[ Stock Code: 00525 ]
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Important Notice
1.
The board of directors (“Director(s)”) of the Company (the “Board”), the Supervisory
Committee, Directors, Supervisors and senior management of the Company warrant that
the contents of this annual report are true, accurate and complete, and there are no
misrepresentations, misleading statements or material omissions in this annual report, and
jointly and severally accept the related legal responsibility.
2.
All Directors of the Company attended the meeting of the Board to consider this annual
report.
3.
Deloitte Touche Tohmatsu Certified Public Accountants LLP issued an audit report for the
Company with standardized and unqualified audit opinions.
4.
Jiang Hui, Chairman of the Board of the Company, Chen Shaohong, General Manager, Luo
Xinpeng, Chief Accountant, and Liu Qiyi, Head of the Finance Department hereby warrant
that the financial statements contained in this annual report are true, accurate and
complete.
5.
Plan for profits distribution for the reporting period (cash dividend plan) or plan for
Common Reserve Capitalization approved by the Board through resolution
At the thirteenth meeting of the tenth session of the Board of the Company, a proposal for profit
distribution (a cash dividend plan) for the reporting period was considered and approved on 27
March 2025. The Board proposed to distribute a final cash dividend for the year 2024 in the amount
of RMB0.07 per share (inclusive of tax) to all shareholders on the basis of the total share capital of
7,083,537,000 shares as at 31 December 2024, amounting to RMB495,847,590 in total. The proposal
is subject to the consideration and approval of the 2024 Annual General Meeting of the Company.
6.
Declaration of risks with respect to forward-looking statements
✓ Applicable □Not applicable
Forward-looking statements, including future plans and development strategies contained in this
annual report, do not constitute any actual commitments to the investors of the Company. Investors
and personnel concerned shall stay adequately mindful of risks, and understand the difference
between plans, projections and commitments.
7.
Is there any appropriation of funds by the controlling shareholder and other related parties
for non-operating purposes?
No
8.
Is there any provision of external guarantee that has violated the applicable decision-
making procedures?
No
9.
Whether more than half of the directors cannot guarantee the authenticity, accuracy and
completeness of the annual report disclosed by the Company
No
10.
Notice of Material Risks
This annual report contains details of future potential risks. Please read “Potential risks” in the chapter
“Report of the Directors (Including Management Discussion and Analysis)” for details.
001
Chapter 1
Definitions
3
Chapter 2
Company Profile and Major Financial
Indicators
4
Chapter 3
Report of the Directors (Including
Management Discussion and Analysis)
10
Chapter 4
Corporate Governance
35
Chapter 5
Environmental and Social
Responsibilities
86
Chapter 6
Matters of Importance
89
Chapter 7
Changes in Shares and Particulars of
Shareholders
100
Chapter 8
Information Regarding Preference
Shares
108
Chapter 9
Information Regarding Bonds
109
Chapter 10 Financial Statements
110
List of Documents
Available for Inspection
I. Financial statements bearing the signatures and official chops of the
Chairman of the Board of the Company, General Manager, Chief Accountant
and Head of the Finance Department;
II. Original audit report bearing the official chop of the accounting firm and the
signatures/chops of certified public accountants;
III. Original copies of all corporate documents and announcements publicly
disclosed by the Company during the reporting period;
IV. Annual reports published in other securities market.
Place to maintain such documents: Board Secretariat of the Company
Contents
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 1
Definitions
Definition of commonly used words
Company
Guangshen Railway Company Limited
Group
The Company and its subsidiaries
Reporting period,
this period, this year
12 months from 1 January to 31 December 2024
Same period last year
12 months from 1 January to 31 December 2023
A Share(s)
Renminbi-denominated ordinary share(s) of the Company with a par value
of RMB1.00 issued in the PRC and listed on the SSE for subscription in
Renminbi
H Share(s)
Overseas listed foreign share(s) of the Company with a par value of RMB1.00
issued in Hong Kong and listed on the SEHK for subscription in Hong Kong
dollars
PRC
The People’s Republic of China
CSRC
The China Securities Regulatory Commission
SSRB
The Shenzhen Securities Regulatory Bureau of the China Securities Regulatory
Commission
SSE
The Shanghai Stock Exchange
SEHK
The Stock Exchange of Hong Kong Limited
SFO
The Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)
Listing Rules
The Rules Governing the Listing of Securities on SEHK and/or the listing rules
of SSE (as the case may be)
Articles
The Articles of Association of the Company
Company Law
The Company Law of the PRC
Securities Law
The Securities Law of the PRC
CSRG
China State Railway Group Co., Ltd.
GRGC
China Railway Guangzhou Group Co., Ltd.
GZIR
Guangdong Guangzhu Intercity Rail Transportation Company Limited
Wuhan-Guangzhou
Passenger Dedicated Line
Wuhan-Guangzhou Passenger Railway Line Co., Ltd.
Guangzhou-Shenzhen-
Hong Kong Passenger
Dedicated Line
Guangzhou-Shenzhen-Hong Kong Express Rail Link Company Limited
GZR
Guangzhou-Zhuhai Railway Company Limited
XSR
Xiamen-Shenzhen Railway Company Limited
GDR
Guangdong Railway Company Limited
GGR
Guiyang-Guangzhou Railway Company Limited
NGR
Nanning-Guangzhou Railway Company Limited
PRDIR
Guangdong Pearl River Delta Inter-city Railway Traffic Company Limited
MZR
MaoZhan Railway Company Limited
SMR
Guangdong Shenmao Railway Company Limited
Meizhou-Shantou
Passenger Dedicated Line
Guangdong Meizhou-Shantou Passenger Railway Line Company Limited
GSTR
Guangzhou Northeast Freight Car Outer Winding Railway Co., Ltd.
GSR
Ganzhou-Shenzhen Railway (Guangdong) Company Limited
NSGR
Guangzhou Nanshagang Railway Company Limited
MBGR
Maoming Bohe Gang Railway Co., Ltd.
GGSR
Guangdong Guangzhou-Shantou Railway Co., Ltd.
MLR
Meizhou-Longchuan Railway Company Limited
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 2
Company Profile and Major Financial Indicators
I. INFORMATION OF THE COMPANY
(1) General information of the Company
Chinese Name
廣深鐵路股份有限公司
Chinese Name Abbreviation
廣深鐵路
English Name
Guangshen Railway Company Limited
Legal Representative of the Company
Jiang Hui
(2) Contact Person and Contact Information
Company Secretary
Representative of Securities Affairs
Name
Tang Xiangdong
Deng Yanxia
Address
No. 1052 Heping Road, Luohu District,
Shenzhen, Guangdong Province
No. 1052 Heping Road, Luohu District,
Shenzhen, Guangdong Province
Tel.
(86) 755-25588150
(86) 755-25588150
Fax.
(86) 755-25591480
(86) 755-25591480
E-mail
ir@gstlgs.com
ir@gstlgs.com
(3) Basic Information
Registered Address
No. 1052 Heping Road, Luohu District, Shenzhen,
Guangdong Province
Change of Registered Address in the Past
Place of Business
None
Place of Business
No. 1052 Heping Road, Luohu District, Shenzhen,
Guangdong Province
Postal Code of the Place of Business
518010
Company Website
http://www.gsrc.com
E-mail
ir@gstlgs.com
(4) Information Disclosure and Document Availability
Media platforms and websites for
disclosure of annual reports by the
Company
China Securities Journal: https://www.cs.com.cn
Securities Times: http://www.stcn.com
Shanghai Securities News: https://www.cnstock.com
Securities Daily: http://www.zqrb.cn
Websites of stock exchanges for disclosure
of annual reports by the Company
SSE: http://www.sse.com.cn
SEHK: http://www.hkexnews.hk
Location for inspection of annual reports
No. 1052 Heping Road, Luohu District, Shenzhen,
Guangdong Province
(5) Share Information of the Company
Class of Shares
Stock Exchange
Stock Short Name
Stock Code
A Shares
SSE
廣深鐵路
601333
H Shares
SEHK
GUANGSHEN RAIL
00525
(6) Other Information
Auditor engaged by
the Company
Name
Deloitte Touche Tohmatsu Certified Public Accountants LLP
Office Address
30/F, 222 Yan An East Road, Huangpu District, Shanghai,
China
Name of signing
auditors
Huang Tianyi, Chen Wanlin
Legal advisor as
to PRC law
Name
Haiwen & Partners Shenzhen Office (北京市海問(深圳)律師事
務所)
Office Address
Room 3801, Tower Three, Kerry Plaza 1 Zhong Xin Si Road,
Futian District, Shenzhen, China
Legal advisor as
to Hong Kong law
Name
Haiwen & Partners LLP
Office Address
Suites 1101-1104, 11/F, One Exchange Square, 8 Connaught
Place, Central, Hong Kong, China
Registrar for
A Shares
Name
China Securities Depository and Clearing Corporation Limited
Shanghai Branch
Office Address
36th Floor, China Insurance Building, No. 166, Lujiazui East
Road, Pudong New District, Shanghai
Registrar for
H Shares
Name
Computershare Hong Kong Investor Services Limited
Office Address
Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong
Principal bank
Name
Construction Bank of China Shenzhen Branch Jiabin Road
Sub-branch
Office Address
1st to 4th Floors, Jinwei Building, Jiabin Road, Shenzhen,
China
004
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
II. COMPANY PROFILE
On 6 March 1996, the Company was incorporated in Shenzhen, the PRC in accordance with the Company
Law.
In May 1996, the H shares and ADSs issued by the Company were listed on the SEHK and the US New York
Stock Exchange, respectively; in December 2006, the A Shares issued by the Company were listed on the
Shanghai Stock Exchange; in January 2007, the Company used the proceeds from the issue of A Shares to
acquire the railway of Guangzhou-Pingshi section (southern section of Beijing-Guangzhou line), expanding its
operations from regional railways into the national trunk line networks; in November 2020, the Company’s
ADSs were delisted from the US New York Stock Exchange and transferred to the US OTC market; in
October 2021, the trading of the Company’s ADSs was suspended in the US OTC market; in October 2022,
the Company applied to the US Securities and Exchange Commission to withdraw the registration of ADSs
and terminate the reporting obligation; and in January 2023, the deregistration of the Company’s ADSs was
completed. So far, the Company is the only PRC railway transportation enterprise which has issued securities
in Shanghai and Hong Kong.
The Company is mainly engaged in the railway passenger and freight transportation businesses, the Hong
Kong Through Train passenger services in cooperation with MTR Corporation Limited, and is entrusted to
provide railway transportation services for other railway companies in the PRC. The Company is also engaged
in the provision of integrated services in relation to railway facilities and technology, commercial trading and
other industrial businesses that are consistent with the Company’s objectives.
