CHINA UNICOM (HONG KONG) Ltd | CIK:0001113866 |

Filed: 4/20/2018

Entity registrant name: CHINA UNICOM (HONG KONG) Ltd (CIK: 0001113866)

Generator: Donnelley Financial Solutions

SEC filing page: http://www.sec.gov/Archives/edgar/data/1113866/000119312518123736/0001193125-18-123736-index.htm

XBRL Instance: http://www.sec.gov/Archives/edgar/data/1113866/000119312518123736/chu-20171231.xml

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15.	PROPERTY, PLANT AND EQUIPMENT

The movements of property, plant and equipment for the years ended December 31, 2016 and 2017 are as follows:

 

		2016
		Buildings				Tele- communications equipment				Office furniture, fixtures, motor vehicles and other equipment				Leasehold improvements				CIP				Total
Cost:
Beginning of year			62,969				838,995				19,464				3,878				97,601				1,022,907
Additions			57				748				427				186				70,418				71,836
Transfer from CIP			4,211				79,808				748				301				(85,068	)			—
Transfer to other assets			—				—				—				—				(4,046	)			(4,046	)
Disposals			(97	)			(43,099	)			(632	)			(330	)			—				(44,158	)
End of year			67,140				876,452				20,007				4,035				78,905				1,046,539
Accumulated depreciation and impairment:
Beginning of year			(26,612	)			(525,244	)			(14,059	)			(2,256	)			(105	)			(568,276	)
Charge for the year			(2,621	)			(62,932	)			(1,516	)			(681	)			—				(67,750	)
Disposals			59				39,704				589				250				—				40,602
End of year			(29,174	)			(548,472	)			(14,986	)			(2,687	)			(105	)			(595,424	)
Net book value:
End of year			37,966				327,980				5,021				1,348				78,800				451,115
Beginning of year			36,357				313,751				5,405				1,622				97,496				454,631

 

		2017
		Buildings				Tele- communications equipment				Office furniture, fixtures, motor vehicles and other equipment				Leasehold improvements				CIP				Total
Cost:
Beginning of year			67,140				876,452				20,007				4,035				78,905				1,046,539
Additions			129				293				426				290				41,510				42,648
Transfer from CIP			4,219				58,535				783				284				(63,821	)			—
Transfer to other assets			—				—				—				—				(4,376	)			(4,376	)
Disposals			(411	)			(64,588	)			(1,046	)			(319	)			—				(66,364	)
End of year			71,077				870,692				20,170				4,290				52,218				1,018,447
Accumulated depreciation and impairment:
Beginning of year			(29,174	)			(548,472	)			(14,986	)			(2,687	)			(105	)			(595,424	)
Charge for the year			(2,765	)			(62,311	)			(1,386	)			(810	)			—				(67,272	)
Disposals			225				59,384				928				308				—				60,845
End of year			(31,714	)			(551,399	)			(15,444	)			(3,189	)			(105	)			(601,851	)
Net book value:
End of year			39,363				319,293				4,726				1,101				52,113				416,596
Beginning of year			37,966				327,980				5,021				1,348				78,800				451,115

As of December 31, 2017, the net book value of assets held under finance leases was approximately RMB789 million (2016: approximately RMB582 million).

For the year ended December 31, 2017, interest expense of approximately RMB670 million (2015: approximately RMB936 million; 2016: approximately RMB769 million) was capitalized to CIP. The capitalized borrowing rate represents the cost of capital for raising the related borrowings and varied from 3.21% to 3.88% for the year ended December 31, 2017 (2015: 3.40% to 4.33%; 2016: 3.33% to 3.79%).

For the year ended December 31, 2017, the Group disposed certain property, plant and equipment with carrying amounts RMB5,519 million (2015: RMB41,925 million 2016: RMB3,556 million) for sales proceeds of RMB2,030 million (2015: RMB49,176 million 2016: RMB3,201 million) in total, resulting in a net loss on disposal of property, plant and equipment of approximately RMB3,489 million (2015: a net gain of approximately RMB7,251 million, including the gain on the Group’s Tower Assets Disposal of approximately RMB9,246 million; 2016: a net loss of approximately RMB355 million), mainly as a result of Group’s ongoing upgrade of its broadband network. In order to achieve a higher speed of transmission, the Group is gradually replacing copper cabling broadband network by optical fibre broadband network. Subscribers’ migration progress, which is voluntary, is not entirely predictable. When all subscribers of a copper broadband network site have migrated to optical fibre broadband network site, the old broadband related equipment became idle and were then disposed by the Group.