9. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
(a) Investments in joint ventures
Movements in investments in joint ventures are as follows:
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2016 |
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2017 |
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As at January 1, |
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5,150,887 |
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6,240,200 |
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Capital injections |
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1,224,912 |
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201,864 |
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A joint venture changed into a subsidiary (note 38 (i)) |
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— |
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(315,706) |
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A subsidiary changed into a joint venture (note 39 (f)) |
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— |
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11,980 |
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Share of profits and losses for the year |
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(95,508) |
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8,151 |
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Share of changes in reserves |
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8,373 |
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(6,105) |
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Cash dividends declared |
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(48,464) |
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(132,760) |
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As at December 31, |
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6,240,200 |
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6,007,624 |
As at December 31, 2016 and 2017, all joint ventures of the Group were unlisted.
As at December 31, 2017, particulars of the Group’s material joint venture is as follows:
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Place of |
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establishment |
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Registered |
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Effective equity interest held |
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and |
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and paid‑in |
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Ownership |
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Voting |
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Profit |
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Name |
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operation |
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capital |
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Principal activities |
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interest |
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power |
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sharing |
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Guangxi Huayin Aluminum Co.,Ltd.*(“Guangxi Huayin”) (廣西華銀鋁業有限公司) |
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PRC/Mainland of China |
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2,441,987 |
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Manufacturing |
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33 |
% |
33 |
% |
33 |
% |
Guangxi Huayin, which is considered a material joint venture of the Group, is accounted for using the equity method.
* The English names represent the best effort by management of the Group in translating the Chinese names of the Companies as they do not have any official English names.
The following table illustrates the summarized financial information in respect of Guangxi Huayin:
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2016 |
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2017 |
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Cash and cash equivalents |
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444,104 |
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259,280 |
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Other current assets |
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1,519,522 |
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1,056,431 |
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Current assets |
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1,963,626 |
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1,315,711 |
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Non-current assets |
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6,253,828 |
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5,921,936 |
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Financial liabilities |
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2,642,830 |
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942,641 |
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Other current liabilities |
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199,885 |
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258,858 |
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Current liabilities |
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2,842,715 |
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1,201,499 |
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Non-current liabilities |
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1,866,613 |
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1,383,866 |
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Net assets |
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3,508,126 |
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4,652,282 |
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Non-controlling interests |
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— |
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— |
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Reconciliation to the Group's interest in the joint venture: |
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Proportion of the Group's ownership |
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33 |
% |
33 |
% |
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Group's share of net assets of the joint venture |
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1,157,682 |
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1,535,253 |
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Carrying amount of the investment |
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1,157,682 |
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1,535,253 |
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2015 |
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2016 |
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2017 |
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Revenue |
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4,234,157 |
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4,008,925 |
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5,547,895 |
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Gross profit |
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706,818 |
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531,785 |
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1,844,116 |
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Interest income |
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5,004 |
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2,944 |
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31,754 |
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Depreciation and amortization |
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524,436 |
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509,510 |
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524,090 |
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Interest expenses |
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227,592 |
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169,745 |
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132,273 |
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Profit before income tax |
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189,720 |
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173,690 |
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1,507,883 |
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Income tax |
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47,914 |
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35,312 |
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214,264 |
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Profit and total comprehensive income for the year |
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141,806 |
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138,378 |
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1,293,619 |
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Other comprehensive income |
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— |
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— |
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— |
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Dividend received |
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— |
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— |
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40,260 |
The following table illustrates the aggregate financial information of the Group’s joint ventures that are not individually material:
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2016 |
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2017 |
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Share of the joint ventures' profits and losses for the year |
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(141,173) |
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(418,743) |
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Share of the joint ventures' total comprehensive income |
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(141,173) |
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(418,743) |
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Aggregate carrying amount of the Group's investments in joint ventures |
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5,082,518 |
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4,472,371 |
As at December 31, 2017, there were no proportionate interests of the Group in the joint ventures’ capital commitments (December 31, 2016: RMB3 million).
There were no material contingent liabilities relating to the Group’s interests in the joint ventures and the joint ventures themselves.