The Shenzhen-Guangzhou-Pingshi Railway, which is operated solely and independently by the Company,
runs 481.2 kilometers long and connects the entire Guangdong Province vertically. The Guangzhou-
Pingshi Railway is the southern part of Beijing-Guangzhou Railway, forming an aorta connecting northern
and southern China; whereas the Guangzhou-Shenzhen Railway is one of the main railway passways from
mainland China to Hong Kong, linking with the Beijing-Guangzhou, Beijing-Kowloon, Sanshui-Maoming,
Pinghu-Nantou and Pinghu-Yantian lines, as well as with the Xiamen-Shenzhen Railway, Guangzhou-
Dongguan-Shenzhen Intercity Railway, Ganzhou-Shenzhen Railway, Guangdong Guangzhou-Shantou Railway
and the East Rail Line in Hong Kong, which form a key integral part of the railway transportation network in
the PRC.
Passenger transportation, which is the most important transportation business segment of the Company,
includes the transportation businesses of Guangzhou-Shenzhen inter-city trains (including Guangzhou East
to Chaozhou-Shantou cross-network electric multiple unit (“EMU”) trains), long-distance trains and Hong
Kong Through Trains. The Company adopts an “as-frequent-as-buses” operation for Guangzhou-Shenzhen
inter-city trains, meaning that one pair of China Railway High-speed Trains are dispatched every 10 minutes
on average during peak hours between Guangzhou and Shenzhen. The through trains passing through
Hong Kong, jointly operated by the Company and MTR Corporation Limited, are an important means of
transportation for travelling between Guangzhou and Hong Kong. The Company operates a number of
long-distance trains running from and to Guangzhou and Shenzhen, linking with most of the provinces,
autonomous regions and municipals across the nation.
Freight transportation is an important transportation business segment of the Company. The Company is
not only well-equipped with comprehensive freight facilities which enable the efficient transportation of full
load cargos, single load cargos, containers, bulky and heavy cargos, dangerous goods, perishable goods
and oversized cargos, but also operates rail lines which are closely connected to major ports in Guangzhou
and Shenzhen and are at the same time connected to several large industrial zones, logistics zones, and
plants and mining enterprises in the Pearl River Delta region via dedicated railway lines. The major market
of the Company’s freight transportation business is domestic mid-to-long-distance transportation, where the
Company maintains significant competitive strengths.
The railway entrusted transportation services are one of the extended passenger and freight transportation
services that the Company has expanded since the commencement of operation of WGPR in December
2009. So far, the Company has provided this service to other railway companies such as Wuhan-Guangzhou
Passenger Dedicated Line, GZIR, Guangzhou-Shenzhen-Hong Kong Passenger Dedicated Line, GZR, XSR,
GDR, NGR, GGR, PRDIR, MZR, SMR, Meizhou-Shantou Passenger Dedicated Line, GSTR, GSR, NSGR, MBGR,
GGSR and MLR, where such railway entrusted transportation service has also become a new area of business
growth for the Company. With the successive completion and commencement of operation of a series of
high-speed railways and inter-city railways in the “Guangdong-Hong Kong-Macau Greater Bay Area”, the
geographical coverage of the Company’s railway entrusted transportation services will be further expanded.
III. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS FOR THE
PAST FIVE YEARS
(1) Major Accounting Data
(Unit: RMB)
Major accounting data
2024
2023
Year-on-year
increase/
decrease (%)
2022
2021
2020
Operating revenue
27,090,074,926
26,194,897,332
3.42
19,943,429,883
20,206,156,783
16,349,365,706
Net profit attributable to
shareholders of the Company
1,060,161,237
1,058,289,071
0.18
(1,994,665,063)
(973,119,082)
(557,875,873)
Net profit attributable to
shareholders of the
Company after deducting
extraordinary gain or loss
1,022,942,988
934,311,708
9.49
(2,030,067,217)
(1,057,673,671)
(1,421,613,857)
Net cash flows from
operating activities
2,710,300,274
1,116,364,342
142.78
(193,449,258)
1,002,468,547
1,336,173,449
At the end
of 2024
At the end
of 2023
Increase/decrease
as at the end of
the year compared
to the end of last
year (%)
At the end
of 2022
At the end
of 2021
At the end
of 2020
Net asset attributable to
shareholders of the Company
27,109,235,057
26,389,885,558
2.73
25,289,695,971
27,241,949,775
28,192,839,252
Total assets
36,567,255,729
37,234,946,966
(1.79)
37,041,375,827
37,403,422,526
36,780,451,862
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(2) Major Financial Indicators
Major Financial Indicators
2024
2023
Year-on-year
increase/
decrease (%)
2022
2021
2020
Basic earnings per share
(RMB/Share)
0.1497
0.1494
0.20
(0.28)
(0.14)
(0.08)
Diluted earnings per share
(RMB/Share)
0.1497
0.1494
0.20
(0.28)
(0.14)
(0.08)
Basic earnings per share
after deducting
extraordinary gain or loss
(RMB/Share)
0.1444
0.1319
9.48
(0.29)
(0.15)
(0.20)
Weighted average return
on net assets (%)
3.96
4.09
Decreased by 0.13
percentage point
(7.60)
(3.51)
(1.94)
Weighted average return
on net assets after
deducting extraordinary
gain or loss (%)
3.82
3.61
Increased by 0.21
percentage point
(7.74)
(3.82)
(4.96)
Note: “Year-on-year increase/decrease (%)” of return on net assets represents the difference between the amount of the
two periods.
IV. DIFFERENCES IN ACCOUNTING DATA UNDER CHINESE AND OVERSEAS
ACCOUNTING STANDARDS
□ Applicable ✓ Not applicable
V. MAJOR FINANCIAL DATA BY QUARTER IN 2024
(Unit: RMB)
The 1st
Quarter
(January
to March)
The 2nd
Quarter
(April to June)
The 3rd
Quarter
(July to
September)
The 4th
Quarter
(October to
December)
Operating income
6,600,382,306
6,324,338,024
7,105,300,763
7,060,053,833
Net profit attributable to shareholders
of the Company
546,940,436
365,340,808
296,938,476
(149,058,483)
Net profit attributable to shareholders of
the Company after deducting
extraordinary gain or loss
540,658,598
360,397,083
292,734,945
(170,847,638)
Net cash flows from operating activities
900,003,348
210,356,794
1,053,409,365
546,530,767
VI. EXTRAORDINARY GAIN OR LOSS ITEMS AND AMOUNTS
✓ Applicable □ Not applicable
(Unit: RMB)
Extraordinary gain or loss items
The amount
for 2024
The amount
for 2023
The amount
for 2022
Gain or loss on disposal of non-current assets (including
offset part of the provision for impairment of assets)
19,775,569
80,528,475
13,420,216
Government grants included in profit or loss for the
period, other than government grants closely related
to the normal operation of the Company, in compliance
with requirements of national policies, granted
according to determined standards, and continuously
affecting the Company’s gain or loss
8,593,698
80,705,869
46,115,247
Capital occupation fee charged to non-financial
enterprises included in current profit and loss
29,600,233
–
–
Reversal of provision for impairment of receivables
subject to impairment test separately
–
350,000
–
Income from compensation
–
523,366
–
Other non-operating income and expenses
other than aforesaid items
(3,470,525)
3,724,354
(6,104,909)
Less: Effect of income tax
17,112,706
43,887,972
17,522,008
Effect of minority interests (after tax)
168,020
(2,033,271)
506,392
Total
37,218,249
123,977,363
35,402,154
Note: Extraordinary losses are expressed in negative figures.
VII. ITEMS MEASURED AT FAIR VALUE
✓ Applicable □ Not applicable
(Unit: RMB)
Item
Opening
balance
Closing
balance
Change in the
current period
Impact on the
profit for the
current period
Investments in other equity instruments
462,695,717
478,375,517
15,679,800
–
Total
462,695,717
478,375,517
15,679,800
–
008
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 3
Report of the Directors
(Including Management Discussion and Analysis)
I. CHAIRMAN’S STATEMENT
Dear shareholders,
On behalf of the Board, I am pleased to present the audited operating results of the Company for 2024, and
hereby extend my sincere gratitude to all the shareholders for your concern and support for the Company!
(1) Business review
In 2024, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping as the core,
the Board and the management of the Company united to lead the cadres and employees to adhere to
Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era as the guidance, and took
the spirit of General Secretary Xi Jinping’s important directives and instructions on railway work as the
fundamental guide. We also resolutely implemented the decisions and arrangements of the CPC Central
Committee and the State Council, and focused on serving and supporting the construction of Chinese
modernization. Closely centered on the Company’s annual production and operational goals, we took practical
actions, forged ahead with resolve, comprehensively strengthened the Party building, continued to maintain
transportation safety, and recorded a steady increase in passenger transportation business. We accelerated
the transportation of our freight transportation business towards modern logistics, with broadened scope
of railway entrusted transportation services. Our services provided substantive and effective support for
national strategies, with comprehensive improvement in operating quality and efficiency. We successfully
completed all annual objectives and tasks of the year, achieving new progress in high-quality development
and modernization efforts of the Company.
In 2024, the Company recorded passenger delivery volume of 69,106,700 people, representing a year-on-
year increase of 16.51%, while its freight delivery volume amounted to 14,099,800 tonnes, representing a
year-on-year decrease of 12.05%. Additionally, the Company recorded an operating revenue of RMB27.090
billion, representing a year-on-year increase of 3.42%; consolidated net profit attributable to shareholders
of the Company amounted to RMB1.060 billion, representing a year-on-year increase of 0.18%. Its basic
earnings per share amounted to RMB0.15.
Throughout 2024, the Company’s Board duly performed its duties under the Articles. With their meticulous
and conscientious efforts, all Directors strived to enhance the Company’s corporate governance and improve
its operations efficiency. During the year, the Company convened 3 shareholders’ general meetings, 8 Board
meetings, 8 Audit Committee meetings, 4 Nomination Committee meetings, and 2 Remuneration Committee
meetings. The Company made sound decisions in relation to important matters of the Company, such as
the Company’s profit distribution, financial budget and accounting, production and operation, corporate
governance, establishment of systems, appointment of accountants, changes in directors and supervisors,
appointment of senior management, and purchase of director liability insurance. The Company adjusted
some management members, and reappointed the Company’s general manager and two deputy general
managers. The Company also revised the Articles, the Management Rules on Inside Information and
Insiders, and the Business Performance Evaluation Measures, which effectively ensured the sustainable and
stable development of the Company.
In 2024, the Company’s Board actively carried out information disclosure and investor relations management
work, and strictly complied with the provisions of domestic and overseas Listing Rules and the Company’s
Management Measures of Information Disclosure to ensure proper control over the information disclosure
process and guarantee the quality of information disclosure. Moreover, the Board promptly responded
to inquiries from the capital market and investors under the premise of legal and regulatory compliance,
strengthened interaction and communication between the Company and investors, and enhanced the level
of investor relations management. During the reporting period, all announcements of the Company were
prepared and disclosed in accordance with regulatory requirements, and the information was disclosed in a
timely and standardized manner, with no instances of information disclosure violations.
