36. FINANCIAL AND CAPITAL RISK MANAGEMENT
36.1 Financial risk management
The Group’s activities expose it to a variety of financial risks, including market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the Group’s financial performance.
Risk management is carried out by the treasury management department (the “Group Treasury“) under policies approved by the board of directors of the Company. The Group Treasury identifies, evaluates and hedges financial risks through close co-operation with the Group’s operating units.
(a) Market risk
|
(i) |
Foreign currency risk |
Foreign currency risk primarily arises from certain significant foreign currency deposits, trade and notes receivables, trade and notes payables, advances paid to suppliers, and short-term and long-term loans denominated in United States dollars (“USD“), Australian dollars (“AUD“), Euro (“EUR“), Japanese yen (“JPY“), and Hong Kong dollars (“HKD“). Related exposures are disclosed in notes 14, 15, 16, 19, 22, 23 and 40 to the financial statements, respectively. The Group Treasury closely monitors the international foreign currency market on the change of exchange rates and takes these into consideration when investing in foreign currency deposits and borrowing loans. As at December 31, 2016 and 2017, the Group only had significant exposure to USD.
As at December 31, 2017, if RMB had strengthened/weakened by 5% against USD with all other variables held constant, the profit for the year would have been approximately RMB21 million lower/higher (2016: RMB269 million lower/higher), mainly as a result of foreign exchange gains and losses arising from translation of USD-denominated borrowings, cash and receivables. Profit was less sensitive to the fluctuation in the RMB/USD exchange rates in 2017 than in 2016, mainly due to the decrease in the USD denominated cash and receivables.
As the assets and liabilities denominated in other foreign currencies other than USD were relatively minimal to the total assets and liabilities of the Group, the directors of the Company are of the opinion that the Group was not exposed to any significant foreign currency risk arising from these foreign currency denominated assets and liabilities as at December 31, 2016 and 2017.
|
(ii) |
Interest rate risk |
The interest rate risk of the Group mainly arises from medium-term notes and short-term bonds issued at fixed rates. As at December 31, 2016 and 2017, as the Group had no significant interest-bearing assets except for bank deposits (note 16), entrusted loans (note 15), and a loan to Shanxi Huaxing (note 12), the Group’s income and operating cash flows are substantially independent of changes in market interest rates.
Most of the bank deposits are maintained in savings and time deposit accounts in the PRC. The interest rates are regulated by the People’s Bank of China and the Group Treasury closely monitors the fluctuation on such rates periodically. The interest rates of entrusted loans are fixed. As the interest rates applied to the entrusted loans were fixed, the directors of the Company are of the opinion that the Group was not exposed to any significant interest rate risk for its financial assets held as at December 31, 2016 and 2017.
The interest rate risk for the Group’s financial liabilities primarily arises from interest-bearing loans. Loans borrowed at floating interest rates expose the Group to cash flow interest rate risk. The exposures to these risks are disclosed separately in note 19. The Group enters into debt obligations to support general corporate purposes including capital expenditures and working capital needs. The Group Treasury closely monitors market interest rates and maintains a balance between variable rate and fixed rate borrowings in order to reduce the exposures to the interest rate risk described above.
As at December 31, 2017, if interest rates had been 100 basis points (December 31, 2016: 100 basis points) higher/lower for bank and other loans borrowed at floating interest rates with all other variables held constant, net profit for the year would have been RMB535 million lower/higher (2016: RMB480 million), respectively, mainly as a result of the higher/lower interest expense on floating rate borrowings.
The interest rate risk of the Group mainly arises from medium-term notes and short-term bonds issued at fixed rates. As the fluctuation of comparable interest rates of corporate bonds with similar terms was relatively low, the directors of the Company are of the opinion that the Group is not exposed to any significant fair value interest rate risk for its fixed interest rate borrowings held as at December 31, 2016 and 2017.
|
(iii) |
Commodity price risk |
The Group uses futures and option contracts to reduce its exposure to fluctuations in the price of primary aluminum and other products. The Group uses the futures contract for hedging other than speculation. With reference to the hedging of primary aluminum, production company hedges the output of primary aluminum and trading company hedges the quantities of buyout and self-supporting.
