% YoY. As of the end of the Period, we had 19 integrated urban
construction and urban-rural development projects in progress, with a total planned investment of RMB
106.5 billion, of which RMB 27.0 billion was already delivered.
The Company devoted itself to creating a fully integrated investment platform for “new
urbanization” construction initiatives focusing on ten selected tier-1/2 cities. To this end, three business
models were established and implemented: (1) land consolidation and construction, where the priority is
to stimulate China Construction’s traditional businesses; (2) interactive land development characterized
by interactions between tier-1 and tier-2 business segments; (3) investment-based land operations
seeking to integrate land investment, construction and operation. The three models are interconnected
through progressive business escalation, and are intended to provide a comprehensive solution for new
urbanization.
4. New businesses
The Company launched into new businesses revolving around key construction related markets
such as construction industrialization, energy conservation, environmental protection and construction
43
ecommerce. Efforts were made to actively promote financial businesses conducive to construction
industrialization and “industry-finance integration”.
In terms of industrial innovation, we set up three industrial innovation companies: China
Construction Science and Technology Group (CCST), China Construction Water Supply and Water
Environmental Protection (CSCEC Water and Environment) and China State Construction Ecommerce
Platform (CSCEC Ecommerce). As the promoter of new construction industrialization, CCST developed
the China Construction industrialization EPC general contracting system, and is leading the formulation
of industry standards for temporary construction standardization. It established seven construction
industrialization bases in Shanghai, Wuhan, etc. where 54 construction industrialization projects have
been launched or planned integrating 92 housing construction projects and more than 4,700 modules;
CSCEC Water and Environment focuses on “sponge city” development aiming to optimize water supply,
drainage, pipeline construction and water ecological management. In 2015, it launched water plants,
ecological water management and comprehensive river treatment projects in Jing-Jin-Ji, Shenzhen and
Chengdu defined as the three major strategic regions; CSCEC Ecommerce focused its efforts on
centralized online procurement, and transformed P2P lending into an “industry-internet” enterprise
integrating internet finance and construction businesses. In 2015, centralized procurement exceeded
RMB 300 billion. In addition, the company developed the “Building in Cloud” platform, and piloted
supplier financing at selected subsidiaries in partnership with the ICBC, “in pursuit of our dreams and a
bright future”.
As for financial business innovation, the Company set up CSCEC Capital, CSCEC Fund and
CSCEC Capital (Hong Kong) in 2015, as the vehicles to promote industry-finance integration. Several
investment deals have been concluded relying on the headquarters-to-headquarters cooperation
framework introduced by CSCEC Fund, and the framework has been playing an increasingly important
supportive role for business development across the Company. We sponsored the Silk Road Transport
Development Fund and a number of other industry development funds to facilitate industry-finance
integration and business transformation and upgrade initiatives launched by subsidiaries.
5. Overseas business development
During the Reporting Period, the Company achieved impressive progress in its overseas market
expansion efforts, in keeping with the “Belt and Road” national strategy. In full-year 2015, the
contracted value of overseas projects (including real estate projects) hit RMB 111.9 billion, surpassing
the RMB 100 billion mark for the first time in history. Overseas contracted value grew 42.2% YoY and
accounted for 6.8% of the total.
44
(i) Successful implementation of key the “Belt and Road” projects. To date, the Company has
broken into the national markets in 43 of the 65 countries covered by the “Belt and Road” program,
where the value of contracts executed in 2015 totaled US$ 6.7 billion. Agreements were signed for the
US$ 2.89 billion Pakistani Karachi-Lahore Motorway (Sukkur – Multan section) project and Egyptian
New Capital (~US$ 2.7 billion) program, marking a real milestone in our campaign to promote projects
related to the “Belt and Road” strategy. Furthermore, we strengthened ties with relevant financial
institutions, including Asia Infrastructure Investment Bank, China Investment Corporation and Silk
Road Fund.
(ii) In recent years, the Company established a “mega overseas business” platform, and expanded
our business presence overseas by setting up marketing centers and country-specific teams. In keeping
with the changes in relevant national policies, we have set up nine overseas marketing centers and more
than 30 country-specific teams, creating a marketing network covering virtually all major national
markets in Africa, ASEAN and surrounding regions, Central Asia, Central and Eastern Europe and Latin
America. Key projects were actively marketed, and business models were transformed, laying a solid
foundation for participating in the “Belt and Road” program going forward. In an effort to promote
business model transformation, general contracting businesses were stimulated through proactive
financing and investment operations. Overseas concession projects were supported in line with the
government’s policies, and concrete progresses have been achieved in certain key projects.
(iii) The Company’s major overseas organizations developed steadily, and our global business
network has been further consolidated. Driven by robust business operations in traditional regional
markets such as Hong Kong and Macao, the Middle East, Singapore, United States and Algeria, we
successfully expanded into the surrounding countries. Regional market development started to bear fruit,
leading to enhanced overseas resource sharing and operating efficiency. Our new overseas representative
organizations in West and Central Africa, Pakistan, etc. grew rapidly, and 45% of our total contracted
value in overseas markets was contributed by new overseas contracts executed in 2015. In addition, we
further expanded our overseas business network to include the UK, Germany, Brunei, Gabon and
Zimbabwe.
(iv) Effective risk management and control. Our victory in a number of international suits (e.g. the
new airport in Qatar) attests to our growing capabilities in terms of applying international rules to settle
disputes abroad.
45
6. Specialized business analysis
During the Reporting Period, the Company continued to push forward professional resource
integration. China Construction Steel Structure Corp. Ltd (CSCEC Steel Structure), China Construction
Installation Engineering Co., Ltd (CSCEC Installation), China State Construction Decoration Group Co.,
Ltd (CSCEC Decoration) and China West Construction have all established themselves as market
leaders in their fields, thereby giving the Company “first-mover” and comparative advantages to
compete in various segments of the construction industry.
Our core businesses are divided into 13 specialties, and healthy development was maintained across
the board. The value of newly signed contracts reached RMB 373.6 billion, up 26.8% YoY; revenue
totaled RMB 224.9 billion, up 7.5% YoY; gross profit was RMB 24.33 billion, down 5.2% YoY;
operating profit was RMB 10.66 billion, down 2.0% YoY. The Company is also making active efforts to
build on its capabilities in specialized businesses such as underground utility pipelines, water supply and
environmental protection, industry parks, underground space and “sponge city”.
Item
Segment
Installation
Crossindustry
Housing
construct
ion
Infrastru
cture
Real
estate
Survey
& design
Newly
contract
ed value
301
2015
Revenue
372
Growth
YoY
(%)
27.8
Growth Growt
Operatin Growth
profit
h YoY
g profit
YoY
2015
(%)
2015
(%)
35.7
9.9
17.0
19.7
Steel
Structure
Concrete
98
150
35.1
14.0
14.8
7.0
11.1
174
102
2.0
13.0
6.9
5.9
4.6
Decoration
209
241
6.6
22.0
7.3
8.5
2.5
Gardening
83
14
0.0
0.9
8.9
0.3
(7.4)
Municipal
Engineering
Railway
Construction
Rail Transit
700
227
8.1
28.0
21.7
15.2
16.9
285
121
(16.0)
(4.7)
-
(11.1)
-
303
192
12.9
12.0
20.0
6.0
36.4
Road and
Bridge
Electric
Power
Construction
Port
Engineering
CSC Land
825
460
19.5
58.0
16.0
33.9
2.7
85
25
0.0
3.0
(7.8)
2.2
(15.4)
290
58
(6.5)
5.3
0.0
2.0
0.0
295
225
(21.3)
44.7
(32.5)
14.7
(2.0)
88
62
(8.8)
11.4
(14.6)
5.0
(16.7)
3,736
2,249
7.5
243.3
(5.2)
106.6
(2.0)
Survey &
design
Total
46
GM (%)
Installation
Steel Structure
9.6
9.3
8.9
11.3
Concrete
Decoration
Gardening
Municipal Engineering
Railway Construction
Rail Transit
12.8
12.2
0.6
5.7
4.6
1.1
9.1
6.1
9.1
5.7
0.0
0.4
3.5
1.8
3.7
2.1
(0.2)
(0.3)
12.3
(3.9)
9.5
5.1
2.8
(9.0)
6.7
(9.2)
5.5
(1.4)
1.2
(7.8)
6.3
5.6
0.7
3.1
2.6
0.5
12.6
13.3
(0.7)
7.4
9.0
(1.6)
11.8
14.8
(3.0)
8.8
14.4
(5.6)
9.1
8.5
0.6
3.4
2.7
0.7
19.9
18.3
23.1
19.3
(3.2)
(1.0)
6.5
8.1
5.2
9.7
1.3
(1.6)
11.8
(1.0)
4.7
5.0
(0.3)
Item
Segment
Cross-industry
Housing
construction
Infrastructure
Real estate
Survey &
design
Operating margin (%)
Change
2015 2014 YoY
(%)
4.6
3.9
0.7
4.7
5.3
(0.6)
Change
YoY
(%)
0.7
(2.0)
Road and Bridge
Electric Power
Construction
Port Engineering
CSC Land
Survey & design
Total
2015
10.8
2014
Cross-industry: During the Reporting Period, CSCEC Installation was certified as a premium
general contractor for petrochemical engineering, which gave an extra boost to the transition in the
equipment manufacturing business toward chemicals, new energy and new product manufacturing
equipment. The Company set up business divisions dedicated to Africa, the Middle East and Southeast
Asia, and the equipment factory in Pakistan started corporate operation. CSCEC Steel Structure
introduced the first intelligent manufacturing simulation line in the Chinese construction steel industry,
developed and promoted a world-class lifecycle IT management platform for steel structure operations.
As a result, quantity statistics are now generated on a real-time basis with 100% accuracy; China West
Construction launched 35 new mixing stations and 70 production lines, corresponding to 20.9 million
cubic meters of additional production capacity. The Company became a leader in the admixture industry
in terms of business scale and technology, following the acquisition of BASF’s admixtures assets in
Sichuan.
Housing construction: During the Reporting Period, CSCEC Decoration continued to optimize its
business operations. Specifically, new contracts executed in the curtain wall business amounted to RMB
5.5 billion, accounting for 30% of the total contracted value. The quality of marketing operations
improved, and large projects (above RMB50 million) make up nearly 70% of the total. New businesses
47
such as exhibit display, flood lighting, weak current intelligence, furnishing and decoration continued to
scale up. Trade in products has been pushed forward to expand profit sources levering on our overseas
business network and supplier resources in China. Furthermore, an international company was
established to create a specialized business platform overseas.
Infrastructure: During the Reporting Period, the Company stepped up subway marketing efforts
fully leveraging its competitive advantages in subway and railway superstructure development;
innovated financing and investment models to develop the highway market on multiple levels; further
improved its professional qualifications and brand value following the incorporation of Sino Road and
Bridge; consolidated the brand influence of China Construction Hydraulic Engineering, and achieved
breakthroughs in the strategic Yantze River Economic Belt and traditional markets, relying on its
competitive advantages; and ramped up business development in market sub-segments, e.g. airports,
transportation hubs, bridges and power engineering, to build China Construction into a leading brand in
the field.
48
(vi) Investment operation analysis
1. Offshore equity investment
Offshore equity investments operated by the Company mainly include stocks purchased on the
secondary market for sale and equity in listed companies or unlisted companies held not for trading
purposes. Relevant accounting items include trading financial assets, financial assets available for sale
and long-term equity investments.
(1) Major equity investments
(2) Major non-equity investments
(3) Financial assets at fair value
Securities investment
No
.
Type
1
Stock
2
Stock
Stock
code
600015
.SH
600723
.SH
Abbreviation
Initial
investmen
t
No. of
shares
held
Profit/lo
% of total
Closing
ss in the
securities
book
Reporti
investment
value
ng
(%)
Period
13,499
53.49
1,430
Huaxia Bank
675
1,111,968
Beijing
Capital
Retailing
(formerly
known as
“Xidan
Market”)
3
Stock
/
PACIFIC
CENTURY
4
Stock
/
SPH
Other securities held at year-end
Investment gains and losses from sale
of securities during the Reporting
Period
Total
4,406
599,308
6,658
26.38
1,852
9,161
1,230,000
2,370
9.39
980
1,809
1,833
/
85,000
/
/
963
1,747
/
3.82
6.92
/
367
(108)
35,717
17,884
/
25,237
40,238
Descriptions about securities investments
① “Securities investment” above refers to investments in stocks, warrants, convertible bonds, etc. Only
stock investments recognized as financial assets at fair value through profit or loss are listed;
② Items are arranged in order of closing book value as a percentage of the total securities investment at
year-end; the top-4 largest stocks held by the Company at year-end are listed;
49
③ “Other securities investment” refers to stock investments recognized as financial assets at fair value
through profit or loss, excluding the top-4 stocks.
Equity in other listed companies held by the Company
Initial
investmen
t cost
Open
ing
share
holdi
ng
(%)
Closi
ng
share
holdi
ng
(%)
Closing
book
value
Profit/lo
ss
during
Equity
Accounti Sou
the
changes
ng item
rce
Reporti
ng
Period
54,088 (106,988) Financial
Pur
assets
cha
available
sed
for sale
Stock
code
Abbre
viation
601288.
SH
Agricu
ltural
Bank
of
China
Huaxia
Bank
796,467
Belo
w1
Belo
w1
959,920
29,325
Belo
w1
Belo
w1
586,469
17,512
33,454
Bank
of
Comm
unicati
ons
Shenzh
en
Energy
5,582
Belo
w1
Belo
w1
29,147
1,161
1,993
1,008
Belo
w1
Belo
w1
9,781
133
1,772
Cheng
Du
Hi-Tec
h
Develo
pment
Xi'an
Minshe
ng
440
Belo
w1
Belo
w1
5,423
-
2,036
193
Belo
w1
Belo
w1
193
75
-
Nanjin
g
Zhong
bei
Bohai
Water
Industr
y
150
Belo
w1
Belo
w1
4,145
-
822
1,320
Belo
w1
Belo
w1
4,718
-
1,714
600015.
SH
601328.
SH
000027.
SZ
000628.
SZ
000564.
SZ
000421.
SZ
000605.
SZ
50
Financial
assets
available
for sale
Financial
assets
available
for sale
Pur
cha
sed
Financial
assets
available
for sale
Financial
assets
available
for sale
Pur
cha
sed
Financial
assets
available
for sale
Financial
assets
available
for sale
Financial
assets
available
for sale
Pur
cha
sed
Pur
cha
sed
Pur
cha
sed
Pur
cha
sed
Pur
cha
sed
600778.
SH
600688.
SH
00081.
HK
Xinjian
g
Youha
o
Sinope
c
Shangh
ai
Petroc
hemica
l
China
Overse
as
Grand
Oceans
Total
720
Belo
w1
Belo
w1
5,957
45
1,140
Financial
assets
available
for sale
Financial
assets
available
for sale
Pur
cha
sed
601
Belo
w1
Belo
w1
601
-
-
2,380,092
37.98
37.98
3,555,130
258,627
(382,307)
Long-term
equity
investmen
t
Pur
cha
sed
3,215,898
/
/
5,161,484
331,641
(446,364)
/
/
Pur
cha
sed
Descriptions about equity in listed companies held by the Company
① The table above contains the Company’s long-term equity investments, and equities in other listed
companies held by the Company recognized as financial assets available for sale;
② “Profit or loss during the Reporting Period refers to the impact of a given investment on the
Company’s consolidated net profit in the Reporting Period.
Equity in financial enterprises held by the Company
Target
company
Initial
investment
Opening
shareholding
(%)
Closing
shareholding
(%)
Closing
book
value
Huatai
Insurance
20,000
1.5
1.5
41,012
Hankou
Bank
20,000
0.6
0.6
36,013
255
1
1
255
Greatwall
Life
Insurance
30,000
2.1
1.3
30,000
Bank of
Shanghai
1,641
Below 1
Below 1
1,641
Anhui
Guoyuan
Trust
Total
492,720
40.4
40.4
2,257,125
Bank of
Chengdu
564,616
/
/
2,366,046
51
Profit/loss
during the
Equity
Accounting
Reporting
changes
item
Period
2,200
- Financial
assets
available for
sale
2,465
- Financial
assets
available for
sale
97
- Financial
assets
available for
sale
- Financial
assets
available for
sale
122
- Financial
assets
available for
sale
349,683
(3,871) Long-term
equity
investment
354,567
(3,871)
/
Source
Initial
corporate
offerings
Initial
corporate
offerings
Initial
corporate
offerings
Initial
corporate
offerings
Initial
corporate
offerings
Initial
corporate
offerings
/
Descriptions about equity in financial enterprises held by the Company
① “Financial enterprises” include securities companies, commercial banks, insurance companies,
futures companies and trust companies;
② Provision for impairment should be deducted from closing book value;
③ Profit/loss during the Reporting Period refers to the impact of a given investment on the Company’s
consolidated net profit in the Reporting Period.
(vii) Major asset and equity sales
On 20 March 2015, it was approved during the 77th Meeting of the Company’s First Board of
Directors that real estate businesses directly operated by the Company and real estate businesses
operated by China Overseas be sold to the Company’s subsidiary listed in Hong Kong, China Overseas
Land & Investment (00688.HK). Relevant details can be found in the Announcement of Capital Injection
by China Construction into China Overseas Holdings Ltd. and Subscription to New Shares Issued by
China Overseas Land & Investment Ltd. and the relevant resolution announcement. After the deal, real
estate businesses operated by the Company were incorporated into China Overseas Land & Investment
so as to improve operating efficiency and brand value.
(viii) Key companies controlled or invested by the Company
1. Key subscription established or acquired by the Company through investment
Company
Business
China Overseas Holdings
Shareholding
Total
Net
Net assets
(%)
assets
profit
Registered
capital
Investment
holdings
15,432,258
Investment
Real estate
development
& operation
34,632,697
China State
Construction
International Holdings
Ltd.
Construction
and
installation
China Overseas Property
Holdings Ltd.
Property
management
HKD
30,000,000
61.18
Construction
and
installation
3,766,850
Construction
and
installation
Ltd.
st
China Construction 1
Building (Group)
Corporation
China Construction 2nd
Engineering Bureau
Ltd.
China Construction 3rd
Engineering Bureau
Ltd.
100.00
390,023,614
121,477,572
18,321,007
329,885,979
142,449,307
22,295,937
58,700,067
17,800,718
3,297,300
1,814,432
528,116
94,096
100.00
84,090,481
9,095,435
1,347,430
2,875,290
100.00
71,772,646
10,260,433
2,007,442
Construction
and
installation
5,039,865
100.00
121,067,392
18,673,998
3,736,669
Construction
2,728,836
100.00
52,363,582
9,387,820
1,486,282
61.18
57.59
1,320,750
52
Corp., Ltd.
Corp., Ltd.
Corp., Ltd.
Corp., Ltd.
Corp., Ltd.
and
installation
China Construction
Engineering Design Group
Corporation
China State Decoration
China Construction
Fangcheng Investment
& Development
Construction
and
installation
3,018,000
100.00
56,474,115
10,528,836
1,936,927
Construction
and
installation
2,577,946
100.00
34,841,353
4,540,356
674,804
Construction
and
installation
3,121,540
100.00
61,589,221
10,472,600
1,603,715
Construction
and
installation
5,662,792
100.00
95,948,291
17,777,589
3,540,540
Construction
survey &
design
Industry
decoration
1,308,970
100.00
10,597,744
4,876,411
651,290
690,000
100.00
8,105,705
1,636,288
296,027
Infrastructure
construction
5,000,000
100.00
19,139,507
8,046,071
322,686
2. Key subsidiaries acquired by merging enterprises under common control
Company
CSCEC Xinjiang
Construction &
Engineering
Group
China Overseas Investment
Management (Shenzhen)
Finance
Business
Construction
and
installation
Building
materials
Real estate
development
& operation
Finance
Shareholding
Total
Net
Net assets
(%)
assets
profit
Registered
capital
85.00
817,480
516,117
68.73
21,620,734
4,421,309
446,604
12,556,221
4,369,669
366,680
3,327,462
2,705,267
383,556
74,253,252
3,353,341
485,713
100.00
1,950,000
3,000,000
80.00
3. Key subsidiaries acquired by merging enterprises not under common control
Company
Far East Global Group
Ltd.
Port Engineering Group
Business
Construction
and
installation
Construction
and
installation
Shareholding
Total
Net
Net assets
(%)
assets
profit
Registered
capital
HKD 100,00
0,000
42.65
1,756,812
808,984
3,399
3,314,281
602,268
104,045
69.88
363,338
53
Harbour Construction
Infrastructure
construction
800,000
50.00
4,106,768
1,093,099
Please refer to “Equities in Subsidiaries” of Financial Statements Appendix 6 “Equities in Other
Entities” of the “Financial Report” in this Report for further details.
(ix) Structured bodies controlled by the Company
As of the end of the Reporting Period, the Company did not hold any significant equities in any
structured bodies not included in the consolidated financial statements.
54
60,388
III. Discussions and Analyses on Future Development
(i) Competitive landscape and development trends
The Company enjoys a generally favorable external business climate. Refer to “The Macro
Environment and Industry Trends” of This Section for further details.
(ii) Corporate development strategy
During the 13th “Five-year Plan” period, the Company will adhere to the guiding principles of
“combining tradition with innovation” and “improving development quality and efficiency”, and work
toward our mission dubbed “Building Happiness”. Efforts will be made to drive two structural
transitions, i.e. shifting toward the infrastructure business and overseas market expansion; to build on the
existing three core businesses, i.e. further consolidating our leading market position in our traditional
core businesses – construction survey and design, housing construction and real estate development; to
foster four prospective businesses, i.e. specialized construction, integrated urban construction, energy
conservation and environmental protection, and financial businesses. We will adapt ourselves to the
latest market trends, and be actively involved in national development strategies (e.g. the “Belt and
Road”, Jing-Jin-Ji synergistic development and Yantze River Economic Belt) while consistently
improving our “full lifecycle” professional capabilities in construction and investment businesses,
thereby contributing to the transformation of China into a well-off society, building the Company toward
a “construction investment group with the strongest global competitiveness”.
Taking various factors into consideration, the Company sets the overall revenue growth target for
the 13th “Five-year Plan” to be 9% per year, aiming to achieve a “5:3:2” business structure, with
overseas businesses accounting for 10%.
During the 13th “Five-year Plan” period, the Company’s four core businesses (products) are
construction survey and design, construction, investment and new businesses. Specifically, construction
includes housing construction and infrastructure construction; investment includes real estate
development, infrastructure investment and integrated urban construction.
Survey & design
Construction
Development
New businesses
investment

Urban planning and

design

Infrastructure

Survey

Construction design

Real Estate

investment
 Residential real estate
Construction
 Highway
investment
55
Construction
industrialization

Water supply

Environmental
 Architectural design
Construction
 Infrastructure design
 Railway Construction
 Commercial real
estate investment
 Municipal

construction

Ecommerce

Financial business
investment
 Urban rail transit
 Highway investment
 Municipal investment
construction