The Company has always strived to enhance its enterprise value, and persisted in ensuring a sustainable
and stable profit distribution policy, and attaching importance to the reasonable returns to investors while
focusing on the sustainable development of the Company. In 2024, the Company implemented the cash
dividend for 2023, distributing a cash dividend of RMB0.07 per share, totaling approximately RMB496 million.
Since its listing in 1996, the Company has cumulatively distributed cash dividends of about RMB12.8 billion,
with a dividend distribution ratio of 64.31%.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(2) Prospects
Shareholders are reminded that the Company has made certain forward-looking statements in this annual
report in relation to the national and overseas economic landscapes and the railway transportation
market, as well as the Company’s work plans for the year of 2025 and the future. These forward-looking
statements are subject to the influences of various uncertainties, where the actual outcome may be greatly
different from these forward-looking statements of the Company. These statements do not constitute any
commitments to the future operating results of the Company. Please be advised to consider the investment
risks.
The year 2025 marks the conclusion of the national “14th Five-Year Plan” and the layout of the “15th Five-
Year Plan”, as well as a crucial year for railway enterprises to further deepen reforms comprehensively. The
Company will adhere to the guidance of Xi Jinping's Thought on Socialism with Chinese Characteristics for
a New Era, and fully implement the spirit of the 20th CPC National Congress, the 2nd and the 3rd Plenary
Sessions of the 20th CPC Central Committee and the Central Economic Work Conference. The Company will
deeply study and implement the spirit of the important directives and instructions on railway-related work
of General Secretary Xi Jinping, adhere to the overall principle of “seeking advancement while maintaining
stability”, and implement the new development concept in an integral, accurate and comprehensive manner.
Focusing on serving the construction of a world-class railway enterprise, the Company will take further
comprehensive deepening of reform as the driving force, the in-depth construction of “Six Modernization
System” as a carrier, and the building of “Six Market-oriented Operation Centers” as a driver, to better
coordinate development and safety, unswervingly advance the strict governance of the Party in all aspects,
and make every effort to maintain stability, promote reforms, and facilitate development. The Company
strives to promote the high-quality and sustainable development, and works hard to create a new situation
for the Company’s reform and development.
Looking ahead to the new year, the members of the Board and I believe that with the strong support of
all shareholders and all sectors of the community, and with the joint efforts of the Board, Supervisory
Committee, management and all employees, the Company will be able to make new progress in various
businesses, create new value for shareholders and make new contributions to social development.
Jiang Hui
Chairman of the Board
27 March 2025
II. INDUSTRY IN WHICH THE COMPANY OPERATED DURING THE
REPORTING PERIOD
Being the aorta of the nation’s economy, a key infrastructure, a significant project for people’s livelihood, the
backbone of an integrated transportation system and one of the main means of transportation, the railway
is of crucial importance for the nation’s economic and social development. Since the State Council approved
the implementation of the Medium to Long Term Plan for Railway Network Development (《中長期鐵路網規
劃》) in 2004, railways in China have experienced exponential development. On the whole, the tight capacity
of railways in China has now been alleviated, the bottle neck restriction has been eliminated, and economic
and social development needs have been met. However, it should also be noted when benchmarking
with the requirements for a new normal of economic developments, other transportation forms and the
advanced levels of developed countries, China’s railways still face deficiencies such as incomplete layout,
low operational efficiency and rather severe structural conflicts. By the end of 2024, the nationwide railway
operating mileage reached 162,000 kilometers, among which, the high-speed railway operating mileage
exceeded 48,000 kilometers, signifying the increasingly prominent role of railways as the backbone in the
modern comprehensive transportation system.
According to industry statistics released by the National Railway Administration, in 2024, for railways
nationwide, the passenger traffic volume was 4.312 billion people, representing a year-on-year increase of
11.85%, and the outbound freight volume reached 5.175 billion tonnes, representing a year-on-year increase
of 2.78%.
III. BUSINESSES ENGAGED IN BY THE COMPANY DURING THE REPORTING
PERIOD
During the reporting period, as a railway transportation enterprise, the Company primarily operates railway
passenger and freight transportation businesses. It also operates the Hong Kong Through Train passenger
transportation services in cooperation with MTR Corporation Limited, and provides railway transportation
services for entrusted transportation for other railway companies such as Wuhan-Guangzhou Passenger
Dedicated Line, GZIR, Guangzhou-Shenzhen-Hong Kong Passenger Dedicated Line, GZR, XSR, GDR, NGR,
GGR, PRDIR, MZR, SMR, Meizhou-Shantou Passenger Dedicated Line, GSTR, GSR, NSGR, MBGR, GGSR and
MLR.
IV. ANALYSIS OF CHANGE(S) IN THE COMPANY’S CORE COMPETITIVENESS
DURING THE REPORTING PERIOD
□ Applicable ✓ Not applicable
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V. DISCUSSION AND ANALYSIS OF THE PRINCIPAL OPERATION OF THE
COMPANY DURING THE REPORTING PERIOD
In 2024, the operating revenue of the Company was RMB27,090 million, representing an increase of 3.42%
as compared to RMB26,195 million for the same period of last year; operating cost amounted to RMB25,383
million, representing an increase of 3.38% as compared to RMB24,553 million for the same period of last
year; operating profit amounted to RMB1,473 million, representing an increase of 0.33% as compared to
RMB1,468 million for the same period of last year; consolidated net profit attributable to shareholders of
the Company amounted to RMB1,060 million, representing an increase of 0.18% as compared to RMB1,058
million for the same period of last year. Its basic earnings per share amounted to RMB0.15.
(1) Analysis of Principal Businesses
1. An analysis of changes in items of the income statement and the cash flow statement
(Unit: RMB)
Item
Current period
Same period
last year
Change (%)
Operating revenue
27,090,074,926
26,194,897,332
3.42
Operating cost
25,382,787,574
24,552,915,441
3.38
Tax and surcharges
91,811,343
48,312,602
90.04
Selling expenses
74,970
–
100.00
Administration expenses
167,698,640
175,146,280
(4.25)
Finance costs
49,218,498
50,491,943
(2.52)
Other income
41,369,148
90,353,774
(54.21)
Investment income
31,156,729
39,739,933
(21.60)
Credit impairment loss
13,010,985
5,506,202
136.30
Asset impairment loss
2,330,205
120,818,857
(98.07)
Gains on disposal of assets
17,610,387
96,646,068
(81.78)
Income tax expenses
413,447,676
399,681,566
3.44
Net cash flows from operating activities
2,710,300,274
1,116,364,342
142.78
Net cash flows from investing activities
(1,275,776,063)
(822,839,668)
55.05
Net cash flows from financing activities
(982,244,453)
(110,696,642)
787.33
2. Analysis of revenue and costs
✓ Applicable □ Not applicable
(1) Revenue from passenger transportation operations
Passenger transportation, which is the most important transportation business segment of the Company,
includes the transportation businesses of Guangzhou-Shenzhen inter-city trains (including Guangzhou East to
Chaozhou-Shantou cross-network EMU trains), long-distance trains and Hong Kong Through Trains. The table
below sets forth the revenue from passenger transportation and passenger delivery volume for this period in
comparison with those from the same period last year:
2024
2023
Year-on-year
increase/
decrease (%)
Revenue from passenger transportation
(RMB ten thousand)
1,099,550
1,072,777
2.50
– Guangzhou-Shenzhen inter-city trains
319,765
316,904
0.90
– Through trains
226,342
156,239
44.87
– Long-distance trains
492,700
539,795
(8.72)
– Other revenue from passenger transportation
60,743
59,839
1.51
Passenger delivery volume (Persons)
69,106,716
59,315,044
16.51
– Guangzhou-Shenzhen inter-city trains
25,962,793
23,395,556
10.97
– Through trains
1,005,348
802,766
25.24
– Long-distance trains
42,138,575
35,116,722
20.00
•
The increase in revenue from passenger transportation and passenger traffic volume
was mainly due to the following: During the reporting period, with the steady development of
the domestic economy and society, the demand for railway passenger transportation continued to
grow. The Company actively adapted to market demands, continuously increased the frequency of
Guangzhou-Shenzhen inter-city trains and Hong Kong Through Trains to meet travelers’ needs, which
contributed to the growth in passenger transportation traffic and overall revenue from passenger
transportation. Due to a year-on-year reduction in the number of cross-network long-distance EMU
trains organized by the Company, there was a decline in the revenue from long-distance trains.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(2) Revenue from freight transportation operations
Freight transportation forms an important part of the Company’s transportation business. The table below
sets forth the revenue from freight transportation and outbound freight volume for this period as compared
with the same period last year:
2024
2023
Year-on-year
increase/
decrease (%)
Revenue from freight transportation
(RMB ten thousand)
162,300
182,830
(11.23)
– Revenue from freight charges
139,827
163,307
(14.38)
– Other revenue from freight transportation
22,473
19,523
15.11
Outbound freight volume (tonnes)
14,099,841
16,032,467
(12.05)
•
The decline in revenue from freight transportation and outbound freight volume was
mainly due to the following: During the reporting period, affected by the optimization and
adjustment of the domestic economic structure and the transformation and upgrading of traditional
industries in the Pearl River Delta region, the volume of goods dispatched from various stations within
the Company’s network, especially bulk commodities such as coal, metal ores, steel, and industrial
machinery, decreased year-on-year, leading to a decline in revenue from freight transportation.
(3) Revenue from provision of transportation business operations
Transportation services provided by the Company mainly include passenger and freight transportation railway
network usage and entrusted transportation service. The table below sets forth the revenue from provision
of transportation services for this period in comparison with those of the same period last year:
2024
2023
Year-on-year
increase/
decrease (%)
Revenue from provision of transportation
business operations (RMB ten thousand)
1,268,586
1,209,307
4.90
－Railway network usage services
466,270
427,309
9.12
－Entrusted transportation service
802,316
781,998
2.60
•
The increase in revenue from railway network usage services was mainly due to the
following: During the reporting period, as the demand in the railway passenger transportation
market continued to pick up, the number of passenger train pairs organized by other railway
companies to the stations under the Company’s management increased, workload for railway network
usage services provided by the Company increased, thereby resulting in an increase in the Company’s
revenue from railway network usage services.
•
The increase in revenue from entrusted transportation services was mainly due to the
following: During the reporting period, as demand in the railway passenger transportation market
continued to pick up, the transportation and passenger and other entrusted transportation service
provided by the Company for other railway companies increased, thereby resulting in an increase in
the relevant service revenue.