The Group uses mainly futures contracts and option contracts traded on the Shanghai Futures Exchange and London Metal Exchange ("LME") to hedge against fluctuations in primary aluminum prices. As at December 31, 2017, the fair values of the outstanding futures contracts amounting to RMB10 million (December 31, 2016: RMB55 million) and RMB89 million (December 31, 2016: RMB3 million) were recognized in financial assets and financial liabilities at fair value through profit or loss, respectively. As at December 31, 2017, the Company did not hold any option contracts (December 31, 2016: the fair value of the outstanding options contracts amounting to RMB0.1 million was recognized in financial liabilities at fair value through profit or loss).
As at December 31, 2017, if the commodity futures prices had increased/decreased by 3% (Decem PaymentsForGuaranteeObligationRelatedPartyTransactions ber 31, 2016: 3%) and all other variables held constant, profit for the year would have changed by the amounts shown below:
|
|
|
2016 |
|
2017 |
|
|
Primary aluminum |
|
Decrease/increase |
|
Decrease/increase |
|
|
Copper |
|
Decrease/increase |
|
Increase/decrease |
|
|
Zinc |
|
Decrease/increase |
|
Decrease/increase |
|
|
Lead |
|
Increase/decrease RMB0.1 million |
|
— |
|
|
Coal |
|
Decrease/increase RMB1 million |
|
Decrease/increase |
|
(b) Credit risk
Credit risk arises from balances with banks and financial institutions, short-term investments, trade and notes receivables, other current and non-current receivables as well as credit exposures of customers, including outstanding receivables and committed transactions. The carrying amounts of short-term investments and these receivables included in notes 10, 12, 14, and 15 represent the Group’s maximum exposure to credit risk in relation to its financial assets. The Group also provided financial guarantees to certain subsidiaries and a joint venture. The guarantees to joint ventures and an associate mentioned in note 35 represented the Group’s maximum exposure to credit risk in relation to its guarantees to a joint venture.
The Group maintains substantially all of its bank balances and cash and short-term investments in several major state-owned banks in the PRC. With strong support from the PRC government to these state-owned banks, the directors of the Company are of the opinion that there is no significant credit risk on such assets being exposed to losses.
With regard to receivables, the marketing department assesses the credit quality of the customers and their related parties, taking into account their financial positions, past experience and other factors. The Group performs periodic credit evaluations of its customers and considers that adequate provision for impairment of receivables has been made in the financial statements. Management does not expect any further losses from non-performance by these counterparties. The Group holds collateral for some entrusted loans.
For the year ended December 31, 2017, revenues of approximately RMB39,759 million (2015: RMB 31,818 million, 2016: RMB30,940 million) were derived from entities directly or indirectly owned or controlled by the PRC government including Chinalco. There were no other individual customers from whom the Group has derived revenue of more than 10% of the Group’s revenue during the years ended December 31, 2016 and 2017. Thus, the directors of the Company are of the opinion that the Group was not exposed to any significant concentration of credit risk as at December 31, 2015, 2016 and 2017.
(c) Liquidity risk
Cash flow forecast is performed in the operating entities of the Group and aggregated by the Group Treasury. The Group Treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. This forecast takes into consideration of the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements, for example, currency restrictions.
As at December 31, 2017, the Group had total banking facilities of approximately RMB152,080 million (2016: RMB134,235 million) of which amounts totalling RMB69,414 million (2016: RMB61,980 million) have been utilized as at December 31, 2017. Banking facilities of approximately RMB56,104 million (2016: RMB 67,510 million) will be subject to renewal during the next 12 months. The directors of the Company are confident that such banking facilities can be renewed upon expiration based on their past experience and good credit standing.
In addition, as at December 31, 2017, the Group had credit facilities through its futures agent at the LME amounting to USD20 million (equivalent to RMB131 million) (December 31, 2016: USD120 million (equivalent to RMB832 million)), of which USD2 million (equivalent to RMB13 million) (December 31, 2016: USD50 million (equivalent to RMB344 million)) has been utilized. The futures agent has the right to adjust the related credit facilities.
Management also monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flows.