Infrastructure
protection

Specialized
Construction
Integrated urban
construction
 Steel construction
investment
 Installation
 Primary land
engineering
investment
 Decoration
 Industrial park
 Concrete
investment
Survey and design. Survey and design is at the forefront of the construction industry chain, and is
illustrative of the Company’s “soft competitiveness”. “Design is integral to construction excellence”.
During the 13th “Five-year Plan” period, the Company will continue to scale up housing
construction survey and design businesses, and effect a shift toward infrastructure (public utilities, roads,
water and power supplies) survey and design. In addition, industrial survey and design operations will be
piloted when the time is ripe, and boost the EPC business through construction design.
Construction. The construction business provides the basis for the Company to survive and
develop. It is our core competitiveness that we rely on for sustained growth. “Construction is the
foundation for stable development”.
During the 13th “Five-year Plan” period, the Company will maintain and further develop the
housing construction segment and our share of the construction market, maintaining our absolute leading
position in this area. We will continue to build on our competitive advantages in high-end construction
projects, e.g. super high-rise and long-span construction, and acquire high-end state-of-the-art core
construction technologies. Priority will be given to infrastructure construction, seeking to achieve major
breakthroughs in key market segments such as railway transports, intercity rail transit, urban
underground utility pipelines, bridges, municipal roads, highways, railways, petrochemical, hydraulic
engineering and water conservancy. Furthermore, efforts will be made to optimize the Group’s business
structure and safeguard the Company against cyclical economic fluctuations.
56
Development investment. It serves as an important vehicle for the Company to expand into
upstream sectors of the industry chain and to enhance operating profitability, as well as being a main
source of profits. “Investment is the path to wealth”.
During the 13th “Five-year Plan” period, the Company will continue to consolidate and increase the
scale and profitability of real estate development projects employing a vertical integration strategy, and
push forward real estate business restructuring, focusing on new real estate related businesses taking into
account structural changes in national population, “consumption upgrade” and “new urbanization”
development. In the meanwhile, we will push ahead with the internationalization of our real estate
businesses, fortifying infrastructure investment operations to drive construction business growth. The
proprietary infrastructure operation model will be explored, developed and implemented in key areas.
Following the “4 in 1” development philosophy, more efforts will be made to break through bottlenecks
in integrated urban construction, revolving around urban renewal and the development of new towns and
new industrial centers.
New businesses. During the 13th “Five-year Plan” period, we will step up new business
development, improving the Company’s business structure for increased returns through new business
cultivation and incubation. As the Chinese economy embraces the New Normal growth model, new
value can be created through the introduction of new businesses. “Innovation is what it takes to achieve
prosperity”.
The “venture capital + incubation” business model will be adopted for the development of new
businesses at the Company. Based on market-oriented operations, relying on CSCEC Development as
the platform, China Construction venture capital fund and online entrepreneur and innovation incubation
base will be established to sponsor and foster construction related innovation enterprises and businesses.
The new businesses will primarily include new construction industrialization, green building, building
energy conservation, new energy, integrated modular mobile homes (temporary construction
standardization), water control and ecological environmental engineering, water supply, gas, water and
soil comprehensive management and resource utilization, and construction ecommerce.
Furthermore, the Company will ramp up financial services for core business development. Efforts
will be stepped up to obtain licenses for financial businesses, in a bid to add a financial dimension to the
Company’s business operations.
57
(iii) Business development plan
In 2016, our overall objective for business development is to “stabilize growth, and improve quality
and efficiency”. Full-year targets include: newly contracted value of RMB 1.6 trillion, and total revenue
of over RMB 920 billion. Prioritizes going forward are defined as follows:
Volume consolidation and quality optimization in the housing construction business. (1)
Stabilizing business growth, and ensuring steady increases in business scale; (2) Restructuring
businesses toward specialization and regional development as the long-term goals; (3) reinforcing
“baseline” management – special inspections and management audits to ensure compliance with baseline
requirements will become part of the routine at the Company; (4) optimizing resource sharing and
compliance-related interactions between the survey/design and housing construction segments.
Infrastructure resource integration for leap-frog development. (1) On the basis of business
specialization, subsidiaries will be graded based on high-level qualifications for the infrastructure
business, so as to create a group of highly competitive infrastructure companies within the shortest time
possible; (2) seizing the opportunities arising from the introduction of the PPP model to push forward
business model upgrade, ramp up construction contracting, and improve profitability, driven by
investment operations; (3) allowing regional headquarters to play a greater role as the infrastructure
investment platform and frontline market developer.
System optimization and growth acceleration in overseas businesses. (1) Fortifying the “mega
overseas business” network, and gradually deregulating foreign operations; (2) Improving the
Company’s capabilities of overseas business operations, and strengthening cooperation with leading
local enterprises to tap into local resources for market expansion purposes; (3) keeping track of high
quality foreign investment targets within the “Belt and Road” program, and stepping up capital
operations to boost internationalization and global competitiveness of the Company.
Keeping the leading edge in line with the latest trends. (1) Taking advantage of the growing
polarization in the real estate industry, China Overseas should maintain its leading market position
levering on internet technology and resources available in the Chinese and overseas capital markets,
striving for relevant diversification or business expansion as the overriding principle; (2) China Overseas
will adhere to the two-pronged strategy giving equal emphasis to overseas real estate development and
proprietary properties, steadily scale up real estate operations overseas, and ultimately enhance its brand
influence outside China.
Consolidation and rapid development of financial businesses. Industry-finance integration will
be systematically planned on three stages, i.e. “organizational integration”, “product integration” and
“functional integration”, seeking a comprehensive solution to issues concerning “organizational
58
structure and business structure”, “financial product R&D and serving the core businesses” and “full
industry chain stimulation through business model upgrade”.
(iv) Potential risks
1. Risks associated with government debts
Local government debts have been affected by the slowdown in China’s economic growth and
fixed asset investment. If local governments default on debt repayment or run up excessive debts in
violation of the regulations, the Company will be exposed to risks that may affect its normal operations.
We will pay close attention to macroeconomic development, local government debts and credit risks
associated with our partners, take advantage of our financial strengths, and strengthen liaison with local
governments. Only economically developed local governments supported by high revenues will be
selected as our partners so as to avoid government debt related risks as source.
2. Risks arising from overseas operations
The Company operates international construction contracting businesses in many countries and
regions, with different cultures, customs, political and legal systems, natural environments, economic
development, economic policies, etc. Such differences pose challenges to the Company in overseas
project operations and management. The Company will align its strategies to the latest developments in
the “Belt and Road” program, clarify our strategic market layout overseas, and play an active role in the
establishment of ASEAN Free Trade Area, integrating internal resources to sharpen our competitiveness
and scale up business operations in overseas markets.
Financial risks facing the Company include market related risks (primarily foreign exchange and
interest risks), credit risks and liquidity risks. Overall, our risk management plan will revolve around
unforeseeable changes in the financial markets, aiming to smooth out negative impacts on the
Company’s financial performance. Please refer to Financial Statements Appendix 15 “Financial
Instruments and Relevant Risks” of the “Financial Report” in this Report for further details.
59
CHINA STATE CONSTRUCTION ENGINEERING CORPORATION
LIMITED
FINANCIAL STATEMENTS AND
AUDITOR’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
[English translation for reference only. Should there be any inconsistency
between the Chinese and English versions, the Chinese version shall prevail.]
CHINA STATE CONSTRUCTION ENGINEERING CORPORATION LIMITED
Financial Statements and Auditor’s Report
For the year ended 31 December 2015
[English translation for reference only]
Content
Auditor’s Report
Page
1-2
Financial Statements For the year ended 31 December 2015
Consolidated and Company balance sheets
1-2
Consolidated and Company income statements
3
Consolidated and Company cash flow statements
4
Consolidated statement of changes in shareholders’ equity
5-6
Company statement of changes in shareholders’ equity
7
Notes to financial statements
8-163
Supplementary information provided by management
1
Statement of non-recurring profit or loss
1
2.
Return on net assets and earnings per share
2-3
[English Translation for Reference Only]
Auditor’s Report
PwC ZT Shen Zi (2016) No. 10079
(Page 1 of 2)
To the Shareholders of China State Construction Engineering Corporation
Limited,
We have audited the accompanying financial statements of China State
Construction Engineering Corporation Limited (hereinafter the “Company”),
which comprise the consolidated and company balance sheets as at 31 December
2015, and the consolidated and company income statements, the consolidated and
company statements of changes in shareholders’ equity and the consolidated and
company cash flow statements for the year then ended, and the notes to the
financial statements.
Management’s Responsibility for the Financial Statements
Management of the Company is responsible for the preparation and fair
presentation of these financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises, and for such internal control as
management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with China Standards on
Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
PwC ZT Shen Zi (2016) No. 10079
(Page 2 of 2)
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances. An
audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying financial statements present fairly, in all
material respects, the consolidated and company’s financial position of the
Company as at 31 December 2015, and their financial performance and cash flows
for the year then ended in accordance with the requirements of Accounting
Standards for Business Enterprises.
PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the People’s Republic of China
April 18, 2016
2
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2015
(All amounts in RMB Thousand Yuan unless otherwise stated)
ASSETS
Current assets
Cash at bank and on hand
Financial assets at fair value through
profit or loss
Notes receivable
Accounts receivable
Advances to suppliers
Interest receivable
Dividends receivable
Other receivables
Inventories
Including: Work in progress
Assets classified as held for sale
Current portion of non-current assets
Other current assets
Total current assets
Non-current assets
Available-for-sale financial assets
Long-term equity investments
Investment properties
Fixed assets
Construction in progress
Intangible assets
Goodwill
Long-term prepaid expenses
Deferred tax assets
Other non-current assets
TOTAL ASSETS
Notes
31 December 2015 31 December 2014 31 December 2015 31 December 2014
Consolidated
Consolidated
Company
Company
4(1)
216,409,816
154,069,259
19,905,110
16,038,782
4(2)
4(3)
4(5)、18(1)
4(7)
4(4)
1,130,227
6,731,344
115,556,903
27,464,856
324,946
6,831
34,176,902
387,589,435
137,843,236
755,687
33,850,912
8,468,748
832,466,607
1,037,762
5,355,116
118,430,369
31,129,012
166,044
941
24,994,876
348,273,350
95,701,833
9,372,549
17,499,104
7,048,189
717,376,571
19,438
430,449
15,919,421
4,387,256
16,413
11,200,969
29,941,268
10,991,615
10,895,873
2,806,116
1,487,263
97,105,318
108,055
9,230,267
3,270,435
16,413
9,612,693
40,133,072
9,413,289
9,327,016
2,466,528
339,174
90,628,708
5,848,967
125,376,445
26,326,097
30,597,871
24,443,413
10,136,821
8,913,027
2,126,048
388,866
7,137,341
1,143,396
242,438,292
4,968,599
100,069,116
23,310,984
25,267,953
22,883,728
6,704,128
9,238,538
2,022,401
612,203
6,021,207
630,787
201,729,644
1,200,932
13,233,581
99,394,326
478,477
787,085
488,199
140,345
103,918
315,697
116,142,560
1,418,583
8,504,214
75,003,939
496,115
830,579
341,737
143,197
345,659
257,215
87,341,238
1,074,904,899
919,106,215
213,247,878
177,969,946
4(6)、18(2)
4(8)
4(8)
4(9)
4(10)
4(11)
4(12)
4(13)
4(14)、18(3)
4(15)
4(16)
4(17)
4(18)
4(19)
4(20)
4(21)
1
CONSOLIDATED AND COMPANY BALANCE SHEETS (CONTINUED)
AS AT 31 DECEMBER 2015
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings
Financial liabilities at fair value through
profit or loss
Notes payable
Accounts payable
Advances from customers
Including: Advances for contract
work
Employee benefits payable
Taxes payable
Interest payable
Dividends payable
Other payables
Liabilities classified as held for sale
Current portion of non-current liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds payables
Long-term payables
Payables for specific projects
Provisions for other liabilities and
charges
Deferred income
Long-term employee benefits payable
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Notes 31 December 2015 31 December 2014 31 December 2015 31 December 2014
Consolidated
Consolidated
Company
Company
4(23)
25,602,969
21,714,536
5,948,080
8,978,275
4(24)
4(25)
4(26)
14,218,247
320,001,082
114,519,512
19,441
12,514,256
268,431,620
106,344,576
84,341
114,100
20,955,146
19,707,083
19,441
41,448
16,004,973
12,168,103
26,322,416
5,867,475
39,244,603
2,489,054
1,342,390
40,408,401
39,317,350
7,239,894
610,250,977
22,825,149
4,228,591
36,939,229
2,346,399
469,247
34,129,378
5,867,944
48,648,524
2,984,772
544,638,513
4,051,532
396,055
1,361,851
821,007
870,000
14,626,603
7,553,566
72,437,832
1,789,621
346,646
1,194,704
846,346
14,271,467
3,629,271
152,587
57,653,261
98,324,864
101,172,467
13,570,706
51,692
76,124,678
80,064,763
11,708,493
47,318
8,805,228
24,102,537
6,801,944
420
3,935,700
26,064,927
5,302,618
2,661
452,609
891,716
297,860
790,886
17,093
-
27,572
-
2,263,177
1,208,518
7,935,452
225,871,201
2,328,999
1,197,748
4,993,477
177,554,222
129,551
39,856,773
115,902
35,449,380
836,122,178
722,192,735
112,294,605
93,102,641
30,000,000
16,972,180
14,975,410
1,996,770
23,526,065
1,667,001
24,735
161,625
2,920,006
92,705,780
30,000,000
1,996,770
1,996,770
28,680,437
2,314,028
22,494
84,162
2,168,700
73,752,867
167,977,392
70,805,329
238,782,721
139,019,458
57,894,022
196,913,480
100,953,273
100,953,273
84,867,305
84,867,305
1,074,904,899
919,106,215
213,247,878
177,969,946
4(26)
4(27)
4(28)
4(29)
4(30)
4(31)
4(32)
4(33)
4(34)
4(35)
4(36)
4(37)
4(38)
4(20)
4(39)
TOTAL LIABILITIES
Shareholders’ equity
Paid-in capital
Other equity instruments
Including: Preference Share
Perpetual bond
Capital surplus
Other comprehensive income
Special reserve
General risk reserve
Surplus reserve
Undistributed profits
Total equity attributable to shareholders
of the Company
Non-controlling interests
Total shareholders’ equity
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
4(40)
4(41)
4(42)
4(43)
4(44)
4(45)
4(46)
The accompanying notes form an integral part of these financial statements.
2
30,000,000
16,972,180
14,975,410
1,996,770
44,117,263
(218,580)
2,344
2,920,006
7,160,060
30,000,000
1,996,770
1,996,770
43,986,986
162,220
328
2,168,700
6,552,301
CONSOLIDATED AND COMPANY INCOME STATEMENTS
Item
Notes
2015
Consolidated
2014
Consolidated
2015
Company
2014
Company
4(47)、18(4)
880,577,134
800,028,753
49,824,619
41,150,633
4(47)、18(4)
(771,038,770)
(699,364,000)
(46,998,740)
(39,395,839)
Taxes and surcharges
4(48)
(31,961,640)
(30,891,831)
(525,335)
(359,961)
Selling and distribution expenses
General and administrative expenses
4(49)
4(50)
(2,370,307)
(17,186,333)
(2,098,826)
(15,605,773)
(931,321)
(1,049,614)
Financial expenses - net
4(51)
(8,425,866)
(7,429,397)
(1,388,414)
(1,558,431)
Asset impairment losses
4(55)
(3,756,309)
(4,524,263)
(66,401)
(607,581)
(222,120)
(45,462)
Revenue
Less: Cost of sales
Gains arising from changes in fair value
Add: Investment income
Including: Share of profit of associates and
joint ventures
4(53)
4(54)、18(5)
Operating profit
130,498
(19,441)
1,855,143
2,321,021
8,296,838
7,615,135
1,558,615
1,506,953
22,275
9,311
47,085,471
42,213,564
8,165,784
6,512,980
Add: Non-operating income
Including: Gains on disposal of non-current
assets
4(56)
864,704
1,272,406
22,429
8,350
170,680
258,030
9,873
Less: Non-operating expenses
Including: Losses on disposal of non-current
assets
4(57)
(253,386)
(149,869)
(599)
(11,553)
(27,164)
(44,296)
(257)
(719)
47,696,789
(11,753,981)
43,336,101
(10,159,287)
8,187,614
(674,549)
6,509,777
(354,582)
Total profit
Less: Income tax expenses
4(58)
Net profit
Attributable to shareholders of the Company
Non-controlling interests
Net amount of other comprehensive income
after deducting income tax
4(43)
660
35,942,808
33,176,814
7,513,065
6,155,195
26,061,898
22,569,967
7,513,065
6,155,195
9,880,910
10,606,847
-
-
(389,072)
1,359,374
(380,800)
207,992
Items that will not be subsequently reclassified
to profit or loss
Remeasurements of post-employment benefit
obligations
(647,027)
1,376,874
(380,800)
207,992
(94,589)
51,133
(18,190)
(36,140)
(94,589)
51,133
(18,190)
(36,140)
Items that may be reclassified to profit or loss
Shares of other comprehensive income of
investments accounted for using the equity
method
Changes in fair value of available-for-sale
financial assets
(552,438)
1,325,741
(362,610)
244,132
(519,364)
41,824
-
-
(60,970)
429,508
(106,988)
274,157
Currency translation differences
27,896
854,409
(255,622)
(30,025)
Attributable to non-controlling interests
257,955
(17,500)
Total comprehensive income
-
-
35,553,736
34,536,188
7,132,265
6,363,187
25,414,871
23,946,841
7,132,265
6,363,187
Attributable to non-controlling interests
10,138,865
10,589,347
-
-
Earnings per share
Basic earnings per share (RMB Yuan)
Diluted earnings per share (RMB Yuan)
4(60)(a)
0.84
0.75
N/A
N/A
4(60)(b)
0.83
0.75
N/A
N/A
3
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
Item
Notes
2015
Consolidated
2014
Consolidated
2015
Company
2014
Company
Cash flows from operating activities
Cash received from sales of goods or rendering of services
Refund of taxes and surcharges
Cash received relating to other operating activities
4(61)(a)
Sub-total of cash inflows
Cash paid for goods and services
796,860,313
766,191,304
48,093,189
35,824
105,221
2,432
43,214,530
1,298
10,054,388
9,616,490
9,125,127
1,584,744
806,950,525
775,913,015
57,220,748
44,800,572
(655,417,782)
(664,574,144)
(39,967,182)
(37,863,812)
Cash paid to and on behalf of employees
(39,031,581)
(34,237,711)
(1,649,280)
(1,285,416)
Payments of taxes and surcharges
(47,255,971)
(40,754,170)
(1,525,675)
(1,008,816)
(10,641,550)
(11,440,649)
(1,097,216)
(4,281,916)
(752,346,884)
(751,006,674)
(44,239,353)
(44,439,960)
54,603,641
24,906,341
12,981,395
360,612
11,378,278
14,050,065
3,909,737
12,810,000
1,300,378
1,300,990
6,368,594
4,971,634
907,616
785,414
20,879
30,644
Cash paid relating to other operating activities
4(61)(b)
Sub-total of cash outflows
Net cash flows from operating activities
4(62)(a)
Cash flows from investing activities
Cash received from disposal of investments
Cash received from returns on investments
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets
Cash received from disposal of subsidiaries and other
business units
Cash received relating to other investing activities
Cash paid to acquire fixed assets, intangible assets and other
long-term assets
4(61)(c)
Cash paid to invest
Net cash paid to acquire subsidiaries and other business units
Net cash outflows due to disposal of subsidiaries and other
business units
Cash paid relating to other investing activities
-
28,956
-
-
2,468,078
16,054,350
5,511,091
21,676,516
16,877,261
27,176,471
2,999,626
20,811,904
(13,506,484)
(13,246,546)
(367,404)
(510,307)
(15,084,308)
(19,476,951)
(26,557,121)
(17,518,019)
(725,127)
(749,844)
(66)
4(61)(d)
Net cash flows from investing activities
-
-
-
(4,732,188)
(3,669,922)
(21,327,160)
(1,731,633)
(34,048,173)
(37,143,263)
(48,251,685)
(19,759,959)
(17,993,823)
(15,466,747)
(21,075,214)
1,051,945
15,355,966
4,681,546
14,975,410
1,996,770
Cash flows from financing activities
Cash received from capital contributions
Including: Cash received from capital contributions by
non-controlling shareholders of subsidiaries
Cash received from borrowings
Cash received from issuance of bonds
Cash received relating to other financing activities
4(61)(e)
Repayments of borrowings
Cash payments for interest expenses and distribution of
dividends or profits
Including: Cash payments for dividends or profit to
non-controlling shareholders of subsidiaries
Cash paid to acquire non-controlling interest of subsidiaries
Cash paid relating to other financing activities
4(61)(f)
Net cash flows from financing activities
Effect of foreign exchange rate changes on cash
Net increase in cash and cash equivalents
Add: Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
4(62)(b)
380,556
2,684,776
-
-
111,123,055
74,026,833
10,604,527
14,247,935
30,484,408
32,291,034
4,999,335
2,995,185
3,184,228
753,875
742,654
5,000
160,147,657
111,753,288
31,321,926
19,244,890
(110,457,047)
(68,802,508)
(12,055,426)
(12,428,114)
(21,704,776)
(18,394,856)
(7,308,085)
(6,185,933)
(2,436,575)
(1,926,588)
-
-
(261,622)
(6,962)
-
-
(773,774)
(6,354,387)
-
(133,197,219)
(93,558,713)
(19,363,511)
26,950,438
18,194,575
11,958,415
464,996
546,707
2,001
630,843
(139,595)
64,025,252
28,180,876
3,866,597
1,903,805
145,118,441
116,937,565
16,033,489
14,129,684
209,143,693
145,118,441
19,900,086
16,033,489
4
(18,614,047)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Item
Note
Balance at 1 January 2015
Net profit
Capital contribution and withdrawal
by shareholders
Capital contribution by shareholders
Capital contribution by holders of
other equity instruments
Share-based payment
Effect on changes in shareholding of
subsidiaries
Others
Profit distribution
Appropriation to statutory surplus
reserve
Appropriation to general risk reserve
Profit distribution to shareholders
Profit distribution to holders of other
equity instruments
Others
Special reserves
Appropriation to safety production
expenses
Use of safety production expenses
Balance at 31 December 2015
Other equity
instruments
Preference Perpetual
share
bond
Paid-in
capital
30,000,000
Other
comprehensive
income
Capital
surplus
- 1,996,770 28,680,437
Total
Undistributed Non-controlling shareholders'
profits
interests
equity
General
Surplus
risk reserve reserve
22,494
84,162
-
-
-
-
-
-
-
196,913,480
10,138,865
9,880,910
257,955
35,553,736
35,942,808
(389,072)
5,207,325
380,556
14,904,403
380,556
-
-
-
-
-
14,975,410
45,539
-
-
77,463
751,306
(123,960)
(6,985,025)
5,322,998
(496,229)
(2,436,575)
(497,102)
(8,592,831)
(2,436,575)
(7,596,575)
-
-
14,975,410
-
-
4(41)
4(59)
-
14,975,410
-
-
4(42)
-
-
-
-
-
-
-
-
-
77,463
-
751,306
-
(751,306)
(77,463)
(5,160,000)
-
-
-
-
-
2,241
-
-
(994,000)
(2,256)
-
-
-
-
-
-
13,145,769
-
-
-
34,744
13,180,513
-
-
-
-
-
(13,143,528)
-
-
-
(33,052)
(13,176,580)
14,975,410 1,996,770 23,526,065
1,667,001
4(46)
4(44)
30,000,000
45,539
(5,322,998)
123,087
-
5
24,735
161,625
26,061,898
26,061,898
-
57,894,022
-
(5,154,372)
-
(647,027)
(647,027)
2,168,700 73,752,867
-
4(43)
-
2,314,028
Special
reserve
(123,960)
-
2,920,006 92,705,780
1,692
70,805,329
(994,000)
(2,256)
3,933
238,782,721
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)
Other equity
instruments
Item
Note
Net profit
Capital contribution and withdrawal
by shareholders
Capital contribution by shareholders
Capital contribution by holders of
other equity instruments
Share-based payment
Redemption of exchangeable bonds
Others
Profit distribution
Appropriation to statutory surplus
reserve
Appropriation to general risk reserve
Special reserve
Appropriation to safety production
expenses
Others
Paid-in
capital
share
bond
Other
comprehensive
income
Capital
surplus
30,000,000
-
- 29,315,286
-
-
-
-
-
1,996,770
-
4(46)
-
-
1,996,770
-
4(44)
-
-
-
-
-
-
-
-
-
-
30,000,000
-
1,996,770 28,680,437
2,314,028
4(43)
4(41)
4(59)
4(42)
Total
General risk Surplus Undistributed Non-controlling shareholders'
reserve
reserve
profits
interests
equity
Special
reserve
937,154
32,366
20,162
1,553,720
56,178,067
46,526,762
164,563,517
1,376,874
1,376,874
-
-
-
22,569,967
22,569,967
-
10,589,347
10,606,847
(17,500)
34,536,188
33,176,814
1,359,374
(634,849)
-
-
-
-
-
(20,797)
-
2,711,735
2,684,776
4,052,859
2,684,776
62,174
(593,586)
(103,437)
-
-
-
64,000
615,519
(20,880)
83
(4,969,519)
26,959
(1,934,720)
1,996,770
62,174
(614,466)
(76,395)
(6,224,720)
(9,872)
64,000
-
615,519
-
(615,519)
(64,000)
(4,290,000)
-
(1,934,720)
898
(6,224,720)
(8,974)
12,313,841
(12,323,713)
-
-
(539)
(4,851)
39,130
(38,232)
-
12,352,971
(12,361,945)
(5,390)
84,162
2,168,700
-
6
22,494
73,752,867
57,894,022
196,913,480
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Item
Net profit
Capital contribution and withdrawal by
shareholders
Capital contribution by holders of other equity
instruments
Share-based payment
Profit distribution
Appropriation to statutory surplus reserve
Special reserve
Appropriation to safety production expenses
Others
Net profit
Capital contribution and withdrawal by
shareholders
Capital contribution by holders other equity
instruments
Share-based payment
Others
Profit distribution
Appropriation to statutory surplus reserve
Profit distribution to holders of other equity
instruments
Special reserve
Appropriation to safety production expenses
Note
4(41)
4(59)
4(46)
4(41)
4(59)
4(46)
Other equity instruments
Other
comprehensive
share
bond
Capital surplus
income
Paid-in
capital
Surplus
reserve
Undistributed Total shareholders'
profits
equity
4,301
-
1,553,720
-
5,307,476
6,155,195
6,155,195
-
80,744,537
6,363,187
6,155,195
207,992
-
-
-
2,058,944
30,000,000
-
-
-
43,924,812
-
-
-
1,996,770
62,174
30,000,000
-
-
1,996,770
1,996,770
-
62,174
43,986,986
-
-
14,975,410
-
130,277
-
-
-
-
14,975,410
-
-
45,539
84,738
-
-
-
751,306
751,306
-
(6,905,306)
(751,306)
(5,160,000)
14,975,410
45,539
84,738
(6,154,000)
(5,160,000)
30,000,000
14,975,410
1,996,770
44,117,263
2,016
577,900
(575,884)
2,344
2,920,006
(994,000)
7,160,060
(994,000)
2,016
577,900
(575,884)
100,953,273
7
(45,772)
207,992
207,992
Special
reserve
162,220
(380,800)
(380,800)
(218,580)
(3,973)
454,924
(458,897)
328
-
615,519
615,519
(539)
2,168,700
-
(4,905,519)
(615,519)
(4,290,000)
(4,851)
6,552,301
7,513,065
7,513,065
-
1,996,770
62,174
(4,290,000)
(4,290,000)
(3,973)
454,924
(458,897)
(5,390)
84,867,305
7,132,265
7,513,065
(380,800)
15,105,687
NOTES TO THE FINANCIAL STATEMENTS
1
Company profile
China State Construction Engineering Corporation Limited (“the Company”) was established as a joint
stock limited company under the People’s Republic of China (“PRC”) laws and regulations in
accordance with the approval of Guo Zi Gai Ge [2007] No.1495 issued by State-owned Assets
Supervision and Administration Commission of the State Council (“SASAC”) on 6 December 2007.
The founder-members of the Company are China State Construction Engineering Corporation
(“CSCEC”), China National Petroleum Corporation, Baosteel Group Corporation and Sinochem
Corporation (the latter three are called by “other founder-members”).
The Company was established on 10 December 2007 in Beijing, PRC, its head quarter is situated in
Beijing, PRC. The parent company and the ultimate parent company of the Company is CSCEC. The
Company got listed in Shanghai Stock Exchange in July 2009. As at 31 December 2015, the total
share capital of the Company was RMB30,000 million with RMB1 par value per share. As at 31
December 2015, CSCEC held 16,879.07 million shares, representing 56.26% of the total share capital.
The approved scope of business of the Company and its subsidiaries (together “the Group”) includes
survey, design, construction, installation, consultation, development, decoration service,
manufacturing, wholesale, retail and imports and exports. The core operations include: offering a full
range of construction-related services to foreign and domestic civil engineering and building
construction such as construction, installation and consultation, investment and construction of
infrastructure projects, foreign and domestic real estate investment and development, architecture and
infrastructure construction survey and design, decoration engineering, landscape engineering design
and construction, industrial investment, contracting for foreign projects in PRC, import and export,
production and distribution of construction materials and other non-metal mineral products,
construction-related metalwork & tools and construction engineering & drilling equipment and finance
business.
Please refer to Note 6 for details of significant subsidiaries included in the consolidation scope in the
current year. The Group does not have any important subsidiaries newly included in or excluded from
the consolidation scope in the current year.
These financial statements are authorised for issue by the Company’s Board of Directors on 18 April
2016.
8
2
Summary of significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates were decided by the Group according to the
characteristics of its production and operation, mainly including methods of determine provision for bad
debts of receivables (Note 2(10)), costing of inventories (Note 2(11)), models for subsequent
measurement of investment properties (Note 2(13)), recognition of revenue from construction contract
and sale of properties (Note 2(24)), etc..
Please refer to Note 2(31) for the details of the Group’s critical judgments in applying the accounting
policies.
(1)
Basis of preparation
The financial statements are prepared in accordance with the Accounting Standard for Business
Enterprises - Basic Standard, and the specific accounting standards and other relevant regulations
issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereafter collectively
referred to as “the Accounting Standard for Business Enterprises” or “CAS”) and the disclosure
requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities
to the Public No.15 – General Rules on Financial Reporting issued by the China Securities Regulatory
Commission.
The financial statements are prepared on a going concern basis.
(2)
Statement of compliance with the Accounting Standards for Business Enterprises
The consolidated and company financial statements of the Company for the year ended 31 December
2015 are in compliance with the Accounting Standards for Business Enterprises, and truly and
completely present the financial position of the Consolidated and the Company as of 31 December
2015 and of their financial performance, cash flows and other information for the year then ended.
(3)
Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4)
Recording currency
The recording currency for the Company and its domestic subsidiaries is Renminbi (RMB). The
Company’s foreign subsidiaries choose their recording currency on the basis of the primary economic
environment in which it operates, and foreign currencies are translated into RMB when preparing
financial statements. The Company adopts RMB to prepare its financial statements.
(5)
Business combinations
(a)
Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination are
measured at the carrying amount. The difference between the carrying amount of the net assets
obtained from the combination and the carrying amount of the consideration paid for the combination is
adjusted to capital surplus (share premium). If the capital surplus (share premium) is not sufficient to
absorb the difference, any excess shall be adjusted against retained earnings. Costs directly
attributable to the combination are charged to profit or loss in the period in which they are incurred.
Transaction costs associated with the issue of equity or debt securities for the business combination are
included in the initially recognised amounts of the equity or debt securities.
9
2
Summary of significant accounting policies and accounting estimates (Continued)
(5)
Business combinations (Continued)
(b)
Business combinations not involving enterprises under common control and goodwill
The cost of combination and identifiable net assets obtained by the acquirer in a business combination
are measured at fair value at the acquisition date. Where the cost of the combination exceeds the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognised
as goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period.
Costs directly attributable to the combination are charged to profit or loss in the period in which they are
incurred. Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognised amounts of the equity or debt securities.
Where a business combination not involving enterprises under common control is achieved in stages
that involve multiple transactions, the equity interest in the acquire held before the acquisition date is
remeasured at its fair value at the acquisition date, with any difference between its fair value and its
carrying amount being recognised as investment income. The other comprehensive income held before
the acquisition date, which relating to the previously held equity interest in acquire is transferred to
investment income. Goodwill is recognised at the excess of the combination cost which is the sum of
the consideration paid at the acquisition date and the fair value at the acquisition date of the acquirer’s
previously held interest in the acquire, over the acquirer’s interests in the fair value of the acquiree’s
identifiable net assets acquired during the acquisition.
(6)
Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its
subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are
de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business
combination involving enterprises under common control, it is included in the consolidated financial
statements from the date when it, together with the Company, comes under common control of the
ultimate controlling party. The portion of the net profit or loss realised before the combination date is
presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accounting
periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries
are adjusted in accordance with the accounting policies and the accounting period of the Company. For
subsidiaries acquired from business combinations not involving enterprises under common control, the
individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable
net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised gains or losses are eliminated in the
consolidated financial statements. The portion of subsidiaries’ equity and the portion of a subsidiary’s
net profit or loss for the period and comprehensive income not attributable to Company are recognised
as non-controlling interests and presented separately in the consolidated financial statements under
equity, net profit and total comprehensive income respectively. Unrealised gains and losses resulting
from the sale of assets by the Company to its subsidiaries are fully eliminated against net profit
attributable to shareholders of the parent. Unrealised gains and losses resulting from the sale of assets
by a subsidiary to the Company are eliminated and allocated between net profit attributable to
shareholders of the parent and non-controlling interests in accordance with the allocation proportion of
the parent in the subsidiary. Unrealised gains and losses resulting from the sale of assets by one
subsidiary to another are eliminated and allocated between net profit attributable to shareholders of the
parent and non-controlling interests in accordance with the allocation proportion of the parent in the
subsidiary.
10
2
(6)
Preparation of consolidated financial statements (Continued)
If an enterprise loses control of an investee due to the disposal of a portion of an equity investment or
other reasons, the remaining equity investment shall be re-measured at its fair value in the consolidated
financial statements at the date when control is lost. The difference between the total amount of
consideration received from the transaction that resulted in the loss of control and the fair value of the
remaining equity investment and the share of net assets of the former subsidiary calculated
continuously from the acquisition date or the combination date based on the previous shareholding
proportion, shall be recognized as investment income for the current period when control is lost. The
amount previously recognised in other comprehensive income in relation to the former subsidiary’s
equity investment should be transferred to investment income for the current period when control is lost.
If the accounting treatment of a transaction which considers the Group as an accounting entity is
different from that considers the Company or its subsidiaries as an accounting entity, it is adjusted from
the perspective of the Group.
(7)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and
short-term and highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
(8)
Foreign currency translation
(a)
Foreign currency transactions
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates
of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB
using the spot exchange rates on the balance sheet date. Exchange differences arising from these
translations are recognised in profit or loss for the current period, except for those attributable to foreign
currency borrowings that have been taken out specifically for the acquisition or construction of
qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items
denominated in foreign currencies that are measured at historical costs are translated at the balance
sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate
changes on cash is presented separately in the cash flow statement.
(b)
Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot
exchange rates on the balance sheet date. Among the shareholders’ equity items, the items other than
“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income
and expense items in the income statements of overseas operations are translated at the spot
exchange rates of the transaction dates. The differences arising from the above translation are
presented in other comprehensive income. The cash flows of overseas operations are translated at the
spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash is
presented separately in the cash flow statement.
11
2
(9)
Financial instruments
(a)
Financial assets
(i)
Classification of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at fair
value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity
investments. The classification of financial assets depends on the Group’s intention and ability to hold
the financial assets.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of selling
in the short term and derivatives.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market (Note 2(10)).
Available-for-sale financial assets are non-derivative financial assets that are either designated in this
category or not classified in any of the other categories at initial recognition. Available-for-sale financial
assets are included in other current assets on the balance sheet if management intends to dispose of
them within 12 months after the balance sheet date.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or
determinable payments that management has the positive intention and ability to hold to maturity.
Held-to-maturity investments with maturities over 12 months when the investments were made but are
due within 12 months at the balance sheet date are included in the current portion of non-current assets;
held-to-maturity investments with maturities no more than 12 months when the investments were made
are included in other current assets.
(ii)
Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to
the contractual provisions of the financial instrument. In the case of financial assets at fair value through
profit or loss, the related transaction costs incurred at the time of acquisition are recognised in profit or
loss for the current period. For other financial assets, transaction costs that are attributable to the
acquisition of the financial assets are included in their initially recognised amounts.
Financial assets at fair value through profit or loss and available-for-sale financial assets are
subsequently measured at fair value. Investments in equity instruments are measured at cost when
they do not have a quoted market price in an active market and whose fair value cannot be reliably
measured. Receivables and held-to-maturity investments are measured at amortised cost using the
effective interest method.
Gains or losses arising from change in the fair value of financial assets at fair value through profit or loss
are recognised in profit or loss. Interests and cash dividends received during the period in which such
financial assets are held, as well as the gains or losses arising from disposal of these assets are
recognised in profit or loss for the current period.
12
2
(9)
Financial instruments (Continued)
(a)
Financial assets (Continued)
(ii)
Recognition and measurement (Continued)
Gains or losses arising from change in fair value of available-for-sale financial assets are recognised
directly in equity, except for impairment losses and foreign exchange gains and losses arising from
translation of monetary financial assets. When such financial assets are derecognised, the cumulative
gains or losses previously recognised directly into equity are recycled into profit or loss for the current
period. Interests on available-for-sale investments in debt instruments calculated using the effective
interest method during the period in which such investments are held and cash dividends declared by
the investee on available-for-sale investments in equity instruments are recognised as investment
income, which is recognised in profit or loss for the period.
(iii)
Impairment of financial assets
The Group assesses the carrying amounts of financial assets other than those at fair value through
profit or loss at each balance sheet date. If there is objective evidence that a financial asset is impaired,
an impairment loss is provided for.
The objective evidence of impairment losses on financial assets refers to events that actually incurred
after the initial recognition of financial assets, have influence on the expected future cash flow from the
financial assets and the influence can be reliably measured.
The objective evidence of impairment losses on available-for-sale financial instruments includes the fair
value declined significantly or non-temporarily. The Group assesses the available-for-sale financial
instruments individually on balance sheet date. If its fair value at the balance sheet date is lower than its
initial investment cost for more than 50% or lower than its initial investment cost for the duration of no
less than 1 year, therefore, the impairment loss incurred. However, if its fair value at the balance sheet
date is lower than its initial investment cost for more than 20%, but not yet 50%, the Group will take into
account other factors, such as price volatility in the judgement of impairment loss. The Group calculates
the initial investment cost of available-for-sale financial instruments using weighted average method.
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of
loss is provided for at the difference between the asset’s carrying amount and the present value of its
estimated future cash flows (excluding future credit losses that have not been incurred). If there is
objective evidence that the value of the financial asset recovered and the recovery is related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is
reversed and the amount of reversal is recognised in profit or loss.
If there is an impairment loss on available-for-sale financial assets measured at fair value incurred, the
cumulative losses arising from the decline in fair value that had been recognised directly in equity are
transferred out from equity and into impairment loss. For an investment in debt instrument classified as
available-for-sale on which impairment losses have been recognised, if, in a subsequent period, its fair
value increases and the increase can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss, the previously recognised impairment loss is reversed into profit or
loss for the current period. For an investment in an equity instrument classified as available-for-sale on
which impairment losses have been recognised, the increase in its fair value in a subsequent period is
recognised directly in equity.
If an impairment loss on an available-for-sale financial asset measured at cost incurred, the amount of
loss is measured at the difference between the asset’s carrying amount and the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial asset.
The previously recognised impairment loss will not be reversed in subsequent periods.
13
2
(9)
Financial instruments (Continued)
(a)
Financial assets (Continued)
(iv) Derecognition of financial assets
A financial asset is derecognised when any of the below criterion is met:
(1) the contractual rights to receive the cash flows from the financial asset expire;
(2) the financial asset has been transferred and the Group transfers substantially all the risks and
rewards of ownership of the financial asset to the transferee; or
(3) the financial asset has been transferred and the Group has not retained control of the financial asset,
although the Group neither transfers nor retains substantially all the risks and rewards of ownership
of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the sum of the
consideration received and the cumulative changes in fair value that had been recognised directly in
equity, is recognised in profit or loss.
(b)
Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilities at
fair value through profit or loss and other financial liabilities. The financial liabilities of the Group mainly
comprise other financial liabilities, including payables, borrowings and bonds payables.
Payables include accounts payable, other payables, etc. which are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
Borrowings and bonds payables are recognised initially at fair value, net of transaction costs incurred,
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities with maturities no more than one year or expected to be settled in a operating
period are classified as current liabilities. Other financial liabilities with maturities over one year but are
due within one year at the balance sheet date are classified as the current portion of non-current
liabilities. Others are classified as non-current liabilities.
A financial liability is derecognised or partly derecognised when the current obligation is discharged or
partly discharged. The difference between the carrying amount of the financial liability or the
derecognised part of the financial liability and the consideration paid is recognised in profit or loss.
(c)
Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted
price in the active market. The fair value of a financial instrument that is not traded in an active market is
determined by using a valuation technique. When measuring the asset or liability at fair value, the group
use valuation techniques that are appropriate in the circumstances and for which sufficient data and
other information are available to measure fair value, select inputs that are consistent with the
characteristics of the asset or liability that market participants would take into account in a transaction
for the asset or liability, and give priority to the use of relevant observable inputs. Unobservable inputs
are inputs for which market data are not available.
14
2
(10) Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivable arising from sale
of goods or rendering of services are initially recognised at fair value of the contractual payments from
the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment for
provision for bad debts