(4) Revenue from other businesses
The Company’s other businesses mainly include train repairs, on-board catering services, leasing, sales of
materials and supplies, sales of goods and other businesses that are related to railway transportation. In
2024, revenue from other businesses was RMB1.786 billion, representing an increase of 15.52% as compared
to RMB1.546 billion for the same period last year. The increase was mainly due to the increase in special
purchase of construction projects provided to other railway companies and the corresponding increase in
revenue.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(5) Analysis of costs
(Unit: RMB)
By industry
Cost item
Amount for the
current period
Amount for the
same period
last year
Change in
percentage of
the amount for
the current
period compared
with the
same period
last year
(%)
Principal businesses
Equipment rental and service fees
8,681,782,852
8,265,304,666
5.04
Wages and welfare
9,087,467,858
8,896,834,493
2.14
Depreciation of fixed assets
1,740,058,293
1,835,315,273
(5.19)
Material and utilities consumption
1,559,174,557
1,461,137,042
6.71
Maintenance costs
1,357,976,727
1,298,231,131
4.60
Passenger service fees
881,819,334
693,980,980
27.07
Cargo handling charges
223,736,754
425,933,912
(47.47)
Depreciation of right-of-use assets
16,246,410
16,246,409
–
Others
376,218,247
278,532,286
35.07
Subtotal
23,924,481,032
23,171,516,192
3.25
Other businesses
Wages and welfare
514,980,788
506,720,680
1.63
Material and utilities consumption
315,683,880
386,652,063
(18.35)
Depreciation of fixed assets
27,219,294
27,274,144
(0.20)
Others
600,422,580
460,752,362
30.31
Subtotal
1,458,306,542
1,381,399,249
5.57
Total
25,382,787,574
24,552,915,441
3.38
• The changes in costs of the principal businesses were mainly due to the following: (a)
the corresponding increase in equipment rental and service fees, material and utilities consumption,
maintenance costs, passenger service fees and other expenses due to the increase in the workload of
passenger trains organized by the Company and the provision of railway entrusted transportation services;
(b) the increase in wages and welfare expenses due to the policy adjustment of wages and the increase
in the social insurance contribution base and contribution ratio; (c) the decrease in the volume of cargo
delivery and the year-on-year decrease in the workload of cargo handling business for other railway
companies during the reporting period, resulting in a decrease in cargo handling charges; (d) the year-on-
year decrease in the amount of construction-in-progress completed and capitalised as fixed assets during
the reporting period, resulting in a decrease in the depreciation of fixed assets provided for.
• The changes in costs of other businesses were mainly due to the following: (a) the increase
in special purchase of construction projects provided to other railway companies and the corresponding
increase in expenses; (b) the increase in wages and welfare expenses as a result of the policy adjustment
of wages; (c) the year-on-year decrease in the workload of train maintenance and catering during the
reporting period, resulting in a decrease in the material and utilities consumption.
(6) By industry and by region
(Unit: RMB)
By industry
Operating
revenue
Operating cost
Gross margin
(%)
Year-on-year
change in
operating revenue
(%)
Year-on-year
change in
operating cost
(%)
Year-on-year
change in
gross margin
(%)
Principal businesses
25,304,356,566
23,924,481,032
5.45
2.66
3.25
Decreased by 0.54
percentage point
Other businesses
1,785,718,360
1,458,306,542
18.34
15.52
5.57
Increased by 7.70
percentage points
By region
Operating
revenue
Operating cost
Gross margin
(%)
Year-on-year
change in
operating revenue
(%)
Year-on-year
change in
operating cost
(%)
Year-on-year
change in
gross margin
(%)
China
27,090,074,926
25,382,787,574
6.30
3.42
3.38
Increased by 0.03
percentage point
(7) Major sales customers and suppliers
A. The Company’s major customers
✓ Applicable □ Not applicable
The sales from the top five customers amounted to RMB8.50519 billion, accounting for 31.40% of the total
annual sales; of which the sales to related (connected) parties amounted to RMB8.50519 billion, accounting
for 31.40% of the total annual sales.
Among the top five customers, the largest customer is GRGC (the controlling shareholder of the Company),
with sales of RMB4.33106 billion, accounting for 15.99% of the total annual sales. GRGC is a minority
shareholder of the second-largest customer and the controlling shareholder of the third-, fourth-, and fifth-
largest customers.
During the reporting period, the Company did not record sales to any single customer that exceeded 50% of
the total sales, nor did it experience any significant reliance on a few major customers.
B. The Company’s major suppliers
✓ Applicable □ Not applicable
The purchases from the top five suppliers amounted to RMB9.18127 billion, accounting for 63.08% of total
annual purchases; of which purchases from related (connected) parties amounted to RMB9.18127 billion,
accounting for 63.08% of the total annual purchases.
Among the top five suppliers, the largest supplier is GRGC (the controlling shareholder of the Company),
the purchases amounted to RMB4.97816 billion, accounting for 34.20% of the total annual purchases. The
second largest supplier is CSRG, the de facto controller of the Company. GRGC is the controlling shareholder
of the third-, fourth-, and fifth-largest suppliers.
During the reporting period, the Company did not record any purchases from a single supplier that exceeded
50% of total purchases, nor did it experience any material dependence on a few major suppliers.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
C. Other information
Save as disclosed above, none of the Directors of the Company, their close associates, nor any shareholders
(who, to the knowledge of the Board, own more than 5% of the issued shares of the Company) have any
other interests in the top five customers and top five suppliers of the Company.
3. Expenses
✓ Applicable □ Not applicable
(Unit: RMB)
Item
2024
2023
Year-on-year
increase/
decrease
(%)
Major reason(s)
for the change
Tax and surcharges
91,811,343
48,312,602
90.04
The increase in value-added
tax, and the corresponding
city maintenance and
construction tax, education
surcharge.
Selling expenses
74,970
–
100.00
The increase in marketing
expenses for the freight
transportation.
Administration expenses
167,698,640
175,146,280
(4.25)
Management salaries
and welfare expenses
decreased.
Finance costs
49,218,498
50,491,943
(2.52)
Interest expenses on bank
borrowings decreased.
Other income
41,369,148
90,353,774
(54.21)
The government grants
received decreased.
Investment gains
31,156,729
39,739,933
(21.60)
The dividends distribution
from other equity
instrument investment
decreased.
Credit impairment loss
13,010,985
5,506,202
136.30
The losses on bad debts
of accounts receivable
increased.
Asset impairment loss
2,330,205
120,818,857
(98.07)
The impairment losses on
fixed assets decreased.
Gains on disposal of assets
17,610,387
96,646,068
(81.78)
Net gain from the disposal
of intangible assets
decreased.
Income tax expenses
413,447,676
399,681,566
3.44
The total pre-tax profit
increased.
4. Cash flow
✓ Applicable □ Not applicable
(Unit: RMB)
2024
2023
Year-on-year
increase/
decrease
(%)
Major reason(s)
for the change
Net cash flows from
operating activities
2,710,300,274
1,116,364,342
142.78
Cash from sales of goods and
provision of services increased.
Net cash flows from
investment activities
(1,275,776,063)
(822,839,668)
55.05
Cash paid for the purchase and
construction of fixed assets,
intangible assets and other long-
term assets increased.
Net cash flows from
financing activities
(982,244,453)
(110,696,642)
787.33
Cash received from bank
borrowings decreased.
(2) Analysis of assets and liabilities
✓ Applicable □ Not applicable
(Unit: RMB)
Item
Amount
at the
end of
current
period
Amount
at the
end of
previous
period
Changes
in amount
from the
end of
previous
period to
the end
of current
period (%)
Explanation
Cash and bank balances
1,934,900,900
1,482,463,336
30.52
Bank deposit balance
increased.
Bill receivable
192,750,000
–
100.00
Bank acceptance received
increased.
Other receivables
957,959,832
632,761,629
51.39
Construction payment
receivables increased.
Deferred income tax assets
465,724,288
883,835,180
(47.31)
Deductible losses decreased.
Short-term borrowings
300,176,917
700,385,000
(57.14)
Repayment of short-term bank
credit borrowings.
Bill payables
–
200,000,000
(100.00)
Bank acceptance bills were
paid upon maturity.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(Unit: RMB)
Item
Amount
at the
end of
current
period
Amount
at the
end of
previous
period
Changes
in amount
from the
end of
previous
period to
the end
of current
period (%)
Explanation
Trade payables
2,650,474,072
4,913,237,216
(46.05)
During the reporting period,
the Company will present
the payables for construction
in other payables.
Other payables
3,014,436,331
1,373,640,812
119.45
During the reporting period,
the Company will present
the payables for construction
in other payables.
Long-term borrowings
500,000,000
780,000,000
(35.90)
Repayment of long-term bank
credit borrowings.
(3) Analysis of investment positions
✓ Applicable □ Not applicable
During the reporting period, the Company did not invest in securities such as stocks, warrants or convertible
bonds, and did not hold or deal in equity interests in other listed companies and non-listed financial
enterprises. Details of investments in the external equity interests of the Company at the end of the
reporting period are set out in Note V(9), Note V(10) and Note VII to the financial statements.
1. Significant investments in equity interests
□ Applicable ✓ Not applicable
2. Significant non-equity investments
□ Applicable ✓ Not applicable
3. Financial assets at fair value
✓ Applicable □ Not applicable
Financial assets at fair value which were held by the Company during the reporting period are set out in
Note V(10) to the financial statements.