The table below analyzes the maturity profile of the Group’s financial liabilities as at the end of the reporting period. The amounts disclosed in the table are the contractual undiscounted cash flows.
|
|
|
Within 1 |
|
|
|
|
|
Over 5 |
|
|
|
|
|
year |
|
1 to 2 years |
|
2 to 5 years |
|
years |
|
Total |
|
As at December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease payables, including current portion |
|
2,253,720 |
|
2,068,315 |
|
2,895,251 |
|
— |
|
7,217,286 |
|
Long-term bank and other loans, including current portion |
|
4,725,151 |
|
8,000,722 |
|
10,275,883 |
|
8,698,516 |
|
31,700,272 |
|
Long-term bonds |
|
2,000,000 |
|
— |
|
— |
|
— |
|
2,000,000 |
|
Medium-term notes and bonds, including current portion |
|
6,400,000 |
|
12,500,000 |
|
3,215,000 |
|
— |
|
22,115,000 |
|
Short-term bonds |
|
7,900,000 |
|
— |
|
— |
|
— |
|
7,900,000 |
|
Gold leasing arrangement |
|
3,000,000 |
|
— |
|
— |
|
— |
|
3,000,000 |
|
Short-term bank and other loans |
|
32,321,825 |
|
— |
|
— |
|
— |
|
32,321,825 |
|
Interest payables for borrowings |
|
6,062,365 |
|
1,701,480 |
|
2,436,061 |
|
470,469 |
|
10,670,375 |
|
Financial liabilities at fair value through profit or loss |
|
3,575 |
|
— |
|
— |
|
— |
|
3,575 |
|
Financial liabilities included in other payables and accrued liabilities, excluding accrued interest |
|
8,501,869 |
|
— |
|
— |
|
— |
|
8,501,869 |
|
Financial liabilities included in other non-current liabilities (Note) |
|
— |
|
218,201 |
|
330,021 |
|
405,261 |
|
953,483 |
|
Trade and notes payables |
|
11,342,870 |
|
— |
|
— |
|
— |
|
11,342,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,511,375 |
|
24,488,718 |
|
19,152,216 |
|
9,574,246 |
|
137,726,555 |
The table below analyzes the maturity profile of the Group's financial liabilities as at the end of the reporting period. The amounts disclosed in the table are the contractual undiscounted cash flows.
|
|
|
Within 1 |
|
|
|
|
|
Over 5 |
|
|
|
|
|
year |
|
1 to 2 years |
|
2 to 5 years |
|
years |
|
Total |
|
As at December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Finance lease payables, including current portion |
|
2,371,917 |
|
1,762,618 |
|
1,890,329 |
|
73,603 |
|
6,098,467 |
|
Long-term bank and other loans, including current portion |
|
6,890,140 |
|
5,174,015 |
|
8,673,794 |
|
19,745,385 |
|
40,483,334 |
|
Medium-term notes and bonds, including current portion |
|
12,500,000 |
|
3,215,000 |
|
— |
|
— |
|
15,715,000 |
|
Short-term bonds |
|
3,500,000 |
|
— |
|
— |
|
— |
|
3,500,000 |
|
Gold leasing arrangement |
|
6,818,393 |
|
— |
|
— |
|
— |
|
6,818,393 |
|
Short-term bank and other loans |
|
30,834,442 |
|
— |
|
— |
|
— |
|
30,834,442 |
|
Interest payables for borrowings |
|
5,282,030 |
|
2,123,149 |
|
4,106,037 |
|
1,048,728 |
|
12,559,944 |
|
Financial liabilities at fair value through profit or loss |
|
89,426 |
|
— |
|
— |
|
— |
|
89,426 |
|
Financial liabilities included in other payables and accrued liabilities, excluding accrued interest |
|
10,307,315 |
|
— |
|
— |
|
— |
|
10,307,315 |
|
Financial liabilities included in other non-current liabilities (Note) |
|
— |
|
107,785 |
|
108,896 |
|
587,668 |
|
804,349 |
|
Trade and notes payables |
|
12,321,970 |
|
— |
|
— |
|
— |
|
12,321,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,915,633 |
|
12,382,567 |
|
14,779,056 |
|
21,455,384 |
|
139,532,640 |
Note: As disclosed in note 21, as at December 31, 2017, the carrying value of financial liabilities included in other non-current liabilities was RMB769 million (December 31, 2016: RMB790 million).