Receivables with amounts, which are individually significant, are subject to assessment for impairment
on the individual basis. If there exists objective evidence that the Group will not be able to collect the
amount under the original terms, a provision for impairment of that receivable is made.
The criterion for determine “individually
significant” amounts
The Group determines that any individual amount is more
than RMB 10 million is recognised as “individually
significant”.
The method of providing for bad debts for
those individually significant amounts
Based on the amount of the present value of the future
cash flows expected to be derived from the receivable
below its carrying amount.
(b) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that are not individually significant and those receivables that have been
individually assessed for impairment and have not been found impaired are classified into certain
groupings based on their credit risk characteristics. The provision for bad debts is determined based on
the historical loss experience for the groupings of receivables with similar credit risk characteristics,
taking into consideration of the current circumstances.
Basis for grouping is as follows:
Group 1
Any accounts receivables except for those included in
Group 2
Accounts receivables with no significant credit risk are
determined on the basis of business nature and
historical transactions with the customer.
Group 2
Methods of determine provision for bad debts by groupings are as follows:
Group 1
Group 2
Aging analysis method
No provision for bad debts
The provision ratios used under the aging analysis method for the above groupings are as follows:
Aging
Provision ratios used for
accounts receivable
Provision ratios used for
other receivables
5%
10%
20%
50%
100%
5%
10%
20%
50%
100%
No more than 1 year (including 1 year)
1 to 2 years (including 2 years)
Over 5 years
15
2
(10) Receivables (Continued)
(c)
(d)
Receivables with amounts, which are not individually significant but subject to separate assessment for
The reason for making separate
assessment for provision for bad debts
Existence of objective evidence that the Group will not be
able to collect the amount under the original terms of
the receivable.
The method of providing for bad debts for
making separate assessment
Based on the amount of the present value of the future
cash flows expected to be derived from the receivable
below its carrying amount.
When the Group transfers the accounts receivable to the financial institutions without recourse, the
difference between the proceeds received from the transaction and their carrying amounts and the
related taxes is recognised in profit or loss for the current period.
(11) Inventories
(a)
Classification
The Group’s inventories include inventories of real estate development enterprises, work in progress
regarding construction contract, raw materials, turnover materials, working in progress and finished
goods. Major inventories of real estate development enterprises include properties under development
and completed properties for sale.
Inventories are measured at the lower of cost and net realisable value. Cost of inventories comprises
construction cost, purchase cost, conversion cost and other expenditures incurred in bringing the
inventories to their present location and condition.
(b)
Completed properties for sale and properties under development
Properties under development and completed properties for sale mainly include costs for acquiring the
land use rights, expenditures of basic facilities, expenditures of construction and installation work,
borrowing costs incurred before the completion of development project, which is eligible for
capitalization and other related expenses incurred during the course of development. Properties under
development are measured at actual cost. Public ancillary facilities comprise government-approved
public ancillary projects, i.e. roads. The relevant costs are recognised under the properties under
development, and are recorded by each cost items, the cost paid for land use rights are classified and
accounted for as part of properties under development.
(c)
Construction contract - Work in progress / Advances for contract work
Construction contract is disclosed at the aggregate amount of costs incurred and aggregate gross profit
/ (loss) recognised, less the settlement amount.
The excess of the aggregate amount of costs incurred and aggregate gross profit/(loss) recognised
over the settlement amount is recognised as “Work in progress” under inventories; while, it is
recognised as “Advances for contract work ” under advances from customers when aggregate amount
of costs incurred and aggregate gross profit/(loss) recognised is less than the settlement amount.
16
2
(11) Inventories (Continued)
(d)
Costing of inventories of raw materials, turnover materials, work in progress and finished goods
Cost is determined using the first in first out or weighted average method. The cost of finished goods
and work in progress comprise raw materials, direct labour and systematically allocated production
overhead based on the normal production capacity.
(e)
The Group adopts the perpetual inventory system
(f)
Turnover materials are amortised into expenses based upon amortization method.
(g)
Basis for determining net realisable values of inventories and method for making provision for decline in
the value of inventories
Provision for decline in the value of inventories is determined at the excess amount of the carrying
amounts of the inventories over their net realisable value. Net realisable value is determined based on
the estimated selling price in the ordinary course of business, less the estimated costs to completion
and estimated costs necessary to make the sale and related taxes.
For inventories with large quantity and low values, provision for decline in value is made based on
categories of inventories. The provision for decline in value of inventories relating to a product line that
are produced and sold in the same region and with the same or similar end uses or purposes, which
cannot be practicably evaluated separately from other items in that product line, is determined on an
aggregate basis.
Provision for decline in value of other inventories is made based on the excess of cost inventory over its
net realisable value on an individual basis.
In the circumstances that any factors that previously caused inventories to be written down below cost
is no longer exist after the provision, which lead to the net realisable value of inventory is higher than its
carrying value, the original provision for decline in value is reversed and the reversal is included in profit
or loss for the year.
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries,
the Group’s long-term equity investments in its joint ventures and associates.
Subsidiaries are the investees over which the Company is able to exercise control. A joint venture is a
joint arrangement which is structured through a separate vehicle over which the Group has joint control
together with other parties and only has rights to the net assets of the arrangement based on legal
forms, contractual terms and other facts and circumstances; An associates is the investee over which
the Group has significant influence by participating in the financial and operating policy decisions.
Investments in subsidiaries are presented in the Company’s financial statements using the cost method,
and are adjusted to the equity method when preparing the consolidated financial statements.
Investments in joint ventures and associates are accounted for using the equity method.
17
2
(12) Long-term equity investments (Continued)
(a)
Determination of investment cost
For long-term equity investments acquired through a business combination: for long-term equity
investments acquired through a business combination involving enterprises under common control, the
investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the
party being absorbed at the combination date; for long-term equity investment acquired through a
business combination not involving enterprises under common control, the investment cost shall be the
combination cost. For business combination achieved in stages, the cost of long-term equity investment
is sum of carrying amount of investment before acquisition and the cost of newly added investment on
the acquisition date.
For long-term equity investments acquired not through a business combination: for long-term equity
investment acquired by payment in cash, the initial investment cost shall be the purchase price actually
paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost
shall be the fair value of the equity securities issued.
(b)
Subsequent measurement and recognition of related profit and loss
For long-term equity investments accounted for using the cost method, they are measured at the initial
investment costs, and cash dividends or profit distribution declared by the investees are recognised as
investment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investment
cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial
investment cost; where the initial investment cost is less than the Group’s share of the fair value of the
investee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and
the cost of the long-term equity investment is adjusted upwards accordingly.
Under the equity method, the Group recognises the investment income according to its share of net
profit or loss of the investee. The Group discontinues recognising its share of the net losses of an
investee after the carrying amounts of the long-term equity investment together with any long-term
interests that in substance form part of the investor’s net investment in the investee are reduced to zero.
However, if the Group has obligations for additional losses and the criteria with respect to recognition of
provisions under the accounting standards on contingencies are satisfied, the Group continues
recognising the investment losses and the provisions. The changes of the Group’s share of the
investee’s shareholders’ equity other than those arising from the net profit or loss, other comprehensive
income and profit distribution, are recognised in the Group’s equity and the carrying amounts of the
long-term equity investment are adjusted accordingly. The carrying amount of the investment is
reduced by the Group’s share of the profit distribution or cash dividends declared by an investee. The
unrealised gains or losses or losses arising from the transactions between the Group and its investees
are eliminated in proportion to the Group’s equity interest in the investees, based on which the
investment gain or losses are recognised. Any losses resulting from transactions between the Group
and its investees attributable to asset impairment losses are not eliminated.
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(c)
Basis for determine existence of control, jointly control or significant influence over investees
Control exists when the investor has all the following: power over the investee; exposure, or rights to
variable returns from its involvement with the investee; and the ability to use its power over the investee
to affect the amount of the investor’s returns.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the
investee, but is not control or joint control over those policies.
(d)
Joint arrangements
The Group classifies joint arrangement as joint venture and joint operation based on its rights and
obligations to the arrangements.
A joint venture is a joint arrangement, which is structured through a separate vehicle over which the
Group has joint control together with other parties and only has rights to the net assets of the
arrangement based on legal forms, contractual terms and other facts and circumstances. The
investment in a joint venture is recognised as long-term equity investments accounted for using the
equity method. A joint operation is a joint arrangement that is not structured through a separate vehicle,
over which the Group has rights to the assets, and obligations for the liabilities relating to the
arrangement. The Group recognises the assets, liabilities, revenue and expenditures according to its
share of the joint operation in is consolidated financial statements.
(e)
Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures and associates are
reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts
(Note 2(19)).
(13) Investment properties
Investment properties, including land use rights that have already been leased out, buildings that are
held for the purpose of leasing, and buildings that are being constructed or developed for the purpose of
leasing in future, are measured initially at cost. Subsequent expenditures incurred in relation to an
investment property are included in the cost of the investment property when it is probable that the
associated economic benefits will flow to the Group and their costs can be reliably measured; otherwise,
the expenditures are recognised in profit or loss in the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of investment properties. Buildings and
land use rights are depreciated or amortised based on the same policy as owner-occupied buildings
and land use rights.
When an investment property is transferred to owner-occupied properties, it is reclassified as fixed
asset or intangible asset at the date of the transfer. When properties under development and completed
properties for sale or an owner-occupied property is transferred out for earning rentals or for capital
appreciation, the inventory, fixed asset or intangible asset is reclassified as investment properties at its
carrying amount at the date of the transfer.
The investment property’s estimated useful life, net residual value and depreciation (amortisation)
method applied are reviewed and adjusted as appropriate at each year-end.
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(13) Investment properties (Continued)
An investment property is derecognised on disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from its disposal. The net amount of
proceeds from sale, transfer, retirement or damage of an investment property after its carrying amount
and related taxes and expenses is recognised in profit or loss for the current period.
The carrying amount of an investment property is reduced to the recoverable amount if the recoverable
amount is below the carrying amount (Note 2(19)).
(14) Fixed assets
(a)
Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles and office equipment.
Fixed assets are recognised when it is probable that the relate economic benefits will flow to the Group
and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are
initially measured at cost at the acquisition date. The fixed assets contributed by the State shareholders
at the organisation of the Company are recognised based on the revaluated amounts approved by the
state-owned assets administration department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is
probable that the associated economic benefits will flow to the Group and the related cost can be
reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent
expenditures are recognised in profit or loss in the period in which they are incurred.
(b)
Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their
estimated residual values over their estimated useful lives. For the fixed assets that have been provided
for impairment loss, the related depreciation charge is prospectively determined based upon the
adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and the
annual depreciation rates of fixed assets are as follows:
Estimated Estimated residual
useful lives
values
Buildings
Machinery and equipment
Motor vehicles
Office equipment and others
8-35 years
5-14 years
3-10 years
5-10 years
0%-5%
0%-5%
0%-5%
0%-5%
Annual
depreciation rates
2.71%-12.50%
6.79%-20.00%
9.50%-33.33%
9.50%-20.00%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method
applied to the asset are reviewed and adjusted as appropriate at each year-end.
(c)
The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable
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(14) Fixed assets (Continued)
(d)
Basis for identification of fixed assets held under finance leases and related measurement
A lease that in substance transfers substantially all the risks and rewards incidental to ownership of an
asset is a finance lease. The leased asset is recognised at the lower of the fair value of the leased asset
and the present value of the minimum lease payments. The difference between the recorded amount of
the leased asset and the minimum lease payments is accounted for as unrecognised finance charge
(Note 2(27)(b)).
Fixed assets held under a finance lease are depreciated on a basis consistent with the depreciation
policy adopted for fixed assets that are self-owned. When a leased asset can be reasonably determined
that its ownership will be transferred at the end of the lease term, it is depreciated over the period of
expected use; otherwise, the leased asset is depreciated over the shorter period of the lease term and
the period of expected use.
(e)
Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expected from its
use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a
fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for
the current period.
(15) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring
the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets
when the assets are ready for their intended use, and depreciation begins from the following month.
The carrying amount of construction in progress is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2(19)).
(16) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an asset that
needs a substantially long period of time for its intended use commence to be capitalised and recorded
as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred,
and the activities relating to the acquisition and construction that are necessary to prepare the asset for
its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under
acquisition or construction becomes ready for its intended use and the borrowing costs incurred
thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is
suspended during periods in which the acquisition or construction of a fixed asset is interrupted
abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is
resumed.
For the specific borrowings obtained for the acquisition or construction of an asset qualifying for
capitalisation, the amount of borrowing costs eligible for capitalisation is determined by deducting any
interest income earned from depositing the unused specific borrowings in the banks or any investment
income arising on the temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of an asset qualifying for
capitalisation, the amount of borrowing costs eligible for capitalisation is determined by applying the
weighted average effective interest rate of general borrowings, to the weighted average of the excess
amount of cumulative expenditures on the asset over the amount of specific borrowings. The effective
interest rate is the rate at which the estimated future cash flows during the period of expected duration
of the borrowings or applicable shorter period are discounted to the initial amount of the borrowings.
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(17) Intangible assets
Intangible assets include land use rights, franchise and software, and are measured at cost. The
intangible assets contributed by the state shareholders at the Company’s forming period are recognised
based on the revaluated amounts as approved by the state-owned assets administration department.
(a)
Land use rights
Land use rights are amortised on the straight-line basis over their estimated useful lives. If the
acquisition costs of the land use rights and the buildings located thereon cannot be reasonably
allocated between the land use rights and the buildings, all of the acquisition costs are recognised as
fixed assets.
(b)
Franchise
The Group involves in several service relate franchise arrangements. The Group is engaged in the
construction work for authorised authority in accordance with the prescribed conditions set by the
authorised authority, for obtaining licensing of certain assets. The asset under franchise arrangements
is recognised as intangible assets or payment receivable from authorised authority.
Stipulated in the contract that during a certain period after completion of the infrastructure project, the
Group is able to unconditionally charge the determined amount of cash or other financial assets from
the authorised authority. The authorised authority is responsible for the compensation for any price
differences incurred in the condition that the fee received in provision of management service is lower
than a prescribed amount. The financial assets are recognised when revenue is recognised.
Stipulated in the contract that after the completion of infrastructure project, the Group has the right to
obtain the service fee from the service receiver for a certain period during its operation. However, if the
charge amount is uncertain, such right does not constitute a right to receive cash payment
unconditionally. Therefore, it should be recognised as intangible assets when revenue is recognised.
If it is applicable to apply the intangible assets model, the Group will recognise the franchise under
franchise arrangement as intangible assets in the statement of financial position, and amortise the
franchise in a straight-line method during the franchising period after completion of related infrastructure
projects.
If it is applicable to apply the financial assets model, the Group will recognise the rights to unconditional
obtain cash or other financial assets under franchise arrangement as long-term receivables in the
statement of financial position. Interest revenue from long-term receivables is measured at amortised
cost using the effective interest method. The effective interest rate is generally remained unchanged
during the period
(c)
Software
Software is amortised on the straight-line basis over their expected useful lives.
(d)
Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is
performed at each year-end, with adjustment made as appropriate.
(e)
Research and development
The expenditure on an internal research and development project is classified into expenditure on the
research phase and expenditure on the development phase based on its nature and whether there is
material uncertainty that the research and development activities can form an intangible asset at end of
the project.
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(17) Intangible assets (Continued)
(e)
Research and development (Continued)
Expenditure on the planned investigation, evaluation and selection for the research object is
expenditure on the research phase, which is recognised in profit or loss in the period in which it is
incurred. Expenditure on design and test for the final application of the research object before mass
production is expenditure on the development phase, which is capitalised only if all of the following
conditions are satisfied:
 the development of research object has been fully justified by technical team;
 management has approved the budget of development of research object;
 market research analysis proved the products produced by research object has marketing
capabilities;
 there are sufficient technical, financial and other resources to complete the development and the
ability for subsequent mass production; and
 expenditure attributable to the research object can be reliably measured.
Other development expenditures that do not meet the conditions above are recognised in profit or loss
in the period in which they are incurred. Development costs previously recognised as expenses are not
recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is
presented as development costs in the balance sheet and transferred to intangible assets at the date
that the asset is ready for its intended use.
(f)
Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverable
(18) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets held under
operating leases, and other expenditures that have been incurred but should be recgonised as
expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses
are amortised on the straight-line basis over the expected beneficial period and are presented at actual
expenditure net of accumulated amortisation.
(19) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investment properties
measured using the cost model and long-term equity investments in subsidiaries, joint ventures and
associates are tested for impairment if there is any indication that the assets may be impaired at the
balance sheet date. If the intangible assets have not reached the condition for use, regardless of
whether there is any indication, at least annually test for impairment. If the result of the impairment test
indicates that the recoverable amount of an asset is less than its carrying amount, a provision for
impairment and an impairment loss are recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and the present value of the future cash flows expected to be derived from the asset.
Provision for asset impairment is determined and recognised on the individual asset basis. If it is not
possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group
of assets to which the asset belongs is determined. A group of assets is the smallest group of assets
that is able to generate independent cash inflows.
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(19) Impairment of long-term assets (Continued)
Goodwill that is separately presented in the financial statements is tested at least annually for
impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test,
the carrying value of goodwill is allocated to the related asset groups or groups of asset groups, which
are expected to benefit from the synergies of the business combination. If the result of the test indicates
that the recoverable amount of an asset group or group of asset groups, including the allocated goodwill,
is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss
is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of
asset groups, and then deducted from the carrying amounts of other assets within the asset groups or
groups of asset groups in proportion to the carrying amounts of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in
the subsequent periods.
(20) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits provided in various forms of consideration in exchange
for service rendered by employees or compensations for the termination of employment relationship.
(a)
Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances and subsidies,
staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity
insurance, housing funds, union running costs and employee education costs, short-term paid
absences. The employee benefit liabilities are recognised in the accounting period in which the service
is rendered by the employees, with a corresponding charge to the profit or loss for the current period or
the cost of relevant assets. Employee benefits, which are non-monetary benefits, are measured at fair
value.
(b)
Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined
benefit plans. Defined contribution plans are post-employment benefit plans under which the Group
pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and
Defined benefit plans are post-employment benefit plans other than defined contribution plans. During
the reporting period, the Group's post-employment benefits mainly include basic pensions,
unemployment insurance, annuity payment, and supplementary retirement benefits for specific
employees. Basic pensions, unemployment insurance and annuity payment belong to the defined
contribution plans, while supplementary retirement benefits belong to the defined benefit plans.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local
authorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on the
basic pensions are calculated according to prescribed bases and percentage by the relevant local
authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions
to them. The amounts based on the above calculations are recognised as liabilities in the accounting
period in which the service has been rendered by the employees, with a corresponding charge to the
profit or loss for the current period or the cost of relevant assets.
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(20) Employee benefits (Continued)
(b)
Post-employment benefits (Continued)
Supplementary retirement benefits
The Company pays supplementary retirement benefits for its employees who retired on or before 31
March 2007 in addition to the contribution made to statutory insurance schemes. The supplementary
retirement benefit is a type of defined benefit plan. The present value of defined benefit plan obligation
is calculated annually by an independent actuary using projected unit credit method, which is based on
the treasury rate, similar as the duration and currency of the employee benefits obligation. The present
value of defined benefit plan obligation is presented as long-term benefits payable in the balance sheet.
Service costs related to supplementary retirement benefit (including past service costs and settled
gains or losses) and net interest calculated based on defined benefit plan liabilities and applicable
discount rate are recognised as profit and loss in current period and changes in re-measurement of
defined benefit plans liabilities as other comprehensive income.
(c)
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises liabilities related to termination benefits as well as in profit and loss at
the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits;
and (b) when the Group recognise costs for a restructuring that involves the payment of termination
benefits.
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirement
arrangements. The early retirement benefits refer to the salaries and social security contributions to be
paid to and for the employees who accept voluntary retirement before the normal retirement date
prescribed by the State, as approved by the management. The Group pays early retirement benefits to
those early-retired employees from the early retirement date until normal retirement date. The Group
accounts for the early retirement benefits in accordance with the treatment of termination benefits, in
which the salaries and social security contributions to be paid to and for the early-retired employees
from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding
charge to the profit or loss for the current period. The differences arising from the changes in the
respective actuarial assumptions of the early retirement benefits and the adjustments of benefit
standards are recognised in profit or loss in the period in which they occur.
The termination benefits expected to be paid within one year since the balance sheet date are classified
as current liabilities.
(21) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by the
shareholders’ meeting.
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(22) Share-based payment
(a)
Types of share-based payment
Share-based payment transaction is for the purpose of transfers of an entity’s equity instruments to its
employees who have supplied services to the entity or undertake the liability, which is determined
based on equity instruments. Equity instruments including all the equity instruments of the entity, equity
instruments of the entity’s parent or equity instruments of another entity in the same group as the entity.
Share-based payment transaction is classified as equity-settled share-based payment transactions and
cash-settled share-based transactions.
Equity-settled share-based payment
The equity-settled share-based payment refers to restricted shares and share options granted to certain
employees for their services to the Group, which are measured at fair value on the grant date of the
equity instrument. The equity instruments will be vested upon the achievement of service or
performance conditions during the vesting period. The services received shall be recognized in the
profit and loss and shall appreciate in capital surplus based on fair value of the equity instruments on
the grant date and based on best-estimated number of equity instruments to be vested during the
vesting period. The number of equity instruments to be vested is adjusted to the actual amount on the
vesting date if the subsequent information indicated that there are differences between the number of
equity instruments to be vested and the previous estimation. Regarding share options, the amount of
equity instruments transferred to paid-in capital is calculated and transferred based on actual number of
the equity instruments exercised on the exercise date.
(b)
Method for determine the fair value of equity instruments
The fair value of restricted shares was determined based on the market price prevailing on the grant
date and the grant price paid by the incentive targets, and taking into account the impact of certain
clauses in the Group’s restricted shares plan. The Group adopts the black-scholes option-pricing model
in determining the fair value of share options.
(c)
Best estimation in determining the number of equity instruments to be vested
On each balance sheet date, the Group revisits and revise the expected number of equity instruments
to be vested in accordance with the best estimation made based on the latest information such as
changes of the number of employees of whom the equity instruments are expected to be vested. The
final expected number of equity instruments to be vested would be consistent with the actual number on
the vesting date.
(d)
Related accounting treatment for implementation of share-based payment plan
On the date restricted shares are unlocked; the Group carries forward the capital reserves determined
within the vesting period. On the exercise date of the share options, the Group recognizes paid-in
capital and capital surplus and carries forward the capital reserves determined within the vesting period.
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(23) Provisions
Provisions for product warranties, pending litigation or onerous contracts, etc. are recognised when the
Group has a present obligation, it is probable that an outflow of economic benefits will be required to
settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related
present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time
value of money, are taken into account as a whole in reaching the best estimate of a provision. Where
the effect of the time value of money is material, the best estimate is determined by discounting the
related future cash outflows. The increase in the discounted amount of the provision arising from
passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the
current best estimate.
(24) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or
receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is
shown net of discounts and returns.
Revenue is recognised when the economic benefits associated with the transaction will flow to the
Group, the related revenue can be reliably measured, and the specific revenue recognition criteria have
been met for each type of the Group’s activities as described below:
(a)
Revenue from sale of goods
Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the
goods are transferred to the buyer, the Group retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold, and it is probable
that the economic benefit associated with the transaction will flow to the Group and the relevant
revenue and costs can be measured reliably. The significant risks and rewards have been generally
considered transferred upon the shipment of the goods.
(b)
Revenue from rendering of services
Revenue from rendering of services is recognised when services have been rendered, economic
interests related to services will flow into the Group, the stage of completion of services can be reliably
determined, and the revenue and costs of services can be reliably measured. Revenue is recognised
based on the percentage of completion stage and the costs incurred for the completion stage are
determined in the proportion of labor costs incurred to the total costs.
If the revenue and costs of services cannot be reliably measured, revenue from rendering of services is
measured at the amount of actual labor costs incurred and are able to be compensated. The actual
labor costs incurred is recognised as contract cost for the period. However, revenue is not recognised if
the actual labor costs incurred is unable to be compensated.
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(24) Revenue recognition (Continued)
(c)
Revenue from construction contract
In the situation that result of the construction contract can be reliably measured, contract revenue and
cost are measured by using the completion percentage method on the balance sheet date. The
progress of completion is determined by the percentage of total actual contract cost incurred to the total
expected contract cost.
In the situation that result of the construction contract cannot be reliably measured, contract revenue is
measured at the amount of contract cost, which is able to be compensated, and contract cost is
recognised in the profit or loss for the period. However, if the contract cost is unable to be compensated,
it shall be recognised immediately as expense in profit or loss, with no recognition of contract revenue.
In the situation that the uncertainty factors, which may lead to the result of the construction contract,
cannot be reliably measured no longer exist, the related contract revenue and costs are measured by
using the completion percentage method.
The expected loss which is resulted from the excess of total expected contract costs over the total
expected contract revenue, is recognised as expense for the period.
(d)
Revenue from sale of properties
Revenue from sale of completed properties for sale is recognised when the completion of the projects
and acceptance of its quality inspection, sales contract with legal binding is signed, significant risks and
rewards of ownership of the inventories and completed properties for sale are transferred to the buyer,
the Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold and other conditions for recognition of revenue from
sales of goods listed above.
(e)
Revenue from Build-Operate-Transfer (“BOT”)
Revenue and expenses related to construction service rendered during the construction period are
recognised in accordance with the accounting policies as stated in Note 2(24)(c). After the completion
of the project, any revenue related to subsequent management services is recognised as the general
principle of revenue recognition.
(f)
Revenue from Build-Transfer (“BT”)
Revenue and expenses related to construction service rendered during the construction period are
recognised in accordance with the accounting policies as stated in Note 2(24)(c). When the results of
the construction contract cannot be reliably measured, revenue from construction contract is measured
at the fair value of consideration and recognised as long-term receivable. The long-term receivable is
written down upon the receipt of payment from property owners. Interest revenue from long-term
receivable is measured at amortised cost using the effective interest method. The effective interest rate
is generally remained unchanged during the period.
(g)
Transfer of asset use rights
Interest income is determined by using the effective interest method, based on the length of time for
which the Group’s cash is used by others.
Income for trademark use right is recognized upon contractual terms over the period of the contracts.
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(25) Government Grants
Government grants are transfers of monetary or non-monetary assets from the government to the
Group at nil consideration, including refund of taxes and financial subsidies, etc..
A government grant is recognised when the conditions attached to it can be complied with and the
government grant can be received. For a government grant in the form of transfer of monetary assets,
the grant is measured at the amount received or receivable. For a government grant in the form of
transfer of non-monetary assets, it is measured at fair value; if the fair value is not reliably determinable;
the grant is measured at nominal amount.
The government grants related to assets refer to government grant obtained by enterprises and used
for purchase and construction of long-term assets or formation of long-term asset in other ways. The
government grants related to revenue refer to grants other than grants related to assets.
A government grant related to an asset is recognised as deferred income, and amortised to profit or
loss over the useful life of the related asset using straight-line method. Government grants measured at
nominal amounts are recognised immediately in profit or loss for the current period.
For government grants related to income, where the grant is a compensation for related expenses or
losses to be incurred by the Group in the subsequent periods, the grant is recognised as deferred
income, and included in profit or loss over the periods in which the related costs are recognised; where
the grant is a compensation for related expenses or losses already incurred by the Group, the grant is
recognised immediately in profit or loss for the current period.
(26) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences
arising between the tax bases of assets and liabilities and their carrying amounts (temporary
differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to
subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax
liability is recognised for a temporary difference arising from the initial recognition of goodwill. No
deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the
initial recognition of assets or liabilities due to a transaction other than a business combination, which
affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,
deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax
credits to the extent that it is probable that taxable profit will be available in the future against which the
deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries,
associates and joint ventures, except where the Group is able to control the timing of reversal of the
temporary difference, and it is probable that the temporary difference will not reverse in the near future.
When it is probable that the temporary differences arising from investments in subsidiaries, associates
and joint ventures will be reversed in the near future and that the taxable profit will be available in the
future against which the temporary differences can be utilised, the corresponding deferred tax assets
are recognised.
Deferred tax assets and liabilities are offset when:
 the deferred taxes are related to the same tax payer within the Group and the same taxation
authority; and,
 that tax payer within the Group has a legally enforceable right to offset current tax assets against
current tax liabilities.
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(27) Leases
A financing lease is a lease that transfers substantially all the risks and rewards incidental to ownership
of an asset. An operating lease is a lease other than financing lease.
(a)
Operating leases
Lease payments under an operating lease are recognised on a straight-line basis over the period of the
lease, and are either capitalised as part of the cost of related assets, or charged as an expense for the
current period.
Lease income under an operating lease is recognised on a straight-line basis over the period of the
lease.
(b)
Financing leases
The leased asset is recognised at the lower of the fair value of the leased asset and the present value of
the minimum lease payments. The difference between the recorded amount of the leased asset and the
minimum lease payments is accounted for as unrecognised finance charge and is amortised using the
effective interest method over the period of the lease. A long-term payable is recorded at the amount
equal to the minimum lease payments less the unrecognised finance charge.
(28) Safety production expense
The Group provides safety production expense according to the Announcement for Printing and
Distribution of “Regulation of Provision and Use of Enterprise Safety Production Expense” and
Regulation of Provision and Use of Enterprise Safety Production Expense issued by Ministry of Finance
and State Administration of Work Safety. Safety production expense is dedicated to improve and
perfect the safety production conditions of the enterprise.
The provision for safety production expense is recognised as costs of related product or expense for the
period; in the meantime, it is also included in the special reserve. The special reserve is written down
when the withdraw of safety production cost belongs to the cost expenditure. When the fixed assets are
formed with the withdraw of safety production expense, it is recognised as expenses under construction
in progress. Construction in progress is transferred to fixed assets when the assets are ready for their
intended use and special reserve is written down at the cost of the fixed assets, and accumulated
depreciation is recognised for the same amount. The fixed asset is no longer been depreciated for the
following period.
30
2
(29) Held for sale and discontinued operations
A non-current asset or a disposal group is classified as held for sale when all of the following conditions
are satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its
present condition subject only to terms that are usual and customary for sales of such non-current asset
or disposal group; (2) the Group has made a resolution and obtained appropriate approval for disposal
of the non-current asset or the disposal group; (3) the Group has signed an irrevocable transfer
agreement with the transferee; and (4) the transfer is to be completed within one year.
Non-current assets (except for financial assets, investment property measured at fair value and
deferred tax assets) that meet the recognition criteria for held for sale are recognised at the amount
equal to the lower of the fair value less costs to sell and the carrying amount. Any excess of the original
carrying amount over the fair value less the costs to sell is recognised as asset impairment losses.
Such non-current assets and assets included in disposal groups as classified as held for sale are
accounted for as current assets; while liabilities included in disposal groups classified as held for sale
are accounted for as current liabilities, and presented separately in the consolidated financial
statement.
A discontinued operation is a component of the Group that either has been disposed of or is classified
as held for sale, and is separately identifiable operationally and for financial reporting purposes, and
satisfies one of the following conditions: (1) represents a separate major line of business or
geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations; and (3) is a subsidiary acquired exclusively with a
view to resale.
(30) Segment information
The Group identifies operating segments based on the internal organisation structure, management
requirements and internal reporting system, and discloses segment information of reportable segments
which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions:
(1) the component is able to earn revenues and incur expenses from its ordinary activities;
(2) whose operating results are regularly reviewed by the Group’s management to make decisions
about resources to be allocated to the segment and to assess its performance, and
(3) for which the information on financial position, operating results and cash flows is available to the
Group.
If two or more operating segments have similar economic characteristics and satisfy certain conditions,
they are aggregated into one single operating segment.
31
2
(31) Critical accounting estimates and judgments
The Group continually evaluates the critical accounting estimates and key judgments applied based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable.
The critical accounting estimates and key assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined
below:
(a)
Construction contract
As stated in Note 2(24)(c), in the situation that result of the construction contract can be reliably
measured, contract revenue and cost are measured by using the completion percentage method. In the
situation that result of the construction contract cannot be reliably measured, contract revenue is
measured at the amount of contract cost which is able to be compensated, and contract cost is
recognised in the profit or loss for the period. However, if the contract cost is unable to be compensated,
it shall be recognised immediately as expense in profit or loss, with no recognition of contract revenue.
The expected loss which is resulted from the excess of total expected contract costs over the total
expected contract revenue, is recognised as expense for the period. Due to the nature of construction
contract, the signing date of contract and the completion date of project usually fall in different
accounting periods. During the performance of contract, the management of the Group would regularly
review the total estimated revenue, total estimated costs, completion progress and costs incurred. In
case of changes in revenue, cost or completion percentage, adjustments should be made accordingly,
which increase or decrease the revenue or cost, and would be recognised in income statement.
32
2
(31) Critical accounting estimates and judgments (Continued)