4. Specific progress of major asset restructuring and consolidation during the reporting period
□ Applicable ✓ Not applicable
(4) Disposal of major assets and equity interests
□ Applicable ✓ Not applicable
(5) Analysis on major subsidiaries and investee companies
✓ Applicable □ Not applicable
(Unit: RMB ten thousand)
Name of Company
Nature of
business
Major product
or service
Total
assets
Net
asset
Net
profit
Dongguan Changsheng
Enterprise Company
Limited
Transportation
Loading and unloading,
warehousing
11,787
10,502
465
Shenzhen Pinghu Qun Yi
Railway Store Loading and
Unloading Company Limited
Transportation
Cargo transportation,
loading and unloading,
warehousing
1,592
1,169
114
Shenzhen Guangshen
Railway Economic and
Trade Enterprise
Company Limited
Services
Train catering
management and sales
of food, beverage,
fruit, general
merchandise and
small household
appliances
125
(44,160)
118
Guangzhou Railway
Huangpu Service
Company Limited
Services
Loading and unloading,
handling, warehousing
469
444
108
Zengcheng Lihua Stock
Company Limited
Services
Acting as a railway freight
transport, storage,
loading and unloading
agent; Wholesale and
retail trade (except state
exclusive control
projects); Cargo packing
25,670
(16,548)
(708)
Guangzhou Tiecheng
Enterprise Company
Limited
Real estate
Real estate development
and operation, property
management, etc
56,168
32,321
1,825
Shenzhen Guangzhou Railway
Civil Engineering Company
Limited
Construction
Municipal public works
construction general
contracting
367,916
68,932
5,231
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(6) Structured entities controlled by the Company
□ Applicable ✓ Not applicable
VI. DISCUSSION AND ANALYSIS ON THE FUTURE DEVELOPMENT OF THE
COMPANY
(1) Industry development trend and competition landscape
✓ Applicable □ Not applicable
Development trend: Being the aorta of the nation’s economy, a key infrastructure, a significant project
for people’s livelihood, the backbone of integrated transportation system and one of the main means of
transportation, the railway is of crucial importance for the nation’s economic and social development. Since
the State Council of the PRC approved the implementation of Medium to Long Term Plan for Railway Network
Development (《中長期鐵路網規劃》) in 2004, railways in China have experienced exponential development. On
the whole, the tight capacity of the Chinese railways has now been alleviated, the bottleneck restriction has
been eliminated, and economic and social development needs have been met. However, when benchmarking
with the requirements for a new normal of economic developments, other transportation forms and the
advanced levels of developed countries, China’s railway still faces deficiencies such as incomplete layout, low
operational efficiency and rather severe structural conflicts. To expedite the construction of a contemporary
railway network with reasonable layout and wide coverage along with high efficiency, convenience, safety
and economic efficiencies, the Medium to Long Term Plan for Railway Network Development (《中長期鐵路網
規劃》) (2016-2025) had been jointly modified by the National Development and Reform Commission, Ministry
of Transport and CSRG (formerly known as CRC) in July 2016, highlighting a more ambitious “Eight East-
West Lines and Eight South-North Lines (八縱八橫)” high-speed railway network for the new era. As such, it
is expected that the railway transportation industry will continue to develop rapidly in the long-run, and both
railway passenger and freight transportation capacity and the competitive edge of the railway will continue
to grow at a steady pace.
Competition landscape: The national railway is highly concentrated with a unified transportation
management system. Competition within the industry mainly arises as a result of external factors, such as by
other transportation industries (including highways, aviation and water transportation), and this is expected
to continue to exist in the long run. Meanwhile, with the gradual deepening of market-oriented railway
reforms (including reforms in the investment and financing system, transportation management system, and
pricing mechanism), entry barriers to the railway industry will gradually be relaxed, and investment entities
in the railway industry will become more diversified. Following the completion of construction and the
commencement of operation of the State’s high-speed railway network with “Eight East-West Lines and Eight
South-North Lines (八縱八橫)” and numerous inter-city railways, the competition structure of the railway
transportation industry is expected to experience substantial changes; not only will competition with other
industries (such as highways, aviation and water transportation) intensify, competition within the railway
industry will also gradually increase.
(2) Development strategies of the Company
✓ Applicable □ Not applicable
Under the sound leadership and scientific decision-making of the Board, the Company will vigorously
leverage the historic opportunities arising from large-scale railway constructions, while proactively adapt
to the policy direction of the railway system reform, in order to establish a steadfast foothold in the
Guangdong-Hong Kong-Macao Greater Bay Area, and to optimize and enhance its business portfolio
centered on railway passenger and freight transportation which are complemented by the railway-related
businesses. Striving to become a firstclass railway transportation services enterprise in the PRC and achieve
its development objective of “scaling up and consolidating its strengths (做大做強)”, the Company will also
focus on improving its quality of service and continuously advancing its innovations in management, services
and technologies.
(3) Operating plans
✓ Applicable □ Not applicable
At the thirteenth meeting of the tenth session of the Board of the Company held on 27 March 2025, the
Board considered and approved the financial budget for the year of 2025. The Company plans to achieve
a passenger delivery volume of 71.30 million people (excluding entrusted transportation) and outbound
freight volume of 14.80 million tonnes. To achieve these objectives, the Company will focus its work on the
following aspects:
1.
In terms of corporate governance: we uphold the integration of the Party’s leadership with the
improvement of corporate governance, continuously refine corporate governance systems, enhance
the level of corporate governance and the quality of information disclosure, and ensure that the
Company’s operations comply with laws, regulations, and regulatory requirements.
2.
In terms of production safety: we will insist on giving priority to prevention and treatment. Firstly, we
thoroughly cultivate the safety development concept, strengthen safety awareness, focus on proactive
prevention, enforce strict process management, and enhance oversight and inspections. Secondly,
we comprehensively strengthen the control of key safety areas, and closely monitor natural disasters,
construction, labor activities, equipment quality, fire safety, and emergency response, focusing
on preventing and mitigating risks. Thirdly, we continuously advance the construction of safety
foundation. Driven by the three-year action plan to tackle the root cause of production safety and the
three-year action plan to deepen railway safety infrastructure, we consistently focus on grassroots
initiatives, establish a solid foundation, and enhance intrinsic safety levels.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
3.
In terms of passenger and freight transportation: we will adhere to a market demand-oriented
approach, and continuously improve the supply level of passenger and freight transportation. Firstly,
we will expand the effective supply of passenger transportation, conduct lean analysis to coordinate
transportation capacity, adapt to market needs for quality products, improve services to build a
positive image, and continuously increase market share. Secondly, we will deepen the transformation
and development of logistics, strengthen marketing organization, enhance market development,
optimize service quality, improve freight capacity, and continuously promote the market-oriented
reform of freight services to expand freight volume. Thirdly, we will optimize the structure of
transportation capacity, eliminate bottlenecks, fine-tune scheduling and command, and continuously
enhance transportation efficiency.
4.
In terms of operation and management: we will establish a modern market-oriented operation
philosophy, and continuously promote improvements in operational management quality and
efficiency. Firstly, we will strengthen the overall allocation of resources, improve budget management
quality, capital utilization efficiency, and asset disposal benefits, intensify efforts to save expenditures
and reduce consumption, and promote the preservation and appreciation of assets. Secondly, we will
reinforce standardized management of the enterprise, closely monitor key areas, prevent and mitigate
operational risks, and strengthen legal awareness, compliance risk prevention and control, and
proactive rights protection. Thirdly, we will focus on enhancing operational quality and effectiveness
through reform, and continuously promote market-oriented operational reforms, production and labor
organization reforms, and process repair reforms.
(4) Potential risks
✓ Applicable □ Not applicable
Type of risk
Description of risk
Addressing measures
Macro-economic risk
The railway transportation industry is
highly related to the macro-economic
development conditions and is greatly
affected
by
the
macro-economic
atmosphere.
If
the
macro-economic
outlook declines in the future, the
Company’s operating results and financial
condition may be adversely affected.
The Company will pay close attention
to the changes in international and
domestic
macro-economic
conditions,
strengthen its analysis and research
on the contributing factors relating to
the railway and transportation industry,
adjust its development strategies in a
timely manner in response to changes in
the market environment, and strive to
maintain the stability of the Company’s
production and operation.
Type of risk
Description of risk
Addressing measures
Policy and regulatory risk
The
railway
transportation
industry
is
greatly
affected
by
policies
and
regulations. With changes in the domestic
and international economic environment,
and the reform and development of
the
railway
transportation
industry,
corresponding adjustments in the related
laws, regulations and industrial policies
may be required. These changes may give
rise to uncertainties to the Company’s
business
development
and
operating
results.
The Company will proactively engage
in various seminars on the formulation
and improvement of industrial policies
and regulations development, study the
latest changes in policies and regulations,
capture the development opportunities
brought by the amendments of policies
and regulations, and adopt a prudent
approach
in
addressing
uncertainties
caused by changes in policies and
regulations.
Transportation safety risk
Transportation safety is the prerequisite
and
foundation
for
the
railway
transportation industry in maintaining
normal operations and a good reputation.
Inclement weather, mechanical failures,
human errors and other force majeure
events
may
adversely
affect
the
transportation safety of the Company.
The Company will consciously accept
the
safety
supervision
of
industry
authorities, actively participate in regular
transportation safety meetings held by
competent authorities of the industry
to understand the transportation safety
condition
of
the
Company,
provide
for and utilize the expenses for safety
production, and intensify the training of
safety knowledge and capabilities of its
transportation personnel.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Type of risk
Description of risk
Addressing measures
Market competition risk
Other
transportation
methods
(such
as aviation, road and water) compete
with railway transportation in certain
markets. In addition, a range of high-
speed railways and inter-city railways
have been completed and commenced
operation along with the development
of the railway transportation industry.
Internal competition within the railway
transportation
industry
has
also
intensified. The Company may be subject
to greater competitive pressure in the
future, which in turn could impact the
operating results of the Company.
The
Company
will
take
proactive
measures to address market competition.
For
passenger
transportation,
the
Company will leverage the advantages
of “safe, comfortable, convenient, on
time (安全、舒適、方便、準點)” railway
transportation, improve service facilities
and enhance service quality. In respect
of freight transportation, the Company is
committed to increasing the loading and
unloading efficiency and the turnover rate
of its freight trains to improve the freight
train frequency. In addition, the Company
will strengthen its analysis and research
on the railway transportation market, and
proactively apply to competent authorities
of the industry to add new long-distance
trains in areas not yet covered by high-
speed railways.
Financial risk
The operating activities of the Company
are subject to various financial risks, such
as foreign exchange risks, interest rate
risks, credit risks and liquidity risks.
The Company has established a set of
managerial procedures for financial risks
with a focus on the uncertainties of the
financial market. It is also dedicated
to minimizing to the potential adverse
impacts on the financial performance of
the Company. For more detailed analysis,
please refer to Note Ⅸ to the financial
statements.
VII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON-
DISCLOSURE DUE TO INAPPLICABILITY OF REGULATORY REQUIREMENTS,
STATE SECRETS, TRADE SECRETS, OR OTHER SPECIAL CIRCUMSTANCES
□ Applicable ✓ Not applicable
VIII. BUSINESS REVIEW
According to paragraph 28 (2) of Appendix D2 to the Listing Rules of SEHK, the Company is required to
conduct a business review in accordance with Schedule 5 of the Companies Ordinance (Cap. 622 of Hong
Kong laws) in the Report of the Directors. The details are as follows:
(1) A fair review on the Company’s business
Please refer to the “Business review” section under the “CHAIRMAN’S STATEMENT” and the “DISCUSSION
AND ANALYSIS OF THE PRINCIPAL OPERATION OF THE COMPANY DURING THE REPORTING PERIOD”
section in this chapter.
(2) Major risks and uncertainties to which the Company is exposed
Please refer to the “Potential risks” section under the “DISCUSSION AND ANALYSIS ON THE FUTURE
DEVELOPMENT OF THE COMPANY” in this chapter.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(3) Important event affecting the Company after the reporting period
None.
(4) Future business development of the Company
Please refer to the “DISCUSSION AND ANALYSIS ON THE FUTURE DEVELOPMENT OF THE COMPANY”
section.
