GUANGSHEN RAILWAY CO LTD | CIK:0001012139 | 3

  • Filed: 4/26/2018
  • Entity registrant name: GUANGSHEN RAILWAY CO LTD (CIK: 0001012139)
  • Generator: Fujitsu
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    • ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory

     

    17              38 RELATED PARTY TRANSACTIONS

     

    Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

     

    (a)              Related parties that control the Company or are controlled by the Company:

     

    See Note 10 for the principal subsidiaries.

     

    None of the shareholders is the controlling entity of the Company.

     

    (b)              Nature of the principal related parties that do not control/are not controlled by the Company:

     

    (i)                                  Guangzhou Railway Group and its subsidiaries

     

    Name of related parties

    Relationship with the Company

     

     

    Single largest shareholder and its subsidiaries

     

    Guangzhou Railway Group

    Single largest shareholder

    Guangzhou Railway Group YangCheng Railway Enterprise Development Company

    Subsidiary of the single largest shareholder

    GRCL

    Subsidiary of the single largest shareholder

    GEDC

    Subsidiary of the single largest shareholder

    Guangzhou Railway Material Supply Company

    Subsidiary of the single largest shareholder

    Yuehai Railway Company Limited

    Subsidiary of the single largest shareholder

    Shichang Railway Company Limited

    Subsidiary of the single largest shareholder

    Guangzhou Railway Station Service Centre

    Subsidiary of the single largest shareholder

    Changsha Railway Construction Company Limited

    Subsidiary of the single largest shareholder

    Guangdong Sanmao Enterprise Development Company Limited

    Subsidiary of the single largest shareholder

    Guangzhou Yuetie Operational Development Company

    Subsidiary of the single largest shareholder

     

    38        RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (b)              Nature of the principal related parties that do not control/are not controlled by the Company (continued):

     

    (i)                          Guangzhou Railway Group and its subsidiaries (continued):

     

    Name of related parties

    Relationship with the Company

     

     

    Guangzhou Railway Rolling Stock Works

    Subsidiary of the single largest shareholder

    Foreign Economic & Trade Development Corporation of Guangzhou Railway Group

    Subsidiary of the single largest shareholder

    Guangdong Tieqing International Travel Agency Company Limited

    Subsidiary of the single largest shareholder

    Huaihua Railway Engineer Construction Company

    Subsidiary of the single largest shareholder

    Xiashen Railway Guangdong Company Limited

    Subsidiary of the single largest shareholder

    Ganshao Railway Company Limited

    Subsidiary of the single largest shareholder

    Hunan Changtie Industrial Development Co. Ltd.

    Subsidiary of the single largest shareholder

    Guangzhou Railway Real Estate Construction Company

    Subsidiary of the single largest shareholder

    Guangzhou Beiyang Information Technology Company Limited

    Subsidiary of the single largest shareholder

    Guangdong Sanmao Railway Capital Construction Company

    Subsidiary of the single largest shareholder

    Associates of the Group

     

    Tiecheng

    Associate of the Group

    Shentu

    Associate of the Group

     

    (ii)              Relationship with CRC and other railway companies

     

    On 14 March 2013, pursuant to the Approval, the previous controlling entity of Guangzhou Railway Group, MOR, had been dismantled. The administrative function of MOR were transferred to the Ministry of Transport and the newly established National Railway Bureau, and its business functions were transferred to the CRC. Accordingly, the equity interests of Guangzhou Railway Group which was wholly controlled by MOR previously were transferred to the CRC (“Reform”). The Reform was completed since 1 January 2017 and the Company disclosed details of  transactions undertaken with CRC Group for both years of 2017 and 2016 for reference. Unless otherwise specified, the transactions with CRC Group disclosed below have excluded transactions undertaken with Guangzhou Railway Group and its subsidiaries.

     

     

     

     

     

     

     

     

     

     

     

               

    38         RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (c)              In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties:

     

    (I)         Material transactions undertaken with Guangzhou Railway Group and its subsidiaries:

     

     

    2015

     

    2016

     

    2017

     

    RMB’000

     

    RMB’000

     

    RMB’000

    Provision of services and sales of goods

     

     

     

     

     

    Transportation related services

     

     

     

     

     

    Provision of train transportation services to Guangzhou Railway Group and its subsidiaries (i)

    751,956 

     

    1,425,538

     

    1,505,348

    Revenue collected by CRC for railway network usage and related services provided to Guangzhou Railway Group and its subsidiaries (ii)

    1,180,852

     

    1,400,876

     

    1,428,752

    Revenue from railway operation service provided to Guangzhou Railway Group’s subsidiaries (iii)

    550,168

     

    579,253

     

    660,847

     

    2,482,976   

     

    3,405,667

     

    3,594,947

    Other services

     

     

     

     

     

    Sales of materials and supplies to Guangzhou Railway Group and its subsidiaries (iv)

    25,940

     

    29,449

     

    23,386

     

     

     

     

     

     

    Services received  and purchase made

     

     