(b)
Provision for bad debts
The Group recognises provision for bad debts of accounts receivable, based on the present value of
estimated future cash flows or actual loss rate of previous year receivables with similar credit risk
features. If evidence exists that the present value of estimated future cash flows are under carrying
value or should make provision for bad debts under the age analysis by evaluation, provision for bad
debts is recognised. The recognition of provision for bad debts requires judgment and estimations. Any
difference arising between future and current estimation would affect the carrying value of accounts
receivable in the period when estimation result changes.
(c)
Revenue from sales of properties
According to the accounting policy stated in Note 2(24)(d), the assessment of when an entity has
transferred the significant risks and rewards of ownership to buyers requires the examination of the
circumstances of the transaction. In most cases, the transfer point of risks and rewards of ownership
coincides with the date when the equitable interest in the property vests with the buyer upon release of
the respective property to the buyer.
When signing the sales contract with the customer, who needs to obtain mortgage loan from banks for
payment, the Group would sign a tripartite agreement with customer and the bank. Under such
circumstances, the customer should pay 20% to 80% of total price as down payment, the Group would
provide periodic joint liability guaranty for the mortgage loan the bank granted to customer. Such
guaranty ceases when the customer obtains ownership certificate and completes the formalities of
property mortgage registration.
Under the tripartite agreement, the Group only provides guaranty for the part of mortgage loan, which
are not repaid by the customer, during the guaranty period. And the bank will only exercise recourse
right when the customer defaults and does not repay the mortgage loan.
According to the Group’s experience of the sales of such properties, the Group believes, during the
period of providing joint liability guaranty, the probability of bearing guaranty responsibility, in case of
customer not repaying the mortgage loan, is considerably low, and the Group can recover the advances
paid for such incident by exercising the recourse right to customer to avoid losses by disposing the
property in accordance with relative clauses in the sales contract. Therefore, the Group believes that
such financial guaranty has no impact over the recognition of revenue from sales of properties.
(d)
Properties construction cost
The Group made estimations and judgments when recognizing properties construction cost based on
budget cost and development progress of those properties. If the actual cost was different from the
budget cost, it may have effects on construction cost of those properties and the cost of sales.
(e)
Provision for impairment loss of properties under development and completed properties for sale
The Group evaluates the recovery possibility of properties by assessing the net realisable value,
including current market price analysis over standards and local comparable properties, and estimates
based on construction costs calculated by actual asset structure and price list of labour and material. In
case where actual net realisable value is higher or lower than estimation, due to market fluctuation and/
or properties under development deriving from budgeted amount, significant impairment losses might
be recognised or reversed.
33
2
(f)
Estimated useful life and estimated residual value of fixed assets
The Group makes estimation over the useful life and residual value of fixed assets. The estimation
relies on the experience over the actual useful life and residual value of fixed assets of similar nature
and functions, and might vary due to technical improvement or industrial competitions. In case where
the estimated useful life and residual value is less than previous estimation, the Group would increase
the depreciation rate, or write off or offset the carrying value of fixed assets with obsolete technology.
(g)
Impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of
asset groups and groups of asset groups is the present value of the future cash flows expected to be
derived from them. These calculations require use of estimates.
When assessing impairment of goodwill, if management revises the gross margin that is used in the
calculation of the future cash flows of asset groups and groups of asset groups, and the revised gross
margin is lower than the one currently used, the Group would need to recognise further impairment
against goodwill. If management revises the pre-tax discount rate applied to the discounted cash flows,
and the revised pre-tax discount rate is higher than the one currently applied, the Group would need to
recognise further impairment against goodwill.
If the actual gross margin/pre-tax discount rate is higher/lower than management’s estimates, the
impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.
(h)
Actuary assessment of retirement welfare
The Group hires independent actuary to assess the assets and liabilities recognised for the following
welfare plan:
(1) Supplementary retirement welfare to qualified retired employees and the family dependents of
deceased employees;
(2) Supplementary medical expense reimbursement or commercial medical assurance to qualified
retired employees;
(3) Continuous off-post benefits to qualified early retired employees during the period of early
retirement.
The Group determines the discounted rate based on the yield of national debts, determined the normal
retirement age based on statutory age of retirement, and adopts the death rate data of the simulation of
annuity life chart of China’s life insurance (Year 2000-2003) for the following two years.
34
2
(i)
Income taxes
The Group calculated enterprise income taxes according to laws and regulations, as well as applicable
requirements and tax preference. The Group is subjected to income taxes in numerous jurisdictions.
There are many transactions and events for which the ultimate tax determination is uncertain during the
ordinary course of business. Significant judgment is required from the Group in determining the
provision for income taxes in each of these jurisdictions. The Group should estimate if extra taxes
should be paid for differences that might arise between estimation and final outcome, and estimate if
deferred income tax liabilities should be recognised accordingly. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will affect the income
tax and deferred tax provisions in the period in which such determination is made.
Upon the recognition of deferred income tax assets, the Group considers the probability of realization of
deductible temporary differences and deductible tax losses.. Deductible temporary differences mainly
include provision for asset impairment, accrued expenses not authorised to be deducted before tax, and
elimination of intra-group unrealised profit. The deferred income tax assets are recognised when the
Group expects the deductible temporary differences and deductible tax losses could be realized by
taxable income through continuous operations in near future.
The Group has recognised income taxes and deferred income tax assets and liabilities according to
laws and regulations, as well as optimal estimations. In case of changes in laws and regulations or of
related situations, the Group will make appropriate adjustments to income taxes and deferred income
tax assets and liabilities.
(j)
Land appreciation tax
Land appreciation tax is levied on the land appreciation amount, equal to the selling price of property
less deductible costs (including amortisation of land use right, borrowing costs and all the development
costs).
All the companies engaged in property development in China are subject to such tax, which is included
in taxes and surcharges. However, the implementation and settlement of these taxes varies among
various tax jurisdictions in cities of the PRC, and the Group has not finalised its land appreciation tax
calculation and payments with any local tax authorities in the PRC. Accordingly, significant judgment is
required in determining the amount of land appreciation and its related taxes. The Group recognised
these land appreciation taxes based on management’s best estimates according to the understanding
of the tax rules. The final tax outcome could be different from the amounts that were initially recorded,
and these differences will affect the land appreciation tax in the periods in which such taxes are
finalised with local tax authorities.
35
3
Taxation
(1)
The main categories and rates of taxes applicable to the Group are set out below:
Category
Tax base
Enterprise income tax Taxable income
Tax rate
Mainland China: 25% (except
for preferential treatment in
Note 3(2)
China Hong Kong: 16.5%
Other overseas regions:
0-35%)
6%, 11% or 17%
Value added tax
(Note(a))
Taxable value added amount (Tax payable is
calculated using the taxable sales amount
multiplied by the applicable tax rate less
deductible VAT input of current period)
Business tax (Note(a)) Taxable turnover amount
3% or 5%
Land Appreciation Tax Appreciation amount derived on the transfer of Excess progressive of tax rate
(Note(b))
real estate
30%-60%
City maintenance and Amount of VAT and business tax paid
5% or 7%
construction tax
Educational surtax
Amount of VAT and business tax paid
3%
Note (a): Construction and installation services carried out in the Group are applicable for business tax,
the tax rate is 3%; while real estate sales and labor service are applicable for business tax,
and the tax rate is 5%.
According to Measures for the Implementation of the Business Tax to Value Added Tax
Transformation Pilot Program and the relevant regulations of the Circular on the Business
Tax to Value Added Tax Transformation Pilot Program for the Railway Transportation
Industry and Post Industry (Cai Shui [2013] N0.106) issued by the Ministry of Finance and the
State Administration of Taxation, entities and individuals engaged in transportation industry,
pose industry and some modern service industries in the territory of China are recognised as
VAT taxpayers. Transportation, movables leasing, design and consultation, prospecting and
inspections carried out in the Group’s subsidiaries are applicable for value-added tax. The
applicable tax rate for transportation industry is 11%, tangible movables leasing 17%, design
and consultation, exploration, detection and inspection 6%.
Note (b): Advance payment of land appreciation tax before carrying forward revenues will be calculated
and collected on 1.5% to 5% of presale revenues.
36
3
Taxation (Continued)
(2)
Main referential tax treatments
Pursuant to relevant stipulations in Income Tax Law of the People’s Republic of China (“enterprise
income tax”) issued on 16 March 2007, preferential tax treatment applicable to the Group are as
follows:
(a)
Preferential tax treatment for key high and new technological enterprises encouraged and supported by
the state
According to the income tax law and other relevant regulations, the Group’s subsidiaries recognized as
key high and new technological enterprises encouraged and supported by the state are as follows:
Company Name
China Construction Communications Engineering Group Corp., Ltd.
Beijing China Construction Architectural Scientific Research Institute Limited
China State Construction Third Engineering Bureau Group Co., Ltd.
China Construction Steel Co., Ltd.
Third Construction Co., Ltd of China Construction Fifth Engineering Division
China Construction Fifth Energy Saving Technology Co., Ltd.
CSCEC (Changsha) Fujisrsh Curtain Wall & Decoration Co., Ltd.
China Construction Sixth Engineering Division Corp, Ltd
China Construction Seventh Engineering Division. Corp. Ltd
China Construction Eighth Engineering Division. Corp. Ltd
China Construction Installation Engineering Co., Ltd.
China State Construction Electronic Engineering Co., Ltd.
China State Construction Northeast Architectural Design Institute Co., Ltd.
CSCEC AECOM Consultants Co. Ltd.
China Construction Port Construction Co., Ltd.
China State Construction Built Port Group Co., Ltd.
Beijing China State Construction Baili Engineering Technology Development
Co., Ltd.
China Construction Commercial Concrete Co., Ltd.
China Construction Design Group Co., Ltd. (parent company)
China Construction Fifth Engineering Division Corp., Ltd
China Construction Fifth Industrial Equipment Installation CO., Ltd.
First Construction Co., Ltd of China Construction Eighth Engineering Division
The Second Construction Limited Company of China Construction Eighth
Third Construction Co., Ltd of China Construction Eighth Engineering Division
Hong Kong Huayi Design Consultants (Shenzhen) Ltd.
Shenzhen Hailong Construction Products Co., Ltd.
Anhui Hailong Construction Industral Co., Ltd.
Certificate of High and
New Technological
Enterprises
GR201311000437
GF201411000258
GR201342000537
GF201444200085
GR201543000010
GF201543000134
GR201543000218
GR201312000129
GF201341000020
GR201331000182
GF201432001249
GR201311001592
GF201421000031
GR201562000021
GR201531000167
GR201437100089
GR201511000143
GF201542000711
GR201411003344
GR201443000426
GR201443000127
GR201437000670
GR201537000614
GR201532001106
GR201444200623
GF201544200541
GF201534000044
The term of validity for the Certificate of High and New Technological Enterprises obtained by these
subsidiaries is 3 years and the income tax rate applicable to these companies for the year 2015 is 15%.
37
3
Taxation (Continued)
(2)
Main preferential tax treatments (Continued)
(b)
Preferential tax policy related with Western Development Strategies and Xinjiang region.
Company Name
Chongqing China Construction
Machinery Manufacturing Co., Ltd.
Northwestern architectural design
institutes company Ltd.
Sichuan Southwest Guangsha
Construction Design Institute Co., Ltd.
Sichuan Southwest Biaoban
Construction Design Institute Co., Ltd.
Sichuan Southwest Construction
Engineering Consulting Co., Ltd.
Sichuan Southwest Engineering Project
Management Consulting Co., Ltd.
China Southwest Architectural Survey
and Design Institute Limited.
Zunyi CSCEC Xinpu Construction
Development Co., Ltd.
China West Construction Group Co.,Ltd
(“West Construction”) and some
subsidiaries
Changji Western Construction Co., Ltd.
Hejing xiqing jiyuan Co., Ltd.
Yanqi xiqing jiyuan Co., Ltd.
Shihezi Western Construction Co., Ltd.
Karamay West Construction Building
Materials Co., Ltd.
Kuitun Western Construction Co., Ltd.
Yili Western Construction Co., Ltd.
Xinjiang Construction Architectural
Scientific Research Institute
Preferential Policy (Note)
2015 applicable
tax rate
Cai Shui [2011] No.58
15%
15%
15%
15%
15%
15%
15%
15%
Xin Zheng Fa [2010] No.92
Cai Shui [2011] No.58 and
Xin Guo Shui Fa [2011] No.177
15%
20%
Xin Di Shui Fa [2011] No.235
15%
12%
12%
12%
12%
20%
20%
Note：According to Circular on Issues Concerning Tax Policies for In-depth Implementation of Western
Development Strategies (Cai Shui [2011] No.58), the qualified enterprises are entitled 15%
preferential income tax rate.
According to Implementation of Encouraging Small-and-medium Sized Enterprises (Xin Zheng
Fa [2010] No. 92), the qualified enterprises are entitled two years of exemption and three years
of half rate income tax allocated to the local tax bureau.
According to Guidance on Implementation of Tax Policies to Encourage Small-and-medium
Sized enterprises in autonomous region (Xin Guo Shui Fa [2011] No.177), the qualified
enterprises can be entitled two years of exemption and three years of half rate income tax
allocated to the local tax bureau.
According to Notice on Implementation of Preferential tax policies Regarding Reorganized
Scientific Research institutions (Xin Di Shui Fa [2011] No. 235), from 1 January 2011 to 31
December 2015, qualified enterprises can be entitled exemption from income tax originally
allocated to the local tax bureau.
38
4
Notes to the consolidated financial statements
(1)
31 December 2015
31 December 2014
Cash on hand
Bank deposits
Other cash balances
109,197
211,966,330
4,334,289
106,166
149,782,509
4,180,584
Total
216,409,816
154,069,259
As at 31 December 2015 and 31 December 2014, the bank deposits that were pledged by the Group to
banks for borrowings are presented in detail in Note 4(34)(a).
Other cash balances represent deposits for bank acceptance notes, marginal deposits for security and
marginal deposits for migrant workers’ wages.
As at 31 December 2015, the fixed deposits, which would mature after three months, amounted to
RMB712,000 thousand (31 December 2014: RMB300,000 thousand).
Restricted deposits mainly include Central Bank reserve, deposits for bank acceptance notes, marginal
deposits for security, etc.. As at 31 December 2015, restricted cash balances amounted to
RMB9,553,074 thousand (31 December 2014: RMB8,692,931 thousand).
As at 31 December 2015, the offshore deposits of the Group amounted to RMB53,425,604 thousand
(31 December 2014: RMB19,984,089 thousand).
(2)
31 December 2015
31 December 2014
Investment in equity instrument held-for-trading (Note 1)
Designated as financial assets at fair value through profit
or loss (Note 2)
Derivative financial assets
28,612
1,028,011
1,000,000
101,615
9,751
Total
1,130,227
1,037,762
-
Note 1: The fair value of investment in equity instrument held-for-trading is determined by the closing
price of stock exchange on the last trading day of the year.
Note 2: The fair value of designated as financial assets at fair value through profit or loss is determined
by the yield rate published by the financial institution on each trading day.
39
4
Notes to the consolidated financial statements (Continued)
(3)
Notes receivable
31 December 2015
(a)
31 December 2014
Trade acceptance notes
Bank acceptance notes
5,163,237
1,568,107
3,780,659
1,574,457
Total
6,731,344
5,355,116
As at 31 December 2015, the notes receivable pledged by the Group are as follows:
1,417,591
114,642
Total
1,532,233
As at 31 December 2015 and 31 December 2014, the notes receivable that were pledged by the Group
to banks for borrowings are presented in detail in Note 4(34)(a).
(b)
As at 31 December 2015, the notes that are not mature but have been endorsed or discounted are as
follows:
Without recourse right
(c)
(4)
With recourse right
2,017,984
2,402,760
228,807
Total
2,017,984
2,631,567
In 2015, the notes receivable transferred to accounts receivable by the Group due to default by the
issuers accounted to RMB20,000 thousand (2014: Nil).
Interest receivable
31 December 2015
31 December 2014
Interest receivable for entrusted loans
Others
184,845
140,101
103,691
62,353
Total
324,946
166,044
40
4
(5)
Accounts receivable
31 December 2015
(a)
31 December 2014
Accounts receivable
Less: Provision for bad debts
125,084,202
(9,527,299)
126,471,646
(8,041,277)
Total
115,556,903
118,430,369
The aging of accounts receivable is analysed as follows:
31 December 2015
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
Total
(b)
31 December 2014
93,966,231
19,092,297
6,116,237
3,864,867
2,044,570
101,880,549
15,654,515
4,724,173
2,451,927
1,760,482
125,084,202
126,471,646
Accounts receivable are analysed by categories as follows:
31 December 2015
Ending balance
%
of total
Provision
Amount balance
Amount
Ratio (%)
With amounts that are
individually
significant and that
the related
provision for bad
debts is provided on
the individual basis
17,236,489
That the related
provision for bad
the grouping basis
105,898,916
Including: Group 1
Group 2
not individually
significant but that
the related provision
for bad debts is
provided on the
individual basis
Total
31 December 2014
Ending balance
%
of total
Provision
Amount balance
Amount Ratio (%)
13.78
(3,056,288)
17.73
13,118,825
10.37
(2,294,351)
17.49
84.66
(5,707,901)
5.39
112,025,943
88.58
(5,165,325)
4.61
53,530,271
52,368,645
42.79
41.87
(5,707,901)
-
10.66
-
53,159,961
58,865,982
42.04
46.54
(5,165,325)
-
9.72
-
1,948,797
1.56
(763,110)
39.16
1,326,878
1.05
(581,601)
43.83
125,084,202
100.00
(9,527,299)
126,471,646
100.00
(8,041,277)
41
4
(5)
Accounts receivable (Continued)
(c)
As at 31 December 2015, accounts receivable with amounts that are individually significant and that the
related provision for bad debts is provided on the individual basis are analysed as follows:
Debtor
(d)
Ending balance
Company 1
Company 2
Company 3
Company 4
Company 5
Others
356,264
313,201
234,437
233,466
226,954
15,872,167
(69,751)
(31,320)
(7,472)
(20,473)
(11,348)
(2,915,924)
Total
17,236,489
(3,056,288)
Provision Ratio
(%)
19.58
10.00
3.19
8.77
5.00
18.37
Reason of provision
Provided based on evidence and judgment
Among accounts receivable of which the related provision for bad debts is provided on grouping basis,
Group 1 used the aging analysis method analysed as follows:
Ending balance
Amount
Within 1 year
31 December 2015
Amount Provision Ratio (%)
Ending balance
Amount
31 December 2014
Amount
Provision Ratio (%)
37,509,038
(1,875,452)
5
40,594,549
(2,029,727)
5
1-2 years
9,931,410
(993,141)
10
7,276,058
(727,606)
10
2-3 years
2,807,186
(561,437)
20
2,611,355
(522,271)
20
3-5 years
2,009,532
(1,004,766)
50
1,584,555
(792,277)
50
Over 5 years
1,273,105
(1,273,105)
100
1,093,444
(1,093,444)
100
53,530,271
(5,707,901)
53,159,961
(5,165,325)
Total
42
4
(5)
(e)
Provision for bad debts amounted to RMB2,773,716 thousand are accrued in current year. Provision for
bad debts amounted to RMB902,441 thousand are collected or reversed in current year. The major
amount collected or reversed are as follows:
Reason for reversal/
collection
Company 1
Company 2
Company 3
Company 4
Company 5
Others
Account receivable of
project collected
project collected
project collected
project collected
project collected
project collected
Basis and rationality for
determining the provision
for bad debts
Amount of reversal/
collection
Way of collection
Individually provided
42,568
Cash
32,978
Cash
32,318
Cash
Provided on grouping
basis
Provided individually and
on grouping basis
25,323
Cash
24,321
Cash
744,933
Cash
Total
902,441
(f)
Accounts receivable that were unable to collected and written off in current year amounted to
RMB16,461 thousand (2014: RMB104,582 thousand), all of which were accounts receivable of projects
and design fee due from third parties.
(g)
As at 31 December 2015, the five largest accounts receivable according to customers are analysed as
follows:
Amount of provision for
bad debt
Amount
The total amount of the five largest
accounts receivables
(h)
5,165,300
% of total balance
-
4.13
Accounts receivable derecognized due to the transfer of financial assets are analysed as follows:
Accounts receivable derecognized due to the transfer of financial assets in current year amounted to
RMB35,463,053 thousand (2014: RMB24,392,553 thousand). Related loss in current year amounted to
RMB1,827,521 thousand (2014: RMB1,538,928 thousand).
(i)
As at 31 December 2015 and 31 December 2014, the accounts receivable that were pledged by the
Group to banks for borrowings are presented in detail in Note 4(34)(a).
43
4
(6)
Other receivables
31 December 2015
31 December 2014
Deposits and petty cash receivable
Receivables from related parties (Note 9(6))
Advances receivable
Deposit receivable
Recoursable financial assets acquired (Note)
Others
Sub-total
15,077,583
3,938,672
4,305,722
1,433,023
2,998,951
9,102,530
36,856,481
12,485,583
5,918,761
2,805,022
1,334,515
4,669,723
27,213,604
(2,679,579)
(2,218,728)
Total
34,176,902
24,994,876
Note: Recoursable financial assets acquired held by the Group is reverse repurchase treasury bonds,
which will be sold at a fixed price, with a maturity of 7 days or 14 days, and yield rate varies from
2.80% to 3.71%.
(a)
The aging of other receivables is analysed as follows:
31 December 2015
31 December 2014
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
27,324,608
3,969,687
2,604,759
1,443,305
1,514,122
20,421,229
3,156,265
1,118,362
861,116
1,656,632
Total
36,856,481
27,213,604
44
4
(6)
Other receivables (Continued)
(b)
Other receivables are analysed by categories as follows:
31 December 2015
Ending balance
% of total
Provision
Amount
balance
Amount Ratio(%)
individually
for bad debts is
provided on the
individual basis
That the related
provision for bad
the grouping basis
Including: Group 1
31 December 2014
Ending balance
% of total
Provision
Amount balance
Amount
Ratio(%)
2,398,657
6.51
(1,213,288)
50.58
974,344
3.58
(806,038)
82.73
33,919,926
5,112,813
92.03
13.87
(1,075,672)
(1,075,672)
3.17
21.04
25,647,533
4,311,699
94.25
15.84
(936,852)
(936,852)
3.65
21.73
Group 2
not individually
for bad debts is
provided on the
individual basis
28,807,113
78.16
-
-
21,335,834
78.41
537,898
1.46
(390,619)
591,727
2.17
(475,838)
Total
36,856,481
100.00
(2,679,579)
27,213,604
100.00
(2,218,728)
45
72.62
-
-
80.42
4
(6)
(c)
As at 31 December 2015, other receivables with amounts that are individually significant and that the
Debtor
(d)
Ending balance
Provision for
bad debts
Company 1
Company 2
Company 3
Company 4
Company 5
Others
340,000
200,000
149,579
49,603
43,968
1,615,507
(34,000)
(200,000)
(149,579)
(49,603)
(43,968)
(736,138)
Total
2,398,657
(1,213,288)
Provision
Ratio (%)
Reason of provision
10.00
100.00
100.00
100.00
100.00
45.57
Among other receivables of which the related provision for bad debts is provided on a grouping basis,
31 December 2015
Ending balance
Provision
Amount
Amount Ratio (%)
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
2,820,542
884,100
490,747
338,677
578,747
(141,027)
(88,410)
(98,149)
(169,339)
(578,747)
Total
5,112,813
(1,075,672)
5
10
20
50
100
46
31 December 2014
Ending balance
Provision
Amount
Amount
Ratio (%)
2,329,040
833,736
334,908
287,942
526,073
(116,452)
(83,374)
(66,982)
(143,971)
(526,073)
4,311,699
(936,852)
5
10
20
50
100
4
(6)
(e)
Provision for bad debts amounted to RMB699,139 thousand are accrued in current year. Provision for
bad debts amounted to RMB235,084 thousand are collected or reversed in current year. The major
Reason for reversal/ collection
Basis and rationality for
determining the provision
Amount of
for bad debts reversal/ collection Way of collection
Company 1
Receivable collected Provided on grouping basis
2,364
Cash
Company 2
Receivable collected
1,935
Cash
Company 3
Receivable collected Provided on grouping basis
1,454
Cash
Company 4
1,413
Cash
Company 5
1,240
Cash
Others
Provided individually and
on grouping basis
226,678
Cash
Total
235,084
(f)
In 2015, other receivables that were unable to collected and written off in current year amounted to
RMB5,350 thousand (2014: RMB20,492 thousand), all of which were receivable from third parties.
(g)
As at 31 December 2015, the five largest other receivables according to customers are analysed as
follows:
Relation to the Group
Aging
% of total balance
Provision for bad debt
Company 1
Third party
2,130,418
Within 1 year
5.78
-
Company 2
Joint venture
872,353
Within 1 year
2.37
-
Company 3
Third party
808,600
Within 1 year
2.19
-
Company 4
Joint venture
654,500
Within 1 year
1.78
-
Company 5
Joint venture
652,160
Within 1 year
1.77
-
13.89
-
Total
(h)
Amount
5,118,031
As at 31 December 2015, the Company has no significant government grant recognized in other
receivables.
47
4
(7)
(a)
The aging of advances to suppliers of the Group is analysed as follows:
31 December 2015
Amount % of total balance
31 December 2014
Amount
% of total balance
Within 1 year
1-2 years
2-3 years
Over 3 years
22,482,961
4,082,701
387,364
511,830
81.86
14.87
1.41
1.86
28,953,313
1,206,078
191,882
777,739
93.01
3.87
0.62
2.50
Total
27,464,856
100.00
31,129,012
100.00
As at 31 December 2015, advances to suppliers aged more than 1 year amounted to RMB4,981,895
thousand (31 December 2014: RMB2,175,699 thousand), mainly including advances to subcontractors
and land prepayment. As the project is not completed, such advances have not been settled yet.
(b)
As at 31 December 2015, the total amount of the five largest advances to suppliers is analysed as
follows:
Amount
Total amount of the five largest advances to suppliers
(8)
Inventories
(a)
Inventories are set forth by category as follows:
% of total balance
5,703,494
20.77
31 December 2014
Properties under development
Completed properties for sale
Work in progress
Raw materials
Manufacturing goods
Finished goods
Others
Sub-total
Less: Provision for decline in
the value of inventories
Total
31 December 2015
198,235,063
39,426,392
97,657,887
15,081,643
519,013
1,599,356
130,286
352,649,640
(4,376,290)
348,273,350
193,482,712
42,843,671
139,816,133
14,512,067
567,459
1,972,694
236,882
393,431,618
Increase in
current year
Decrease in
current year
(1,659,006)
193,113
(5,842,183)
387,589,435
In 2015, the average capitalization rate of the capitalised borrowing costs of inventories is 5.42% (2014:
5.12%).
48
4
(8)
Inventories (continued)
(b)
Properties under development
Project name
Jinan China Overseas Huashan Linglong
Beijing Gucheng District C
Tianjin Fuxing Jiuli Sili
Guangzhou Jinyu Huating
Tianjin Huanyu Tianxia
Qide 1H Land
Fuzhou China Overseas Huanyutianxia No.4
Guangzhou Jinchen Huating
Tianjin Fuxing Jiuli Sili
HongKong Yaliao Continent
Jinan CSCEC Changqing Lake
Changsha CSCEC Mei Xi Lake Centre
Shenzhen Longhua shangtang Project
Wuhan CSCEC Grand Hall (K3、K5)
Wuhan CSCEC Yujing Xingcheng
CSCEC HuaFu Project, Da Ying Po, Guiyang
Shenyang China Overseas Gate of Peace No.1
Wuxi Haiyue Garden
Harbin China Overseas Huanyu Tianxia
HongKong Xiying Pan
Hangzhou Yudaolu Land #40
Kunming Huanhu Road East #A-12 Land
Huinan Minju Project Phase 1, Pudong, Shanghai
Shenyang Huan Yu Tian Xia
Shenyang Gate of Peace
Guangzhou Jinhui Huating
Foshan Deng Lake Huafu
Guangzhou GISE #137、#138 Land
Wuhan CSCEC Tangxu Lake #1
Zunyi CSCEC Xingfucheng
Taiyuan Yingze Qiaoxi Project
Changchun China Overseas Ziyu Huafu
Ningbo China Overseass International Community
Estimated Estimated total 31 December 31 December
Date of commence completion date
investment
2015
2014
Jul.2014
Jun.2014
Jun.2015
Feb.2014
Mar.2015
Feb.2014
Aug.2014
Sep.2014
Jun.2015
Jun.2012
Jun.2012
Jun.2013
Mar.2014
Mar.2015
Dec.2014
Jun.2011
May.2014
Aug.2014
Oct.2014
Dec.2010
Dec.2013
Apr.2014
Nov.2012
Feb.2014
Apr.2011
Jun.2014
Mar.2014
Aug.2013
Mar.2015
Apr.2015
Mar.2011
Jan.2013
Oct.2014
Mar.2015
Jun.2013
49
Dec.2016
Dec.2016
Jun.2017
Sep.2017
Jun.2017
Aug.2017
Jun.2019
Oct.2018
Jun.2019
Aug.2016
Jun.2022
Jun.2018
Sep.2016
Oct.2025
Jan.2019
Dec.2016
Dec.2016
Dec.2018
Dec.2017
Mar.2016
Mar.2016
Apr.2016
Apr.2018
Jun.2018
Jun.2019
Dec.2020
Sep.2017
Nov.2016
Jun.2016
Apr.2017
Sep.2017
Oct.2017
Jul.2017
Dec.2018
Dec.2016
15,136,883
8,300,000
8,135,691
5,820,528
6,514,764
8,942,640
6,924,643
5,982,160
8,500,000
3,515,727
4,500,000
8,000,000
5,870,000
7,793,000
8,758,000
5,700,000
3,162,093
2,215,020
3,440,000
2,839,253
2,451,369
2,641,699
19,382,212
2,542,187
3,709,064
2,850,809
2,562,753
2,145,146
2,664,576
3,033,335
5,451,880
4,800,000
4,816,260
5,538,703
6,987,210
8,365,230
5,433,866
5,109,769
4,914,300
4,850,501
4,732,627
4,525,640
4,455,968
4,301,717
3,090,315
3,030,047
3,011,728
2,941,446
2,932,373
2,919,343
2,695,520
2,614,968
1,570,065
2,536,740
2,517,650
2,363,152
2,342,632
2,241,534
2,184,335
2,167,462
2,151,123
2,139,271
2,051,409
2,051,126
2,027,567
2,019,488
1,831,923
1,730,117
1,678,799
1,676,310
4,163,796
5,595,493
4,108,324
4,103,917
4,090,034
4,092,690
2,463,565
2,114,550
2,330,015
4,416,978
2,029,669
2,167,000
3,084,284
1,157,067
1,368,959
2,085,697
2,203,528
1,447,186
1,014,649
2,002,342
2,646,453
1,802,893
1,779,595
1,924,156
2,775,810
1,064,261
1,138,775
2,341,605
4
(8)
Inventories (Continued)
(b)
Properties under development (Continued)
Project name
Shanghai Meilong New Centre A
Foshan China Overseas Jinshali
Ningbo China Overseas Huanyu
Jimo Wang Village Newtown
Wuhan CSCEC Nan Lake NO.1
Wuxi Taihu Xincheng Fenghuang Jingyuan
Weifang CSCEC Da Guan Tian Xia
Zhengzhou China Overseas Jinyuan
Foshan China Overseas Jinyuan
Wuhan Zhongjianfudixingcheng
Shenyang China Overseas #5
Changsha CSCEC Jiangshan No.1
Harbin China Overseas Yongjing Xian #1
CSCEC Xi’an Guo Xi Tai
Wuhan CSCEC Grand Hall (K2、K4)
China Overseas Mingzuan Garden
Urumchi China Overseas Yunding Da Guan
Yantai China Overseas International
Community
Zhenjiang CSCEC Da Guan Tian Xia
Jinan China Overseas International
Community
Shanghai China Overseas Yuefu Phase II
Shenzhen China Overseas Tian Zuan
Zhuhai Zuoan Lantingzhi Garden
Suzhou Shuangwan Jinyuan
Shenyang China Overseas Kangcheng
Kunming China Overseas Jinyuan
Chongqing Lixiang Lake
Others
Date of
commence
Estimated Estimated total
completion date
investment
31 December
2015
31 December
2014
Aug.2013
May 2014
Mar.2014
Mar.2015
Aug.2013
Aug.2014
Nov.2009
Jul.2014
Jan.2014
Aug.2012
Mar.2015
Jun.2013
Apr.2014
Feb.2014
May 2013
Oct.2015
Oct.2014
Apr.2013
Dec.2017
Mar.2016
Dec.2016
Dec.2020
Apr.2017
Dec.2019
Jun.2025
Jun.2016
Jun.2016
Mar.2016
Jun.2020
Dec.2019
Aug.2016
Sep.2017
Jul.2016
Oct.2025
Dec.2016
Dec.2019
5,400,000
3,553,084
3,074,510
5,668,255
2,680,000
3,803,790
9,324,420
2,189,773
1,560,120
1,800,000
5,086,421
3,000,000
2,037,379
1,500,019
2,823,740
3,500,000
1,880,181
3,814,620
1,674,343
1,652,984
1,637,539
1,633,559
1,627,567
2,614,155
1,545,847
1,526,256
1,516,788
1,513,680
1,450,609
1,442,778
1,308,668
1,303,847
1,235,561
1,165,989
1,132,854
1,125,529
4,140,798
2,394,180
990,998
2,113,755
1,557,076
1,317,426
1,274,686
1,186,996
17,749
1,131,967
1,367,937
1,199,458
1,802,625
497,314
741,840
Apr.2014
Dec.2011
Dec.2019
Jan.2020
3,336,250
4,444,810
1,095,466
1,094,053
1,363,091
1,693,018
Jun.2010
Nov.2013
Apr.2015
Jul.2015
Mar.2015
Oct.2013
Mar.2015
Mar.2012
N/A
Dec.2017
Jun.2016
Jul.2017
Dec.2017
Dec.2016
Dec.2019
Dec.2016
Dec.2016
N/A
15,152,000
1,144,440
2,088,003
1,871,200
1,971,997
2,566,019
1,803,786
3,226,896
N/A
1,089,179
1,080,237
1,077,903
1,057,883
1,054,519
1,022,813
1,008,884
1,005,976
48,581,185
2,518,714
847,038
934,765
1,307,752
708,523
733,355
94,880,711
193,482,712
198,235,063
Total
50
4
(8)
(c)
Completed properties for sale
Project name
Shanghai CSCEC Grand Hall
Tianjin China Overseas Balitai
Macau Shuangzuan
Jinan CSCEC Jinxiu City
Shanghai China Overseas Ziyu Hao Ting
Chengdu China Overseas Xinhuafu
Changsha China Overseas International Community
Phase III
Zhenjiang CSCEC Da Guan Tian Xia
Changsha CSCEC Meixi Lake No.1
Shanghai CSCEC Gongyuan No.1
Dalian China Overseas Yuhuxigu
WeiHai Road Project, Binhai, Tianjin
Shenyang Huanyu Tianxia
Yantai Ziyu Grand Hall
Macau Shuangzuan
China Overseas Zhuhai Yinhaiwan #3
Ningbo China Overseas International Community
Xi'an CSCEC Guoxitai
Foshan Huanyu Tianxia
Hong Kong CSCEC Chung Hom Kok
Tianjin Fuxing Jiuli
Guangzhou China Overseas Yupin Garden Phase III
Wuxi CSCEC Xi'an Guandi
Wuhan CSCEC Tangxu Lake No.1
Changchun Zi Jin Yuan
Shanghai Herui Yayuan
Dalian China Overseas Fenghuang Xi'an
Shenyang China Overseas International Community
Phase II
Taizhou CSCEC Jinxiu Longwan Phase I
Jinan China Overseas International Community
Ningbo Sunshine Rose Garden
Shenyang China Overseas Kangcheng Phase I
Hong Kong China Overseas Ge Fu Ling
Weifang CSCEC Da Guan Tian Xia
Wuhan China Overseas Qintaihuafu
Beijing CSCEC Hongshan xigu
Qingdao China Overseas International Community
Nanchang China Overseas Chaoyangjun-Bo Palace
Yantai China Overseas International Community
Shenyang China Overseas Gate of Peace No.1
Nanchang China Overseas Chaoyangjun-Xi'an
Completion date
of latest phase
31 December Increase in
2014 current year
Decrease in 31 December
current year
2015
Dec.2013
Dec.2015
Jun.2015
Dec.2015
Nov.2014
Oct.2015
3,998,902
907,706
3,371,545
-
2,090,148
2,557,133
4,135,514
962,399
(468,984)
(1,363,743)
(1,022,208)
(2,814,199)
(1,056,424)
(22,055)
3,529,918
1,634,111
1,534,925
1,321,315
2,315,121
940,344
Dec.2014
Dec.2015
Dec.2015
Dec.2015
Jun.2015
Dec.2014
Jun.2015
Dec.2015
Dec.2014
Feb.2015
Dec.2014
Dec.2015
Dec.2015
Dec.2015
Jun.2015
Dec.2015
Dec.2015
Dec.2015
Aug.2015
Dec.2013
Sep.2015
Dec.2015
1,379,155
298,116
976,078
62,186
468,130
486,307
918,600
817,435
611,687
1,092,697
1,368,934
759,150
58,804
896,664
-
8,246
891,702
338,317
1,684,524
1,170,485
768,498
510,059
1,462,502
56,936
1,476,124
991,949
4,056,640
844,376
1,713,482
1,268,852
37,251
1,173,637
826,498
603,466
(500,190)
(399,496)
(561,916)
(1,019,454)
(453,057)
(520,839)
(297,801)
(1,693,899)
(147,002)
(428,924)
(2,187,520)
(339,876)
(3,408,183)
(197,506)
(1,097,815)
(667,087)
(221,297)
(682,106)
(361,064)
(321,304)
(119,240)
887,211
790,322
752,479
727,256
717,428
715,789
698,565
687,203
670,433
668,623
663,773
657,538
652,073
648,457
646,870
615,667
601,765
575,104
550,335
535,600
505,194
484,226
Dec.2015
Jun.2015
Dec.2015
Dec.2015
Jun.2015
Dec.2013
Feb.2015
Sep.2015
Jun.2015
Dec.2015
Jun.2014
Dec.2015
Dec.2015
Dec.2014
469,774
282,277
543,359
458,241
305,728
592,390
424,044
-
883,361
913,949
2,213,261
1,611,373
695,764
438,147
1,244,500
1,225,205
1,309,237
916,430
1,452,502
823,046
(871,305)
(525,580)
(2,121,024)
(1,241,358)
(348,997)
(197,138)
(556,537)
(911,218)
(1,223,808)
(1,598,144)
(129,186)
(623,965)
(1,163,702)
(544,641)
481,830
388,369
374,514
370,015
346,767
346,221
339,851
333,282
307,125
303,483
294,858
292,465
288,800
278,405
51
4
(8)
(c)
Completed properties for sale (Continued)
Project name
Completion date
of latest phase
Shenyang China Overseas International Community
Phase IV
Jinan Hexin Phase I
Zhuzhou CSCEC Yushan Heyuan
Zhongshan China Oversea Jincheng Garden
Changsha China Overseas International Community
Phase IV
Xi’an China Overseas City #B Land
Yancheng Chengzhong Yayuan
Nanjing China Overseas International Community
Zibo B10
Others
Oct.2015
Dec.2015
Jun.2015
Mar.2015
538,559
483,109
87,954
-
Dec.2014
Dec.2015
Dec.2015
Dec.2015
Dec.2015
N/A
511,841
109,136
16,147,884
Total
(d)
2014 current year
40,726
3,419
586,253
1,029,622
Decrease in 31 December
current year
2015
(303,315)
(237,620)
(427,962)
(788,306)
275,970
248,908
246,245
241,316
(273,519)
1,495,240 (1,258,980)
136,876
(16,932)
3,746,682 (3,540,614)
332,912
(129,219)
50,685,886 (56,589,591)
238,322
236,260
229,080
206,068
203,693
10,244,179
39,426,392 101,413,129 (97,995,850)
42,843,671
Construction contracts
Costs incurred plus/(less) gross profit recognised
/(estimated losses)
Less: Payment settled
Total
31 December 2015
31 December 2014
2,890,534,412
(2,779,013,592)
2,375,346,642
(2,302,469,958)
111,520,820
72,876,684
Work in progress before provision for impairment
Less: Provision for impairment of work in progress
Work in progress
Advances for contract work (Note 4(26))
139,816,133
(1,972,897)
137,843,236
(26,322,416)
97,657,887
(1,956,054)
95,701,833
(22,825,149)
Total
111,520,820
72,876,684
Construction contract projects at end of year:
(e)
As at 31 December 2015 and 31 December 2014, the inventories that were pledged by the Group to
52
4
(9)
Assets classified as held for sale
31 December 2015
Estimated
Book value Fair vale disposal fee
Cash at bank and on
hand (a)
(a)
Other receivables (a)
Inventories (a)
(a)
Long-term equity
investments (b)
Fixed assets
Total
-
31 December 2014
Estimated
disposal time Book value
-
-
N/A
42,113
Estimated
Fair vale disposal fee
42,113
-
Estimated
disposal time
2015
-
-
59,724
59,724
-
2015
-
-
N/A
-
N/A
N/A
114,781
7,884,564
114,781
7,884,564
-
2015
2015
-
-
-
N/A
515,000
515,000
-
2015
755,687
-
755,687
-
-
2016
N/A
755,687
680
755,687
680
-
2015
2015
755,687
755,687
-
9,372,549
9,372,549
-
(a)
In accordance with an irrevocable agreement signed by the Group, the Group should transfer all shares
of Shanxi Wuyu Company to an independent third party after the completion of its BT construction
contract. The transfer transaction was completed in 2015.
(b)
In 2014, the Group’s wholly owned subsidiary China State Construction International Co., Ltd. signed an
irrevocable agreement with Sinotrans & CSC holdings Co., Ltd. to transfer the equity interest in Beijing
Aocheng Wuhe Real Estate Company Limited (“Aocheng Wuhe”), a wholly owned subsidiary of China
State Construction International Co., Ltd., to Sinotrans & CSC holdings Co., Ltd. At that time, the shares
of interest in Aocheng Wuhe was expected to be transferred in 2015 and therefore was classified as
held for sale asset as 31 December 2014. However, despite continuous efforts and taking necessary
actions to complete the transfer of the shares of interest during the year of 2015, the completion of the
transfer were delayed due to certain procedures surrounding beyond the control of the Group. As a
result, the transfer transaction was not completed by 31 December 2015. The Group remains committed
to its plan and attempts to complete the transfer transaction and based on its prevailing information
available to management, it was expected that the transfer transaction will be completed by 2016.
Therefore, as at 31 December 2015, the shares of interest in Aocheng Wuhe continued to be classified
as held for sale.
53
4
(10) Current portion of non-current assets
31 December 2015
31 December 2014
Receivables for BT project
Project quality and investment warranty
Entrusted loans (Note 4(13))
Receivables for infrastructure construction and other project
Others
9,397,892
16,988,082
2,331,750
5,003,044
130,144
5,856,463
10,996,741
645,900
-
Total
33,850,912
17,499,104
31 December 2015
31 December 2014
(11) Other current assets
Banking wealth management products (a)
Prepaid taxes (b)
Entrusted loans (c)
Others
817,692
5,919,582
40,000
1,691,474
185,000
5,195,895
480,300
1,186,994
Total
8,468,748
7,048,189
(a)
Banking wealth management products are short-term wealth management products purchased by the
Group, which were issued by banks.
(b)
Prepaid taxes mainly include income taxes, business tax and land appreciation tax prepaid by
subsidiaries, in accordance with regulatory requirements of local tax authorities and VAT yet to be
deducted.
(c)
Details of entrusted loans are analysed as follows:
Creditor company
Obligor
Huanggang Construction
Third Engineering Bureau
Investment Group
Co., Ltd.
Co., Ltd
Entrusted bank
Amount
Duration
Maturity date
Interest
rate (%)
Wuchang Branch
of Huaxia Bank
40,000
12 months
25 August 2016
8.25
54
4
(12) Available-for-sale financial assets
(a)
31 December 2015
31 December 2014
Measured at fair value
Available-for-sale equity instrument
Available-for-sale bonds
Other
Sub-total
1,745,692
48,925
20,210
1,814,827
1,946,230
45,568
16,466
2,008,264
Measured at cost
Less: Provisions for impairment
Sub-total
4,074,499
(40,359)
4,034,140
2,985,123
(24,788)
2,960,335
Total
5,848,967
4,968,599
Relevant information of available-for-sale financial assets is analysed as follows:
Available-for-sale financial assets measured at fair value:
—Fair value
—Cost
—Aggregate amounts Included in other
comprehensive income
Available-for-sale bonds
—Fair value
—Cost
31 December 2015
31 December 2014
1,745,692
1,194,612
1,946,230
1,310,196
551,080
636,034
48,925
48,576
45,568
45,950
349
Others
—Fair value
—Cost
Total
—Fair value
—Cost
55
(382)
20,210
37
16,466
35
20,173
16,431
1,814,827
1,243,225
2,008,264
1,356,181
571,602
652,083
4
(12) Available-for-sale financial assets (Continued)
(a)
Relevant information of available-for-sale financial assets is analysed as follows (Continued):
Available-for-sale financial assets measured at cost:
31 December Increase in Decrease in 31 December Shareholding ratio of Cash dividend
2014 current year current year
2015
the invested entity in current year
Available-for-sale equity
instrument-cost
Tai Zhong Yin Railway
Investment Co., Ltd
1,000,000
-
-
1,000,000
7.33
-
Baha Mar Ltd
Shanghai Zhongxin Huidi
Investment Centre
(LLP) (Note)
Tangshan Tangcao
Railway Co., Ltd
Zhongguancun
Development Group
917,852
56,190
-
974,042
10.00
-
-
500,000
-
500,000
45.25
-
120,000
120,000
-
240,000
9.60
-
200,000
-
-
200,000
2.20
2,686
Others
747,271
528,114
(114,928)
1,160,457
N/A
31,223
2,985,123
1,204,304
(114,928)
4,074,499
N/A
33,909
N/A
N/A
N/A
33,909
Sub-total
Less: Provisions for
impairment
Total
(24,788)
2,960,335
(15,583)
1,188,721
12
(114,916)
(40,359)
4,034,140
Note: In January 2015, the Company's subsidiary China Construction Eighth Engineering Division Corp.
Ltd., as a limited partner, together with Shanghai Zhongxin Chengfeng Investment Centre (LLP)
("Zhongxin Chengfeng"), CITIC-CP Asset Management Corporation Ltd (CITIC-CP) and Shanghai
Luhong Investment Management Co., Ltd. ("Luhong Investment"), established Shanghai Zhongxin
Huidi Investment Centre (LLP) ("Zhongxin Huidi") with total investment amounted to RMB1,105.1
million, in which China Construction Eighth Engineering Division Corp. Ltd contributed RMB500
million with 45.25% shareholdings. According to the partnership agreement, China Construction
Eighth Engineering Division Corp. Ltd has no voting right in both Investment Decision Committee
and Management Committee of Zhongxin Huidi, and it has preferred right to proceeds ceiling to
15% of its investment in Zhongxin Huidi. Therefore, the investment was recognized as an
available-for-sale financial asset.
56
4
(12) Available-for-sale financial assets (Continued)
(b)
Relevant information of provisions for impairment of available-for-sale financial assets is analysed as
follows:
(c)
31 December 2014
24,788
Increase in current year
Decrease in current year
15,583
(12)
31 December 2015
40,359
The available-for-sale financial assets measured at cost mainly include the unlisted equity investments
held by the Group which are not quoted in an active market and whose fair value cannot be reliably
measured as the range of fair value reasonable estimates is large and probabilities for determining
these estimates cannot be reasonably determined. The Group has no plan to dispose these
investments.
(13) Long-term receivables
31 December 2015 31 December 2014
Receivables for BT project
Receivables for infrastructure construction and other project
Project quality warranty and investment margin
Loans to related parties (Note 9(6))
Entrusted loans(a)
Others
Sub-total
67,028,288
31,788,958
55,455,663
2,009,928
3,694,340
177,487
160,154,664
(944,293)
55,433,209
19,230,464
38,814,337
1,823,406
2,691,600
181,642
118,174,658
(606,438)
Sub-total
Less: Current portion of long-term receivables (Note 4(10))
159,210,371
(33,833,926)
117,568,220
(17,499,104)
Total
125,376,445
100,069,116
As at 31 December 2015 and 31 December 2014, the receivable for BT project were pledged by the
57
4
(13) Long-term receivables (Continued)
(a)
Details of entrusted loans are analysed as follows:
Creditor company
Obligor
China Construction Third
Wuhan Optics Valley Construction
Engineering Bureau Co., Ltd
Investment Co., Ltd.
Wuhan real estate development
investment group Co., Ltd
China Construction Sixth
Engineering Division Corp,
Ltd
Tianjin City Infrastructure
Construction & Investment
(Group) Co., Ltd
China Construction Sixth
Engineering Division Corp,
Ltd
CSCEC Guilin Traffic
Construction Investment
Company Limited
(Group) Co., Ltd
The Company
Changsha Metro Group Co., Ltd
Wuhan Traffic Engineering
Construction Investment Group
Co., LTD
(Group) Co., Ltd.
(Group) Co., Ltd.
Wuhan Traffic Engineering
Construction Investment Group
Co., LTD
The Company
The Company
The Company
The Company
Guilin City Traffic Investment
Holdings Limited
Entrusted bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Guilin Branch of
Agricultural Bank of
China
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Wuchang Branch of
Huaxia Bank
Tianjin Hexi Branch of
Industrial and
Commercial Bank
of China
Tianjin Hexi Branch of
Industrial and
Commercial Bank
of China
Guilin Branch of
Agricultural Bank of
China
Changsha Furong
Branch of China
Construction Bank
Amount
Duration
Maturity date
Interest
rate(%)
270,000
31 months
28 May 2016
8.75
200,000
22 months
13 Mar. 2016
8.75
300,000
22 months
16 Dec. 2016
9.00
2,000
36 months
18 Apr. 2016
7.75
140,300
36 months
30 Dec. 2017
8.00
4,000
36 months
18 Apr. 2016
7.75
4,000
36 months
18 Apr. 2016
7.75
4,000
36 months
18 Apr. 2016
7.75
2,000
36 months
18 Apr. 2016
7.75
350,000
22 months
11 Mar. 2017
8.75
4,000
36 months
18 Apr. 2016
7.75
140,000
13 months
30 Jan. 2016
8.00
200,000
36 months
29 May 2016
8.75
63,190
36 months
3 Jul. 2017
5.75
63,190
36 months
19 Mar. 2018
5.75
390,000
60 months
27 Oct. 2019
8.25
200,000
96 months
22 Dec. 2023
5.39
Wuhan Rural
Commercial Bank
467,750
48 months
28 Aug. 2016
5.75
CITIC Bank
380,000
36 months
19 Jun. 2016
6.15
CITIC Bank
354,000
36 months
1 Nov. 2016
6.15
Wuhan Rural
Commercial Bank
155,910
60 months
28 Aug. 2017
5.75
Total
3,694,340
58
4
(13) Long-term receivables (Continued)
(b)
Long-term receivables derecognized due to the transfer of financial assets are analysed as follows:
Long-term receivables derecognized due to the transfer of financial assets in current year amounted to
RMB4,311,108 thousand (2014: Nil). Related loss in current year amounted to RMB278,028 thousand
(2014: Nil).
(14) Long-term equity investments
31 December 2015
Joint ventures (a)
Associates (b)
Sub-total
11,391,164
14,936,527
26,327,691
Less: Provision for impairment
(1,594)
Total
26,326,097
31 December 2014
11,059,379
12,252,963
23,312,342
(1,358)
23,310,984
As at 31 December 2015, there were no significant restrictions over the realisation of the Group’s
long-term equity investments (31 December 2014: no significant restrictions).
59
4
(14) Long-term equity investment (Continued)
(a)
Joint ventures
31 December
2014
Net profit / loss
Investment
adjusted
contribution
according to
or withdraw equity method
Current year movement
Share of other
Profit/Cash
comprehensive
dividends
Accrual /
income under
declared by (Reversal) of
equity method joint ventures impairment
Other 31 December
(Note)
2015
Lang Light International Co., Ltd.
Nanjing Second Yangtze River
Bridge Co., Ltd.
Speedy Champ Investments
Limited
China Overseas port (Laizhou)
Co., Ltd
2,481,619
-
(16,456)
(50,659)
(119,400)
50,783
2,345,887
1,190,310
-
140,510