(5) Analysis on the key financial indicators during the reporting period
Please refer to the “DISCUSSION AND ANALYSIS OF THE PRINCIPAL OPERATION OF THE COMPANY DURING
THE REPORTING PERIOD” section.
(6) Environmental policies and performance of the Company
Please refer to the “Environmental and Social Responsibilities” chapter in this annual report, as well as the
2024 Social Responsibility Report published by the Company on the website of the Shanghai Stock Exchange
(http://www.sse.com.cn), the HKExnews website of the Stock Exchange (http://www.hkexnews.hk) and the
Company’s website (http://www.gsrc.com).
(7) Compliance with laws and regulations that have a significant impact on the
Company
During the reporting period, the Company complied with all relevant laws and regulations that have a
significant impact on the Company.
(8) Description of the Company’s significant relationships with its employees,
customers, suppliers and others
During the reporting period, except as disclosed in this annual report, the Company had no other relationship
with its employees, customers and suppliers apart from the relationship of employees, customers and
suppliers, and no other person had a significant impact on the business of the Company.
IX. OTHER DISCLOSURES
(1) Liquidity and source of funding
During the reporting period, the principal sources of funding of the Company were revenue generated from
its operating activities and bank borrowings. The Company’s capital was mainly used for operating and
capital expenses, and the payment of taxes. The Company has stable cash flow and believes that it has
sufficient working capital, bank loans and other sources of funding to meet its operation and development
needs.
As at the end of the reporting period, the Company had short-term borrowings of approximately RMB300
million, with an interest rate range of 1.93%-2.28%; and had long-term borrowings of approximately
RMB500 million, with an interest rate range of 1.8%-2.6%. The Company’s capital commitments as of the
end of the reporting period are set out in Note XII to the financial statements.
As at the end of the reporting period, the Company had no charges on any of its assets and had not
provided any guarantees, and had no entrusted deposits. The gearing ratio (calculated by the balance of
liabilities divided by the balance of total assets as of the end of the period) of the Company was 25.97%.
(2) Risk of foreign exchange rate fluctuations and related hedges
The Company’s exposure to foreign exchange risks was mainly related to USD and HKD. Apart from
payments for imported purchases and dividends paid to foreign investors, which are settled in foreign
currencies, other major operational businesses of the Company are all settled in RMB. RMB is not freely
convertible into other foreign currencies, and its conversion is subject to the exchange rates and regulations
of foreign exchange control promulgated by the PRC government. Any foreign currency denominated
monetary assets and liabilities are subject to the risks of foreign exchange rate fluctuations.
The Company has not used any financial instruments to hedge its foreign exchange risks. Currently, its
foreign currency risks are minimized mainly through monitoring the size of transactions in foreign currencies
and foreign currency denominated assets and liabilities.
(3) Taxation
Details of taxation applicable to the Company during the reporting period are set out in Note IV to the
financial statements.
(4) Interest capitalized
During the reporting period, no interest was capitalized in the fixed assets and construction-in-progress of
the Company.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(5) Properties and fixed assets
During the reporting period, all properties held by the Company were for the purpose of developments,
and their percentage ratios (as defined in Rule 14.04(9) of the Listing Rules of SEHK) did not exceed 5%.
Movements in the properties and fixed assets held by the Company during the reporting period are set out
in Note V(11) to the financial statements.
(6) Undistributed profit
Details of movements in the undistributed profit of the Company during the reporting period are set out in
the Statement of Changes in Shareholders’ Equity and Note V(34) to the financial statements.
(7) Surplus reserve
Details of movements in the surplus reserve of the Company during the reporting period are set out in the
Statement of Changes in Shareholders’ Equity and Note V(33) to the financial statements.
(8) Subsidiaries
Details of the principal subsidiaries of the Company as at the end of the reporting period are set out in Note
VII to the financial statements.
(9) Material investments held, material acquisitions and disposals of subsidiaries and
associates, and future plans of material investments or acquisition of capital assets
Except as disclosed in this annual report, during the reporting period, the Company had no material
investments, had not carried out any material acquisition and disposal of subsidiaries and associates, and
had no definite plan for material investment or acquisition of capital assets.
(10) Contingent liabilities
At the end of the reporting period, the Company had no contingent liability.
(11) Fixed interest rate
As at the end of the reporting period, the Company had short-term borrowings of approximately RMB300
million, with an interest rate range of 1.93%-2.28%; and had long-term borrowings of approximately
RMB500 million, with an interest rate range of 1.8%-2.6%, details of which are set out in Note V(18) and
Note V(26) to the financial statements.
(12) Board of Directors of the Company
As of the date of publication of this annual report, the Directors of the Company are as follows:
Executive Directors: Jiang Hui, Chen Shaohong, Zhou Shangde
Non-executive Directors: Luo Jinglun, Hu Dan, Zhang Zhe
Independent Non-executive Directors: Tang Xiaofan, Qiu Zilong, Wang Qin
(13) Directors of subsidiaries
At the end of the reporting period, except for Dongguan Changsheng Enterprise Company Limited and
Zengcheng Lihua Stock Company Limited, none of the subsidiaries of the Company had set up their board of
directors. The members of the boards of directors of the above subsidiaries are as follows:
Name of Company
Name of Board Member
Dongguan Changsheng Enterprise
Company Limited
Luo Jiancheng, Chen Longwei, Liu Qiyi, Wan Deqiang, Ren Jiyao,
Yin Jinwen, Yuan Jiansheng
Zengcheng Lihua Stock Company
Limited
Luo Jiancheng, Chen Longwei, Liu Qiyi, Wen Yuxin, Zhang Qingshan
(14) Valuation of property interests or tangible assets
During the reporting period, the Company did not conduct any valuation on its properties or other tangible
assets in accordance with Chapter 5 of the Listing Rules of SEHK.
(15) Management contracts
During the reporting period, the Company did not enter into any contract containing the following terms:
the counterparty of the contract undertakes to be responsible for the management and administration of the
whole or any substantial part of any business of the company pursuant to the contract; and the contract is
not a service contract entered into with any director or full-time employee of the company.
(16) Loans to entities
During the reporting period, the Company did not provide any loan to any entity.
032
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(17) Permitted compensation provisions
At the end of the reporting period, the Company did not have any compensation provision for the benefit of
the Directors (including former Directors) of the Company, or any of the affiliated companies.
Other parts, chapters or notes to this annual report referred to in this section form part of the report of the
directors.
By Order of the Board
Jiang Hui
Chairman of the Board
Shenzhen, China
27 March 2025
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 4
Corporate Governance
I. INFORMATION REGARDING CORPORATE GOVERNANCE
✓ Applicable □ Not applicable
Since the listing of the Company in 1996, the Company has been continuously improving its corporate
governance structure, perfecting its internal control and management systems, enhancing information
disclosures and regulating its operation in accordance with the relevant domestic and overseas Listing
Rules and regulatory requirements after taking into account of the actual state of affairs of the Company.
Participants in the shareholders’ general meetings, the Board and the Supervisory Committee of the
Company have clearly defined powers and duties, each assuming and performing its specific responsibilities
and making its own decisions in an independent, efficient and transparent manner. Currently, there are no
material differences between the Company’s corporate governance structure and the regulatory requirements
as set by regulatory authorities in the places of listing of the Company’s stocks.
During the reporting period, pursuant to the regulatory requirements for the internal control of listed
companies set out by domestic and overseas securities regulatory bodies, the Company completed the
self-assessment and audit on internal control for 2023; elected and replaced some members of the Board
of Directors and the Supervisory Committee, and accordingly adjusted the composition of the special
committees of the Board of Directors; adjusted some management members, and reappointed the general
manager and two deputy general managers of the Company; revised the Articles, the Management Rules on
Inside Information and Insiders, and the Business Performance Evaluation Measures, further improved the
Company’s corporate governance and internal controls to promote the healthy and sustainable developments
of the Company.
During the reporting period, in view of the highly centralized systematic transportation management on
the national railway network, it was necessary for GRGC to obtain the Company’s financial information
and the Company’s monthly financial data summaries during the reporting period, in order to exercise its
administrative functions as an industry leader granted by laws and administrative regulations. In view of
this, the Company duly complied with regulations set out in the Management Rules on Inside Information
and Insiders (《內幕信息及知情人管理制度》), enhanced the management of non-public information, reminded
the shareholders to promptly fulfill their obligations with respect to confidentiality and the prevention of
insider trading.
Improvement of corporate governance is a long-term systematic project, which requires continuous
improvement and enhancement. As it always has, the Company will continue to promptly update and
improve its internal systems in accordance with the relevant regulations, promptly identify and solve
problems, strengthen its management foundation and enhance its awareness of standardized operation and
level of governance to promote the regulated, healthy and sustainable development of the Company.
035
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
II. SPECIFIC MEASURES TAKEN BY THE CONTROLLING SHAREHOLDER AND
ACTUAL CONTROLLER OF THE COMPANY TO ENSURE THE INDEPENDENCE
OF THE COMPANY IN TERMS OF ASSETS, PERSONNEL, FINANCE,
ORGANIZATION AND BUSINESS, AS WELL AS THE SOLUTIONS, WORK
PROGRESS AND FOLLOW-UP WORK PLANS FOR ENSURING THE COMPANY’S
INDEPENDENCE
□ Applicable ✓ Not applicable
Circumstances where the controlling shareholder, actual controller and other units under their
control are engaged in the same or similar business as the Company, as well as the impact
of horizontal competition or major changes in horizontal competition on the Company, the
resolution measures that have been taken, the progress of resolution and the follow-up plan for
resolution
□ Applicable ✓ Not applicable
III. SUMMARY OF SHAREHOLDERS’ GENERAL MEETINGS
(1) Shareholders’ general meetings held during the reporting period
Session of meeting
Date
Media in which
resolutions were
disclosed
Date of
disclosure
Resolutions
First Extraordinary
General Meeting
of 2024
6 February
2024
Website of SSE
(www.sse.com.cn)
7 February
2024
A total of 3 resolutions
were considered and
passed at the meeting
with no objection.
HKExnews website of SEHK
(www.hkexnews.hk)
6 February
2024
2023 Annual
General Meeting
18 June
2024
Website of SSE
(www.sse.com.cn)
19 June
2024
A total of 10 resolutions
were considered and
passed at the meeting
with no objection.
HKExnews website of SEHK
(www.hkexnews.hk)
18 June
2024
Second Extraordinary
General Meeting
of 2024
6 December
2024
Website of SSE
(www.sse.com.cn)
7 December
2024
A total of 1 resolution
was considered and
passed at the meeting
with no objection.