(a) Financial instruments by category
The carrying amounts of each of the categories of financial instruments of the Group as at the end of the reporting period are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
||||||
|
|
|
Financial |
|
|
|
|
|
|
|
|
|
assets |
|
|
|
|
|
|
|
|
|
at fair value |
|
|
|
Available‑ |
|
|
|
|
|
through |
|
|
|
for‑sale |
|
|
|
|
|
profit or |
|
Loans and |
|
financial |
|
|
|
Financial assets |
|
loss |
|
receivables |
|
investments |
|
Total |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and notes receivables |
|
— |
|
7,349,563 |
|
— |
|
7,349,563 |
|
Financial assets at fair value through profit or loss |
|
54,756 |
|
— |
|
— |
|
54,756 |
|
Restricted cash and time deposits |
|
— |
|
2,087,447 |
|
— |
|
2,087,447 |
|
Cash and cash equivalents |
|
— |
|
23,813,736 |
|
— |
|
23,813,736 |
|
Financial assets included in other current assets |
|
— |
|
10,663,486 |
|
— |
|
10,663,486 |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
54,756 |
|
43,914,232 |
|
— |
|
43,968,988 |
|
|
|
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial investments |
|
— |
|
— |
|
164,393 |
|
164,393 |
|
Financial assets included in other non-current assets |
|
— |
|
1,366,359 |
|
— |
|
1,366,359 |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
— |
|
1,366,359 |
|
164,393 |
|
1,530,752 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
54,756 |
|
45,280,591 |
|
164,393 |
|
45,499,740 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
||||
|
|
|
Financial |
|
Financial |
|
|
|
|
|
liabilities at fair |
|
liabilities at |
|
|
|
|
|
value through |
|
amortized |
|
|
|
Financial liabilities |
|
profit or loss |
|
cost |
|
Total |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or loss |
|
3,575 |
|
— |
|
3,575 |
|
Interest-bearing loans and borrowings |
|
— |
|
58,459,394 |
|
58,459,394 |
|
Financial liabilities included in other payables and accrued liabilities |
|
— |
|
9,572,489 |
|
9,572,489 |
|
Trade and notes payables |
|
— |
|
11,342,870 |
|
11,342,870 |
|
|
|
|
|
|
|
|
|
Subtotal |
|
3,575 |
|
79,374,753 |
|
79,378,328 |
|
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities included in other non-current liabilities |
|
— |
|
789,720 |
|
789,720 |
|
Interest-bearing loans and borrowings |
|
— |
|
47,322,748 |
|
47,322,748 |
|
|
|
|
|
|
|
|
|
Subtotal |
|
— |
|
48,112,468 |
|
48,112,468 |
|
|
|
|
|
|
|
|
|
Total |
|
3,575 |
|
127,487,221 |
|
127,490,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
||||||
|
|
|
Financial |
|
|
|
|
|
|
|
|
|
assets |
|
|
|
|
|
|
|
|
|
at fair |
|
|
|
|
|
|
|
|
|
value |
|
|
|
Available‑ |
|
|
|
|
|
through |
|
|
|
for‑sale |
|
|
|
|
|
profit or |
|
Loans and |
|
financial |
|
|
|
Financial assets |
|
loss |
|
receivables |
|
investments |
|
Total |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and notes receivables |
|
— |
|
8,026,209 |
|
— |
|
8,026,209 |
|
Financial assets at fair value through profit or loss |
|
9,534 |
|
— |
|
— |
|
9,534 |
|
Restricted cash and time deposits |
|
— |
|
2,152,492 |
|
— |
|
2,152,492 |
|
Cash and cash equivalents |
|
— |
|
27,750,686 |
|
— |
|
27,750,686 |
|
Financial assets included in other current assets |
|
— |
|
6,487,089 |
|
— |
|
6,487,089 |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
9,534 |
|
44,416,476 |
|
— |
|
44,426,010 |
|
|
|
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial investments |
|
— |
|
— |
|
1,928,201 |
|
1,928,201 |
|
Financial assets included in other non-current assets |
|
— |
|
261,156 |
|
— |
|