(65,297)
(161,129)
64,396
1,168,790
1,444,361
-
104,645
44,818
(46,717)
-
1,547,107
605,571
-
59,382
(59,250)
(46,179)
Guiheng Investment Co., Ltd.
Shandong China Overseas
Huachuang Real Estate Co., Ltd.
Tianjin Yingchao Real Estate
Development Co., Ltd
Ningbo China Overseas Hexie
Properties Investment Co., Ltd
Hangzhou China overseas
Younger Real Estate Co., Ltd.
Shenzhen China Overseas Xinhe
Real Estate Investment Co., Ltd
1,124,786
-
20,468
(60,642)
498,633
-
(4,196)
722,205
(608,587)
(39,594)
60,034
-
175
745
259,780
-
19,190
-
(49,876)
32,664
592,188
-
62,595
1,147,207
-
-
494,437
-
-
24,148
-
-
60,954
-
178,970
(100,000)
169,770
-
8,864
(1,503)
-
-
177,131
Xing Gui Investment Co., Ltd.
Ningbo Cha Ting Properties Co.,
Ltd
909,279
-
26,858
(50,541)
-
50,975
936,571
24,964
-
(25,316)
-
-
-
Xing Chuang Enterprise Co., Ltd
378,031
-
23,942
-
-
367,793
1,190,036
832,770
433,913
(28,314)
(281,141)
202,717
2,349,981
11,059,379
224,183
752,385
(354,347)
(754,566)
464,130
11,391,164
Others
Sub-total
Total
352
(34,180)
(1,358)
-
(1,358)
11,058,021
-
11,389,806
The information of the interests in joint ventures is presented in detail in Note 6(2).
Note: Other is mainly caused by the volatility of foreign exchange rate in 2015.
60
4
(14) Long-term equity investment (Continued)
(b)
Associates
Investment
31 December contribution
2014 or withdraw
Trust House Pte.Ltd.
Beijing China Construction
Zhongchao Concrete Co., Ltd.
DuYun Galactic Real Estate
Henan China Construction
Municipal Construction
Jinmao Investment (Changsha)
Co., Ltd.
Anhui Guoyuan Investment Co.,
Ltd.
Anhui Guoyuan Trust Co., Ltd,
China Overseas Grand Oceans
Group Ltd.(“ Overseas Oceans”)
Krimark Investment Ltd.
Fast Shift Investments Limited
Nanning Metro Line Two
Construction Co. Ltd (Note 2)
Xuzhou Metro Line One
Investment Development Co.,
Ltd.(Note 2)
Jiqing Express Railway Co., Ltd.
Shandong Jilai Intercity
Expressway Co., Ltd.(Note 2)
Others
Sub-total
Total
Net profit /
loss adjusted Share of other
Profit/Cash
according to comprehensive
dividends
Accrual /
equity income under declared by joint (Reversal) of
method equity method
ventures impairment
Other 31 December
(Note 1)
2015
103,155
917
18,339
-
-
1,108
123,519
25,163
-
(1,569)
-
-
-
23,594
38,672
-
(5,756)
-
-
-
32,916
185,264
-
22,476
-
-
-
207,740
1,014,188
-
21,848
-
(197,368)
-
838,668
680,483
1,951,688
236,724
-
47,176
349,683
(13,098)
(3,871)
(85,460)
(40,375)
-
865,825
2,257,125
3,685,744
168,405
1,436,532
-
258,627
(852)
(468)
(485,304)
(2,324)
-
(6,934)
-
102,997
82,104
3,555,130
165,229
1,518,168
1,983,000
-
-
-
-
-
1,983,000
-
196,000
1,000,000
-
-
-
-
196,000
1,000,000
980,669
12,252,963
202,450
805,420
2,441,511
96,726
806,230
122,740
308,949
202,450
1,967,163
14,936,527
(12,857)
(517,454)
(25,535)
(355,672)
-
(236)
(236)
12,252,963
(236)
14,936,291
The information of the interests in associates is presented in detail in Note 6(2).
Note 1: Other is mainly caused by the volatility of foreign exchange rate in 2015.
Note 2: The investment commitment made by the Group to associates is presented in detail in Note
11(4).
61
4
(15) Investment properties
31 December
2014
Increase in
current year
Decrease in
current year
31 December
2015
Cost
Buildings
Land use rights
20,731,515
6,405,785
3,710,755
2,896,156
(393,615)
(186,469)
24,048,655
9,115,472
Sub-total
27,137,300
6,606,911
(580,084)
33,164,127
Accumulated depreciation/amortisation
Buildings
Land use rights
(1,274,625)
(593,739)
(545,659)
(171,909)
17,901
2,758
(1,802,383)
(762,890)
Sub-total
(1,868,364)
(717,568)
20,659
(2,565,273)
Net book value
Buildings
Land use rights
19,456,890
5,812,046
22,246,272
8,352,582
Sub-total
25,268,936
30,598,854
Provision for impairment
Buildings
Land use rights
(983)
-
-
-
(983)
-
Sub-total
(983)
-
-
(983)
Carrying amount
Buildings
Land use rights
19,455,907
5,812,046
22,245,289
8,352,582
Total
25,267,953
30,597,871
62
4
(15) Investment properties (continued)
In 2015, RMB601,757 thousand (2014: RMB401,374 thousand) of depreciation was charged for
investment properties and no (2014: Nil) provision for impairment was provided.
In 2015, the Group changed the use of certain building with a carrying amount of RMB32,671 thousand
(a cost of RMB41,146 thousand) to owner-occupied properties, and therefore, such investment
properties were transferred to fixed assets at the dates of change in use.
In 2015, the Group changed the use of certain buildings with a carrying amount of RMB95,165 thousand
(a cost of RMB99,636 thousand) and land use rights with a carrying amount of RMB55,989 thousand (a
cost of RMB55,989 thousand) to inventories.
In 2015, the Group changed the use of certain buildings with a carrying amount of RMB732,005
thousand (a cost of RMB763,722 thousand) and land use rights with a carrying amount of
RMB2,117,174 (a cost of RMB2,117,174 thousand) to lease-out properties, and therefore, such assets
were transferred from fixed assets and inventories to investment properties at the dates of change in
use.
In 2015, ,the Group disposed investment properties with a carrying amount of RMB330,134 thousand (a
cost of RMB337,823 thousand), with gains on disposal amounting to RMB788,418 thousand.
As at 31 December 2015 and 31 December 2014, the investment properties that were pledged by the
63
4
(16) Fixed assets
Buildings
Machinery and
equipment
Motor vehicles
Office equipment
and others
Total
Cost
31 December 2014
Increases in the current year
Purchase
Transfers from construction
in progress
Others
Decrease in the current year
12,748,578
11,447,877
3,362,180
11,586,903
39,145,538
2,227,067
1,915,155
233,207
3,401,593
7,777,022
325,758
1,376,254
216,306
2,714,235
4,632,553
1,765,499
218,912
-
584,624
2,569,035
135,810
319,989
16,901
(351,894)
(453,188)
(472,090)
(1,411,956)
102,734
(2,689,128)
575,434
Sale and disposal
(127,490)
(285,574)
(235,062)
(1,250,571)
(1,898,697)
others
(224,404)
(167,614)
(237,028)
(161,385)
(790,431)
31 December 2015
14,623,751
12,909,844
3,123,297
13,576,540
44,233,432
(2,040,095)
(4,948,579)
(1,592,720)
(7,623,875)
(16,205,269)
(454,217)
(1,363,822)
(356,195)
(3,204,253)
(5,378,487)
Accrual of depreciation
(419,656)
(1,209,735)
(348,907)
(3,177,640)
(5,155,938)
(34,561)
(154,087)
(7,288)
(26,613)
88,169
270,259
Sale and disposal
32,115
Others
56,054
Accumulated depreciation
31 December 2014
Others
31 December 2015
(222,549)
287,961
1,203,673
1,850,062
216,618
166,131
1,124,685
1,539,549
53,641
121,830
78,988
310,513
(2,406,143)
(6,042,142)
(1,660,954)
(9,624,455)
(19,733,694)
(7,944)
(27,655)
(11,441)
(9,501)
(56,541)
(129)
(760)
-
(3)
(892)
-
(711)
-
(3)
(714)
(49)
-
-
Provision for impairment loss
31 December 2014
Accrual of impairment
Others
Sale and disposal
31 December 2015
(129)
(178)
-
9
56
1,043
1,108
-
9
56
1,043
1,108
(8,461)
(56,325)
(8,073)
(28,406)
(11,385)
Net book value
31 December 2015
12,209,535
6,839,296
1,450,958
3,943,624
24,443,413
31 December 2014
10,700,539
6,471,643
1,758,019
3,953,527
22,883,728
64
4
(16) Fixed assets (continued)
As at 31 December 2015 and 31 December 2014, buildings, and machinery and equipment that were
pledged by the Group to banks for borrowings are presented in detail in Note 4(34)(a).
In 2015, depreciation charged to fixed assets amounted to RMB5,155,938 thousand (2014:
RMB4,477,790 thousand). The costs of fixed assets transferred from construction in progress amounted
to RMB2,569,035 thousand (2014: RMB2,111,488 thousand).
(a)
As at 31 December 2015 and 31 December 2014, the Group had no significant fixed assets that were
temporarily idle.
(b)
Fixed assets held under finance leases
As at 31 December 2015, the fixed assets with a carrying amount of RMB390,428 thousand (a cost of
RMB524,733 thousand) are held under finance leases (31 December 2014: a carrying amount of
RMB467,764 thousand and a cost of RMB550,791 thousand) (Note 13). The analysis is as follows:
31 December 2015
Cost
Accumulated
depreciation
Provision for
impairment
Carrying amount
Motor vehicles
460,575
64,158
(112,658)
(21,647)
-
347,917
42,511
Total
524,733
(134,305)
-
390,428
Motor vehicles
478,955
71,836
(64,033)
(18,994)
-
414,922
52,842
Total
550,791
(83,027)
-
467,764
31 December 2014
(c)
Fixed assets leased out under operating leases
As at 31 December 2015, the fixed assets with a carrying amount of RMB54,902 thousand and a cost of
RMB135,666 thousand are leased out under operating leases (31 December 2014: a carrying amount
of RMB73,015 thousand and a cost of RMB151,782 thousand).
(17) Construction in progress
31 December 2015
Ending Provision for
Carrying
balance
impairment
amount
Construction in progress10,140,825
(4,004) 10,136,821
65
31 December 2014
Carrying
balance impairment
amount
6,708,132
(4,004) 6,704,128
4
(17) Construction in progress (continued)
(a)
Movement of significant projects of construction in progress
Project name
Aonan #3 Land Office Building
Xingfu New Office Building of China
Construction Eighth Engineering Division
Corp. Ltd.
Liutai Building of China Construction Sixth
Engineering Division Corp. Ltd.
Beijing CSCEC HongDa Building
Reorganization and Expansion Project
Chemical Equipment Factory Phase III of
China Construction Eighth Engineering
Division Corp. Ltd.
Headquarters Building of China Construction
Steel Structure Corp. Ltd.
Technology Centre Testing Building
Reorganization and Expansion Project
Western Manufacturing Base of China
Construction Steel Structure Corp. Ltd.
Shenyang huanggu thermal power Co., Ltd. –
Bajiazi New Heat Source Project
Headquarter Building of China Construction
Eighth Engineering Division Corp. Ltd.
Others
Sub-total
Total
(b)
Budgeted
amount
2014 current year
Transfer to
fixed assets
Other
decreases
31 December
2015
Proportion of
Including:
expenditure
Cumulative borrowing costs
incurred to
capitalised
capitalised in Capitalisation
budgeted amount borrowing costs
current year
rate (%) Source of funds
3,434,160
2,566,675
234,875
-
-
2,801,550
81.58
-
-
-
Equity funds
1,600,000
-
1,401,458
-
-
1,401,458
87.59
-
-
-
Equity funds
2,559,200
-
1,338,063
-
-
1,338,063
52.28
-
-
-
Equity funds
620,000
532,079
50,295
-
-
582,374
93.93
-
-
-
Equity funds
648,355
400,274
216,506
-
523,188
95.13
-
-
-
950,000
158,563
328,680
-
(3)
487,240
51.29
6,233
6,233
Equity funds
Equity funds and
loans
432,300
293,093
89,772
-
-
382,865
88.56
-
-
-
Equity funds
450,000
3,845
288,831
-
-
292,676
65.04
-
-
-
364,176
114,672
140,251
188,587
70.00
19,822
7,919
Equity funds
Equity funds and
loans
180,936
-
180,936
180,936
99.99
-
-
45
45
N/A
(93,592)
(62,495)
-
(3,841)
-
2,638,931
6,708,132
(4,004)
2,071,872
6,341,539
-
(2,412,948)
(2,569,035)
-
(335,967)
(339,811)
-
1,961,888
10,140,825
(4,004)
6,704,128
6,341,539
(2,569,035)
(339,811)
10,136,821
N/A
5.56
3.47
4.90
Equity funds
Equity funds and
loans
As at 31 December 2015 and 31 December 2014, the construction in progress that were pledged by the Group to banks for borrowings are presented in detail in Note
4(34)(a).
66
4
(18) Intangible assets
Land use
rights
Cost
31 December 2014
Increase in the current year
31 December 2015
Accumulated amortisation
31 December 2014
Increase in the current year
31 December 2015
Provision for impairment
31 December 2014
31 December 2015
Carrying amount
31 December 2015
31 December 2014
4,325,361
Franchise
rights
Software
Others
Total
5,514,764
275,207
301,585
10,416,917
193,229
(382,423)
4,136,167
30,420
5,545,184
91,480
(2,794)
15,196
(364)
330,325
(385,581)
363,893
316,417
10,361,661
(568,507)
(412,070)
(117,346)
(74,533)
(1,172,456)
(92,303)
37,105
(144,691)
-
(46,370)
1,397
(22,526)
97
(305,890)
38,599
(623,705)
(556,761)
(162,319)
(96,962)
(1,439,747)
(5,923)
(8,887)
3,503,575
3,750,931
-
-
-
4,988,423
5,102,694
201,574
157,861
219,455
227,052
(5,923)
(8,887)
8,913,027
9,238,538
In 2015, amortisation of intangible assets amounted to RMB295,637 thousand (2014: RMB265,013
thousand).
As at 31 December 2015 and 31 December 2014, intangible assets that were pledged by the Group to
67
4
(19) Goodwill
31 December Increase in Other movements 31 December
2014 current year
(Note)
2015
Goodwill China Overseas Land & Investment Ltd.
Far East Global Group Ltd.
Plaza Construction LLP
CSCEC Zhong Huan Engineering Co., Ltd.
China State Construction Built Port Group
Co., Ltd.
Jimsar County Tianyu Huaxin Cement
Dezhou Haoyu Investment Co., Ltd.
Hubei Civil Air Defense Construction Design
Institute
Others
Sub-total
1,336,127
455,719
135,383
40,103
-
76,384
26,053
8,288
-
1,412,511
481,772
143,671
40,103
15,583
-
-
15,583
14,601
13,142
-
-
14,601
13,142
11,563
27,923
2,050,144
3,026
3,026
572
111,297
11,563
31,521
2,164,467
Total
(27,743)
2,022,401
(10,096)
(7,070)
(580)
110,717
(38,419)
2,126,048
As at 31 December 2015, the goodwill of the Group mainly arose from acquisition of China Overseas
Land & Investment Ltd. by the Company’ subsidiary China Overseas Holdings Limited, and from the
acquisition of Far East Global Group Ltd. by the Company’ subsidiary China State Construction
International Holdings Ltd.(“China State Construction International”).
The goodwill of the Group is attributed to several identifiable cash-generating units. Where impairment
assessment is conducted for goodwill, the Group assesses China Overseas Land & Investment Ltd. and
of Far East Global Group Ltd. separately as individual cash-generating unit. Recoverable amount of
China Overseas Land & Investment Ltd. is determined by the fair value of stocks as issued in the open
market net of expected transaction fees; recoverable amount of Far East Global Group Ltd. is
determined by the fair value of stocks as issued in the open market net of expected transaction fees.
Note: Other movements are mainly caused by change of foreign exchange rate in 2015.
68
4
(20) Deferred tax assets and deferred tax liabilities
(a)
Deferred tax assets without taking into consideration the offsetting of balances
31 December 2015
Deductible
temporary
differences and Deferred tax
losses
assets
31 December 2014
Deductible
temporary
differences and Deferred tax
losses
assets
Provision for assets impairment
Elimination of intra-group unrealised profit
Accrued expenses
Accrued liabilities
Deductible losses
Discounted long-term receivables
Others
11,823,295
3,496,584
11,043,164
235,428
2,924,255
3,169,798
146,538
2,584,589
874,146
2,692,989
58,009
728,761
645,741
34,250
9,743,398
2,910,900
9,686,551
152,355
2,374,772
2,575,450
374,477
2,144,816
727,725
2,372,341
37,872
592,145
525,203
91,224
Total
32,839,062
7,618,485
27,817,903
6,491,326
Including:
Expected to reverse within one year (inclusive)
3,356,145
2,741,891
Expected to be reverse after one year
4,262,340
3,749,435
Sub-total
7,618,485
6,491,326
69
4
(20) Deferred tax assets and deferred tax liabilities (Continued)
(b)
Deferred tax liabilities without taking into consideration the offsetting of balances
31 December 2015
Taxable
temporary
Deferred tax
differences
liabilities
Depreciation of fixed assets
Fair value adjustment of
business combinations
involving enterprises not under
common control (Note 1)
Changes in fair value of financial
assets
Gain from special restructuring of
subsidiaries (Note 2)
Withholding tax for dividends
(Note 3)
Revenue from project BT
Others
Total
31 December 2014
Taxable
temporary
Deferred tax
differences
liabilities
400,825
71,227
426,521
78,756
802,565
184,231
755,435
168,427
755,104
174,380
1,047,378
253,950
1,179,437
294,859
1,179,437
294,859
7,463,362
2,107,308
703,888
373,169
479,733
112,063
7,115,274
2,455,310
443,233
355,764
431,930
84,181
13,412,489
1,689,662
13,422,588
1,667,867
Including:
Expected to be reverse within
one year (inclusive)
Expected to be reverse after one
year
458,292
239,366
1,231,370
1,428,501
Sub-total
1,689,662
1,667,867
Note 1: Deferred tax liabilities are recognised due to assets value appreciation for subsidiaries acquired.
Note 2: According to Notice of the Ministry of Finance and the State Administration of Taxation on
Enterprise Income Tax Treatment of Enterprise Reorganization (Cai Shui [2009] No.59),
deferred tax liabilities are recognised by the Company and other related subsidiaries for the
difference between tax base and accounting base of equity investment arising from
reorganization of West Construction.
Note 3: According to the Arrangement between Mainland China and Hong Kong Special Administrative
Region over income taxes to avoid double taxation and tax evasion, signed between Mainland
China and Hong Kong, withholding tax for dividends are provided, by domestic subsidiaries,
domestic associates and domestic joint vetures of China Overseas Land & Investment Ltd, for
profit estimated to be distributed to China Overseas Land & Investment Ltd. at the tax rate of
5%.
70
4
(20) Deferred tax assets and deferred tax liabilities (Continued)
(c)
Deductible temporary differences and deductible losses that are not recognised as deferred tax assets
are analysed as follows:
31 December 2015
31 December 2014
8,300,310
9,689,484
6,287,600
6,655,080
17,989,794
12,942,680
Deductible temporary differences
Deductible losses
Total
(d)
Deductible losses that are not recognised as deferred tax assets will expire in the following years:
31 December 2015
(e)
31 December 2014
2015
2016
2017
2018
2019
2020
477,815
789,161
1,779,800
2,387,158
4,255,550
723,719
511,129
934,253
1,851,955
2,634,024
-
Total
9,689,484
6,655,080
Net amounts of deferred assets and liabilities taking into consideration the offsetting of balances are set
out as follows:
Deferred tax assets
Deferred tax liabilities
31 December 2015
Offsetting
Net amount after
amount
offsetting
31 December 2014
Offsetting
Net amount after
amount
offsetting
481,144
481,144
470,119
470,119
7,137,341
1,208,518
71
6,021,207
1,197,748
4
(21) Other non-current assets
31 December 2015
Prepayment of investment (Note)
Prepayment of land
Prepayment of purchase of long-term assets
Others
Total
31 December 2014
218,298
146,898
526,301
251,899
248,689
50,957
173,595
157,546
1,143,396
630,787
Note: Prepayment of investment mainly includes prepayment of equity acquisition of RMB128,000
thousand to CITIC Fulljoy (Dalian) Real Estate Development Co., Ltd. as made by the Company’s
subsidiary China Construction First Building (Group) Corporation Limited. As at 31 December
2015, such equity acquisition is yet to be completed.
(22) Provision for assets impairment
31 December
2014
Including:
Provision for bad debts of
accounts receivables
other receivables
long-term receivables
Provision for decline in value of
inventories
Provision for impairment of fixed
assets
Provision for impairment of
construction in progress
investment properties
long-term equity investments
available-for-sale financial
assets
intangible assets
goodwill
Provision for impairment of other
assets
Total
Increase in
current year
Decrease in current year
Reversal
Write-off
Recycle and
Other movement
(10,866,443)
(3,543,582)
1,240,508
22,300
(8,041,277)
(2,773,716)
902,441
16,461
(2,218,728)
(699,139)
235,084
5,350
(2,146)
(2,679,579)
(606,438)
(70,727)
102,983
489
(370,600)
(944,293)
(4,376,290)
(1,659,006)
232,400
-
(39,287)
(5,842,183)
(56,541)
(714)
-
-
930
(56,325)
(3,954)
368,792
31 December
2015
(13,151,171)
(9,527,299)
(4,004)
-
-
-
-
(4,004)
(983)
-
-
-
-
(983)
(1,358)
(236)
-
-
-
(1,594)
(24,788)
(15,583)
-
-
12
(40,359)
-
-
(2,964)
(8,887)
-
-
(580)
(38,419)
-
-
50
(95,061)
1,472,908
22,300
(5,923)
(27,743)
(95,111)
(15,459,184)
(10,096)
(5,229,217)
72
(45,793)
(19,238,986)
4
(23) Short-term borrowings
(a)
Classification of short-term borrowings
31 December 2015
31 December 2014
Unsecured
Guaranteed
Impawn
17,357,304
2,531,300
5,714,365
16,609,599
1,891,000
3,213,937
Total
25,602,969
21,714,536
As at 31 December 2015 and 31 December 2014, the Group’s assets that were pledged to banks for
borrowings are presented in detail in Note4 (34)(a).
As at 31 December 2015 and 31 December 2014, there were no borrowings guaranteed by the parent
company of the Company or other related parties.
In 2015, the annual interest rate of short-term borrowings varied from 0.35% to 12.50% (2014: 0.35% to
10.10% ).
(24) Notes payable
31 December 2015
31 December 2014
2,800,051
11,418,196
2,268,480
10,245,776
Total
14,218,247
12,514,256
73
4
(25) Accounts payable
(a)
31 December 2015
31 December 2014
Payables for projects and for real estate development
Payables for purchase of materials
Payables for services
Rent payable
Others
171,554,660
102,695,819
35,916,781
7,287,590
2,546,232
141,766,834
88,870,112
29,595,933
6,252,005
1,946,736
Total
320,001,082
268,431,620
As at 31 December 2015, accounts payable over 1 year with a carrying amount of RMB56,278,231
thousand (31 December 2014: RMB45,303,477 thousand) are mainly payables for projects, which
are unsettled due to the fact that project have not completed nor settled.
(26) Advances from customers
31 December 2015
Amount due to customers for contract work
(Note 4(8)(d))
Advances for projects
Pre-sales deposits (b)
Others
Total
(a)
31 December 2014
26,322,416
29,744,094
54,929,904
3,523,098
22,825,149
23,282,484
57,289,687
2,947,256
114,519,512
106,344,576
As at 31 December 2015, advances from customers over 1 year with a carrying amount of RMB
7,459,247 thousand (31 December 2014: RMB9,007,699 thousand) are mainly advances for projects
and properties pre-sold, which are unsettled due to the incompleteness of projects or the fact that
delivery conditions of sale contract are not met for properties sold.
74
4
(26) Advances from customers (Continued)
(b)
Pre-sales deposits
Project name
Jinan China Overseas Huashan Longcheng Project
Zhuhai China Overseas Mingzuan Garden
Guangzhou Jinyu Huating
Foshan Cina Overseas Wanjin Xi'an
The Nova, Hong Kong
Wuhan CSCEC Nan Lake NO.1
Harbin China Overseas Yongjing Xi'an #1
Jinan CSCEC Changqing Lake
Changsha CSCEC Mei Xi Lake Centre
Zunyi CSCEC Xingfucheng
Shenzhen Longhua shangtang Project
Beijing China Overseas Jinxi Grand Hall
Wuhan CSCEC Fudixingcheng Project
31 December
2015
31 December Estimated completion /
Pre-sale
2014
completion date percentage (%)
7,414,582
3,485,772
1,707,145
1,433,024
1,374,313
1,291,190
1,249,545
1,195,259
1,162,404
1,110,497
1,434,137
1,147,498
1,016,108
958,656
2,278,817
667,276
138,349
796,908
668,619
154,312
546,590
527,252
1,386,490
231,246
Dec. 2016
Dec. 2016
Dec. 2016
Dec. 2015
Mar. 2016
Apr. 2017
Aug. 2016
Jun. 2022
Jun. 2018
Dec. 2016
Oct. 2016
Dec. 2016
Jun. 2017
Sep. 2016
79.62
76.52
29.65
86.21
44.95
35.00
100.00
50.00
42.00
21.29
90.06
40.96
100.00
25.00
Beijing China Overseas International City North
Beijing China Overseas Changan Yayuan
Ningbo China Overseass International Community
916,338
874,183
862,180
50,747
1,838,012
Jul. 2016
Jun. 2017
Dec. 2018
50.45
100.00
61.21
Beijing CSCEC International City South Project
Suzhou Fenghuang Xi'an Project
Foshan Deng Lake Huafu
Suzhou Shuangwan Jinyuan
Changsha Xinhe Town Residence
Harbin China Overseass Huanyu Tianxia
Wuhan Kaiyuan Grand Hall
Tianjin Fuxing Jiuli
Kunming Peninsula Huafu
Foshan Jinshali
Foshan China Overseas Jinyuan
Shanghai Yuefu Phase I
HongKong Pak Tai Street
Changsha CSCEC Jiangshan No.1
Langfang Yulanhuafu Phase I
CSCEC-Star of Yichang Project #A Land, Phase I
Wuxi Haiyue Garden
Shenyang Huanyu Tianxia Phase IV
Shenyang Dingye Phase 2.1
819,559
779,561
768,217
738,214
734,749
715,731
696,550
648,006
641,872
635,194
613,255
602,205
598,063
596,251
556,496
535,324
524,192
487,518
457,617
2,975,296
12,382
882,277
94,586
486,904
31,253
590,543
19,701
224,953
-
Dec. 2018
Dec. 2015
Jun. 2016
Dec. 2016
Dec. 2016
Oct. 2017
Nov. 2016
Jun. 2017
Apr. 2016
Sep. 2016
Dec. 2016
Jun. 2016
Feb. 2016
Dec. 2019
Dec. 2017
May. 2017
Jun. 2016
Jun. 2017
Dec. 2016
94.54
98.14
70.62
65.54
82.00
16.95
100.00
24.93
22.15
29.59
41.37
66.96
82.97
42.00
80.00
65.18
33.10
100.00
71.60
75
4
(26) Advances from customers (Continued)
(b)
Pre-sales deposits (Continued)
Project name
CSCEC HuaFu Project, Da Ying Po, Guiyang
Huinan Minle security housing Project Phase I ,
Pudong, Shanghai
Zhengzhou China Overseas Jinyuan
Chengdu CSCEC Xinhuafu
Wuxi Taihu Xincheng Fenghuang Jingyuan
Tanggu CSCEC Xingfu City
Yantai International Community Phase I Upper Zone
Taiyuan Yingze Qiaoxi Project
Tianjin China Overseas Balitai
Fuzhou China Overseas Huanyu Tianxia Phase I
CSCEC Town in Fengrun District, Tangshan
Number One Scholar House in Xiangyang CSCEC
Others
Total
31 December
2015
31 December Estimated completion /
Pre-sale
2014
completion date percentage (%)
451,495
81,710
Dec. 2016
37.80
425,818
414,738
392,101
375,207
372,719
371,688
363,187
361,305
357,526
305,452
302,775
9,654,488
886,702
339,686
159,884
715,926
482,187
1,240,315
15,409
38,765,355
Dec. 2018
Jun. 2016
May 2016
Dec. 2019
Jun. 2018
Dec. 2019
Jul. 2017
Dec. 2015
Jun. 2017
Dec. 2018
Sep. 2016
67.00
55.93
34.56
43.90
96.40
49.06
16.43
25.81
50.74
23.00
86.92
54,929,904
57,289,687
76
4
(27) Employee benefits payable
(a)
31 December 2015
31 December 2014
Short-term employee benefits payable
Defined contribution plans payable
Termination benefits payable
5,618,049
180,176
69,250
3,929,592
244,711
54,288
Total
5,867,475
4,228,591
Short-term employee benefits
Wages and salaries, bonuses,
allowances and subsidies
Staff welfare
Social security contributions
Including: Medical insurance
Work injury insurance
Maternity insurance
Supplementary commercial insurance
Housing funds
Labor union funds and employee
education funds
Others
Total
(b)
2014 current year
Decrease in
current year
31 December
2015
3,286,752 33,114,498
485
2,277,067
67,059
1,468,103
54,460
1,265,218
6,928
109,325
5,671
93,560
(4,586)
72,400
112,976
1,896,931
(31,487,344)
(2,273,878)
(1,477,352)
(1,270,718)
(111,484)
(95,150)
(69,365)
(1,903,611)
4,913,906
3,674
57,810
48,960
4,769
4,081
(1,551)
106,296
457,849
9,057
765,180
11,462
(693,820)
(11,814)
529,209
8,705
3,929,592
39,605,641
(37,917,184)
5,618,049
2014 current year
Decrease in
current year
31 December
2015
Defined contribution plans payable
Basic pensions
Unemployment insurance
Annuity
154,919
20,716
69,076
3,077,380
164,049
362,475
(3,094,112)
(170,298)
(404,029)
138,187
14,467
27,522
Total
244,711
3,603,904
(3,668,439)
180,176
77
4
(27) Employee benefits payable (Continued)
(c)
Termination benefits payable
31 December 2015
Early retirement benefits payable (due within one year)
(d)
69,250
31 December 2014
54,288
In 2015, the Group has no other termination benefits paid for termination of the employment relationship.
(28) Taxes payable
31 December 2015
31 December 2014
Business tax payable
Land appreciation tax payable
Enterprise income tax payable
Value-added-tax payable
Individual income tax payable
City maintenance and construction tax payable
Educational surcharge payable
Others
13,421,466
9,812,155
13,096,392
274,885
444,489
932,919
490,415
771,882
12,162,955
10,427,269
11,564,236
432,465
445,304
861,201
456,672
589,127
Total
39,244,603
36,939,229
(29) Interest payable
31 December 2015
31 December 2014
Interest of bonds
Interest of borrowings
2,013,744
475,310
2,136,245
210,154
Total
2,489,054
2,346,399
78
4
(30) Other payables
(a)
31 December 2015
31 December 2014
Warranty payable
Project financing payable
Deposits payable
Taxes withheld payable
Construction incentive payable
Incentive targets of the restricted shares payable
Others
20,885,949
3,127,479
4,054,743
1,249,615
2,429,181
177,998
8,483,436
18,007,523
5,231,840
3,614,601
1,068,746
912,394
262,736
5,031,538
Total
40,408,401
34,129,378
As at 31 December 2015, other payables over 1 year with a carrying amount of RMB9,859,380 thousand
(31 December 2014: RMB7,392,871 thousand) are mainly warranty payable and project financing
payable, which were unsettled due to the incompleteness of projects.
(31) Liabilities classified as held for sale
31 December 2015
31 December 2014
Accounts payable
Taxes payable
Other payables
-
821,899
450,958
56,698
4,538,389
Total
-
5,867,944
For details, please refer to Note 4(9).
79
4
(32) Current portion of non-current liabilities
31 December 2015
(a)
31 December 2014
Current portion of long-term borrowings
(Note 4(34))
Current portion of long-term payables
(Note 4(36))
Current portion of bonds payables (a)
Current portion of deferred revenue
17,808,112
30,469,049
13,460,501
7,999,100
49,637
10,848,639
7,296,588
34,248
Total
39,317,350
48,648,524
Current portion of bonds payables
31 December
2014
Current year
imbursement
Transferred from
bonds payables
31 December
2015
Second private targeted debt financing bonds in 2012
1,296,630
(1,296,630)
-
-
First private targeted debt financing bonds in 2012
Third private targeted debt financing bonds in 2013
2,999,958
(2,999,958)
-
-
1,500,000
(1,500,000)
-
Fourth private targeted debt financing bonds in 2013
-
1,500,000
(1,500,000)
-
-
500,000
500,000
-
-
-
-
499,946
499,946
Fifth private targeted debt financing bonds in 2013
-
-
2,998,815
2,998,815
Fifth tranche of medium-term note in 2011
-
-
4,000,339
4,000,339
7,999,100
7,999,100
Total
7,296,588
(7,296,588)
As at 31 December 2015, details about current portion of bonds payables are as follows:
Par value
Fifth tranche of medium-term
note in 2011
RMB4 billion
Issuance date Maturity
19 July 2011 5 years
Issuance
amount
RMB4 billion
18 March 2013 3 years RMB500 million
5.50%
9 August 2013 3 years
5.34%
The Company
80
RMB3 billion
5.44%
Issued by
The Company
China Construction
Sixth Engineering
Division Corp. Ltd.
China Construction
Seventh
Engineering
Division Corp. Ltd.
First private targeted debt
financing tool in 2013
RMB500 million 23 January 2013 3 years RMB500 million
Second private targeted debt
RMB500 million
Fifth private targeted debt
RMB3 billion
Annual
interest rate
6.30%
4
(33) Other current liabilities
31 December 2014
31 December 2015
(a)
Short-term financing bonds (a)
Accept money deposits(Note 9(5)(f))
Others
4,204,284
2,825,370
210,240
2,664,858
316,433
3,481
Total
7,239,894
2,984,772
Short-term financing bonds:
31 December
2014
First short-term financing bills in 2014
Issuance of
current year
Provision for
interest at par
Amortization
of premium or
discount
Repayment
of current
year
31 December
2015
-
52,686
-
-
-
(52,686)
Second short-term financing bills in 2014
600,000
-
-
-
(600,000)
-
Third short-term financing bills in 2014
450,000
-
-
-
(450,000)
-
Fourth short-term financing bills in 2014
362,172
-
-
-
(362,172)
-
Fifth short-term financing bills in 2014
500,000
-
-
-
(500,000)
-
Sixth short-term financing bills in 2014
700,000
-
-
-
(700,000)
-
-
800,000
-
-
-
800,000
-
500,000
-
-
-
500,000
-
600,000
-
-
-
600,000
-
300,000
-
-
-
300,000
-
400,000
4,614
-
-
404,614
-
500,000
-
-
-
500,000
Seventh short-term financing bills in 2015
-
399,670
-
-
-
399,670
Eighth short-term financing bills in 2015
-
700,000
-
-
-
700,000
2,664,858
4,199,670
4,614
-
Total
(2,664,858)
4,204,284
As at 31 December 2015, details about short-term financing bonds are as follows:
Par value
Issuance
amount
Annual
interest
rate(%)
Issuance date
Maturity
Issued by
16 January 2015
365 days
14 April 2015
366 days
RMB800
million
RMB500
million
4.79
China Construction Fifth
Engineering Division Corp., Ltd.
China Construction Eighth
4.10
Engineering Co.,Ltd.
RMB800
million
RMB500
million
RMB600
million
21 May 2015
245 days
RMB600
million
RMB300
million
16 June 2015
366 days
RMB300
million
4.33
RMB400
million
18 August 2015
366 days
RMB400
million
3.94
RMB500
million
16 September 2015
366 days
RMB500
million
3.83
West Construction
RMB400
Seventh short-term financing bills in 2015 million
RMB700
Eighth short-term financing bills in 2015
million
13 October 2015
270 days
24 December 2015
366 days
81
RMB400
million
RMB700
million
4.70
3.50
3.13
China Construction First Building
(Group) Corporation Limited
China Construction First Building
(Group) Corporation Limited
4
(34) Long-term borrowings
31 December 2015
Unsecured
Guaranteed
Impawn
Pledged
Less: current portion of long-term borrowings
Including: Unsecured
Guaranteed
Impawn
Pledged
Total
31 December 2014
91,890,412
12,548,981
5,753,200
5,940,383
80,329,291
15,089,936
8,339,697
2,834,803
116,132,976
106,593,727
(14,793,931)
(1,738,188)
(662,800)
(613,193)
(26,450,999)
(1,745,875)
(2,123,975)
(148,200)
98,324,864
76,124,678
As at 31 December 2015, no guaranteed borrowings were guaranteed by the Company’s parent or other
related parties (31 December 2014: Nil).
In 2015, the annual interest rate of long-term borrowings (including current portion of long-term borrowings)
varied from 1.24% to 14.00% (2014: 1.31% to 14.00%).
(a) Assets pledged and impawned to banks as a security for borrowings (including short-term borrowings
and long-term borrowings) are analysed as below:
Assets impawned to banks
Assets pledged to banks
Principal of borrowings
31 December 31 December 31 December 31 December 31 December 31 December
2015
2014
2015
2014
2015
2014
Notes receivable
Accounts receivable
Inventories
Investment properties
Fixed assets
Intangible assets
Construction in process
Total
30,000
1,532,233
4,090,375
2,794,588
3,328,200
432,290
6,554,012
2,909,806
199,000
8,537,747
2,076,230
12,062
490,600
46,916
-
10,218,988
831,216
175,940
420,000
-
129,000
1,299,105
3,866,261
4,570,200
963,558
37,297
2,230,000
19,327
3,328,200
432,290
5,957,569
4,095,240
209,800
105,538
2,330,000
199,000
11,775,396
10,095,108
11,163,555
11,646,144
16,442,948
13,329,437
Note: As at 31 December 2015, besides the borrowing obtained as above, the Group had a long-term
borrowing of RMB545,000 thousand, for which the future earning rights of project BT’s special
account for income were impawned to banks(31 December 2014: RMB729,000 thousand).
Besides, the Group had a short-term borrowing of RMB420,000 thousand, for which the future
earning rights of a project company were impawned to banks(31 December 2014: RMB330,000
thousand).
82
4
(35) Bonds payables
31 December
2014
Third medium-term note in 2010
Issuance of
current year
Transferred to current
Interest portion of non-current
adjustment
liabilities
Others
(Note)
31 December
2015
10,108,156
10,079,204
-
28,952
-
-
No. 4503 guaranteed note of Hong Kong in 2010
6,078,976
-
5,284
-
347,749
6,432,009
Fourth medium-term note in 2011
5,995,245
-
2,625
-
-
5,997,870
Fifth medium-term note in 2011
Corporate bond in 2012
3,998,145
4,575,271
397,883
-
2,194
5,875
791
261,809
-
4,842,955
398,674
Guaranteed note in 2012
1,179,270
4,239,480
1,776,496
-
552
4,499
298
67,440
242,554
114,510
1,247,262
4,486,533
1,891,304
500,000
499,590
-
356
-
-
174,852
3,235,354
-
-
(4,000,339)
(500,000)
(499,946)
3,052,888
-
7,614
Fifth private targeted debt financing bonds in 2013
2,996,428
-
2,387
609,484
-
408
-
34,860
644,752
3,037,597
-
5,221
-
173,877
3,216,695
USD100,000 thousand privately raised bonds of Agricultural
Bank of China Hong Kong Branch in 2013
A-level guaranteed note of Hong Kong in 2013
(2,998,815)
B-level guaranteed note of Hong Kong in 2013
3,033,697
-
2,268
-
173,528
3,209,493
C-level guaranteed note of Hong Kong in 2013
3,029,021
-
377
-
173,179
3,202,577
First medium-term note of China Construction Third Engineering
Bureau Co., Ltd. in 2014
200,000
-
-
-
-
200,000
First medium-term note of China Construction Fourth
Engineering Division Corp. Ltd. in 2014
300,000
-
-
-
-
300,000
First medium-term note of China Construction First
Building(Group) Corporation Limited. in 2014
First targeted medium-term note in 2014
400,000
2,995,905
-
1,076
-
-
400,000
2,996,981
First medium-term note of China Construction Fifth Engineering
Division Corp., Ltd. in 2014
200,000
4,878,927
-
2,891
-
279,042
200,000
5,160,860
4,292,802
-
(1,068)
-
245,366
4,537,100
Second medium-term note of China Construction Fourth
892,813
-
1,261
-
-
894,074
Second medium-term note of China Construction Third
Engineering Bureau Co., Ltd. in 2014
800,000
-
-
-
-
800,000
First medium-term note of China Construction Second
Engineering Bureau Ltd. in 2014
598,397
3,025,389
-
341
881
-
160,056
598,738
3,186,326
First private targeted debt financing bonds of China Construction
Eighth Engineering Division Corp. Ltd. in 2014
2,500,000
-
-
-
-
2,500,000
Second medium-term note of China Construction Fifth
1,000,000
-
-
-
-
1,000,000
Second medium-term note of China Construction First
400,000
-
-
-
-
400,000
First medium-term note West Construction in 2014
598,649
-
675
-
-
599,324
500,000
-
-
-
-
500,000
504,096
-
-
-
499,386
899,110
-
-
-
899,288
Third medium-term note of China Construction Third Engineering
First private targeted debt financing bonds of China Construction
Seventh Engineering Division Corp. Ltd. in 2014
First medium-term note of China Construction Seventh
83
(4,710)
178
4
(35) Bonds payables (Continued)
31 December Issuance of
2014
current year
First term of private targeted debt financing bonds of China
Construction Seventh Engineering Division Corp. Ltd. in 2015
First medium-term note in 2015
First medium-term note of China Construction Seventh
First medium-term note of China Construction Eighth
First medium-term note of China State Construction Third
Engineering Bureau Co., Ltd in 2015
No. 5544 guaranteed note of Ireland in 2015
Second medium-term note of China Construction Eighth
Second medium-term note in 2015
Private guaranteed note in 2015
CSCEC FN N2011
First term of Corporate Bond of China Overseas Property Group
Co., Ltd. in 2015
Second term of Corporate Bond of China Overseas Property
Group Co., Ltd. in 2015
First medium-term note of China Construction First
Total
Interest
adjustment
Transferred to current
portion of non-current
liabilities
Others
(Note)
31 December
2015
-
500,000
(699)
-
-
499,301
-
3,000,000
(291)
-
-
2,999,709
-
100,000
(88)
-
-
99,912
-
100,000
-
-
-
100,000
-
500,000
4,028,254
4,532
-
170,278
500,000
4,203,064
-
1,600,000
2,000,000
2,673,321
3,183,163
(178)
960
1,372
-
126,132
-
1,600,000
1,999,822
2,800,413
3,184,535
-
7,000,000
-
-
-
7,000,000
-
1,000,000
-
-
-
1,000,000
-
600,000
-
-
-
600,000
80,064,763
26,284,738
76,834
(7,999,100) 2,745,232
101,172,467
Note: Others are mainly caused by change of foreign exchange rate in 2015.
84
4
As at 31 December 2015, details about bonds are as follows:
Par value
Third medium-term note in 2010
Issuance
amount
Annual
interest
rate (%)
Issued by
RMB10 billion 6 September 2010
10 years
RMB10 billion
4.08
The Company
No. 4503 guaranteed note of Hong Kong
in 2010
USD1 billion 10 November 2010
10 years
USD1 billion
5.50
China Overseas Finance (Cayman)
II Limited
Fourth medium-term note in 2011
RMB6 billion
7 March 2011
7 years
RMB6 billion
5.65
The Company
in 2012
USD750 million 15 February 2012
5 years
USD750 million
4.88
IV Limited
Corporate bond in 2012
RMB400 million
15 March 2012
5 years
RMB400 million
7.50
West Construction
HKD1.5 billion
28 June 2012
10 years
HKD1.5 billion
6.00
China Overseas Finance Investment
(Cayman) II Limited
in 2012
USD700 million 15 November 2012
10 years
USD700 million
3.95
V Limited
30 years
USD300 million
5.35
5 years
USD500 million
3.13
V Limited
China State Construction Finance
(Cayman) I Limited
Guaranteed note in 2012
in 2012
in 2013
USD500 million
2 April 2013
USD100,000 thousand privately raised
bonds of Agricultural Bank of China
Hong Kong Branch in 2013
USD100 million
20 August 2013
7 years
USD100 million
4.05
China Overseas Finance Investment
(Cayman) III Limited
A-level guaranteed note of Hong Kong in
2013
USD500 million
29 October 2013
5 years
USD500 million
3.38
III Limited
B-level guaranteed note of Hong Kong in
2013
USD500 million
29 October 2013
10 years
USD500 million
5.38
III Limited
C-level guaranteed note of Hong Kong in
2013
USD500 million
29 October 2013
30 years
USD500 million
6.38
III Limited
RMB200 million 14 February 2014
3 years
RMB200 million
6.20
China State Construction Third
Engineering Bureau Co., Ltd.
5 years
RMB300 million
5.70
5 years
5 years
RMB400 million
RMB3 billion
6.40
5.70
5 May 2014
5 years
RMB200 million
6.18
8 May 2014
5 years
USD800 million
4.25
VI Limited
USD700 million
8 May 2014
10 years
USD700 million
5.95
VI Limited
RMB900 million
16 May 2014
5 years
RMB900 million
5.72
China Construction Fourth
RMB800 million
21 May 2014
3 years
RMB800 million
5.60
RMB600 million
22 May 2014
5 years
RMB600 million
5.98
China Construction Second
Engineering Bureau Ltd.
First medium-term note of China
Construction Third Engineering
Construction Fourth Engineering
Division Corp. Ltd. in 2014
RMB300 million 27 February 2014
Construction First Building(Group)
Corporation Limited. in 2014
RMB400 million
21 April 2014
First targeted medium-term note in 2014
RMB3 billion
22 April 2014
Construction Fifth Engineering
Division Corp., Ltd. in 2014
RMB200 million
in 2014
USD800 million
in 2014
Second medium-term note of China
Construction Fourth Engineering
Construction Second Engineering
Bureau Ltd. in 2014
85
China Construction Fourth
China Construction First
Building(Group) Corporation
Limited
The Company
4
As at 31 December 2015, details about bonds are as follows (Continued):
Par value
in 2014
USD500 million
First private targeted debt financing
bonds of China Construction Eighth
Engineering Division Corp. Ltd. in
2014
RMB2.5 billion
Issuance
amount
11 June 2014 20 years USD500 million
Annual
interest
rate (%)
Issued by
6.45
VI Limited
9 July 2014
5 years
RMB2.5 billion
6.30
Construction Fifth Engineering
20 August 2014
5 years
RMB1 billion
5.70
RMB400 million 16 September 2014
5 years
RMB400 million
5.85
Limited
First medium-term note of West
Construction in 2014
3 years
RMB600 million
6.00
West Construction
Third medium-term note of China
3 years
RMB500 million
5.19
23 October 2014
3 years
RMB500 million
5.80
China Construction Seventh
RMB900 million
8 December 2014
5 years
RMB900 million
5.78
First term of private targeted debt
financing bonds of China Construction
Seventh Engineering Division Corp.
Ltd. in 2015
RMB500 million
23 January 2015
3 years
RMB500 million
5.60
RMB1 billion
First private targeted debt financing
bonds of China Construction Seventh
Engineering Division Corp. Ltd. in
2014
RMB500 million
Construction Seventh Engineering
First medium-term note in 2015
RMB3 billion
24 April 2015
5 years
RMB3 billion
4.65
The Company
Construction Seventh Engineering
RMB100 million
24 April 2015
5 years
RMB100 million
5.48
Construction Eighth Engineering
RMB100 million
29 April 2015
5 years
RMB100 million
5.24
First medium-term note of China State
Bureau Co., Ltd in 2015
RMB500 million
21 May 2015
3 years
RMB500 million
4.38
No. 5544 guaranteed note of Ireland in
2015
EUR600 million
15 July 2015
4 years
EUR600 million
1.75
China Overseas Land International
(Cayman) Limited
RMB1.6 billion
17 August 2015
5 years
RMB1.6 billion
3.99
RMB2 billion
5 November 2015
5 years
RMB2 billion
3.69
The Company
Private guaranteed note in 2015
EUR400 million
6 November 2015
4 years
EUR400 million
1.70
China Overseas Land International
II (Cayman) Limited
CSCEC FN N2011
5 years
USD500 million
2.95
CSCEC Finance (Cayman) I
Limited
RMB7 billion 19 November 2015
6 years
RMB7 billion
3.40
China Overseas Property Group Co.
Ltd.
7 years
RMB1 billion
3.85
5 years
RMB600 million
3.68
Construction Eighth Engineering
Second medium-term note in 2015
First term of Corporate Bond of China
Overseas Property Group Co. Ltd. in
2015
Second term of Corporate Bond of
Ltd. in 2015
RMB1 billion 19 November 2015
RMB600 million 21 December 2015
86
Ltd.
Limited
4
(36) Long-term payables
31 December 2015
Project quality warranty payable
Payables for finance leases
Payables for minority interest financing
Others
Sub-total
Less: current portion of long-term payables (a)
Total
(a)
31 December 2014
26,117,504
330,463
552,036
31,204
27,031,207
21,615,879
323,692
583,143
34,418
22,557,132
(13,460,501)
(10,848,639)
13,570,706
11,708,493
Current portion of long-term payables
Current portion of long-term payables mainly includes project quality warranty and payables for finance
leases due within one year.
(37) Deferred income
31 December 2015
31 December 2014
Government grant
Connection service income
339,836
551,880
275,658
515,228
Total
891,716
790,886
Government grant items
Government compensation
for demolition of Tangshan
Fengrun District Linyin
Road West Side land
for demolition of Guiyang
Dayingpo Renovation
Project
Compensation for Tianjin
Steel Structure Land
for dismantled Shandong
Jianze Old Station
for demolition of Beijing
Dawayao land
Others
Total
Increase in
31 December
current
2014
year
141,561
-
-
82,966
35,844
1,198
20,739
Amount recognised
in non-operating
Other
income in current changes in 31 December
year current year
2015
(2,782)
Related to
assets
/Related to
income
Related to
assets
-
138,779
-
82,966
(786)
-
36,256
Related to
assets
Related to
assets
1,021
(1,808)
-
19,952
Related to
assets
42,151
-
(42,151)
-
-
35,363
35,328
(8,077)
(731)
61,883
275,658
120,513
(55,604)
(731)
339,836
-
87
Related to
assets
Related to
assets and
income
4
(38) Long-term employee benefits payable
31 December 2015
(a)
31 December 2014
Supplementary retirement benefits payable (a)
Termination Benefits payable(b)
2,126,688
136,489
2,164,875
164,124
Total
2,263,177
2,328,999
Supplementary retirement benefits payable
The Company pays supplementary retirement benefits for its employees who retired on or before 31
March 2007 in addition to the contribution made to statutory insurance schemes. The supplementary
retirement benefit is a type of defined benefit plan. The present value of defined plan liability is
calculated annually by an independent actuary, Towers Watson consulting company, using projected
unit credit method, which is based on the Treasury rate, similar as the duration and currency of the
employee benefits liability.
(i)
The movement of the Group’s supplementary retirement benefits payable of the Group is as below:
The present value of defined
benefit plan liability
1 January 2015
2,164,875
Cost of defined benefit plan recognised in profit or loss for the current
period
—Cost of past service
—Gains on settlement
—Net interest
Cost of defined benefit plan recognised in other comprehensive
income
—Losses on remeassurement of the defined benefit plan liability
Other movement
—Benefits paid
14,017
(20,640)
76,020
94,700
(202,284)
31 December 2015
2,126,688
88
4
(38) Long-term employee benefits payable (Continued)
(a)
Supplementary retirement benefits payable (Continued)
(i)
The movement of supplementary retirement benefits payable of the Group is analysed as follows
(Continued):
The present value of defined
benefit plan liability
1 January 2014
2,264,084
The effect of adopting the Accounting Standards for Business
Enterprises No. 9-Employee Benefits
(149,500)
The cost of defined benefit plan recognised in profit or loss for the
current period
—Cost of past service
—Gains on settlement
—Net interest
The cost of defined benefit plan recognised in other comprehensive
income
—Losses on remeassurement of the defined benefit plan liability
Other movement
—Benefits paid
104,110
(203,458)
31 December 2014
(ii)
63,709
(50)
85,980
2,164,875
The actuarial assumptions used to determine the present value of defined benefit obligations are as
follows:
31 December 2015
Discount rate
Annual growth rate of living expenses for
the family dependents of deceased
employees
Annual growth rate of average medical
expenses
Annual growth rate of supplementary
welfare for retired employees
Mortality rate
3.00%
3.75%
4.50%
4.50%
8.00%
8.00%
0.00%
Move two years backward
annuity life chart of China’s
Life Insurance Industry (Year
2000-2003)
89
31 December 2014
0.00%
2000-2003)
4
(a)
Supplementary retirement benefits payable (Continued)
(iii)
The actuarial assumption that significantly affects the Group’s defined benefit plans is discount rate, and
its sensitivity analysis is as follows:
Assumed fluctuation
Discount rate
Effect of present value of defined
benefit obligations
Assumed
Assumed
increase
decrease
0.25%
(43,800)
45,600
The above sensitivity analysis was based on that just one assumption changed while the other
assumptions remained firm. However, assumptions are often interrelated. The above sensitivity analysis
used the same projected unit credit method in calculating the present value of the defined benefit
obligations.
(iv)
The weighted average duration of fair value of the Group’s supplementary retirement benefits payable is
8.4 year.
The aging of undiscounted defined benefit plan is analysed as follows:
Within one year
Supplementary
retirement benefits
(v)
229,830
31 December 2015
Over one year
2,587,440
Total
2,817,270
Supplementary retirement benefits expose the Group to various risks, mainly including risk of changes
in the interest rate of Treasury bonds, inflation risk, etc.. Decline in the interest rate of Treasury bonds
will lead to an increase in defined benefit plan obligations; Supplementary retirement benefits
obligations keep pace with inflation, the rise in inflation will increase the defined benefit plan obligations.
90
4
(b)
(i)
Termination Benefits payable
Some of the Group’s employees early retired. At the balance sheet date, the main actuarial
assumptions used to determine the Group’s early retirement benefits payable are as follows:
31 December 2015
Discount rate
Annual growth rate of living expenses for
the early retired employees
Annual growth rate of average medical
expenses
Mortality rate
(ii)
31 December 2014
2.75%
3.50%
4.50%
4.50%
8.00%
2000-2003)
8.00%
2000-2003)
Early retirement benefits recognised in profit or loss for the current period
31 December 2015
Financial expenses
28,819
5,940
91
31 December 2014
14,641
8,370
4
(39) Other non-current liabilities
31 December 2015
31 December 2014
Exchangeable bonds in 2014 (Note 1)
Prepaid investment of convertible bonds in 2015 (Note 2)
Others
5,967,372
1,948,080
20,000
4,973,477
20,000
Total
7,935,452
4,993,477
Note 1: Related information regarding exchangeable bonds in 2014:
The Company’s subsidiary China Overseas Finance Investment (Cayman) IV Limited (“the issuer”)
publicly issued exchangeable bonds of USD750,000 thousand on Hong Kong Stock Exchange on 4
February 2014. The bonds are secured by China Overseas Holdings Limited, and maturity date is 4
February 2021. Related clauses are as follows:





The bondholder is entitled to apply for redemption of bonds at 116.90% of par value on 4 August
2018;
In cases of change of guarantor, or delisting or restricted trading of China Overseas Land &
Investment Ltd. at Hong Kong Stock Exchange, bond holders have the right to require the issuer to
redeem the bonds readily;
Bond holder have the right to apply for redemption on maturity date at 127.49% of par value;
During the exchange period from 1 January 2015 to 28 January 2021, bond holder have the right to
exchange the bonds for ordinary shares of China Overseas Land & Investment Ltd., the par value
of which is HKD0.10, at the price of HKD33.10 per share;
At any time point from 4 February 2018 to 7 work days before maturity date, if the stock price of
China Overseas Land & Investment Ltd. during 15 trading days is higher than 130% of early
redemption price set in the agreement divided by exchange rate, the issuer has the right to carry
out exchange at full (not partial) amount, and should release notice in no more than 3 days after the
exchange.
Exchangeable bonds in 2014 was recognised as Financial liabilities at fair value through profit or loss in
the first place and disclosed in other non-current liabilities.
Note 2: Related information regarding prepaid investment of convertible bonds in 2015:
As at 31 December 2015, the Group's subsidiary Strategic Capital, LLC ("the Issuer") has received the
prepaid investment of USD300 million from Riton Holdings Corporation Limited ("the Holder"), a
wholly-owned subsidiary of Guoxin International Investment Co., Ltd., under the framework agreement
of convertible bonds ("convertible bonds in 2015"). As at 31 December 2015, related clauses regarding
conversion terms under the framework agreement are not yet determined.
92
4
(40) Paid-in capital
Stock Transfer from
2014 new shares distribution capital surplus Others
Sub-total
Shares not subjected
to trading
restriction
Shares subjected to
trading restriction
29,853,220
-
-
-
47,340
47,340
146,780
-
-
-
(47,340)
(47,340)
Total
30,000,000
-
-
-
-
-
Stock Transfer from
2013 new shares distribution capital surplus
Others
31 December
2015
29,900,560
99,440
30,000,000
Sub-total
31 December
2014
Shares not subjected
to trading
restriction
Shares subjected to
trading restriction
29,853,220
-
-
-
-
-
29,853,220
146,780
-
-
-
-
-
146,780
Total
30,000,000
-
-
-
-
-
30,000,000
93
4
(41) Other equity instruments
(a) Preference Share
The Company acquired Approval on its non-public issue preference shares (Guozi Chanquan ([2014]
No.436) from the SASAC of the State Council and Permission about its non-public issue preference
shares (Zhengjian Approval[2014] No.1419) from China Securities Regulatory Commission on 10 June
2014 and 25 December 2014 respectively, which approved that the Company to non-publicly issue
preference shares to qualified investor, with total shares no more than 300,000,000 and initial issued
shares no less than 150,000,000, with the issue price per share of RMB100. During the period of 5 years
commencing from the first value date of each tranche, the Company is entitled to redeem and cancel all
or part of the preference shares of such tranche at the dividend payment date of such shares each year.
The holders have no redemption right to sell them back to the Company. Unless the mandatory interest
payment events whose occurrence can be decided by the Company itself incurred, the Company's
meeting of shareholders is empowered to decide to cancel all or part of dividends of preference shares,
which will not constitute a default by the Company, and the dividends of preference shares issued at the
time will not be accumulated. The Company received an actual amount of RMB14,975,410 thousand
after deducting related transaction expenses from the total amount collected by initial issuance of
150,000,000 preference shares on 2 March 2015, and classified such amount as other equity
instruments.
The dividends of preference shares the Company decided to pay will be paid annually. Dividend
payment date is the day of 1 year commencing from the payment deadline for the issuance of
preference shares, while the dividend payment date for the initially issued preference shares is 2 March.
If such date is a legal holiday or non-working day, it will be postponed to the next working day, and
dividends payable will not bear interest during the postponement. Preference shares issued at the time
are at fixed dividend rate attached with one-time rate raise arrangement as follows. Nominal dividend
rate of the initially issued preference shares is determined to be and kept at 5.80% for the 1st to 5th
dividend accrual years through enquiry method. From the 6th dividend accrual year, if the Company
does not exercise all of the rights of redemption, dividend rate per share will be 2 percentage points
higher than that of the1st to 5th dividend accrual years, and will remain the same after the adjustment in
the 6th dividend accrual year.
The mandatory interest payment events stated before comprise one of circumstances below which
occur 12 months before dividend payment date: (1) Distribution of dividends to ordinary shareholders
(including cash, shares, the combination of cash and shares and other legitimate patterns);(2) Capital
withdrawal by shareholders (except for the redemption and cancellation of shares incurred by equity
incentive plan, or the redemption and cancellation of ordinary shares by issuance of preference shares).
As at 31 December 2015, the outstanding preference shares of the Company have a carrying amount of
RMB14,975,410 thousand.
94
4
(41) Other equity instruments (Continued)
(b) Perpetual Bond
On 4 September 2014, the Company issued second medium-term note of which the value day was 5
September 2014, and it can be redeemed by the Company in 2019 and thereafter. The total amount was
RMB2,000,000 thousand, and the actual amount received was RMB1,996,770 thousand after deduction
of related transaction expenses such as underwriting fees. According to the clauses of the medium-term
note (the “Clauses”), the term of the medium-term note will be indefinite unless the Company redeemed
the note under the Clauses. At the fifth and each interest payment date thereafter, the Company will be
entitled to redeem the medium-term note at par value plus interest payable (including all deferred
interest and accrued interest) (the “Right of redemption”). The holders of the medium-term note have no
redemption right to sell it back to the Company. At each interest payment date the Company can at its
own discretion choose to postpone payment of the interest for current-period as well as interest deferred
in accordance with the Clauses to the next interest payment date unless the mandatory interest payment
events whose occurrence can be decided by the Company itself incurred. The Company classified the
actual amount received as other equity instruments.
The nominal interest rate of the medium-term notes will be fixed in the first 5 years with annual interest
rate of 6.2%. The annual interest rate will be reset to the current benchmark interest rate plus initial
interest-rate spread (i.e. the variance between nominal interest rate and benchmark interest rate at the
issue date) and 200 basis points every 5 years from the sixth interest-bearing year, if the Company did
not exercise the Right of redemption.
The mandatory interest payment events stated before comprise one of circumstances below which
occur 12 months before dividend payment date:(1) Distribution of dividends to ordinary shareholders; (2)
Capital withdrawal by shareholders (except for the redemption and cancellation of shares incurred by
incentive plan, or the redemption and cancellation of ordinary shares by issuance of preference shares).
As at 31 December 2015 and 31 December 2014, the outstanding perpetual bonds of the Company
have a carrying amount of RMB1,996,770 thousand.
95
4
(42) Capital surplus
Item
31 December
2014
Increase in
current year
Decrease in
current year
31 December
2015
(5,322,998)
22,582,614
Share premium (Note 1)
Other capital surplusShare of changes in equity other than
comprehensive income and profit distribution
of investees under the equity method
Transfer of capital surplus recognised under
the previous accounting system
Others
27,762,998
142,614
356,357
-
203,342
357,740
90,002
(63,990)
203,342
383,752
Total
28,680,437
232,616
(5,386,988)
23,526,065
31 December
2013
Increase in
current year
Decrease in
current year
31 December
2014
(701,720)
27,762,998
Item
-
356,357
Share premium (Note 2)
Other capital surplusShare of changes in equity other than
comprehensive income and profit distribution
of investees under the equity method
Transfer of capital surplus recognised under
the previous accounting system
Others
28,459,631
5,087
356,357
-
203,342
295,956
62,174
(390)
203,342
357,740
Total
29,315,286
67,261
(702,110)
28,680,437
96
-
356,357
4
(42) Capital surplus (Continued)
Note1: As at 20 March 2015, undertaking the matters in the Announcement on the plan of adaption of
the operation mode of directly - operating real estate business and the Announcement on signing
entrust management agreement related to the adaption of the directly- operating real estate
business dated on 6 August 2013 and 30 January 2014 respectively, the Company’s Board of
Directors agreed the resolution regarding the adaption of the directly - operating real estate
business which authorised China Overseas Holdings Limited to sell its directly - operating real
estate business and related assets (the “Target real estate business”) to China Overseas Land
&Investment Ltd. at a transfer consideration of approximately RMB1.8 billion. After the purchase,
the Target real estate business would still bear the obligation to the Company of approximately
RMB32 billion, and the total amount is approximately RMB33.8 billion.
On 24 March 2015, the Company’s Board of Directors passed are resolution which authorised
China Overseas Holdings Limited to subscribe approximately 1,687 million shares newly issued
by China Overseas Land &Investment Ltd. at a price of HKD25.38 per share with total amount
not exceeding RMB33.8 billion to fund the purchase of the Target real estate business and its
operation after the purchase.
On 7 May 2015, China Overseas Land & Investment Ltd. paid a consideration of approximately
RMB1.8 billion and thus completed the purchase of the Target real estate business. Meanwhile,
on 18 May 2015, China Overseas Holdings Limited paid an equity subscription payment of
approximately RMB33.8 billion and thus completed the subscription of the newly issued shares
of China Overseas Land& Investment Ltd. After the subscription, the number of shares held by
China Overseas Holdings Limited in China Overseas Land & Investment Ltd. increased from
4,346,517,308 to 6,033,123,183 which stands for 61.18% shares of China Overseas Land&
Investment Ltd. The above matters resulted in a decreased in the Groups' share of net assets of
the Target real estate business and an increase in the Group's share of net assets of China
Overseas Land & Investment Ltd., leading to a decrease of RMB5,322,998 thousand in the
capital surplus.
Note2: In 2014, a subsidiary of China Oversea Holdings, China Overseas Finance Investment (Cayman)
Limited paid in cash with aggregate amount of approximately US$729 million to repurchase
US$500 million exchangeable bonds which is issued on 14 May 2007, and paid approximately
US$1.24 million for the transaction fee. The total amount of payment for the repurchase and the
transaction fee was allocated to equity and liability components using the same allocation
method as used when the exchangeable bonds issued. Therefore, the allocated amount of equity
component is about RMB614 million, wrote down the equity component accounted for in reserves
when the exchangeable bonds issued about RMB594 million, and then wrote down the
distributed profits about RMB20 million.
97
4
(43) Other comprehensive income
Other comprehensive income in Balance Sheet
Other comprehensive income in 2015 Income Statement
Less: Reclassification
Attributable to
Attributable to equity
current year
of previous other
equity holders of
31 December holders of the Company 31 December accrual before comprehensive income Less: Income tax
the Company
2014
after income tax
2015
income tax
to profit or loss
expenses after income tax
Other comprehensive income items which will not
be reclassified subsequently to profit or loss
The changes of net obligation arising from
remeasurement of defined benefit plan
Attributable to
non-controlling
interests after
income tax
51,133
(94,589)
(43,456)
(94,700)
-
-
(94,589)
(111)
276,072
(519,364)
(243,292)
(871,801)
-
-
(519,364)
(352,437)
539,041
(60,970)
478,071
(82,316)
22,210
(60,970)
Other comprehensive income items which will be
reclassified subsequently to profit or loss
Share of the other comprehensive income of
the investee accounted for using equity
method which will be reclassified
subsequently to profit and loss
Gains or losses arising from changes in fair
value of available-for-sale financial assets
Differences arising from translation of foreign
currency financial statements
1,447,782
27,896
1,475,678
637,586
Total
2,314,028
(647,027)
1,667,001
(411,231)
98
(51)
-
(51)
-
22,210
813
27,896
609,690
(647,027)
257,955
4
(43) Other comprehensive income (Continued)
Other comprehensive income in Balance Sheet
Attributable to equity
31 December holders of the Company 31 December
2013
after income tax
2014
Other comprehensive income items which will not
be reclassified subsequently to profit or loss
The changes of net obligation arising from
remeasurement of defined benefit plan
Other comprehensive income in 2014 Income Statement
Less: Reclassification of
Attributable to
current year
previous other
equity holders of
accrual before comprehensive income Less: Income tax
the Company
income tax
to profit or loss
expenses after income tax
Attributable to
non-controlling
interests after
income tax
-
51,133
51,133
50,780
-
-
51,133
(353)
234,248
41,824
276,072
15,072
-
-
41,824
(26,752)
Other comprehensive income items which will be
reclassified subsequently to profit or loss
Share of the other comprehensive income of
the investee accounted for using equity
method which will be reclassified
subsequently to profit and loss
Gains or losses arising from changes in fair
value of available-for-sale financial assets
Differences arising from translation of foreign
currency financial statements
109,533
429,508
539,041
582,040
593,373
854,409
1,447,782
863,305
Total
937,154
1,376,874
2,314,028
1,511,197
99
(7,854)
-
(7,854)
(143,969)
-
(143,969)
429,508
709
854,409
8,896
1,376,874
(17,500)
4
(44) Special reserve
Item
Reserve for safety in production
Item
Reserve for safety in production
31 December
2014
22,494
31 December
2013
32,366
Increase in
current year
Decrease in
current year
13,145,769
(13,143,528)
Increase in
current year
Decrease in
current year
12,313,841
(12,323,713)
Increase in
current year
Decrease in
current year
31 December
2015
24,735
31 December
2014
22,494
(45) Surplus reserve
Item
31 December
2014
31 December
2015
Statutory surplus reserve
Others
2,169,239
(539)
751,306
-
-
2,920,545
(539)
Total
2,168,700
751,306
-
2,920,006
Item
31 December
2013
Increase in
current year
Decrease in
current year
31 December
2014
Statutory surplus reserve
Others
1,553,720
-
615,519
-
(539)
2,169,239
(539)
Total
1,553,720
615,519
(539)
2,168,700
In accordance with the Company Law and the Company’s Articles of Association, the Company should
appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease
appropriation when the statutory surplus reserve accumulated to more than 50% of the registered
capital. The Company appropriated 10% of net profit, amounting to RMB751,306 thousand for the year
2015 (2014: RMB615,519 thousand) to the statutory surplus reserve.
100
4
(46) Undistributed profits
2015
2014
Note
Undistributed profits at the beginning of the year
Add: net profit attributable to the Company for the current year
Less:Appropriation for statutory surplus reserve
Appropriation to general reserve
(a)
Ordinary share dividends payable
(b)
Dividends payable to other equity holders
(c)
Others
73,752,867
26,061,898
(751,306)
(77,463)
(5,160,000)
(994,000)
(126,216)
56,178,067
22,569,967
(615,519)
(64,000)
(4,290,000)
(25,648)
Undistributed profits at the end of the year
92,705,780
73,752,867
(a) In accordance with the requirements of the Administrative Measures for the Provision of Reserves of
Financial Enterprises (Cai Jin [2012] No.20), financial institutions (including financial companies) shall
provide general risk reserve for assets bearing risks and losses at the balance sheet date. The general
reserve shall be appropriated from net profit as profit distribution with an appropriation ratio not lower
than 1.5% of risk assets at end of year. If it’s difficult for financial institutions to appropriate 1.5%
general reserve at one time, it can also be made in years but principally not more than 5 years. In 2015,
the general reserve provided by the Group’s subsidiary China State Construction Finance Co., Ltd. was
RMB96,829 thousand (2014: RMB80,000 thousand), of which RMB77,463 thousand is attributable to
the Company (2014: RMB64,000 thousand). China State Construction Finance Co., Ltd. plans to fully
provide general risk reserve on 31 December 2016.
(b) According to the resolution at the meeting of shareholders dated 15 May 2015, the Company proposed
a cash dividend of RMB0.172 (before tax) per share to the shareholders on 16 June 2015, amounting
to RMB5.16 billion (2014: RMB4.29 billion) calculated by 30 billion shares issued.
(c) As stated in Note 4(41), the payment of 2014 cash dividend by the Company to ordinary shareholders
on 16 June 2015 was one of the mandatory interest payment events prescribed in the clauses of
preference share and perpetual bond, which triggered that the Company has to pay related dividends
on upcoming dividend payment date of preference share (2 March 2016) and of perpetual bond (5
September 2015) respectively, so the Company made a provision for preference share dividend of
RMB870,000 thousand and a provision for perpetual bond dividend of RMB124,000
thousand( RMB994,000 thousand in total) this year.
(d) According to the resolution at the Board of Directors’ meeting dated on 18 April 2016, the Board of
Directors proposed a cash dividend in the amount of RMB 2.00/10 shares (before tax) to shareholders,
amounting to RMB6 billion calculated by issued shares by 31 December 2015. The proposal is to be
approved by the meeting of shareholders, thus was not recognised as liability in the financial
statements (Note 12(1)).
101
4
(47) Revenue and cost of sales
2015
2014
Revenue from main operations
878,651,314
799,051,914
Revenue from other operations
1,925,820
976,839
880,577,134
800,028,753
Total
2015
2014
Cost of sales from main operations
769,529,611
698,712,765
Cost of sales from other operations
1,509,159
651,235
771,038,770
699,364,000
Total
(a)
Please refer to Note 8 for details of analysis of the Group’s revenue and cost of sales by industry and
region.
(b)
Revenue and cost of sales from other operations
2015
Revenue from Cost of sales from
other operations other operations
Sale of raw materials
Leasing
Leasing and sale of Investment
properties
Others
Total
2014
other operations other operations
469,933
310,959
395,998
234,519
256,349
155,571
172,932
112,028
872,547
272,381
646,890
231,752
185,713
379,206
117,235
249,040
1,925,820
1,509,159
976,839
651,235
102
4
(48) Taxes and surcharges
2015
2014
Tax base
Business tax
Land appreciation tax
City maintenance and construction tax
Educational surcharge
Others
23,334,646
5,426,639
1,512,036
878,846
809,473
21,221,982
6,549,800
1,421,024
841,486
857,539
3% or 5%
30%~60%
5% or 7%
3%
N/A
Total
31,961,640
30,891,831
(49) Selling expenses
Advertising and communication fees
Operating expenses
Employee benefits
Others
Total
2015
2014
727,546
717,415
674,339
251,007
742,608
694,202
469,736
192,280
2,370,307
2,098,826
(50) General and administrative expenses
2015
2014
Employee benefits
Office and travelling expenses
Lease expenses
Depreciation and amortisation
Service fees of specialist agency
Taxes
Others
11,280,639
1,793,979
910,426
726,987
392,869
293,464
1,787,969
9,695,459
1,948,498
936,548
688,757
403,916
363,674
1,568,921
Total
17,186,333
15,605,773
103
4
(51) Financial expenses -net
2015
2014
Interest cost
Less: Interest cost capitalised
14,298,165
(6,130,115)
13,221,103
(5,878,463)
Net interest cost
Less: Interest income
Commission charges
Exchange gains or losses
Discounted long-term receivables/payables and others
8,168,050
(2,011,201)
567,872
1,047,115
654,030
7,342,640
(1,763,444)
411,889
111,116
1,327,196
8,425,866
7,429,397
Total
(52) Expenses by nature
The cost of sales, selling expenses, and general and administrative expenses in the income
statements are listed by nature as follows:
2015
2014
Changes in inventories of finished goods and work in progress
Subcontracting cost
Consumed raw materials
Other construction cost
Employee benefits
Cost of sales from other products
Depreciation and amortization expenses
Others
95,125,845
277,078,056
195,323,770
159,254,689
39,699,637
10,792,362
6,450,956
6,870,095
81,734,267
234,834,168
209,129,847
137,252,956
32,501,153
9,281,836
5,490,661
6,843,711
Total
790,595,410
717,068,599
104
4
(53) Losses arsing from changes in fair value
2015
2014
Financial liabilities at fair value through profit or loss
(53,622)
661,203
(217,063)
439,183
Total
607,581
222,120
(54) Investment income
2015
Income from long-term equity investment under equity
method
1,558,615
1,506,953
3,667
307,712
-
290,687
165,002
199,248
84,318
-
43,541
16,421
1,855,143
2,321,021
Income from disposal of long-term equity investment
Revenue from revaluation of remaining equity of partial
disposal of subsidiaries
Income earned during the holding of available-for-sale
financial assets, etc.
Income from disposal of financial assets at fair value
through profit or losee
Others
Total
2014
There is no significant restriction on recovery of investment income.
(55) Asset impairment losses
2015
2014
Impairment loss on bad debts
Impairment loss on decline in the values of inventories
Other asset impairment losses
2,303,074
1,426,606
26,629
1,949,304
2,492,834
82,125
Total
3,756,309
4,524,263
105
4
(56) Non-operating income
2015
2014
Amount recognised in
non-recurring profit or
loss in 2015
Gains on disposal of non-current assets
Including: Gains on disposal of fixed
assets
Gains on disposal of intangible
assets
Government grant (a)
Others
170,680
258,030
170,680
147,910
238,881
147,910
22,770
266,084
427,940
19,149
398,185
616,191
22,770
266,084
427,940
Total
864,704
1,272,406
864,704
Government grants are mainly tax returns, supporting funds to company, scientific research project
funding, etc..
(a)
Details of government grants
2015
2014
Related to assets
/Related to income
42,151
-
related to assets
23,772
-
related to income
14,300
-
related to income
10,248
3,021
related to income
9,443
-
related to income
8,220
5,510
Others
157,950
389,654
related to income
related to assets
and income
Total
266,084
398,185
Government compensation for demolition of China
Construction First Building(Group) Corporation Limited
Refund of costs for acquiring the land use rights of China
Construction Fifth Engineering Division Corp., Ltd
Refund of costs for acquiring the land use rights of China
Construction Third Engineering Bureau Co., Ltd
Financial refund allocated by government of China
Construction Third Engineering Bureau Co., Ltd
Government compensation for demolition of China
Construction Fifth Engineering Division Corp., Ltd
Tax refund for China Construction Engineering Design
Group Corporation Limited
106
4
(57) Non-operating expenses
Amount recognised
in non-recurring profit
or loss in 2015
2015
2014
Losses on disposal of non-current assets
Including: losses on disposal of fixed assets
Losses on disposal of intangible assets
Penalty cost
Others
27,164
27,164
22,979
203,243
44,296
42,952
1,344
17,921
87,652
27,164
27,164
22,979
203,243
Total
253,386
149,869
253,386
(58) Income tax expenses
2015
2014
Current income tax calculated based on tax law and related regulations
Deferred income tax
12,825,461
(1,071,480)
11,821,508
(1,662,221)
Total
11,753,981
10,159,287
The reconciliation from income tax calculated based on the applicable tax rates and total profit
presented in the consolidated financial statements to the income tax expenses is as follows:
2015
2014
Total profit
47,696,789
43,336,101
Income tax expenses calculated at applicable tax rates (25%)
Effect of differences of subsidiary’s tax rates
Income not subjected to tax
Weighted deduction of expenditure on research
Costs, expenses and losses not deductible for tax purposes
Deductible losses for which no deferred tax asset was
recognised in current year
Utilization of deductible losses for which no deferred tax
assets was recognized in previous years
Deductible temporary differences for which no deferred tax
asset was recognised in current year
Deductible temporary differences resulting from resersal or
recognition of previously unrecognized deferred tax aseets
in current year
Taxable temporary differences for which no deferred tax
liability was recognised in current year
Adjustment of previous tax expenses
11,924,197
(1,008,314)
(692,213)
(110,784)
546,456
10,834,025
(855,888)
(846,147)
(101,268)
618,416
Tax expenses
11,753,981
107
1,063,888
658,506
(229,459)
(222,811)
770,438
694,377
(297,040)
(159,512)
(7,532)
(205,656)
(22)
(460,389)
10,159,287
4
(59) Share-based payment
(a)
Share-based payment of the Company
(1) In accordance with the resolution of China State Construction Engineering Corp., Ltd.’s Restricted
Shares Incentive Plan Revised Draft (A share) (“Incentive Plan”) approved on 31 May 2013 by the
Company’s General Meeting of Shareholders, the Company granted the restricted shares
incentive to 686 targets (“Incentive Targets”). From 6 June 2013 to 25 June 2013, the Company
completed the repurchase of 146,780,000 shares (the first batch of Restricted Shares) in total
from secondary market and completed the granting to the incentive targets on 28 June 2013
(“grant day”) with a granting price of RMB3.58 per share and a valid period of 4 years, including a
lock-up period of 2 years and a lock-out period of 2 years. The Incentive Targets’ purchase price
is 50% of the granting price namely RMB1.79 per share. If the unlock condition of the restricted
shares prescribed by the plan is met, the incentive targets can in turn to unlock the upper limit of
shares to be 33.33%, 33.33% and 33.33% of the number of granted shares in current period on
28 June 2015 (the first batch), 28 June 2016 (the second batch) and 28 June 2017 (the third
batch) respectively.
(2) Increase/decrease of restricted shares in the reporting period
2015
Number of restricted shares at the beginning of the year
Number of restricted shares granted in current year
Number of restricted shares unlocked in current year
Number of restricted shares forfeited in current year
Number of restricted shares at the end of the year
146,780,000
(47,339,794)
(4,740,000)
94,700,206
On 28 June 2015, the 2-year lock-up period of the first batch of Restricted Shares expired and
met the time requirement of the lock-out period for the first batch of Restricted Shares. According
to the performance and situation of the Company in 2014 and the personnel condition and
assessment results of the Incentive Targets, the unlocked restricted shares met the conditions as
required by the Incentive Plan amounted to 47,339,794 shares. Meanwhile, the restricted shares
which should be repurchased totalling 4,740,000 shares, for all of the first batch of Restricted
Shares granted of the 22 Incentive Targets should be repurchased due to their resignation; 20%
of the first batch of Restricted Shares granted of 1 Incentive Target should be repurchased due to
the assessment result. The Company would repurchase the above Incentive Targets' shares at
the price of RMB1.79 per share. Such repurchased restricted shares will be used for the
Company's subsequent Incentive Plan, otherwise they will be written off according to relevant
regulations. The unlocked first batch of Restricted Shares amounting to 47,339,794 shares has
been approved for trading and circulation on 10 July 2015.
108
4
(59) Share-based payment (Continued)
(a)
Share-based payment of the Company (Continued)
(3) The market price of the first batch of Restricted Shares was RMB3.27 per share at the grant date,
and the price paid by the incentive targets was RMB1.79 per share, based on which and
considering the influence from gain restrictive, the fair value of the first batch of Restricted Shares
was determined to be RMB1.2155 per share at the grant date.
(4) the impact on the Company’s financial position and operating results from restricted shares is as
follows:
2015
2014
45,539
62,174
31 December 2015
31 December 2014
139,926
94,387
Total expenses recognised in equity-settled
share-based payment
Accumulated amount of equity-settled
share-based payment in capital surplus
(b)
Share-based payment of China State Construction International
Based on the resolution approved on 9 June 2005, the share-based payment plan of China State
Construction International provided rewards to the directors, qualified employees and senior staff,
which could be suspended by the resolution of the meeting of shareholders. According to the plan, the
Board of Directors of China State Construction International might grant options to qualified people.
China State Construction International granted 49,200,000 options on 14 September 2005, at the
exercise price of HKD1.03. As at 31 December 2015, the incentive plan was expired, and no granted
option was not exercised (31 December 2014: 52,179,607 shares).
The fair value of the equity tools of such plan was determined using Black-Scholes model. In 2015, the
waiting period, during which employees rendered services for options granted, has ended and options
were able to be vested, thus no relevant expenses have been recognised in income statement of the
period (2014: Nil).
109
4
(60) Earnings per share
(a)
Basic earnings per share
Basic earnings per share is calculated by dividing consolidated net profit attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares outstanding:
2015
Net profit attributable to ordinary shareholders of the Company
Less: The effect of other equity instruments dividends (Note 1)
The effect of restricted shares (Note 2)
Weighted average number of ordinary shares outstanding
(in units of 1000 shares) (Note 3)
26,061,898
2014
(Restated)
22,569,967
(994,000)
(40,088)
(79,131)
(110,231)
24,988,767
22,419,648
29,876,890
29,853,220
0.84
0.75
Note 1: In accordance with the relevant clauses and regulations of preference shares and perpetual
bonds stated in Note 4(41), the accrued dividends of preference shares amounting to RMB870
million in 2015 and dividends yielded by perpetual bonds amounting to RMB124 million in 2015
were deducted from net profit attributable to shareholders of the Company while calculating the
basic earnings per share for the year 2015.
Note 2: As stated in Note 4(59)(a), the Company has completed the granting of restricted shares to the
incentive targets in accordance with incentive plans on 28 June 2013. In accordance with the
relevant stipulations in Explanation of Accounting Standards for Business Enterprises No.7
issued by the Ministry of Finance in 2015, the Company deducted net profits attributable to
restricted shares, which expected to be unlocked in the future from net profits attributable to
shareholders of the Company, and made retrospective adjustments of basic earnings per
share in previous years while calculating the basic earnings per share. The net profits
attributable to restricted shares which expected to be unlocked in the future was RMB80 million
and RMB110 million in 2015 and 2014 respectively.
Note 3: As stated in Note 4(59)(a), the Company had completed the granting of restricted shares to the
regulations of the incentive plans, whether the unlocked shares granted could be listed and
circulated depended on that whether the restricted shares met the unlocking conditions at the
unlocking date. Therefore, the impacted amount of the restricted shares not yet meeting the
unlocking conditions and those invalid restricted shares that proposed to be repurchased were
deducted from weighted average number of outstanding ordinary shares when calculating the
basic earnings per share.
110
4
(60) Earnings per share (Continued)
(b)
Diluted earnings per share
In 2015, the restricted shares outstanding have dilutive effects on weighted average number of
ordinary shares outstanding, and relevant calculation results are as follows:
2015
2014
(Restated)
Consolidated net profit attributable to ordinary shareholders of the
Company used for calculating diluted earnings per share (Note)
25,067,898
22,354,288
Weighted average number of ordinary shares outstanding used for
calculating diluted earnings per share (in units of 1000 shares)
(Note)
29,971,011
29,853,220
0.83
0.75
Note: As stated in Note 4(59)(a), the Company completed the granting of restricted shares to the
relevant stipulations in Explanation of Accounting Standards for Business Enterprises No.7
issued by the Ministry of Finance in 2015, the restricted shares which still locked on balance
sheet date were treated as unlocked at the beginning of period when calculating the diluted
earnings per share, and dilution of restricted shares should be considered in accordance with the
relevant stipulations about share option in Accounting Standards for Business Enterprises
No.34-Earings Per Share. The vest price of restricted shares is incentive targets’ purchase price
plus the fair value of unreceived employee services determined in accordance with the relevant
stipulations in Accounting Standards for Business Enterprises No.11- Share-Based Payment on
balance sheet date. Meanwhile, the deducted net profits attributable to restricted shares which
expected to be unlocked in the future while calculating basic earnings per share has been added
back. Retrospective adjustments have also been made to diluted earnings per share in 2014.
111
4
(61) Notes to the consolidated cash flow statement
(a)
Cash received relating to other operating activities
Interest income
Deposits and warrant received and returned by third party
Accept money deposits by China State Construction
Finance Co.,Ltd.
Others
Total
(b)
2014
1,532,806
4,560,333
968,888
7,556,855
2,508,937
1,452,312
316,433
774,314
10,054,388
9,616,490
2015
2014
860,143
4,065,331
2,042,210
5,758,543
1,000,000
4,716,076
3,639,896
10,641,550
11,440,649
2015
2014
Cash paid relating to other operating activities
Restricted cash
Deposits and warrant paid and refunded to third party
Designated as financial assets at fair value through profit
or loss by China State Construction Finance Co., Ltd.
Others
Total
(c)
2015
Cash received relating to other investing activities
Entrusted loan
Repayment of loan from related parties
Others
Total
112
580,767
2,225,403
1,144,042
2,820,044
743,269
465,644
2,468,078
5,511,091
4
(61) Notes to the consolidated cash flow statement (continued)
(d)
(e)
Cash paid relating to other investing activities
2015
2014
Entrusted loan
Loan to related parties
1,143,190
1,658,019
1,323,490
1,518,426
The fixed deposits matured after three months
Others
412,000
1,518,979
300,000
528,006
Total
4,732,188
3,669,922
2015
2014
Received from project financing
1,441,855
447,925
Prepaid investment payment of convertible bond
1,642,130
305,950
100,243
-
3,184,228
753,875
2015
2014
Repayment of project loan
652,598
6,062,610
Lease fee for fixed assets held under finance leases
121,176
291,777
Total
773,774
6,354,387
Cash received relating to other financing activities
Sale-leaseback of fixed asstes
Total
(f)
Cash paid relating to other financing activities
113
4
(62) Supplementary information to the consolidate cash flow statement
(a)
Reconciliation from net profit to cash flows from operating activities
Net profit
Add: Asset impairment losses
Depreciation of fixed assets
Depreciation of investment properties
Amortisation of intangible assets
Amortisation of long-term prepaid expenses
Profit from disposal of fixed assets, intangible
assets and other long-term assets
Financial expenses
Losses on changes in fair value
Investment income
Increase in deferred tax assets
increase/ (Decrease) in deferred tax liabilities
Increase/ (Decrease) in inventories
Increase in restricted cash
Increase in operating receivables
Increase in operating payables
Others
Net cash flows from operating activities
(b)
2015
2014
35,942,808
3,756,309
5,155,938
601,757
295,637
397,624
33,176,814
4,524,263
4,477,790
401,374
265,013
346,484
(223,785)
9,391,893
607,581
(1,855,143)
(1,183,348)
111,868
5,023,633
(860,143)
(93,542,419)
91,172,072
(188,641)