HKExnews website of SEHK
(www.hkexnews.hk)
6 December
2024
(2) Important event for the attention of shareholders in the coming year
The Company plans to convene the 2024 Annual General Meeting, during which it will conduct votes and
make resolutions on issues including the profit distribution plan. With respect to the specific arrangements
for the 2024 Annual General Meeting, investors are advised to pay attention to and carefully read the “Notice
of 2024 Annual General Meeting” which will be published on the website of the SSE (http://www.sse.com.
cn), the HKExnews website of the SEHK (http://www.hkexnews.hk) and the Company’s website (http://www.
gsrc.com) in due course.
036
037
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IV. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
(1) Changes in shareholdings and remunerations of Directors, Supervisors and senior
management (current and resigned during the reporting period)
✓ Applicable □ Not applicable
Name
Position
Gender
Age
Beginning of
engagement
period
End of
engagement
period
Total
remuneration
received from
the Company
(before tax)
during the
reporting
period (RMB)
Whether
receiving
remuneration
from related
parties of the
Company
Jiang Hui
Executive Director,
Chairman of the Board
Male
53
6 December 2024
15 June 2026
–
Yes
Chen Shaohong
Executive Director
Male
58
18 June 2024
15 June 2026
524,050
Yes
General Manager
29 April 2024
To present
Shareholder
Representative
Supervisor (Resigned)
26 June 2008
12 April 2024
Luo Jinglun
Non-executive Director
Male
53
6 February 2024
15 June 2026
–
Yes
Hu Dan
Non-executive Director
Male
52
17 June 2021
15 June 2026
–
Yes
Zhang Zhe
Non-executive Director
Male
53
23 December 2019
15 June 2026
–
Yes
Zhou Shangde
Executive Director
Male
54
17 June 2021
15 June 2026
498,426
No
Deputy Secretary of the
Party Committee
19 March 2021
To present
Employee Representative
Supervisor (Resigned)
28 May 2015
17 June 2021
Tang Xiaofan
Independent Non-
executive Director
Male
56
16 June 2020
15 June 2026
112,000
No
Qiu Zilong
Independent Non-
executive Director
Male
58
16 June 2020
15 June 2026
112,000
No
Wang Qin
Independent Non-
executive Director
Female
54
15 June 2023
15 June 2026
153,408
No
Name
Position
Gender
Age
Beginning of
engagement
period
End of
engagement
period
Total
remuneration
received from
the Company
(before tax)
during the
reporting
period (RMB)
Whether
receiving
remuneration
from related
parties of the
Company
Niu Jianfeng
Shareholder
Representative
Supervisor, Chairman
of the Supervisory
Committee
Male
52
18 June 2024
15 June 2026
–
Yes
Li Songqing
Shareholder
Representative
Supervisor
Male
52
6 February 2024
15 June 2026
–
Yes
Meng Yong
Shareholder
Representative
Supervisor
Male
57
23 December 2019
15 June 2026
–
Yes
Lin Wensheng
Employee Representative
Supervisor
Male
60
16 June 2020
15 June 2026
413,504
No
Song Min
Employee Representative
Supervisor
Female
54
15 June 2023
15 June 2026
413,504
No
Gong Yuwen
Deputy Secretary of
the Party Committee,
Secretary of the
Discipline Inspection
Commission
Male
58
2 April 2018
To present
498,376
No
Tang Xiangdong
Chairman of Labor Union Male
56
23 February 2024
To present
498,521
No
Deputy General Manager,
Secretary of the Board
29 October 2019
To present
Company Secretary
3 December 2019
To present
Luo Xinpeng
Chief Accountant
Male
59
29 October 2019
To present
498,569
No
038
039
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Name
Position
Gender
Age
Beginning of
engagement
period
End of
engagement
period
Total
remuneration
received from
the Company
(before tax)
during the
reporting
period (RMB)
Whether
receiving
remuneration
from related
parties of the
Company
Huang Wu
Deputy General Manager Male
54
6 February 2024
To present
447,330
Yes
Yang Yijian
Deputy General Manager Male
58
28 August 2024
To present
298,293
Yes
Wei Hao
(Resigned)
Executive Director,
Chairman of the Board
Male
53
6 February 2024
11 November 2024
–
Yes
Wu Yong
(Resigned)
Chairman of the Board
Male
61
18 December 2014
6 February 2024
–
No
Executive Director
16 December 2014
Hu Lingling
(Resigned)
Executive Director
Male
61
26 May 2016
12 April 2024
305,453
No
General Manager
9 December 2015
Huang Chaoxin
(Resigned)
Shareholder
Representative
Supervisor, Chairman
of the Supervisory
Committee
Male
55
15 June 2023
29 April 2024
–
Yes
Luo Jiancheng
(Resigned)
Deputy General Manager Male
52
30 December 2016
25 September 2024
365,736
Yes
Total
/
/
/
/
/
5,139,170
/
Note: During the reporting period, none of the directors, supervisors and senior management held or traded the shares
of the Company, nor did they hold any share options of the Company or were granted restricted shares.
Name
Biography
Jiang Hui
Mr. Jiang, male, born in January 1972, is an Executive Director and the Chairman of the
Board of the Company. Mr. Jiang holds a bachelor’s degree and is a senior engineer.
Mr. Jiang had successively served as the secretary of the Communist Youth League of
Shanghai Railway Bureau, the secretary of the Party Committee of Hangzhou Power
Supply Section, the director of the office of Shanghai Railway Bureau (Party Committee
Office), the deputy secretary of the Party Committee and the secretary of the Discipline
Inspection Committee of Shanghai Railway Bureau, the vice general manager of China
Railway Shanghai Bureau Group Company Limited, the vice chairman, general manager
and deputy secretary of the Party Committee of China Railway Nanchang Bureau Group
Company Limited, the director, general manager and deputy secretary of the Party
Committee of China Railway Xi’an Bureau Group Company Limited, and the secretary of
the Party Committee and chairman of China Academy Of Railway Sciences Corporation
Limited. He is currently the secretary of the Party Committee and the chairman of the
board of directors of the GRGC.
Chen Shaohong
Mr. Chen, male, born in January 1967, is an Executive Director, the secretary of
the Party Committee and the General Manager of the Company. Mr. Chen holds a
bachelor’s degree and is a senior economist. Mr. Chen had previously served as the
deputy director of the Corporate Management Office of GRGC, the deputy director
and director of the Corporate Management and Legal Affairs Section of GRGC, the
deputy chief economist of GRGC and the director of the Corporate Management and
Legal Affairs Section of GRGC, the chief legal advisor and the director of the Corporate
Management and Legal Affairs Section of GRGC, the chief legal advisor and the director
of the Corporate Management and Legal Affairs Department of GRGC, and the general
counsel of GRGC. And he had also served as a Shareholder Representative Supervisor
of the Company. He is currently the secretary of the Party Committee and the General
Manager of the Company.
Luo Jinglun
Mr. Luo, male, born in July 1971, is a Non-executive Director of the Company. Mr. Luo
holds a master’s degree and is a senior accountant. Mr. Luo had previously served as
the chief accountant of Diversified Operation Management Center (Diversified Operation
Group Company) of Chengdu Railway Bureau, the deputy director of the Finance
Department of Chengdu Railway Bureau and deputy secretary-general of the Financial
Accounting Society of Chengdu Railway Bureau, the secretary-general of the Financial
Accounting Society of Chengdu Railway Bureau, the deputy director and the director
of the Finance Department (Revenue Department) of China Railway Chengdu Bureau
Group Company Limited and is currently the chief accountant of the GRGC.
040
041
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Name
Biography
Hu Dan
Mr. Hu, male, born in June 1972, is a Non-executive Director of the Company. Mr. Hu
holds a bachelor’s degree and is a senior engineer. Mr. Hu had previously served as the
chief of the Integrated Analysis Division of the Safety Supervision Office, the deputy
chief of the Safety Supervision Office, the secretary of the Party Committee of the
Loudi Railway Depot, the head of the Loudi Railway Depot and the head of the Zhuzhou
Railway Station of GRGC. He is currently the chief of the Transportation Department of
GRGC.
Zhang Zhe
Mr. Zhang, male, born in October 1971, is a Non-executive Director of the Company.
Mr. Zhang holds a bachelor’s degree and is a senior engineer. He had previously
served as the station master of Tangxi Station and the director of the Subdivision of
Freight Transportation Marketing of the Yangcheng company headquarters of GRGC,
the deputy director of Safety Supervision Sub-office of Guangzhou Railway Office, the
deputy station master of Jiangcun Station of the Company, the head of Zhaoqing Train
Section of SR, and the station master of Guangzhou South Station of the Company. He
is currently the director of Passenger Transport Department of GRGC.
Zhou Shangde
Mr. Zhou, male, born in December 1970, is currently an Executive Director and deputy
secretary of Party Committee of the Company. Mr. Zhou holds a master’s degree
and is a political officer. Mr. Zhou had previously served as the deputy head of the
Organization and Human Resources Department, the chief of the Party Committee
Office and the chairman of the union of the General Service Center of the Company;
the deputy head of the Human Resources Department, the deputy office chief and chief
of the Reception Office and the secretary of the Party General Branch of the Company
Affairs Office of GRGC; and the secretary of the Party Committee and head of the
Shenzhen Railway Station, the head and deputy secretary of the Party Committee of
the Shenzhen North Railway Station of the Company, and an employee representative
supervisor of the Company. He is currently the deputy secretary of the Party Committee
of the Company.
Name
Biography
Tang Xiaofan
Mr. Tang, male, born in October 1968, is an Independent Non-executive Director,
and the Chairman of the Audit Committee and the Remuneration Committee and the
member of the Nomination Committee of the Company. Mr. Tang holds a master’s
degree and is a senior auditor, a PRC certified public accountant, an accountant
certified by the Association of International Accountants and a Certified Internal Auditor
(CIA). Mr. Tang also obtained the qualification of secretary of the board of companies
listed on the SSE and the securities and fund practitioner qualification in the PRC,
and is a securities investment advisor. Mr. Tang had previously served as the deputy
section chief of Yichun Audit Bureau of Jiangxi, the audit manager of Shenzhen Dahua
Tiancheng Accounting Firm, the audit manager of BDO China Shu Lun Pan Certified
Public Accountants LLP and Yangcheng (HK) CPA Limited, the vice president and CFO
of Guangzhou Greenery Cafe Company Limited, the secretary of the board and CFO of
Guangzhou Jiacheng International Logistics Co., Ltd. (a company listed on the SSE),
the deputy general manager of Guangdong Xiyu Investment Management Co., Ltd., a
director and senior vice president of Jiangxi Geto New Materials Corporation Limited
(a company listed on Shenzhen Stock Exchange), a managing director of Guangzhou
Dening Investment Management Co., Ltd., and the deputy general manager of
Guangzhou Huizhi Venture Capital Co., Ltd. He is currently the partner of Guangzhou
Zhonghui Jianyuan Investment Partnership (LP) (廣州中匯建元投資合夥企業(有限合
夥)), and the independent non-executive director of Guangdong Qili Aomei High-tech
Materials Co., Ltd. (廣東齊力澳美高新材料股份有限公司) and Guangzhou Haote Energy
Saving and Environmental Protection Technology Co., Ltd. (廣州豪特節能環保科技股份有
限公司).