261,156 |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
— |
|
261,156 |
|
1,928,201 |
|
2,189,357 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
9,534 |
|
44,677,632 |
|
1,928,201 |
|
46,615,367 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
||||
|
|
|
Financial |
|
|
|
|
|
|
|
liabilities at fair |
|
Financial |
|
|
|
|
|
value through |
|
liabilities at |
|
|
|
Financial liabilities |
|
profit or loss |
|
amortized cost |
|
Total |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or loss |
|
89,426 |
|
— |
|
89,426 |
|
Interest-bearing loans and borrowings |
|
— |
|
62,752,570 |
|
62,752,570 |
|
Financial liabilities included in other payables and accrued liabilities (note 22) |
|
— |
|
11,284,456 |
|
11,284,456 |
|
Trade and notes payables |
|
— |
|
12,321,970 |
|
12,321,970 |
|
|
|
|
|
|
|
|
|
Subtotal |
|
89,426 |
|
86,358,996 |
|
86,448,422 |
|
|
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities included in other non-current liabilities (note 21) |
|
— |
|
769,061 |
|
769,061 |
|
Interest-bearing loans and borrowings |
|
— |
|
40,289,703 |
|
40,289,703 |
|
|
|
|
|
|
|
|
|
Subtotal |
|
— |
|
41,058,764 |
|
41,058,764 |
|
|
|
|
|
|
|
|
|
Total |
|
89,426 |
|
127,417,760 |
|
127,507,186 |
(b) Fair value and fair value hierarchy
Fair value
The carrying amounts and fair values of the Group’s financial instruments, other than those with carrying amounts that reasonably approximate to fair values and those carried at fair value, are as follows:
|
|
|
Carrying amounts |
|
|
|
Fair values |
|
|
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
Financial assets |
|
|
|
|
|
|
|
|
|
Available-for-sale financial instruments |
|
— |
|
1,848,000 |
|
— |
|
1,848,000 |
|
Financial assets included in other non-current assets (note 12) |
|
1,366,359 |
|
261,156 |
|
1,375,140 |
|
242,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,366,359 |
|
2,109,156 |
|
1,375,140 |
|
2,090,567 |
|
|
|
Carrying amounts |
|
|
|
Fair values |
|
|
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
Financial liabilities included in other non-current liabilities (note 21) |
|
789,720 |
|
769,061 |
|
789,720 |
|
660,688 |
|
Long-term interest-bearing loans and borrowings (note 19) |
|
47,322,748 |
|
40,289,703 |
|
46,766,169 |
|
39,475,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
48,112,468 |
|
41,058,764 |
|
47,555,889 |
|
40,136,080 |
Management has assessed that the fair values of cash and cash equivalents, restricted cash and time deposits, trade and notes receivables, financial assets included in other current assets, entrusted loans, trade and notes payables, financial liabilities included in other payables and accrued liabilities, short-term and the current portion of interest-bearing loans and borrowings, interest payable and the current portion of long-term payables approximate to their carrying amounts largely due to the short term maturities of these instruments.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
|
· |
The fair values of the financial assets included in other non-current assets and financial liabilities included in other non-current liabilities and long-term interest-bearing loans and borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments on with similar terms, credit risk and remaining maturities. |
The Group’s own non-performance risk for financial liabilities included in other non-current liabilities and long-term interest-bearing loans and borrowings as at December 31, 2016 and 2017 was assessed to be insignificant.