(213,734)
7,977,923
222,120
(2,321,021)
(1,326,150)
(336,071)
(29,466,146)
(2,042,210)
(69,008,311)
78,324,578
(96,375)
54,603,641
24,906,341
31 December 2015 31 December 2014
Including: Cash on hand
Cash at bank that can be readily drawn on
demand
Other monetary fund that can be readily drawn
on demand
Cash at bank that classified as held for sale
Recoursable financial asets acquired (Note 4(6))
209,143,693
109,197
145,118,441
106,166
205,170,408
143,701,324
865,137
2,998,951
1,268,838
42,113
-
Cash and cash equivalents at the end of the year
209,143,693
145,118,441
114
4
(63) The foreign currency monetary items
31 December 2015
Amount in foreign currency
Cash at bank and on handUSD
HKD
DZD
EUR
Others
1,096,523
20,267,725
43,118,267
277,453
N/A
Exchange rate
6.4936
0.8378
0.0606
7.0952
N/A
Total
Accounts receivableUSD
HKD
DZD
AED
Others
Amount in RMB
7,120,383
16,980,300
2,612,967
1,968,582
6,078,878
34,761,110
521,156
7,215,952
14,023,366
686,400
N/A
6.4936
0.8378
0.0606
1.7684
N/A
Total
3,384,178
6,045,525
849,816
1,213,830
4,092,755
15,586,104
Other receivablesUSD
HKD
DZD
Others
74,090
209,316
4,273,366
N/A
6.4936
0.8378
0.0606
N/A
Total
481,111
175,365
258,966
182,770
1,098,212
Long-term receivablesUSD
AED
LYD
Others
52,118
326,328
69,661
N/A
6.4936
1.7684
4.7584
N/A
Total
338,433
577,079
331,476
560,662
1,807,650
Short-term borrowingsUSD
HKD
Others
472,615
183,165
N/A
Total
6.4936
0.8378
N/A
3,068,974
153,456
101,583
3,324,013
115
4
(63) The foreign currency monetary items (Continued)
31 December 2015
Amount in foreign currency
Exchange rate
301,188
6,976,097
50,530,396
306,508
N/A
6.4936
0.8378
0.0606
4.5873
N/A
1,955,793
5,844,574
3,062,142
1,406,042
2,647,510
14,916,061
Other payablesUSD
HKD
EUR
DZD
Others
Total
232,857
478,962
28,884
2,675,446
N/A
6.4936
0.8378
7.0952
0.0606
N/A
1,512,083
401,274
204,938
162,132
847,880
3,128,307
Current portion of non-current liabilitiesUSD
HKD
DZD
Others
Total
9,807
6,269,728
241,683
N/A
6.4936
0.8378
0.0606
N/A
63,682
5,252,778
14,646
393
5,331,499
454,665
42,377,904
190,456
N/A
6.4936
0.8378
9.6159
N/A
2,952,412
35,504,208
1,831,407
10,609
40,298,636
7,273,391
1,488,735
987,073
6.4936
0.8378
7.0952
47,230,493
1,247,262
7,003,477
55,481,232
155,034
36,987
N/A
6.4936
4.5873
N/A
1,006,729
169,672
179,596
1,355,997
1,218,962
6.4936
7,915,452
Accounts payableUSD
HKD
DZD
SGD
Others
Total
Long-term borrowingsUSD
HKD
GBP
Others
Total
Bonds payablesUSD
HKD
EUR
Total
Long-term payables
USD
SGD
Others
Total
USD
116
Amount in RMB
5
Changes of consolidation scope
(1)
The Group has newly entity which is not significant included in the consolidation scope through
business combination involving entities not under common control in 2015.
(2)
The Group has newly entity which is not significant included in the consolidation scope through
business combination involving entities under common control in 2015.
(3)
The Group has entities which are not significant excluded from the consolidated scope due to disposal
of subsidiaries in 2015.
6
Interest in other entities
(1)
Interest in subsidiaries
(a)
Significant subsidiaries obtained through incorporation
Name
Main operation Place of
Location
registration
Nature of business
China Overseas Holdings Limited
Hong Kong
Hong Kong
China Overseas Land & Investment Ltd.
Hong Kong
China State Construction International
Hong Kong
China Overseas Property Holdings Ltd.
China Construction First Building(Group)
Corporation Limited
China Construction Second Engineering
Bureau Ltd.
China Construction Third Engineering Bureau
Co.,Ltd
China Construction Fourth Engineering Division
Corp.Ltd
China Construction Fifth Engineering Division
Corp.,Ltd
China Construction Sixth Engineering Division
Corp,Ltd
China Construction Seventh Engineering
Division. Corp.Ltd
Division. Corp.Ltd
Hong Kong
Hong Kong
Cayman
Islands
Cayman
Islands
Property Management
Construction and
Beijing
Installation
Construction and
Beijing
Installation
Construction and
Wuhan
Installation
Construction and
Guangzhou
Installation
Construction and
Changsha
Installation
Construction and
Tianjin
Installation
Construction and
Zhengzhou
Installation
Construction and
Shanghai
Installation
Engineering
Prospecting and
Beijing
Design
Beijing
Industrial Decoration
Infrastructure
Beijing
Construction
China Construction Engineering Design Group
Corporation Limited
China Construction Decoration Group Ltd.
China Construction Fangcheng Investment &
Beijing
Beijing
Wuhan
Guangzhou
Changsha
Tianjin
Zhengzhou
Shanghai
Beijing
Beijing
Beijing
Investment
Real Estate
Development and
Operation
Construction and
Installation
Note：Shareholding ratio refers to the shares of subsidiary’s net asset hold by the Group.
117
Shareholding
Percentage (Note)
100.00
61.18
57.59
61.18
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
6
Interests in Other Entities (Continued)
(1)
Interests in subsidiaries (Continued)
(b)
Significant subsidiaries under common control
Name
CSCEC Xinjiang Construction &
Engineering (Group) Co.,Ltd
location
registration
Nature of business
Percentage of
Shares (%)
Construction
Urumqi
Urumqi
Installation
85.00
Construction
West Construction
Shenzhen China Overseas
Investing Management.,Ltd.
Co., Ltd.
(c)
Chengdu
Urumqi
Hong Kong
Shenzhen
Beijing
Beijing
Materials
Real Estate
Development and
Investment
68.73
100.00
80.00
Finance
Significant subsidiaries not under common controlled
Name
Far East Global Group Ltd.(Note 1)
China State Construction Built Port
Group Co., Ltd.
China Construction Port
Construction Co., Ltd. (Note 2)
location
registration
Hong Kong
Cayman
Islands
Qingdao
Qingdao
Shanghai
Shanghai
Nature of business
Construction
Installation
Construction
Installation
Infrastructure
Construction
Percentage of
Shares (%)
42.65
69.88
50.00
Note 1:The Group holds 42.65% of shares of Far East Global Group Ltd.. China State Construction
International, the wholly-owned subsidiary of the Company, holds 74.06% of shares of Far East
Global Group Ltd.. Therefore, Far East Global Group Ltd. included in the consolidation scope.
Note 2: The Group holds 50% of shares China Construction Port Construction. As the Company has
majority voting rights in its board of directors, and take substantial control of China Construction
Port Construction. Therefore, China Construction Port Construction Co., Ltd included in
business combination.
(d)
Subsidiaries involving non-controlling interest
Name
China Overseas Land & Investment
Ltd.
West Construction
China State Construction Finance Co.,
Ltd.
Shareholding of
Dividend attributable to
Non-controlling Non-controlling
the non-controlling
Interest (%) Interest in 2015 shareholders in 2015
Non-controlling
Interest at 31
Dec.2015
38.82
42.41
7,881,116
1,402,856
1,755,655
424,908
56,419,370
6,605,240
31.27
108,442
13,332
1,254,776
20.00
97,143
68,063
670,668
118
6
(1) Interests in subsidiaries (Continued)
(d) Subsidiaries involving non-controlling interest (Continued)
Financial information of the above companies listed as follows:
Current
Assets
Investment Ltd. (Note)
286,150,880
International
27,150,839
West Construction
9,570,083
Co., Ltd.
59,663,447
Non-current
Assets
31 December 2015
Current
Total Assets
Liabilities
Non-current
Liabilities Total Liabilities
Current
Assets
31 December 2014
Non-current
Current Non-current
Assets Total Assets
Liabilities
Liabilities Total Liabilities
43,735,099
329,885,979
95,251,943
92,184,729
187,436,672
261,644,637
40,558,371
302,203,008 149,168,020 60,606,578
209,774,598
31,549,228
2,986,138
58,700,067
12,556,221
25,757,298
7,055,936
15,142,051
1,130,615
40,899,349
8,186,551
27,082,627
7,999,415
25,441,631
2,873,479
52,524,258 24,630,304 12,117,798
10,872,894 5,709,788 1,139,076
36,748,102
6,848,864
14,589,805
74,253,252
70,899,911
-
70,899,911
40,470,836
9,415,547
49,886,383 46,678,443
46,678,443
2015
China Overseas Land & Investment Ltd. (Note)
West Construction
China State Construction Finance Co., Ltd.
-
2014
Revenue
Net Profit
Other Comprehensive Income
Cash flow from
operating activities
119,661,597
30,615,385
10,294,929
1,216,911
22,295,937
3,297,300
366,680
485,713
16,125,697
1,967,333
366,680
485,713
30,824,722
241,247
786,197
19,925,327
Revenue
110,314,626
27,645,629
10,211,040
956,644
Net Profit
18,179,898
2,682,522
365,529
452,254
Cash flow from
Other Comprehensive Income operating activities
17,925,936
2,537,253
365,529
452,254
Note: As stated in Note 4(42), China Overseas Land & Investment Ltd. purchased the target real estate business under common control, therefore the financial
information of China Overseas Land & Investment Ltd. in 2014 has been restated.
119
(3,363,392)
(1,337,301)
19,244
23,374,129
6
(2)
Interests of joint ventures and associates
(a)
General Information of main joint ventures and associates
Main operation
Place of
location
registration
Nature of business
Important to the
Group on
strategic level
Percentage
of Shares
Real Estate Investment
and Development
Yes
37.98%
AssociatesOverseas Oceans
(b)
Hong Kong
Hong Kong
General financial information of Overseas Oceans
31 Dec.2015
31 Dec.2014
Current Assets
Including: Cash and cash equivalents
Non-current Assets
Total Assets
44,098,879
8,129,101
2,647,529
46,746,408
40,935,709
6,962,264
2,696,982
43,632,691
Current Liabilities
Non-current Liabilities
Total Liabilities
24,221,701
12,630,426
36,852,127
20,800,189
12,598,600
33,398,789
Non-controlling Interests
533,750
9,360,531
529,442
9,704,460
Net assets calculated by the percentage of shares holding (i)
3,555,130
3,685,744
Book value of investment of associates
3,555,130
3,685,744
Market value of associates (Public)
2,381,938
2,693,936
2015
2014
Revenue
Net Profit
Other Comprehensive Income
Total Comprehensive Income
13,440,644
741,066
(1,315,689)
(574,623)
Dividends received from Overseas Oceans in current year
120
7,261
11,132,111
1,144,927
(36,589)
1,108,338
68,469
6
(2)
Interests of joint ventures and associates (Continued)
(b)
General financial information of Overseas Oceans (Continued)
(i)
The interest of the Group is based on the amount of joint ventures and associates in combined financial
state attributable to the Company and calculated by the percentage of shareholding. The consolidated
financial statements of joint venture and associates have taken the market value of recognized assets
and liabilities at acquisition date and its accounting policy adjustments into consideration.
(c)
Other general information of joint ventures and associates
2015
2014
Joint Ventures：
Total book value of investment
Subtotals by the percentage of share holding
Net Income(i)
Other Comprehensive Income(i)
11,389,806
752,385
(354,347)
398,038
11,058,021
527,671
(43,817)
483,854
Associates：
Total book value of investment
Subtotals by the percentage of share holding
Net Income(i)
Other Comprehensive Income(i)
11,381,161
547,603
(32,150)
515,453
8,567,219
599,017
71,117
670,134
(i)
The calculation of net profit and other comprehensive income has taken the market value of recognized
assets and liabilities at acquisition date and its accounting policy adjustments into consideration.
(d)
Guarantees to joint ventures/associate is set out in Note 9.
121
7
Interests of non-consolidated special purpose vehicle
As at 31 December 2015, the Group has no significant interests of non-concolidated special purpose
vehicle.
8
Segment information
The Group identities 5 reportable segments based on internal organisation structure, management
requirements and internal reporting system, and discloses segment information of reportable
segments which is determined on the basis of operating segments. The management of the Group
regularly evaluates their operating results respectively, in order to make decisions about resources to
be allocated to these segments and to assess their performance.
The 5 reportable segments of the Group are as follows:
- Building construction engineering
- Infrastructure construction and investment
- Real estate development and investment
- Prospecting, design, etc.
- Others
Segment information is disclosed based on the accounting policy and measurement criteria adopted by
the management of segment which is consistent with the accounting policy and measurement criteria
used in preparing the financial statements.
122
8
Segment information (Continued)
2015
Building
Infrastructure
construction
construction
engineering and investment
Real estate
development
and investment
Prospecting
and design
Others
Unallocated
Elimination
Total
Revenue
Revenue from external
Inter-segment revenue
Total revenue
Less: Cost of sales
Selling expenses
Financial expenses-net
Add: Profit (losses) arising from changes in fair value
Investment income
578,956,138
9,311,049
588,267,187
141,365,956
28,465
141,394,421
142,347,742
11,828
142,359,570
6,475,077
35,606
6,510,683
11,432,221
2,225,352
13,657,573
(542,282,880)
(14,204,328)
(190,633)
(8,971,410)
(1,768,334)
-
(125,797,762)
(3,412,629)
(19,050)
(2,015,487)
(1,791,938)
-
(97,869,984)
(14,091,418)
(2,015,078)
(1,526,245)
(178,064)
-
(5,295,690)
(65,047)
(3,150)
(650,526)
(21,943)
-
(10,748,996)
(188,218)
(142,396)
(1,389,368)
3,970
-
-
(11,612,300)
(11,612,300)
880,577,134
880,577,134
(2,658,561)
(8,410,883)
(607,581)
1,855,143
10,956,542
25,264
(14,983)
-
(771,038,770)
(31,961,640)
(2,370,307)
(17,186,333)
(8,425,866)
(3,756,309)
(607,581)
1,855,143
Operating profit
20,849,602
-
8,357,555
-
26,678,781
-
474,327
-
1,192,565
-
(9,821,882)
864,704
(253,386)
(645,477)
-
47,085,471
864,704
(253,386)
Total profit
Net profit
20,849,602
8,357,555
26,678,781
474,327
1,192,565
(9,210,564)
(645,477)
47,696,789
(11,753,981)
35,942,808
3,951,210
7,117,638
1,392,844
1,585,438
579,675
1,992,301
102,864
53,762
346,120
2,591,627
Supplementary information:
Depreciation and amortization
Capitalized expenditure
78,243
41,082
-
6,450,956
13,381,848
31 December 2015
Total segment assets
316,326,628
233,063,225
335,734,866
8,314,963
149,293,480
151,647,580
(119,475,843)
1,074,904,899
Total segment liabilities
243,141,286
177,033,049
173,226,196
3,916,742
110,328,263
244,963,473
(116,486,831)
836,122,178
123
8
2014
Building
construction
engineering
Revenue
Revenue from external
Inter-segment revenue
Total revenue
Less: Cost of sales
Selling expenses
Financial expenses-net
Add: Profit arising from changes in fair value
Investment income
Infrastructure
Real estate
construction development and
and investment
investment
Prospecting
and design
Others
544,585,881
10,309,039
554,894,920
118,850,035
56,546
118,906,581
124,344,671
19,211
124,363,882
7,100,170
15,240
7,115,410
5,147,996
2,157,132
7,305,128
(513,205,080)
(14,325,355)
(202,365)
(8,787,904)
(1,798,376)
-
(105,535,529)
(3,115,999)
(20,270)
(1,803,616)
(272,453)
-
(82,485,688)
(13,239,281)
(1,771,190)
(1,518,382)
(2,303,170)
-
(5,645,346)
(82,605)
(2,279)
(634,880)
(43,155)
-
(5,047,308)
(128,591)
(102,722)
(1,206,653)
(107,109)
-
Unallocated
-
Elimination
Total
(12,557,168)
(12,557,168)
800,028,753
800,028,753
(1,662,656)
(7,373,865)
(222,120)
2,321,021
12,554,951
8,318
(55,532)
-
(699,364,000)
(30,891,831)
(2,098,826)
(15,605,773)
(7,429,397)
(4,524,263)
(222,120)
2,321,021
Operating profit
16,575,840
-
8,158,714
-
23,046,171
-
707,145
-
712,745
-
(6,937,620)
1,272,406
(149,869)
(49,431)
-
42,213,564
1,272,406
(149,869)
Total profit
Net profit
16,575,840
8,158,714
23,046,171
707,145
712,745
(5,815,083)
(49,431)
43,336,101
(10,159,287)
33,176,814
3,538,603
6,941,708
1,067,298
1,623,193
405,059
5,508,507
98,003
103,807
288,052
1,183,905
Supplementary information:
Depreciation and amortization
Capitalized expenditure
93,646
182,800
-
5,490,661
15,543,920
31 December 2014
Total segment assets
275,127,780
186,614,386
327,405,829
7,727,809
90,169,517
111,326,705
(79,265,811)
919,106,215
Total segment liabilities
233,701,317
139,386,210
171,094,740
3,745,975
66,721,785
184,247,226
(76,704,518)
722,192,735
124
8
The Group’s revenue from external customers domestically and in foreign countries or geographical
areas, and the total non-current assets other than financial assets and deferred tax assets located
domestically and in foreign countries or geographical areas are as follows:
Revenue from external customers
2015
2014
Domestic
In other countries/geographical areas
819,498,776
61,078,358
748,473,719
51,555,034
Total
880,577,134
800,028,753
31 December 2015
31 December 2014
Domestic
In other countries/geographical areas
65,800,215
11,949,227
57,260,553
10,099,185
Total
77,749,442
67,359,738
Note: Non-current assets are non-current assets except for long-term equity investment measured
under equity method, available-for-sale financial assets, long-term receivables and deferred tax
assets.
125
9
Related parties and related party transactions
(1)
Information of the parent company:
(a)
General information of the parent company:
Place of registration
Nature of business
Beijing
Investment holding
CSCEC
The Group’s ultimate controlling party is State-owned Assets Supervision and Administration
Commission of the State Council.
(b)
Registered capital and changes in registered capital of the parent company
Increase in
current year
31 December 2014
CSCEC
(c)
5,845,965
1,200,000
31 December 2015
-
7,045,965
Registered capital and changes in registered capital of the parent company
31 December 2015
Share holding
Voting rights
CSCEC
(2)
Decrease in
current year
56.26%
56.26%
31 December 2014
Share holding
Voting rights
56.15%
56.15%
Information of subsidiaries
The general information and other related information of the subsidiaries is set out in Note 6.
126
9
Related parties and related party transactions (Continued)
(3)
Information of joint ventures and associates
Except the general information and other related information of joint ventures and associates set out in
Note(6), the rest of information listed as follows:
Main
operation
location
Place of
registration
Nature of business
Beijing
Beijing
Real Estate Investment and
Development
Chengdu
Hong Kong
Chengdu
Hong Kong
Lang Light International
Co.,Ltd.(Note 1)
China Resources (Taiyuan) Land
Co., Ltd.
Chongqing
Hong Kong
Chongqing
Hong Kong
Shanxi
Shanxi
Suzhou Yihu Real Estate Co., Ltd.
Ltd.(Note 1)
Jiangsu
Jiangsu
Zhejiang
Zhejiang
Dali Enterprises Co., Ltd.
Hong Kong
BVI
Hangzhou
Hong Kong
Xing Chuang Enterprise Co., Ltd.
Shandong China Overseas
Huachuang Real Estate Co.,
Ltd.(Note 1)
Tianjin Yingchao Real Estate
Shenzhen China Overseas Xinhe
Real Estate Investment Co., Ltd
Anhui Bengwu Expressway
Investment Management Co.,
Ltd.(Note 1)
Hong Kong
Hong Kong
Shandong
Shandong
Tianjing
Tianjing
Shenzhen
shenzhen
Development
Development
Development
Anhui
Anhui
Hong Kong
Important to the
Group on
strategic level
Percentage of
Shares(%)
Joint Venture–
Aocheng Wuhe
Chengdu Jincheng CSCEC Real
Estate Development
Co.,Ltd.(Note 1)
Haixing Material Co., Ltd
Speedy Champ Investments Limited
(Note 1)
Hong Kong
127
No
50.00
No
No
51.00
50.00
No
50.00
No
60.00
No
50.00
No
50.00
No
35.00
No
50.00
No
50.00
No
50.00
No
60.00
No
50.00
No
50.00
Infrastructure Construction
and Investment
No
70.00
Development
No
45.00
Development
Material Sale
Development
Development
Development
Development
Development
Development
Development
Development
9
(3)
Information of joint ventures and associates (Continued)
Main
operation
location
Place of
registration
Hong Kong
Hong Kong
Macau
Macau
Beijing
Xinjiang
Beijing
Xinjiang
Nature of business
Important to the
Group on
strategic level
Percentage
of Shares(%)
AssociatesGangjiu Concrete Co., Ltd.
Beijing China Construction Runtong Electrical
Engineering Construction Co., Ltd.
Xinjiang Yifa Heating Co., Ltd. (Note 2)
Jinmao Investment (Changsha) Co., Ltd.
Hunan
Hunan
Beijing CSCEC Lefu Decoration Co., Ltd.
Beijing
Beijing
Guizhou
Guizhou
Shanghai
Shanghai
DuYun Galactic Real Estate Development Co.,
Ltd
Shanghai Port Meiya Steel Pipe Manufacturing
Co., Ltd.
Krimark Investment Ltd
Hong Kong
BVI
Macau Concrete Co., Ltd.
Macau
Macau
Wuhan Port Construction Engineering Co., Ltd
(Note 3)
Hubei
Hubei
Material Sale
Real Estate
Investment and
Development
No
32.00
No
29.00
Building Construction
Public Service
Real Estate
Investment and
Development
No
No
30.00
60.00
No
20.00
Building Construction
Real Estate
Investment and
Development
Manufacturing and
Sales
Real Estate
Investment and
Development
No
30.00
No
33.33
No
48.00
No
40.00
Material Sale
Infrastructure
Construction and
Investment
No
31.34
No
19.00
Note 1: The percentage of shares of the invested company is the percentage of that held directly by the
Group. The board of directors of Chengdu Jincheng CSCEC Real Estate Development Co., Ltd,
Lang Light International Co., Ltd., Ningbo Cha Ting Properties Co., Ltd, Shandong China
Overseas Huachuang Real Estate Co., Ltd. Anhui Bengwu Expressway Investment
Management Co., Ltd and Speedy Champ Investments Limited can’t make an important
decision without an unanimous consent of the investors. Therefore, those companies are
deemed as joint ventures of the Group.
Note 2: The percentage of shares of the invested company is the percentage of that held directly by the
Group. Pursuant to the Articles of Association of Xinjiang Yifa Heating Co., Ltd. concerning
decision-making mechanism of significant operation and financial decisions, the Company is
not able to exercise substantial control or common control over Xinjiang Yifa Heating Co., Ltd.
Therefore, Xinjiang Yifa Heating Co., Ltd. is deemed as an associate of the Group.
.
Note 3: The percentage of shares of the invested company is the percentage of that hold directly by the
Group. The Group has one seat in the board of directors of Wuhan Port Construction
Engineering Co., Ltd. which entitled the Group 33% voting rights. The Group can exercises
substantial influence on the significant operation and financial decisions of Wuhan Port
Construction Engineering Co., Ltd Therefore, Wuhan Port Construction Engineering Co., Ltd. is
deemed as an associate of the Group.
128
9
(4) Information of other related parties
Relationship with the Group
China Construction First Engineering Bureau Industrial
Company
CSCEC First Engineering Bureau Civil Engineering Co., Ltd.
CSCEC Water & Environmental Protection Co., Ltd
CSCEC Electronic Commerce Co., Ltd
Shanghai International Port (Group) Co.,Ltd.
Shanghai International (Group) Ruitai Development Co., Ltd.
SIPG Pinghudushan Dock Co., Ltd.
Shanghai Tongsheng Inland Waterway Construction
Shanghai Yinhui Real Estate Development Co., Ltd.
129
Controlled by the same parent company
Impose significantly impact on the
subsidiaries of the Group
Controlled by the other shareholder of a
subsidiary of the Group
9
(5)
Related party transactions
(a)
Sale and purchase of goods, and rendering and receiving of services
Purchase of goods and accepting services
Pricing policy and
procedure for
decision-making
Nature of the
transaction
Name
2014
Shanghai Port Meiya Steel Pipe Purchase of goods
Manufacturing Co., Ltd.
As per agreement
343,870
24,872
Gangjiu Concrete Co., Ltd
Purchase of goods
As per agreement
225,520
104,829
Macau Concrete Co., Ltd.
Purchase of goods
As per agreement
109,604
-
Haixing Material Co., Ltd
Purchase of goods
Purchase of goods
and accepting
services
As per agreement
87,406
97,146
As per agreement
28,472
-
794,872
226,847
Others
Total
(b)
2015
Contract engineering
Name
Anhui Bengwu Expressway
Investment Management Co., Ltd.
Shanghai International (Group)
Ruitai Development Co., Ltd.
Shanghai International Port (Group)
Co., Ltd.
DuYun Galactic Real Estate
Others
Nature of the
transaction
Contract
engineering
Contract
engineering
Contract
engineering
Contract
engineering
Contract
engineering
Contract
engineering
Total
130
Pricing policy and
procedure for
decision-making
2015
As per agreement
494,866
118,834
As per agreement
398,398
-
As per agreement
79,045
251,879
As per agreement
55,448
60,005
As per agreement
42,895
57,309
As per agreement
230,982
260,121
1,301,634
748,148
2014
9
(5)
Related party transactions (Continued)
(c)
Projects sub-contracted out
Name
Beijing China Construction
Runtong Electrical Engineering
Construction Co., Ltd.
Wuhan Port Construction
Engineering Co., Ltd.
CSCEC First Engineering Bureau
Civil Engineering Co., Ltd.
Others
Nature of the
transaction
Contract
engineering
Contract
engineering
Contract
engineering
Contract
engineering
Pricing policy and
procedure for
decision-making
2014
As per agreement
188,807
241,560
As per agreement
62,200
-
As per agreement
60,038
-
As per agreement
75,742
44,248
386,787
285,808
Total
(d)
2015
Guarantee
Guarantee receiver
Guaranteed
amount
Starting date
Ending date
Fully performed
or not
200,000
6 December 2013
15 June 2017
NO
150,000
30 December 2014
30 December 2017
NO
50,000
28 January 2015
30 December 2017
NO
25,000
18 June 2015
30 December 2017
NO
98,000
12 December 2014
11 December 2017
NO
49,000
29 January 2015
11 December 2017
NO
49,000
20 April 2015
11 December 2017
NO
50,000
13 November 2015
9 November 2018
NO
Guiheng Investment Co. ,Ltd.
53,500
9 December 2015
9 November 2018
NO
Jinmao Investment
(Changsha) Co., Ltd
150,000
29 December 2015
9 November 2018
NO
913,300
24 May 2011
23 May 2021
NO
Total
1,787,800
131
9
(5)
(e)
Financing
Amount at
beginning of year
Amount at
end of year
Starting date
Ending date
Rate
Financing provided Borrowing Xinjiang Yifa Heating Co., Ltd.
Chengdu Jincheng CSCEC Real Estate
4,240
4,000
31 Dec. 2014
31 Dec. 2016
6.00%
26,080
-
30 Jun. 2014
19 Jun. 2015
6.65%
36,783
-
30 Aug. 2014
19 Jun. 2015
6.65%
97,302
-
30 Nov. 2014
19 Jun. 2015
6.65%
Lang Light International Co. ,Ltd.
284,000
-
11 Jun.2012
11 Jun. 2015
7.32%
Dali Enterprises Co., Ltd
602,829
637,292
1 Jan. 2010
24 Dec. 2019 (IBOR)+6%
Total financing provided
1,051,234
641,292
Amount at
beginning of year
Amount at
end of year
Starting date
Ending date
Rate
9 Dec. 2014
9 Dec. 2017
5.00%
Financing received Entrusted loans CSCEC
600,000
600,000
CSCEC
-
205,000 25 Nov. 2015
25 Nov. 2017
5.00%
CSCEC
-
595,000
3 Dec. 2015
3 Dec. 2017
5.00%
CSCEC
-
600,000 28 Dec. 2015
28 Dec. 2020
3.70%
CSCEC
1,500,000
- 26 Dec. 2014
25 Dec. 2015
4.48%
CSCEC
595,000
- 19 Dec. 2014
19 Dec. 2015
5.00%
CSCEC
205,000
- 21 Nov. 2014
21 Nov. 2015
5.00%
Jinmao Investment (Changsha) Co., Ltd
-
200,000
28 Jan. 2015
29 Jan. 2016
0.35%
-
360,000 11 Feb. 2015
12 Feb. 2016
0.35%
-
100,000
31 Jul. 2015
30 Jul. 2016
0.35%
200,000
-
29 Jan. 2014
28 Jan. 2015
0.35%
360,000
-
12 Feb. 2014
11 Feb. 2015
0.35%
100,000
-
31 Jul. 2014
30 Jul. 2015
0.35%
100,000
-
4 Dec. 2014
3 Dec. 2015
0.35%
3,660,000
2,660,000
Total financing received
132
9
(5)
(f)
Financing received
31.Dec.2014
CSCEC Electronic Commerce Co., Ltd
CSCEC
(g)
Decrease in
current year
31.Dec.2015
70,141
55,014
3,422,622
(15,000)
(1,410,922)
40,014
2,081,841
CSCEC Water & Environmental Protection
Co., Ltd
246,292
4,048,223
(3,591,000)
703,515
Total
316,433
7,525,859
(5,016,922)
2,825,370
Transfer of assets
Name of related party
Overseas Oceans
(h)
Increase in
current year
Nature of transaction
Pricing policy
2015
Trademark use right
As per agreement
132,136
2014
109,204
Remuneration of key management personnel
Remuneration of key management personnel
2015
2014
7,690
9,005
(6) Receivables from and payables to related parties
(a) Receivables from related parties
31 December 2015
31 December 2014
balance
bad debts
balance
bad debts
Accounts
SIPG Pinghudushan Dock Co.,
receivables
Ltd.
Engineering Bureau Industrial
Company
Shanghai International (Group)
Ruitai Development Co., Ltd
Others
99,861
283,584
(995)
29,130
233,219
(147)
Total
939,185
(995)
813,864
(147)
133
400,754
-
420,741
-
154,986
-
130,774
-
9
(6)
Receivables from and payables to related parties (Continued)
(a)
Receivables from related parties (Continued)
31 December 2015
balance
bad debts
Other
receivables
Lang Light International Co., Ltd.
Ltd.
China Resources (Taiyuan) Land
Co., Ltd
Suzhou Yihu Real Estate Co.,
Ltd.
Others
Total
Long-term
receivables
Total
31 December 2014
balance
bad debts
872,353
-
724,272
-
654,500
-
655,168
-
652,160
595,000
350,965
-
947,160
100,000
387,456
-
216,018
597,676
(178,050)
915,950
2,188,755
(178,262)
3,938,672
(178,050)
5,918,761
(178,262)
Xing Chuang Enterprises Co.,
Ltd.
Others
31 December 2015
balance
bad debts
31 December 2014
balance
bad debts
763,220
637,292
216,903
210,302
721,948
602,829
198,310
166,393
153,796
28,415
2,009,928
134
(120,772)
(120,772)
118,441
15,485
1,823,406
(114,241)
(114,241)
9
(6)
Receivables from and payables to related parties (continued)
(b)
Payables to related parties
Accounts Beijing China Construction Runtong Electrical
payable
Engineering Construction Co., Ltd.
Shanghai Port Meiya Steel Pipe
Manufacturing Co., Ltd.
China Construction First Engineering Bureau
Civil Engineering Co., Ltd.
Wuhan Port Construction Engineering Co., Ltd
Others
Total
Other
payable
Shandong China Oversea Huachuang Real
Estate Co., Ltd.
Speedy Champ Investments Limited
Krimark Investment Ltd.
Shenzhen China Oversea Xinhe Real Estate
Others
Total
31 December 2015
31 December 2014
199,999
169,659
87,464
3,065
43,438
31,379
51,326
8,433
71,420
413,606
252,577
31 December 2015
31 December 2014
512,998
336,249
218,489
515,998
142,715
220,604
197,074
613,240
197,074
1,492,486
1,878,050
2,568,877
31 December 2015
31 December 2014
Entrusted
Loans
CSCEC
Jinmao Investment (Changsha) Co., Ltd.
2,000,000
660,000
2,900,000
760,000
Total
2,660,000
3,660,000
135
9
(6)
Receivables from and payables to related parties (Continued)
(b)
Payables to related parties (Continued)
31 December 2015
31 December 2014
Dividends
Payable Shanghai International Port (Group) Co., Ltd.
CSCEC
341,167
68,062
341,167
66,062
Total
409,229
407,229
31 December 2015
31 December 2014
30,143
-
Advances from Shanghai Yinhui Real Estate
customers
Shanghai International Port (Group) Co.,
Ltd.
Shanghai International (Group) Ruitai
Others
19,142
-
11,677
11,261
2,090
13,591
Total
72,223
15,681
136
10
Contingencies
(1)
Pending litigation
As at 31 December 2015, pending litigations in which the Group was the defending party are listed as
follows:
Disputed value at end of year
China Construction Third Engineering Bureau Co., Ltd
China Construction First Building(Group) Corporation Limited
The Company
China Construction Fifth Engineering Division Corp., Ltd
China Construction Second Engineering Bureau Ltd.
China Construction Eighth Engineering Division. Corp. Ltd
China Construction Fourth Engineering Division Corp. Ltd
China Construction Seventh Engineering Division. Corp. Ltd
China Construction Sixth Engineering Division Corp, Ltd
CSCEC Xinjiang Construction & Engineering (Group) Co., Ltd
Total
517,830
318,335
267,428
226,330
188,830
122,566
119,977
49,038
22,103
6,011
85
1,838,533
Note: The above pending litigation is mostly related with project quality and progress payment. The
Group considers the possibility quite remote for it to undertake liabilities resulted from those
pending litigations and therefore no provision was recognised.
(2)
Guarantee provided
Type of guarantee
Guaranteed amount at end of year
Property Owners mortgage guarantee (Note)
Guarantees for bank loan
23,483,904
5,312,897
Total
28,796,801
Note: The Group provides guarantees to property owners and property owners pledge the houses they
have bought when taking loans from banks. In 2015, there was no breach of contract from
commodity house buyers and the Group considers risk associated with the guarantee obligation
are immaterial (Note 2(31)(c)).
137
11
Commitments
(1) Capital commitments
Capital expenditures contracted for but not yet necessary to be recognised on the balance sheet:
31 December 2015
Purchase and construction of non-current assets
(2)
31 December 2014
632,610
773,044
Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are
summarised as follows:
31 December 2015
(3)
31 December 2014
Within 1 year
1 to 2 years
2 to 3 years
Over 3 years
425,147
225,484
134,000
96,817
308,106
152,520
99,889
124,164
Total
881,448
684,679
Significant purchase commitments
At 27 November 2015, the Group signed an agreement with Nanjing Municipal Bureau of Land and
Resources with the commitment of purchasing the No.2015G55 State-owned construction land use
rights at a price of RMB2.17 billion. As at 31 December 2015, amounts to RMB1.085 billion has been
paid by the Group, and the rest will be paid in 2016.
(4)
Investment commitments
The Group’s significant investment commitments for the subsequent years are as follows:
Investee/Project
Xuzhou Metro Line One Investment
Nanning Metro Line Two Construction
Co., Ltd.
Shandong Jilai Intercity Expressway Co.,
Ltd.
Guizhou Jianxin Water Environment
Industry Co., Ltd.
Changsha Xinghui Real Estate
Total investment Investment amount as Retained investment
amounts at 31 December 2015
amounts
5,000,000
196,000
4,804,000
3,304,000
1,983,000
1,321,000
927,000
202,450
724,550
90,000
-
90,000
8,000
-
8,000
138
12
Events after the balance sheet date
(1)
An explanation of profit distribution
Profit distribution after the balance sheet date: in accordance with the resolution at the Board of
Directors’ meeting dated on 18 April 2015, the Board of Directors proposed a dividend in the amount of
RMB6 billion to the shareholders (RMB2.00 for every ten shares before tax), which is not recorded as
liability in the financial statements for the current year as the profit distribution plan is subject to
approval from the Company’s General Meeting of Shareholders.
(2) As stated in the announcement of Major Transaction in relation to the acquisition of Property Portfolio
from CITIC Group issued by the subsidiary of the Group, China Overseas Development, on 14 March
2016, China Overseas Development, CITIC Pacific Limited and CITIC Corporation Limited (both
wholly-owned subsidiaries of CITIC Limited, as the sellers) entered into a sale purchase agreement for
the conditional acquisition of the entire issued share capital of Tuxiana Corp. and CITIC Real Estate
Group Company Limited (together with their respective subsidiaries, the “CITIC Target Group) and the
outstanding loans and advances owing by the CITIC Target Group to CITIC Limited and its subsidiaries.
The initial consideration of acquisition is RMB31 billion(equivalent to HK$37.08 billion, subject to the
adjustments as provided in the agreement),and shall be satisfied through (i) an amount of HK$29.72
billion, which will be settled by the allotment and issue of 1,095,620,154 shares of China Overseas
Development at an issue price of HK$27.13 per share to the sellers; and (ii) an amount of
RMB6.15billion (equivalent to HK$7.36 billion) , which will be settled by the transfer of a portfolio of
properties to the sellers.
(3)
In accordance with the Notice on Entire Implementation of Business Tax to Value Added Tax
Transformation Pilot Program (Cai Shui [2016] No.36) issued by Ministry of Finance and State
Administration of Taxation on 23 March 2016, revenues derived from construction services, real estate
services and other relevant businesses of the Group will be subject to value added tax from 1 May 2016.
The applicable tax rate is 11% or 6%.
139
12
Events after the balance sheet date (Continued)
(4)
As approved by National Association of Financial Market Institutional Investors and Hong Kong
Exchanges and Cleaning Limited, details of the Company and its subsidiaries issuing bonds after the
balance sheet date are as follows:
Issuer
China Overseas Finance
Investment (Cayman) V Limited
Engineering Division. Corp.Ltd
The Company
Type
Exchangeable
bonds
First medium-term
in 2016
Short-term
financing bonds
Short-term
financing bonds
First medium-term
in 2016
Value date
Interest
rate (%)
6 Jan. 2016
6 Jan. 2016
Note 1
RMB0.5 billion
18 Jan. 2016
19 Jan. 2016
3.38
RMB0.6 billion
23 Feb. 2016 24 Feb. 2016
3.00
RMB0.4 billion
24 Feb. 2016 25 Feb. 2016
2.99
Issuing amount
Issuance date
USD1.5 billion
RMB3 billion
11 Apr.2016
13 Apr.2016
3.60
Note 1: Unless otherwise the exchangeable bonds were converted into shares, redeemed, purchased
or cancelled in accordance with related terms of the agreement, the Group will redeem the
exchangeable bonds at 121.07% of the principal.
13
Leases
The future lease payments of fixed assets held under finance leases (Note 4(16)(b)) are as follows:
31 December 2015
31 December 2014
Within 1 year
1-2 years
2-3 years
Over 3 years
100,932
194,879
41,473
13,170
130,637
104,318
80,113
45,468
Total
350,454
360,536
As at 31 December 2015, the unrecognised financing charge amounts to RMB19,991 thousand (31
December 2014: RMB36,845 thousand).
14
Business combinations
Please refer to Note 5 for details.
140
15
Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk
and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
the Group's financial performance.
(1)
Market risk
(a)
Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of the
transactions is denominated in RMB. The Group is exposed to foreign exchange risk arising from the
recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily
with respect to US dollars and HK dollars. The Group’s finance department at its headquarters is
responsible for monitoring the amount of assets and liabilities, and transactions denominated in foreign
currencies. The Group may consider entering into forward exchange contracts or currency swap