     

     

     

    Transportation related services

     

     

     

     

     

    Provision of train transportation services by Guangzhou Railway Group and its subsidiaries (i)

    888,903 

     

    989,778

     

    1,048,524

    Cost settled by CRC for railway network usage and related services provided by Guangzhou Railway Group and its subsidiaries (ii)

    1,406,962

     

    1,628,336

     

    1,720,849

    Operating lease rental paid to Guangzhou Railway Group for the leasing of land use rights (Note 36 (b))

    55,090

     

    55,090

     

    57,358 

     

    2,350,955

     

    2,673,204

     

    2,826,731

     

     

     

     

     

     

    Other services

     

     

     

     

     

    Social services (employee housing and public security services and other ancillary services) provided by GEDC and Yangcheng Railway (iii)

    16,080

     

    11,297

     

    -

    Provision of repair and maintenance services by Guangzhou Railway Group and its subsidiaries (iv)

    489,038

     

    306,988

     

    298,040

    Purchase of materials and supplies from Guangzhou Railway Group and its subsidiaries (v)

    384,262

     

    469,273

     

    455,716

    Provision of construction services by Guangzhou Railway Group and its subsidiaries (vi)

      226,089

     

    347,409

     

    272,390 

     

    1,115,469

     

    1,134,967

     

    1,026,146

     

    38         RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (c)              In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):

     

    (I)               Material transactions undertaken with Guangzhou Railway Group and its subsidiaries:

     

    (i)       The service charges are determined based on a pricing scheme set by the CRC or based on negotiation between the contracting parties with reference to actual costs incurred.

     

    (ii)      Such revenues/charges are determined by the CRC based on its standard charges applied on a nationwide basis.

     

    (iii)     The service charges are levied based on contract prices determined based on a "cost plus a profit margin" and agreed between both contracting parties.

     

    (iv)     The prices are determined based on mutual negotiation between the contracting parties with reference to actual costs incurred.

     

    (v)      The prices are determined based on mutual negotiation between the contracting parties with reference to procurement costs incurred plus a management fee ranged from 0.3% to 5% on the costs.

     

    (vi)     Based on construction amount determined under national railway engineering guidelines.

     

    (II)             Material transactions with CRC and other railway companies

     

    The Group work in cooperation with the CRC and other railway companies owned and controlled by CRC for the operations of certain long distance passenger train and freight transportation businesses within the PRC.  The revenues generated therefrom are collected and settled by the CRC according to its central recording and settlement systems (see details in Note 2.24). The charges for the use of the rail lines and services provided by other railway companies are also instructed by the CRC and settled by the CRC based on its systems. Since March 2013, the collection, processing and distribution functions of revenues which were executed by MOR previously have been transferred to CRC.  As at 31 December 2017, the cooperation mode and pricing model had not been subject to any material changes.

     

    38         RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (c)              In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):

     

    (II)                     Material transactions with CRC and other railway companies (continued):

     

    In addition to those disclosed elsewhere in the financial statements, during the year, the Group had   the following material transactions undertaken with the CRC Group:

     

     

    2015

     

    2016

     

    2017

     

    RMB’000

     

    RMB’000

     

    RMB’000

    Provision of services and sales of goods

     

     

     

     

     

    Transportation related services

     

     

     

     

     

    Provision of train transportation services to CRC Group (i)

    36,515

     

    29,794

     

    81,396

    Revenue collected by CRC for services provided to CRC Group (ii)

    1,752,666

     

    1,777,640

     

    1,877,719

    Revenue from railway operation service provided to CRC Group (iii)

    1,421,995  

     

    1,628,143

     

    1,800,692

     

    3,211,176

     

    3,435,577

     

    3,759,807

    Other services

     

     

     

     

     

    Provision of repairing services for cargo trucks to CRC Group (ii)

    284,348

     

    323,993

     

    333,917

    Sales of materials and supplies to CRC Group (iv)

    38,395

     

    7,073

     

    7,185

    Provision of apartment leasing services to CRC Group (iv)

    762

     

    641

     

    722

     

    323,505

     

    331,707

     

    341,824

     

     

     

     

     

     

    Services received and purchases made

     

     

     

     

     

    Transportation related services

     

     

     

     

     

    Provision of train transportation services by CRC Group (i)

     277,138

     

    292,754

     

    306,208

    Cost settled by CRC for services provided by CRC Group (ii)

     1,365,352

     

    1,376,047

     

    1,395,591

     

    1,642,490

     

    1,668,801

     

    1,701,799

     

     

     

     

     

     

    Other services

     

     

     

     

     

    Provision of repair and maintenance services by CRC Group (iv)

    2,813

     

    42,954

     

    31,089

    Purchase of materials and supplies from CRC Group (v)

    33,591

     

    15,220

     

    19,258

    Provision of construction services by CRC Group (vi)

    13,538

     

    4,385

     

    -

     

     49,942 

     

    62,559

     

    50,347

     

    (i)               The service charges are determined based on a pricing scheme set by the CRC or based on negotiation between the contracting parties with reference to actual costs incurred.