(b) Investments in associates
Movements in investments in associates are as follows:
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2016 |
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2017 |
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As at January 1, |
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5,602,701 |
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5,926,533 |
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Capital injections |
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511,151 |
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857,317 |
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Deemed disposal of a subsidiary (note 39 (e)) |
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— |
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100,092 |
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A subsidiary changed into an associate (note 39 (d)) |
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— |
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240,258 |
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An investment in an associate changed into an available-for-sale financial investment |
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(176,774) |
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— |
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Share of profits and losses for the year |
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115,091 |
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(165,249) |
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Cash dividends declared |
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(65,603) |
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(26,330) |
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Share of changes in reserves |
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596 |
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2,409 |
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Other decrease of investment in an associate |
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(60,629) |
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— |
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As at December 31, |
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5,926,533 |
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6,935,030 |
As at December 31, 2017, all associates of the Group were unlisted.
As at December 31, 2016, particulars of the Group's material associate are as follows:
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Effective equity |
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interest held |
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Place of |
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establishment |
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Registered |
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and |
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and |
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Principal |
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Ownership |
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Voting |
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Profit |
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Name |
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operation |
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paid‑in capital |
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activities |
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interest |
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power |
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sharing |
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Ling Wu Power |
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PRC/Mainland of China |
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Registered capital 1,300,000 Paid-in capital 2,050,239 |
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Thermal power generation |
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35 |
% |
35 |
% |
35 |
% |
Ling Wu Power, which is considered a material associate of the Group in 2016, is accounted for using the equity method.
The following table illustrates the summarized financial information in respect of Ling Wu Power:
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2016 |
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2017 |
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Cash and cash equivalents |
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26,191 |
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10,629 |
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Other current assets |
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705,994 |
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948,443 |
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Current assets |
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732,185 |
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959,072 |
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Non-current assets |
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8,781,399 |
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8,151,428 |
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Financial liabilities |
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1,521,912 |
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1,885,097 |
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Other current liabilities |
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6,011 |
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18,129 |
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Current liabilities |
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1,527,923 |
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1,903,226 |
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Non-current liabilities |
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4,126,278 |
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3,469,266 |
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Net assets |
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3,859,383 |
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3,738,008 |
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Non-controlling interests |
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— |
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— |
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Reconciliation to the Group's interest in the associate: |
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Proportion of the Group's ownership |
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35 |
% |
35 |
% |
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Group's share of net assets of the associate |
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1,350,784 |
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1,308,303 |
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Carrying amount of the investment |
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1,350,784 |
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1,308,303 |
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2015 |
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2016 |
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2017 |
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Revenue |
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4,319,345 |
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3,297,397 |
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3,723,669 |
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Gross profit |
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1,190,966 |
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524,930 |
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79,200 |
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Interest income |
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2,140 |
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1,320 |
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1,513 |
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Depreciation and amortization |
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610,910 |
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608,345 |
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609,240 |
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Interest expenses |
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312,128 |
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251,838 |
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213,983 |
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Profit/ (Loss) before income tax |
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629,564 |
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327,481 |
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(154,054) |
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Income tax expense/ (benefits) |
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75,404 |
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74,911 |
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(32,679) |
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Profit and total comprehensive income/ (loss) for the year |
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554,160 |
|
252,570 |
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(121,375) |
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Other comprehensive income |
|
— |
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— |
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- |
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Dividend received |
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289,605 |
|
— |
|
- |
The following table illustrates the aggregate financial information of the Group’s associates that are not individually material:
|
|
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2016 |
|
2017 |
|
Share of the associates' profits and losses |
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26,692 |
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(122,768) |
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Share of the associates' total comprehensive income |
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26,692 |
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(122,768) |
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Aggregate carrying amount of the Group's investments in the associates |
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4,575,749 |
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5,626,727 |
As at December 31, 2017, the proportionate interests of the Group in the associates’ capital commitments amounted to RMB760 million (December 31, 2016: Nil)
There were no material contingent liabilities relating to the Group’s interests in the associates and the associates themselves.