contracts to mitigate the foreign exchange risk. During 2015 and 2014, the Group did not enter into any
significant forward exchange contracts or currency swap contracts.
As at 31 December 2015 and 31 December 2014, the carrying amounts in RMB equivalent of the
Group’s assets and liabilities denominated in foreign currencies are summarized as follows:
31 December 2015
Financial assets denominated in
foreign currency Cash at bank and on hand
Financial assets at fair value through
profit or loss
Accounts receivable
Other receivables
Total
USD
HKD
Others
Total
7,120,383
16,980,300
10,660,427
34,761,110
3,384,178
481,111
64,823
338,433
6,045,525
175,365
21,043
-
4,872
6,156,401
441,736
35,143
1,469,217
4,872
15,586,104
1,098,212
121,009
1,807,650
11,388,928
23,222,233
18,767,796
53,378,957
Financial liabilities denominated in
foreign currency Accounts payable
Other payables
Current portion of non-current
liabilities
Bonds payables
Long-term payables
1,955,793
1,512,083
3,068,974
5,844,574
401,274
153,456
7,115,694
1,214,950
101,583
14,916,061
3,128,307
3,324,013
63,682
2,952,412
47,230,493
1,006,729
7,915,452
5,252,778
35,504,208
1,247,262
-
15,039
1,842,016
7,003,477
349,268
-
5,331,499
40,298,636
55,481,232
1,355,997
7,915,452
Total
65,705,618
48,403,552
17,642,027
131,751,197
141
15
Financial instrument and risk (Continued)
(1)
Market risk (continued)
(a)
Foreign exchange risk (continued)
31 December 2014
Financial assets denominated in
foreign currency Cash at bank and on hand
Financial assets at fair value
through profit or loss
Accounts receivable
Other receivables
Available-for-sale financial
assets
Total
USD
HKD
Others
Total
8,944,306
3,112,009
6,827,633
18,883,948
2,800,257
71,508
1,002,958
5,125,712
9,940
3,753
5,679,866
942,577
1,006,711
13,605,835
1,024,025
60,441
432,129
766
-
13,016
1,155,317
74,223
1,587,446
12,308,641
9,251,385
14,622,162
36,182,188
2,588,214
1,051,879
2,640,624
4,691,388
89,684
-
3,457,005
1,743,412
6,525
10,736,607
2,884,975
2,647,149
16,748,873
22,137,653
42,809,298
1,082,697
4,973,477
104,020,729
Financial liabilities denominated
in foreign currency Accounts payable
Other payables
Current portion of non-current
liabilities
Bonds payables
Long-term payables
405,763
16,342,691
2,447,887
41,630,028
188,056
4,973,477
17,858,066
1,179,270
1,708
-
419
1,831,700
892,933
-
Total
55,925,928
40,162,807
7,931,994
As at 31 December 2015, if the currency had strengthened/weakened by 10% against the foreign
currencies while all other variables had been held constant, the Group’s net profit for the year would
have been approximately RMB5.92 billion (31 December 2014: RMB5.2 billion) higher/lower for various
financial assets and liabilities denominated in foreign currencies.
142
15
(1)
Market risk (continued)
(b)
Interest rate risk
The Group's interest rate risk arises from interest bearing borrowings including borrowings, bonds
payables and borrowings from related parties. Financial liabilities issued at floating rates expose the
Group to cash flow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair
value interest rate risk. The Group determines the relative proportions of its fixed rate and floating rate
contracts depending on the prevailing market conditions. As at 31 December 2015, the Group’s interest
bearing borrowings with fixed rates amounts to RMB155,589,594 thousand (31 December 2014:
RMB125,179,037 thousand) and floating rates interest bearing borrowings amounts to
RMB104,830,964 thousand (31 December 2014: RMB98,196,855 thousand) (Note 4(23), 4(32)(a),
4(33), 4(34), 4(35), 4(36), 4(39) and Note 9(5)(f)).
Increases in interest rates will increase the cost of new borrowing and the interest expenses with
respect to the Group’s outstanding floating rate borrowings, and therefore could have a material
adverse effect on the Group’s financial position. The Group’s finance department at its headquarters
continuously monitors the interest rate position of the Group and makes decisions with reference to the
latest market conditions. The Group may enter into interest rate swap agreements to mitigate its
exposure to interest rate risk. During 2015 and 2014, the Group did not enter into any significant interest
rate swap agreements.
As at 31 December 2015, if interest rates on the floating rate borrowings had risen/fallen 50 basis points
while all other variables had been held constant, the Group’s net profit would have decreased/increased
by approximately RMB492,000 thousand (31 December 2014: approximately RMB434,000 thousand).
(2)
Credit risk
Credit risk is managed on a Group basis. Credit risk mainly arises from cash at bank, accounts
receivable, other receivables, notes receivable, etc..
The Group expects that there is no significant credit risk associated with cash at bank since they are
deposited at state-owned banks and other medium or large size listed banks. Management does not
expect that there will be any significant losses from non-performance by these counterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables
and notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by
taking into account their financial position, the availability of guarantee from third parties, their credit
history and other factors such as current market conditions. The credit history of the customers is
regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use
written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the
Group is limited to a controllable extent.
143
15
(3)
Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s
finance department in its headquarters. The Group’s finance department at its headquarters monitors
rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it has sufficient
cash and securities that are readily convertible to cash to meet operational needs, while maintaining
sufficient headroom on its undrawn committed borrowing facilities from major financial institution so that
the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the
short-term and long-term liquidity requirements.
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below
at their undiscounted contractual cash flows.
31 December 2015
Within 1 year
1-2 years
2-5 years
Over 5 years
26,165,557
Notes payable
14,218,247
Accounts payable
320,001,082
Interest payable
2,489,054
Dividends payable
1,342,390
Other payables
40,408,401
7,300,036
22,629,938
Bonds payables
14,786,883
Long-term payables
13,460,501
-
29,702,193
12,128,851
8,099,243
-
69,696,734
60,616,647
6,331,833
-
6,798,692
51,979,695
466,855
8,895,115
26,165,557
14,218,247
320,001,082
2,489,054
1,342,390
40,408,401
7,300,036
128,827,557
139,512,076
28,358,432
8,895,115
Total
49,930,287
136,645,214
68,140,357
717,517,947
462,802,089
Total
31 December 2014
Within 1 year
1-2 years
2-5 years
Over 5 years
22,976,871
Notes payable
12,514,256
Accounts payable
269,253,520
Interest payable
2,346,399
Dividends payable
469,247
Other payables
34,186,075
3,018,002
35,233,997
Bonds payables
12,105,782
Long-term payables
10,864,473
-
27,977,108
11,999,299
8,917,999
-
48,654,722
49,503,089
2,867,562
-
7,232,404
60,905,819
812,953
5,903,154
22,976,871
12,514,256
269,253,520
2,346,399
469,247
34,186,075
3,018,002
119,098,231
134,513,989
23,462,987
5,903,154
Total
48,894,406
101,025,373
74,854,330
627,742,731
402,968,622
144
Total
16
Fair value estimates
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair
value hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that is not based on observable market data (that is,
unobservable inputs).
(1)
Assets and liabilities measured at fair value on a recurring basis
As at 31 December 2015, the assets measured at fair value on a recurring basis by the above three
levels are analysed below:
Level 1
Financial assets Financial assets at fair value through profit or loss
Designated as financial assets at fair value
through profit or loss (Note 4(2))
1,000,000
Investments in equity instrument held-for-trading
(Note 4(2))
28,612
Derivative financial assets (Note 4(2))
Available-for-sale equity instruments (Note 4(12)) 1,702,551
Available-for-sale bonds (Note 4(12))
48,925
Others (Note 4(12))
Bank wealth management products (Note 4(11))
Others
-
Level 2
Level 3
Total
-
-
1,000,000
-
101,615
28,612
101,615
-
43,141
20,210
1,745,692
48,925
20,210
-
817,692
200,000
817,692
200,000
Total financial assets
2,780,088
-
1,182,658
3,962,746
Financial liabilities Exchangeable bonds in 2014 (Note 4(39))
5,967,372
-
-
5,967,372
145
16
Fair value estimates (Continued)
(1)
Assets and liabilities measured at fair value on a recurring basis (Continued)
As at 31 December 2014, the assets measured at fair value on a recurring basis by the above three
levels are analysed below:
Level 1
Financial assets Financial assets at fair value through profit or loss
Investments in equity instrument held for trading
(Note 4(2))
1,028,011
Financial Derivative assets (Note 4(2))
Available-for-sale equity instruments (Note 4(12)) 1,706,036
Available-for-sale bonds (Note4(12))
45,568
Others (Note 4(12))
Bank wealth management products (Note 4(11))
-
Level 2
Level 3
Total
-
9,751
1,028,011
9,751
-
240,194
16,466
1,946,230
45,568
16,466
-
185,000
185,000
Total financial assets
2,779,615
-
451,411
3,231,026
Financial liabilities Derivative financial liabilities
Exchangeable bonds in 2014 (Note 4(39))
4,973,477
-
19,441
-
19,441
4,973,477
Total financial liabilities
4,973,477
-
19,441
4,992,918
The Group takes the date on which events causing the transfers between the levels take place as the
timing specific for recognising the transfers. There is no transfer between Level 1 and Level 2 for the
current year.
The fair value of financial instruments traded in an active market is determined at the quoted market
price; and the fair value of those not traded in an active market is determined by the Group using
valuation technique. The valuation models used mainly comprise discounted cash flow model and
market comparable corporate model. The inputs of the valuation technique mainly include future cash
flow, PBR of companies in same category, unit price of comparable property.
146
16
(1) Assets and liabilities measured at fair value on a recurring basis (Continued)
The changes in Level 3 financial assets are analysed below:
Equity
Derivative
instruments financial assets
1 January 2015
Purchases
240,194
9,751
Bank wealth
management
products and others
Total
201,466
451,411
799
-
8,200,623
8,201,422
Sales
-
-
(7,567,930)
(7,567,930)
Transfer into / (out of) Level 3
Total gains or losses for the current period
Gains or losses recognised in profit or loss
Gains or losses recognised in other
-
-
-
-
-
91,864
-
91,864
2,148
-
3,743
5,891
243,141
101,615
837,902
1,182,658
-
91,864
-
91,864
Equity
Derivative
instruments financial assets
Bank wealth
management
products and others
Total
31 December 2015
Changes in unrealised gains or losses
included in profit or loss for the current
period with respect to assets still held as
at 31 December 2015
- Gains / (losses) arising from changes in
fair value
1 January 2014
Purchases
Sales
Transfer into / (out of) Level 3
Total gains or losses for the current period
Gains or losses recognised in profit or loss
Gains or losses recognised in other
31 December 2014
47,411
-
1,088,364
1,135,775
200,000
-
12,644,070
12,844,070
(7,345)
-
(13,532,570) (13,539,915)
-
-
-
-
-
9,751
-
9,751
128
-
1,602
1,730
240,194
9,751
201,466
451,411
-
9,751
-
9,751
Changes in unrealised gains or losses
included in profit or loss for the current
period with respect to assets still held as
at 31 December 2014
- Gains / (losses) arising from changes in
fair value
Gains or losses recognised in profit or loss are included in the income statement under the items of
gains / losses arising from changes in fair value.
147
16
(2)
Assets and liabilities measured at fair value on a non-recurring basis
Assets and liabilities classified as held for sale are recognised at the amount equal to the lower of the
original carrying amount and the fair value less costs to sell. As at 31 December 2015, assets which are
satisfied with all of the held-for-sale conditions are classified as held for sale assets (Note 4(9)).
According to the irrevocable transfer agreement signed by the Group, the original carrying amounts of
the assets classified as held for sale is equal to their fair value, so the Group will not bear any disposal
fee.
(3)
Assets and liabilities not measured but disclosed at fair value
Financial assets and liabilities measured at amortised cost mainly include receivables, held-to-maturity
investments, short-term borrowings, payables, long-term borrowings, bonds payables and long-term
payables.
Except for financial assets and liabilities listed below, the carrying amount of the other financial assets
and liabilities not measured at fair value is a reasonable approximation of their fair value.
31 December 2015
Book value
Fair value
Financial liabilitiesBonds payables
101,172,467
103,692,424
31 December 2014
Book value
Fair value
80,064,763
83,238,645
The fair value of bonds payables quoted in an active market is determined at the quoted market price,
and categorised within Level 1 of the fair value hierarchy. The fair value of bonds payables not quoted in
an active market is the present value of the contractually determined stream of future cash flows
discounted at the rate of interest applied at that time by the market to instruments of comparable credit
status and providing substantially the same cash flows on the same terms, and categorised within Level
3 of the fair value hierarchy.
148
17
Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders, and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the ways of financing, issue
new shares or other equity instruments, or sell assets to reduce debts.
The Group uses the debt to assets ratio to control capital. On 31 December 2015 and 31 December
2014, the debt to assets ratio of the Group is analysed below:
31 December 2015
Total assets (A)
Total liabilities (B)
Debt to assets ratio (B/A) (%)
149
31 December 2014
1,074,904,899
836,122,178
919,106,215
722,192,735
77.79
78.58
18
Notes to the Company’s financial statements
(1)
Accounts receivable
(a)
31 December 2015
31 December 2014
Accounts receivable
16,328,330
(408,909)
9,452,730
(222,463)
Total
15,919,421
9,230,267
The aging of accounts receivable is analysed as follows:
31 December 2015
(b)
31 December 2014
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
13,291,373
1,964,274
852,118
127,377
93,188
7,694,195
1,433,995
75,719
161,751
87,070
Total
16,328,330
9,452,730
Accounts receivable are analysed by categories as follows:
31 December 2015
Ending balance
% of total
Provision
Amount
balance
Amount
Ratio (%)
31 December 2014
Ending balance
% of total
Provision
Amount
balance
Amount
Ratio (%)
individually
for bad debts is
provided on the
individual basis
515,869
That the related
provision for bad
the grouping basis
15,804,955
3.16
(234,277)
45.41
186,081
1.97
(61,117)
32.85
96.79
(167,126)
1.06
9,228,406
97.63
(146,916)
1.59
Including: Group 1
2,036,288
12.47
(167,126)
8.21
1,991,551
21.07
(146,916)
7.38
Group 2
13,768,667
not individually
for bad debts is
provided on the
individual basis
7,506
84.32
-
7,236,855
76.56
38,243
0.40
(14,430)
9,452,730
100.00
(222,463)
Total
16,328,330
-
0.05
(7,506)
100.00
(408,909)
150
100.00
-
-
37.73
18
Notes to the Company’s financial statements (Continued)
(1)
(c)
As at 31 December 2015, accounts receivable with amounts that are individually significant and that
the related provision for bad debts is provided on the individual basis are analysed as follows:
Debtor
Ending balance
Provision for Provision
bad debts Ratio (%)
Company 1
Company 2
Company 3
Company 4
Company 5
Others
184,628
141,372
104,901
19,568
18,748
46,652
(92,314)
(28,274)
(52,450)
(3,910)
(18,748)
(38,581)
Total
515,869
(234,277)
50.00
20.00
50.00
19.98
100.00
82.70
Reason of provision
Provided based on evidence and judgement
(d) Among accounts receivable of which the related provision for bad debts is provided on grouping basis,
31 December 2015
Ending balance
Provision
Amount
Amount
Ratio (%)
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
1,700,406
165,211
110,096
34,019
26,556
(85,020)
(16,521)
(22,019)
(17,010)
(26,556)
Total
2,036,288
(167,126)
151
5
10
20
50
100
31 December 2014
Ending balance
Provision
Amount
Amount
Ratio (%)
1,650,203
234,194
47,196
56,819
3,139
(82,510)
(23,419)
(9,439)
(28,409)
(3,139)
1,991,551
(146,916)
5
10
20
50
100
18
(1)
(e)
Provision for bad debts amounted to RMB243,232 thousand were accrued in current year. Provision
for bad debts amounted to RMB37,469 thousand were collected or reversed in current year. The major
collection
Company 1
Company 2
Company 3
Company 4
Company 5
Others
project collected
project collected
project collected
project collected
project collected
project collected
Basis for determining the Reversal/ collection
amount
Provided on grouping basis
7,792
Cash
7,127
Cash
5,536
Cash
2,839
Cash
Provided individually and on
grouping basis
2,551
Cash
20,622
Cash
Total
(f)
Way of
collection
46,467
In 2015, there was no accounts receivable that were unable to be collected and written off (2014:
RMB178 thousand).
(g) As at 31 December 2015, the five largest accounts receivable according to customers are analysed as
follows:
Amount
The total amount of the five largest accounts receivable 3,380,238
Amount of provision
for bad debt
-
% of total
balance
20.70
(h) As at 31 December 2015, the Company has no accounts receivable derecognised due to the transfer
of financial assets.
152
18
(2)
Other receivables
31 December 2015
Deposits and petty cash receivable
Receivables from related parties
Others
Sub-total
285,341
29,715,559
470,421
30,471,321
(530,053)
Total
(a)
31 December 2014
408,542
39,890,281
518,831
40,817,654
(684,582)
29,941,268
40,133,072
31 December 2015
31 December 2014
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
27,374,345
2,658,630
276,247
62,287
99,812
36,852,478
3,792,731
60,122
77,483
34,840
Total
30,471,321
40,817,654
The aging of other receivables is analysed as follows:
153
18
(2)
(b)
Other receivables are analysed by categories as follows:
31 December 2015
Ending balance
% of total
Provision
Amount
balance
Amount
Ratio (%)
individually
for bad debts is
provided on the
individual basis
562,612
That the related
provision for bad
the grouping basis
29,896,116
Including: Group 1
15,226
Group 2
29,880,890
not individually
for bad debts is
provided on the
individual basis
12,593
Total
(c)
30,471,321
1.85
(513,920)
98.11
0.05
(8,809)
(8,809)
98.06
91.35
-
0.04
(7,324)
100.00
(530,053)
31 December 2014
Ending balance
% of total
Provision
Amount
balance
Amount
Ratio (%)
756,357
1.85
(668,388)
88.37
0.03 40,053,068
57.85
20,579
98.13
0.05
(9,130)
(9,130)
0.02
44.37
-
58.16
40,032,489
98.08
-
8,229
0.02
(7,064)
40,817,654
100.00
(684,582)
-
85.84
As at 31 December 2015, other receivables with amounts that are individually significant and that the
Debtor
Ending balance
Provision for Provision
bad debts Ratio (%)
Reason of provision
Company 1
243,461
(194,769)
80.00
Company 2
149,578
(149,578)
100.00
Company 3
115,962
(115,962)
100.00
Company 4
42,894
(42,894)
100.00
Company 5
10,717
(10,717)
100.00
562,612
(513,920)
Total
154
18
(2)
(d)
Among other receivables of which the related provision for bad debts is provided on grouping basis,
31 December 2015
Ending balance Provision for bad debts
Provision
Amount
Amount
Ratio (%)
Within 1 year
1-2 years
2-3 years
3-5 years
Over 5 years
Total
(e)
4,553
1,088
174
1,947
7,464
(228)
(109)
(35)
(973)
(7,464)
15,226
(8,809)
5
10
20
50
100
8,561
206
3,372
866
7,574
(428)
(21)
(674)
(433)
(7,574)
20,579
(9,130)
5
10
20
50
100
Provision for bad debts amounted to RMB3,731 thousand were accrued in current year. Provision for
bad debts amounted to RMB158,107 thousand were collected or reversed in current year. The major
collection
Basis for determining the
Reversal/
collection amount
Way of collection
Company 1
Receivables collected
157,104
Cash
Company 2
500
Cash
Company 3
189
Cash
Company 4
100
Cash
Company 5
60
Cash
Others
154
Cash
Total
(f)
31 December 2014
Ending balance
Provision
Amount
Amount Ratio (%)
158,107
In 2015, there was no other receivables that were unable to be collected and written off (2014:
RMB279,671 thousand).
155
18
(2)
(g)
As at 31 December 2015, the five largest other receivables by customers are analysed as follows:
Relationship with
the Company
Aging
% of total
balance
Within 1 year, 1-2 years and
over 5 years
70.04
-
Amount
Company 1
Subsidiary
Company 2
Subsidiary
2,880,000 Within 1 year and 1-2 years
9.45
-
Company 3
Subsidiary
5.61
-
Company 4
Subsidiary
4.94
-
Company 5
Subsidiary
989,942 Within 1 year and 1-2 years
3.25
-
93.29
-
Total
21,342,701
Provision for
bad debts
28,428,512
(h)
As at 31 December 2015, the Company has no significant government grant recognized in other
receivables.
(3)
Long-term equity investments
Subsidiaries
-Subsidiaries under direct control (a)
-Subsidiaries under indirect control (b)
Joint ventures (c)
Associates (d)
Sub-total
Total
156
31 December 2015
31 December 2014
99,553,165
93,528,567
6,024,598
312,388
287,953
100,153,506
75,468,497
70,001,369
5,467,128
92,659
201,963
75,763,119
(759,180)
(759,180)
99,394,326
75,003,939
18
(3)
Long-term equity investments (Continued)
(a)
Subsidiaries under direct control
Accounting
Method
Investment
cost
Comment for
Impairment
difference between
provided in Cash dividend
31 December Current year 31 December
Share
Voting share holding and Provision for the current declared in the
2014
movement
2015 holding (%) rights (%)
voting rights impairment
year
current year
China Construction First Building(Group)
Corporation Limited
China Construction Second Engineering
Bureau Ltd.
China Construction Third Engineering Bureau
Co.,Ltd
China Construction Fourth Engineering
Division Corp.Ltd
China Construction Fifth Engineering Division
Corp.,Ltd
China Construction Sixth Engineering Division
Corp,Ltd
China Construction Seventh Engineering
Division. Corp.Ltd
Division. Corp.Ltd
China Construction Engineering Design
Group Corporation Limited.
China Construction Fangcheng Investment &
Shenzhen Zhonghai Investment Management
Co., Ltd.
Infrustructure Business of China State
Construction
China Construction America, Inc.
Cost method
33,844,328
25,444,328
8,400,000
33,844,328
100.00
100.00
N/A
-
-
2,648,869
Cost method
4,343,069
3,470,559
872,510
4,343,069
100.00
100.00
N/A
-
-
259,470
Cost method
3,084,439
2,087,139
997,300
3,084,439
100.00
100.00
N/A
-
-
512,699
Cost method
6,271,354
4,208,854
2,062,500
6,271,354
100.00
100.00
N/A
-
-
851,570
Cost method
3,028,537
2,141,037
887,500
3,028,537
100.00
100.00
N/A
-
-
412,900
Cost method
3,413,789
2,018,789
1,395,000
3,413,789
100.00
100.00
N/A
-
-
662,440
Cost method
2,577,946
1,940,996
636,950
2,577,946
100.00
100.00
N/A
-
-
214,998
Cost method
3,128,070
2,078,070
1,050,000
3,128,070
100.00
100.00
N/A
-
-
434,780
Cost method
6,301,942
4,212,312
2,089,630
6,301,942
100.00
100.00
N/A
-
-
731,280
Cost method
2,026,923
1,948,313
78,610
2,026,923
100.00
100.00
N/A
-
-
190,450
Cost method
5,851,624
5,851,624
-
5,851,624
100.00
100.00
N/A
-
-
-
Cost method
2,901,537
2,901,537
-
2,901,537
100.00
100.00
N/A
-
-
327,470
Cost method
Cost method
2,855,956
2,153,228
345,956
2,153,228
2,510,000
-
2,855,956
2,153,228
100.00
100.00
100.00
100.00
N/A
N/A
-
-
103,000
China State Construction Finance Co., Ltd.
China Construction South Investment Co.,
Ltd.
Cost method
2,324,554
2,324,554
-
2,324,554
80.00
80.00
N/A
-
-
272,250
Cost method
1,000,000
1,000,000
-
1,000,000
100.00
100.00
N/A
-
-
-
157
18
(3)
(a)
Subsidiaries under direct control (Continued)
Accounting
Method
Comment for
difference between
Current year 31 December
Share
Voting share holding and Provision for
movement
2015 holding (%) rights (%)
voting rights impairment
Impairment
provided in Cash dividend
the current declared in the
year
current year
Investment
cost
31December
2014
China State Construction Railway Corp, Ltd. Cost method
355,758
355,758
-
355,758
100.00
100.00
N/A
-
-
-
China State Construction Thailand Co., Ltd.
China State Construction the Philippines
Co., Ltd.
CSCEC Xinjiang Construction &
Engineering (Group) Co.,Ltd
China State Construction Shandong
Cost method
656,107
656,107
-
656,107
100.00
100.00
N/A
656,107
-
-
Cost method
100,207
100,207
-
100,207
100.00
100.00
N/A
100,207
-
-
Cost method
601,764
601,764
-
601,764
100.00
100.00
N/A
Cost method
1,000,000
-
1,000,000
1,000,000
100.00
100.00
N/A
-
-
-
Cost method
5,707,435
4,160,237
1,547,198
5,707,435
N/A
N/A
N/A
2,866
-
324,389
70,001,369
23,527,198
93,528,567
759,180
-
7,946,565
Others
Total
158
18
(3)
(b)
Subsidiaries under indirect control
Accounting
Method
China Construction Communications Engng.
Group Corp Ltd.
Cost method
Investment 31 December Current year 31 December
Share
cost
2014
movement
2015 holding (%)
Comment for
difference between
Voting share holding and
rights (%)
voting rights
Impairment Cash dividend
Provision for provided in the declared in the
impairment
current year
current year
1,279,000
1,279,000
-
1,279,000
100.00
100.00
N/A
-
-
39,000
West Construction
China Construction Installation Engineering
Co., Ltd.
China Construction Steel Structure Corp. Ltd
Hangzhou China Construction Guobo
Property Investment Co., Ltd.
China Construction Electric Power
Nanning China Construction Yongshen City
Construction Investment Co., Ltd.
China Construction Chongqing Infrastructure
China State Construction Guilin
Infrastructure Investment and
Cost method
942,264
942,264
-
942,264
68.73
68.73
N/A
-
-
7,757
Cost method
Cost method
790,305
739,664
725,585
739,664
64,720
-
790,305
739,664
100.00
100.00
100.00
100.00
N/A
N/A
-
-
50,740
49,490
Cost method
668,432
668,432
-
668,432
100.00
100.00
N/A
-
-
32,000
Cost method
300,000
200,000
100,000
300,000
100.00
100.00
N/A
-
-
37,204
Cost method
230,000
230,000
-
230,000
100.00
100.00
N/A
-
-
-
Cost method
217,950
79,200
138,750
217,950
100.00
100.00
N/A
-
-
-
Cost method
180,000
180,000
-
180,000
100.00
100.00
N/A
-
-
-
Cost method
102,400
102,400
-
102,400
100.00
100.00
N/A
-
-
-
CSCEC Underground Space Co., Ltd.
China Construction Overseas Development
(Shanghai) Co., Ltd.
China State Construction Foshan
Transportation Joint Investment Co., Ltd.
China Construction Wuhan Construction
China Construction (Qingdao) Dongjiagang
Harbor Project Management Co., Ltd.
Cost method
100,000
75,000
25,000
100,000
100.00
100.00
N/A
-
-
5,320
Cost method
100,000
-
100,000
100,000
100.00
100.00
N/A
-
-
-
Cost method
90,000
90,000
-
90,000
100.00
100.00
N/A
-
-
-
Cost method
60,000
60,000
-
60,000
100.00
100.00
N/A
-
-
-
Cost method
50,583
50,583
-
50,583
100.00
100.00
N/A
-
-
-
159
18
(3)
(b) Subsidiaries under indirect control (Continued)
China Construction Infrastructure Investment
(Wuzhou) Co., Ltd.
China Construction Langfang Infrastructure
Investment and Development Co., Ltd.
China Construction Railway Investment
(Hunan) Co., Ltd.
China Construction Infrastructure Investment
(Nanchang) Co., Ltd.
China Construction Guangan Investment Co.,
Ltd.
Total
31 December Current year 31 December
Share
2014
movement
2015 holding (%)
Comment for
difference between
Voting share holding and
rights (%)
voting rights
Impairment Cash dividend
Provision for provided in the declared in the
impairment
current year
current year
Accounting
Method
Investment
cost
Cost method
50,000
-
50,000
50,000
100.00
100.00
N/A
-
-
-
Cost method
45,000
45,000
-
45,000
100.00
100.00
N/A
-
-
-
Cost method
40,000
-
40,000
40,000
100.00
100.00
N/A
-
-
-
Cost method
30,000
-
30,000
30,000
100.00
100.00
N/A
-
-
-
Cost method
9,000
-
9,000
9,000
100.00
100.00
N/A
-
-
-
5,467,128
557,470
6,024,598
-
-
221,511
Note: The share holding of the subsidiaries under indirect control is the total of the Company’s share holding under both direct control and indirect control.
160
18
(c)
Joint ventures
Investment
31December contribution
2014 or withdraw
CSCEC-Dacheng Construction
Ltd
Beijing Zhongguancun Bio
Pharmaceutical Industry
Investment and
Development Co. Ltd.
Sino Road & Bridge
Construction Group Co., Ltd.
Total
(d)
72,791
19,868
-
(19,818)
Net profit / loss Share of other
Profit/Cash
adjusted comprehensive
dividends
31 December
according to income under declared by Accrual of
equity method equity method joint ventures impairment Others
2015
12,413
(50)
-
(12,500)
-
-
72,704
-
-
-
-
-
-
229,762
9,922
-
-
-
-
239,684
92,659
209,944
22,285
-
(12,500)
-
-
312,388
Associates
Investment
31December contribution
2014 or withdraw
Xuzhou Metro Line One
Investement Development
Co.,Ltd.
Beiqi Industrial Park
Investment Center in
Cangzhou Development
Zone (LLP)
Shangrao City Construction
Investment Development
Group Co. Ltd.
Shanlv Yanan Tourism
Investment Co. Ltd.
200,000
(200,000)
Total
201,963
86,000
Net profit / loss Share of other
Profit/Cash
adjusted comprehensive
dividends
31 December
according to income under declared by Accrual of
equity method equity method joint ventures impairment Others
2015
-
186,000
-
-
-
-
-
186,000
-
100,000
-
-
-
-
-
100,000
1,963
-
-
-
-
-
1,953
-
-
-
-
-
-
-
-
-
287,953
(10)
(10)
161
18
(4)
Revenue and cost of sales
2015
2014
Revenue from main operations
49,759,735
41,104,391
Revenue from other operations
64,884
46,242
Total
49,824,619
41,150,633
Cost of sales from main operations
46,940,346
39,357,027
Cost of sales from other operations
58,394
38,812
46,998,740
39,395,839
Total
(a)
Revenue and cost of sale from main operations
Analysis by industries is as follows:
Revenue from
main operations
2015
2014
Cost of sales from
main operations main operations
main operations
Building construction
17,791,543
16,614,099
19,055,971
18,082,297
Infrastructure construction
31,946,383
30,304,372
22,014,383
21,238,619
21,809
21,875
34,037
36,111
49,759,735
46,940,346
41,104,391
39,357,027
Others
Total
162
18
(5)
Investment income
2015
2014
Income from long-term equity investments under cost method
Income from long-term equity investments under equity method
Income from disposal of long-term equity investments (Note)
Income earned during the holding of available-for-sale financial
assets
Income from disposal of available-for-sale financial assets, etc.
8,168,076
22,275
3,668
7,298,978
9,311
146,985
91,569
11,250
159,861
-
Total
8,296,838
7,615,135
Note: Investment income from disposal of long-term equity investments is the difference between the
proceeds from disposal and the carrying amount of the disposed long-term equity investments.
In 2015, the Company’s income from disposal of long-term equity investments is RMB3,668
thousand, mainly comprising the disposal of investment in China State Construction Shanlv
Yanan Tourism Investment Co. Ltd. and China State Construction Beijing Zhongguancun Bio
Pharmaceutical Industry Investment and Development Co. Ltd.
There is no significant restriction on recovery of investment income.
163
SUPPLEMENTARY INFORMATION FROM THE MANAGEMENT
1. Statement of non-recurring profit or loss
2015
2014
Profit or loss items from non-operating activities
Profit on disposal of non-current assets
143,516
213,734
Government grants recognised in profit or loss for the current year
Profit recognized as the combination cost is lower than the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets
266,084
398,185
25,074
-
Net profit from other non-operating activities
176,644
510,618
611,318
1,122,537
Net profit from non-operating activities
Losses arising from changes in fair value of financial assets, income from
disposal of financial assets and available-for-sale financial assets
Interest income from providing entrusted loan
Reversal of the provision on receivables for impairment on an individual
basis
Income from disposal of long-term equity investments
Revenue from revaluation of remaining equity of partial disposal of
subsidiaries
Sub-total
Effect of income tax
(504,249)
(206,718)
244,704
276,882
660,233
493,058
3,667
307,712
-
290,687
1,015,673
2,284,158
(320,542)
Sub-total
695,131
Effect of non-controlling interests (after tax)
258,572
Total
953,703
(519,578)
1,764,580
(128,117)
1,636,463
Basis for preparation of statement of non-recurring profit or loss
Under the requirements in Explanatory announcement No. 1 on information disclosure by companies
offering securities to the public – non-recurring profit or loss [2008] from CSRC, non-recurring profit or loss
refer to those arises from transactions and events that are not directly relevant to ordinary activities, or that
are relevant to ordinary activities, but are extraordinary and not expected to recur frequently that would
have an influence on users of financial statements making economic decisions on the financial
performance and profitability of an enterprise.
1
2. Return on net assets and earnings per share
Earnings per share
2015
2014
2015
2014
Weighted average
return on net assets (%)
2015
2014
ordinary shareholders of
the Company
ordinary shareholders of
the Company after
deducting non-recurring
profit or loss
16.00
17.70
0.84
0.75
0.83
0.75
15.39
16.42
0.80
0.70
0.80
0.69
Calculation of above financial indexes:
(a) Formula to calculate weighted average return on equity (ROE) is as follows:
P
ROE=——————————————————————
E0+NP÷2+Ei×Mi÷M0-Ej×Mj÷M0±Ek×Mk÷M0
Where P is the consolidated net profit attributable to ordinary shareholders of the Company and the
consolidated net profit attributable to ordinary shareholders of the Company after deducting non-recurring
profit or loss; NP is the net profit attributable to ordinary shareholders of the Company; E0 is the net asset
attributable to ordinary shareholders of the Company at the beginning of period; Ei is the net asset
increased from newly issued shares or debt for equity swap that are attributable to ordinary shareholders
of the Company during the reporting period; Ej is the net asset decreased due to share repurchase or
cash dividend attributable to ordinary shareholders of the Company during the reporting period; M0 is the
number of months during the reporting period; Mi is the number of months from the next month when
asset increased to the end of the reporting period; Mj is the number of months from the next month when
asset decreased to the end of the reporting period; Ek is the change in net asset due to other transactions
or events; and Mk the number of months from the next month when change in net asset due to other
transactions or events are incurred to the end of the reporting period.
2
2.
Return on net assets and earnings per share (Continued)
(b) Basic earnings per share (EPS) are calculated as follows:
P
EPS=————————————————
S0+S1+Si×Mi÷M0-Sj×Mj÷M0-Sk
P stands for the consolidated net profit attributable to ordinary shareholders of the Company or the
consolidated net profit attributable to ordinary shareholders of the Company after deducting
non-recurring profit or loss; S is the total weighted average number of shares issued; S0 is the total
number of shares at the beginning of the period; S1 is number of shares increased due to capitalization
of reserve fund or dividend distribution during the reporting period; Si is the number of shares increased
due to new share issuance or debt for equity swap; Sj is the number of shares decreased due to share
repurchase, etc. during the reporting period; Sk is the shrinked number of shares during the reporting
period; M0 is the number of months during the reporting period; Mi is the number of months from the
next month of share increase to the end of the reporting period; Mj is the number of months from the next
month of share decrease to the end of the reporting period.
(c)
Diluted earnings per share are calculated as follows:
Diluted earnings per share is calculated by dividing net profit attributable to ordinary shareholders of the
Company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average
number of ordinary shares outstanding. When dilutive ordinary shares such as convertible bonds, share
option or warrants are issued, diluted earnings per share can be calculated based on the following
formula:
Diluted earnings per share=[P+（interest on the dilutive ordinary shares recognised as expense
-conversion expense）×（1-income tax rate）]/（S0+S1+Si×Mi÷M0-Sj×Mj÷M0-Sk+ average number of
shares increased from warrants, share options or convertible bonds, etc..）
P stands for the consolidated net profit attributable to ordinary shareholders of the Company or the
consolidated net profit attributable to ordinary shareholders of the Company after deducting
non-recurring profit or loss. The Company shall consider all dilutive ordinary shares when calculating
diluted earnings per share until it is reduced to the smallest amount. For subsidiaries issuing dilutive
ordinary shares, such number of dilutive ordinary shares shall be included when calculating the
consolidated diluted earnings per share as well as the subsidiary has diluted earnings per share.
3

China State Construction Engineering Co., Ltd. 2015 Annual Report

Transcription

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