     

    (ii)              Such revenue/charges are determined by the CRC based on its standard charges applied on a nationwide basis.

     

     

    38         RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (c)              In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):

     

    (II)                 Material transactions with CRC and other railway companies (continued):

     

    In addition to those disclosed elsewhere in the financial statements, during the year, the Group had   the following material transactions undertaken with the CRC Group (continued):

     

    (iii)             The service charges are levied based on contract prices determined based on a “cost plus a profit margin” and explicitly agreed between both contracting parties.

     

    (iv)            The prices are determined based on mutual negotiation between the contracting parties with reference to actual costs incurred.

     

    (v)             The prices are determined based on mutual negotiation between the contracting parties with reference to procurement costs incurred plus a management fee ranged from 0.3% to 5% on the costs.

     

    (vi)            Based on construction amounts determined under national railway engineering guidelines.

     

    (III)                Revenues collected and settled through the CRC:

     

     

    2015

     

    2016

     

    2017

     

    RMB’000

     

    RMB’000

     

    RMB’000

     

     

     

     

     

     

     - Passenger transportation

     6,642,129

     

    6,960,491

     

    7,295,985

     - Freight transportation

      1,022,025

     

    1,105,061

     

    1,266,122

     - Other transportation related services

     86,199

     

     86,883

     

    112,267

     

    7,750,353

     

    8,152,435

     

    8,674,374

     

     

    38        RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (d)              As at 31 December 2016 and 2017, the Group had the following material balances maintained with related parties:

     

    (I)               Material balances with Guangzhou Railway Group and its subsidiaries:

     

     

    2016

     

    2017

     

    RMB’000

     

    RMB’000

     

     

     

     

    Trade receivables

      730,061

     

    1,435,421

    - Guangzhou Railway Group (i)

    229,056

     

    132,830

    - Subsidiaries of Guangzhou Railway Group (i)

    501,005

     

    1,302,591

     

     

     

     

    Prepayments and other receivables

     25,961

     

    44,329

    - Guangzhou Railway Group

    691

     

    3,277

    - Subsidiaries of Guangzhou Railway Group

    25,270

     

    41,052

     

     

     

     

    Prepayments for fixed assets and construction-in-progress

    225

     

    4,352

    - Guangzhou Railway Group

    -

     

    -

    - Subsidiaries of Guangzhou Railway Group (ii)

    225

     

    4,352

     

     

     

     

    Trade payables

    533,051

     

    681,587

    - Guangzhou Railway Group (i)

    61,486

     

    61,899

    - Subsidiaries of Guangzhou Railway Group (ii)

    432,712

     

    619,509

    - Associates

    38,853

     

    179

     

     

     

     

    Payables for fixed assets and construction-in-progress

    249,308

     

    342,519

    - Guangzhou Railway Group

     10,805

     

    53,821

    - Subsidiaries of Guangzhou Railway Group

    168,038

     

    220,377

    - Associates

    70,465

     

    68,321

     

     

     

     

    Accruals and other payables

    430,331

     

    439,509

    - Guangzhou Railway Group

    5,663

     

    7,390

    - Subsidiaries of Guangzhou Railway Group (iii)

    422,877

     

    430,041

    - Associates (iv)

    1,791

     

    2,078

     

    38         RELATED PARTY TRANSACTIONS (CONTINUED)

     

    (e)        As at 31 December 2016 and 2017, the Group had the following material balances maintained with related parties (continued):

     

    (I)           Material balances with Guangzhou Railway Group and its subsidiaries:

     

     

    (i)           The trade balances due from/to Guangzhou Railway Group, subsidiaries of Guangzhou Railway Group mainly represent service fees and charges payable and receivable balances arising from the provision of passenger transportation and cargo forwarding businesses jointly with these related parties within the PRC.

     

    (ii)          The trade payables due to subsidiaries of Guangzhou Railway Group mainly represent payables arising from unsettled fees for purchase of materials and provision of other services according to various service agreements entered into between the Group and the related parties.

     

    (iii)         The other payables due to subsidiaries of Guangzhou Railway Group mainly represent the performance deposits received for construction projects and deposits received from ticketing agencies.

     

    (iv)        The other payables due to associates mainly represent the performance deposits received for construction projects operated by associates.

     

    As at 31 December 2016 and 2017, all the balances maintained with related parties were unsecured, non-interest bearing and were repayable on demand.

     

    (II)                                         Material balances with CRC Group:

     

    As at 31 December

    2016

    2017

    RMB’000

    RMB’000

    Due from CRC Group

    - Trade receivables

    1,443,272

    1,372,631

    - Other receivables

    4,672

    1,207

    Due to CRC Group

    - Trade payables and payables for fixed assets and construction-in-progress

    65,496

    62,620

    - Other payables

    15,901

    6,413

     

    As at 31 December 2017, all the balances maintained with CRC Group were unsecured, non-interest bearing and were repayable on demand.