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value measurement using |
||||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices in |
|
Significant |
|
Significant |
|
|
|
|
|
active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2016 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Financial assets at fair value through profit or loss: |
|
|
|
|
|
|
|
|
|
Futures contracts |
|
54,756 |
|
— |
|
— |
|
54,756 |
|
Available for sale financial investments |
|
93,893 |
|
— |
|
— |
|
93,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
148,649 |
|
— |
|
— |
|
148,649 |
|
|
|
Fair value measurement using |
|
|||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices in |
|
Significant |
|
Significant |
|
|
|
|
|
active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2017 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Financial assets at fair value through profit or loss: |
|
|
|
|
|
|
|
|
|
Futures contracts |
|
9,534 |
|
— |
|
— |
|
9,534 |
|
Available-for-sale financial investments |
|
|
|
|
|
|
|
|
|
Listed equity investments |
|
9,701 |
|
— |
|
— |
|
9,701 |
|
Other unlisted investment |
|
— |
|
1,848,000 |
|
— |
|
1,848,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
19,235 |
|
1,848,000 |
|
— |
|
1,867,235 |
Liabilities measured at fair value
|
|
|
Fair value measurement using |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices |
|
Significant |
|
Significant |
|
|
|
|
|
in active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2016 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Financial liabilities at fair value through profit or loss: |
|
|
|
|
|
|
|
|
|
Futures contracts |
|
3,468 |
|
— |
|
— |
|
3,468 |
|
European option contracts |
|
— |
|
107 |
|
— |
|
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,468 |
|
107 |
|
— |
|
3,575 |
|
|
|
Fair value measurement using |
|
|||||
|
|
|
Quoted prices |
|
Significant |
|
Significant |
|
|
|
|
|
in active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2017 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Financial liabilities at fair value through profit or loss: |
|
|
|
|
|
|
|
|
|
Futures contracts |
|
89,426 |
|
— |
|
— |
|
89,426 |
|
|
|
89,426 |
|
— |
|
— |
|
89,426 |
Assets for which fair values are disclosed
|
|
|
Fair value measurement using |
||||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices |
|
Significant |
|
Significant |
|
|
|
|
|
in active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2016 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Loans and receivables: |
|
|
|
|
|
|
|
|
|
Financial assets included in other non-current assets |
|
— |
|
1,375,140 |
|
— |
|
1,375,140 |
|
|
|
Fair value measurement using |
||||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices |
|
Significant |
|
Significant |
|
|
|
|
|
in active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2017 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Loans and receivables: |
|
|
|
|
|
|
|
|
|
Financial assets included in other non-current assets |
|
— |
|
242,567 |
|
— |
|
242,567 |
Liabilities for which fair values are disclosed
|
|
|
Fair value measurement using |
|
|||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices in |
|
Significant |
|
Significant |
|
|
|
|
|
active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2016 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at amortized cost: |
|
|
|
|
|
|
|
|
|
Financial liabilities included in other non-current liabilities |
|
— |
|
789,720 |
|
— |
|
789,720 |
|
Long-term interest-bearing loans and borrowings |
|
— |
|
46,766,169 |
|
— |
|
46,766,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
47,555,889 |
|
— |
|
47,555,889 |
|
|
|
Fair value measurement using |
||||||
|
|
|
Quoted |
|
|
|
|
|
|
|
|
|
prices in |
|
Significant |
|
Significant |
|
|
|
|
|
active |
|
observable |
|
unobservable |
|
|
|
|
|
markets |
|
inputs |
|
inputs |
|
|
|
As at December 31, 2017 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total |
|
Financial liabilities at amortized cost: |
|
|
|
|
|
|
|
|
|
Financial liabilities included in other non-current liabilities |
|
— |
|
660,688 |
|
— |
|
660,688 |
|
Long-term interest-bearing loans and borrowings |
|
— |
|
39,475,392 |
|
— |
|
39,475,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
40,136,080 |
|
— |
|
40,136,080 |
During the year ended December 31, 2017, the Group had no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities (2016: Nil).
36.3 Capital risk management
The Group’s capital management objectives are 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 amount of dividends paid to shareholders, issue new shares or sell assets to reduce debts.
Consistent with other entities in the industry, the Group monitors capital on the basis of its gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total liabilities (excluding deferred tax liabilities, income tax payable and deferred government grants) and deferred government grants less restricted cash, time deposits and cash and cash equivalents. Total capital is calculated as equity, as shown in the consolidated statement of financial position, plus net debt less non-controlling interests.
The gearing ratio as at December 31, 2016 and 2017 is as follows:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2016 |
|
2017 |
|
|
Total liabilities (excluding deferred tax liabilities, income tax payable and deferred government grants) |
|
131,916,992 |
|
132,022,668 |
|
|
Less: restricted cash, time deposits and cash and cash equivalents |
|
(25,901,183) |
|
(29,903,178) |
|
|
|
|
|
|
|
|
|
Net debt |
|
106,015,809 |
|
102,119,490 |
|
|
|
|
|
|
|
|
|
Total equity |
|
55,786,808 |
|
65,513,879 |
|
|
Add: net debt |
|
106,015,809 |
|
102,119,490 |
|
|
Less: non-controlling interests |
|
(17,618,510) |
|
(26,035,429) |
|
|
|
|
|
|
|
|
|
Total capital attributable to owners of the parent |
|
144,184,107 |
|
141,597,940 |
|
|
|
|
|
|
|
|
|
Gearing ratio |
|
74 |
% |
72 |
% |