Qiu Zilong
Mr. Qiu, male, born in March 1967, is an Independent Non-executive Director,
Chairman of the Nomination Committee and member of the Audit Committee and
Remuneration Committee of the Company. Mr. Qiu holds a bachelor’s degree of physics
in radio from Hunan Normal University and a master’s degree in business administration
from Peking University Shenzhen Graduate School and is currently the executive vice
president of Shenzhen Changsha Chamber of Commerce. Mr. Qiu had previously served
as the assistant engineer, assistant to factory director and deputy factory director of
Guangdong Panyu Safety Equipment Factory, the deputy general manager of Shenzhen
Xingelan Electronic Co., Ltd., the managing director of Shenzhen Guanzhong Xie’an
Electronic Technology Co., Ltd. and the managing director of Shenzhen Xingguanzhong
Electronic Technology Co., Ltd. He is currently the general manager of Shenzhen
Changshang Investment Management Co., Ltd. and a director of Shenzhen Beida Soft
Bank Investment Corporation Limited.
042
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Name
Biography
Wang Qin
Ms. Wang, female, born in April 1970, a permanent resident of Hong Kong, is
an Independent Non-executive Director, and member of the Audit Committee,
Remuneration Committee and Nomination Committee of the Company. Ms. Wang
graduated from the University of Windsor, Canada with a bachelor’s degree in business
administration. She has worked for China Travel Service (Hong Kong) and Hongkong
Post. She has previously served as the vice president of the China (Overseas)
Enterprises Reputation Association and is currently the general manager of Centennial
Chishui (Hong Kong) Wine Company Limited, honorary director of Hong Kong
Famous Brand Technology Limited and vice president of the Federation of HK Jiangsu
Community Organisations.
Niu Jianfeng
Mr. Niu, male, born in June 1972, is a Shareholder Representative Supervisor and the
Chairman of the Supervisory Committee of the Company. Mr. Niu holds a bachelor’s
degree and is a senior political officer. He had previously served as the secretary
of the Youth League Committee of Zhengzhou Railway Bureau, the secretary of the
Party Committee of Shangqiu Station, the head of the Propaganda Department of the
Party Committee (the director of the Corporate Culture Department), the secretary
of the Party Committee and the director of the Personnel Department (the head of
the Organization Department of the Party Committee) of Zhengzhou Station, the
deputy secretary of the Party Committee and the secretary of the Discipline Inspection
Committee of China Railway Shanghai Group Company Limited. He is currently the
secretary of the Discipline Inspection Committee of the GRGC.
Li Songqing
Mr. Li, male, born in October 1972, is a Shareholder Representative Supervisor of
the Company. Mr. Li holds a bachelor’s degree and is a senior political officer. Mr. Li
had previously served as the head of the political work section, the head and deputy
director of the research and supervision section of the office of GRGC (Party Committee
Office), the head (director) of the publicity department of the Party Committee
(Corporate Culture Department) of GRGC, and is currently the director (head) of the
Human Resources Department (Organization Department of the Party Committee) of
the GRGC.
Meng Yong
Mr. Meng, male, born in September 1967, is a Shareholder Representative Supervisor
of the Company. Mr. Meng holds a bachelor’s degree and is an accountant. He had
previously served as the head of the Finance Planning Division of the Finance Section
and the deputy director of the Finance Section, the deputy director of the Finance
Department (Revenue Division) and the director of the Audit Department of GRGC. He
is currently the director of the Finance Department (Income Department) of GRGC.
Name
Biography
Lin Wensheng
Mr. Lin, male, born in December 1964, is an Employee Representative Supervisor of
the Company. Mr. Lin holds a bachelor’s degree and is a senior accountant. Mr. Lin
had previously served as the chief accountant of the Industrial and Electrical Business
Department of the Company, the deputy chief economist of the Guangzhou Electricity
Section, the head of the Planning and Finance Department and the head of the Audit
Department of the Company. He is currently an Employee Representative Supervisor of
the Company.
Song Min
Ms. Song, female, born in November 1970, is an Employee Representative Supervisor
of the Company. Ms. Song holds a bachelor's degree and is an accountant. Ms. Song
had served as the deputy manager of the operating finance office, department of
finance and planning of Qinghai Tibet Railway Company, deputy office director and
finance director of Qinghai Tibet Railway Public Security Bureau, vice officer supervisor
of Qinghai-Tibet Railway Company Annuity Council, vice consultant of department
of financial management of the State Taxation Bureau of Qinghai Province, senior
manager of Petrol China Guangdong Sales Company Shenzhen Branch and the chief
of Department of Audit of the Company. She is currently the director of the Board
Secretariat (Investor Relations Department) of the Company.
Gong Yuwen
Mr. Gong, male, born in September 1966, is the Deputy Secretary of the Party
Committee, and the Secretary of the Discipline Inspection Commission of the
Company. Mr. Gong holds a bachelor’s degree and is an economist. He had served
successively as the deputy director and the director of the Leading Cadres Section of
the Personnel Department (Organization Department of the Party Committee) of GRGC,
deputy director of the Personnel Department and deputy director of the Organization
Department of the Party Committee of GRGC, deputy secretary of the Party Committee
of Guangzhou East Station of the Company, and secretary and the deputy station
master of the Party Committee and the deputy station master of Guangzhou East
Station. He is currently the Deputy Secretary of the Party Committee, and the Secretary
of the Discipline Inspection Commission of the Company.
Tang Xiangdong
Mr. Tang, male, born in September 1968, is the Chairman of Labor Union, Deputy
General Manager and the Secretary of the Board of the Company. Mr. Tang holds a
bachelor’s degree and an MBA degree, and is a senior accountant. He had served as
the Office Supervisor of the Revenue Settlement Center, the Director of the Finance
Department, the Chief Accountant, the Deputy General Manager and the Secretary
of the Board of the Company. He is currently the Chairman of Labor Union, Deputy
General Manager and the Secretary of the Board of the Company.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Name
Biography
Luo Xinpeng
Mr. Luo, male, born in October 1965, is the Chief Accountant of the Company. Mr. Luo
completed a part-time master’s degree and is a senior accountant. He had previously
served as the vice director of the finance department of the Guangzhou Railway Works
of the Ministry of Railways, the director of the finance department, the chief accountant
and the director of the finance department of the Guangzhou Railway Rolling Stock
Works of China National Railway Locomotive & Rolling Stock Industry Corporation, the
chief accountant of GRGC’s Guangzhou railway rolling stock works, the chief accountant
of Yuehai Railway Company Limited, and the chief accountant of Hainan Railway
Company Limited. He is currently the Chief Accountant of the Company.
Huang Wu
Mr. Huang, male, born in October 1970, is the Deputy General Manager of the
Company. Mr. Huang holds a bachelor’s degree and a master’s degree in engineering
and is an economist. Mr. Huang has served as an accountant in the finance office of the
Guangzhou Railway Section of the Yangcheng company headquarters of the GRGC, an
assistant accountant and deputy director of the Talent Exchange and Training Center of
the Cadre Department (Party Committee Cadre Department) of the GRGC, the director
of the Political and Legal Comprehensive Management (Road Protection and Joint
Defense) Office, and the director of the Human Defense and Preparedness Department
(People’s Armed Forces Department), director (head) of the Protection Department
(People’s Armed Forces Department) and director of the Political and Legal Affairs
Office of the GRGC. He is currently the Deputy General Manager of the Company.
Yang Yijian
Mr. Yang, male, born in December 1966, is the Deputy General Manager of the
Company. Mr. Yang holds a doctorate degree and is a senior political officer. Mr. Yang
has served as secretary of the Party Committee Office of GRGC, director of the Party
Committee Office of the Company, secretary of the Party Committee and secretary of
the Discipline Inspection Commission of Shenzhen Civil Engineering Company, director
of the Material and Real Estate Department of the Company, director of the Board
Secretariat and director of the Investor Relations Department of the Company, secretary
of the Party Branch of the Construction Command of Guangzhou Xinke Station (Foshan
West Station) of GRGC, secretary of the Party Committee and deputy commander of the
Jiangmen Construction Command of GRGC, and secretary of the Party Committee and
deputy commander of the Shenzhen Construction Command of GRGC. He is currently
the Deputy General Manager of the Company.
(2) Engagements of directors, supervisors and senior management (current and
resigned during the reporting period)
1.
Engagements in shareholders
✓ Applicable □ Not applicable
Name of personnel
Name of
shareholder
Position at shareholder
Beginning of
engagement
End of engagement
Jiang Hui
GRGC
Secretary of the Party Committee,
Chairman of the Board
October 2024
To present
Luo Jinglun
GRGC
Chief Accountant
August 2023
To present
Hu Dan
GRGC
Director of the Transportation
Department
July 2020
To present
Zhang Zhe
GRGC
Director of the Passenger Transport
Department
April 2019
To present
Niu Jianfeng
GRGC
Secretary of the Committee for
Discipline Inspection
July 2023
To present
Li Songqing
GRGC
Director (head) of Human Resources
Department (Organization
Department of the Party committee)
December 2023
To present
Meng Yong
GRGC
Director of the Finance Department
(Income Department)
May 2020
To present
Huang Wu
GRGC
Director (head) of Protection
Department (People’s Armed Forces
Department) and Director of the
Political and Legal Affairs Office
November 2018
January 2024
Yang Yijian
GRGC
Secretary of the Party Committee
and deputy commander of
Shenzhen Engineering Construction
Headquarters
October 2023
June 2024
Wei Hao (Resigned)
GRGC
Secretary of the Party Committee,
Chairman of the Board
October 2023
October 2024
Wu Yong (Resigned)
GRGC
Chairman of the Board
August 2014
October 2023
Secretary of the Party Committee November 2017
October 2023
Huang Chaoxin
(Resigned)
GRGC
Deputy secretary of the Discipline
Inspection Committee and the head
of the Inspection Office of the Party
Committee
December 2019
To present
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
2. Engagements in other companies
✓ Applicable □ Not applicable
Name of
personnel
Name of company
Position at company
Jiang Hui
Xiashen Railway Guangdong Company Limited, Qian Zhang
Chang Railway Company Limited, Huai Shao Heng Railway
Co., Ltd., Guangzhou-Shenzhen-Hong Kong Express Rail
Link Company Limited
Chairman of the Board
Chen Shaohong
Xiashen Railway Guangdong Company Limited, Guangdong
Meizhou-Shantou Passenger Railway Line Company Limited
Director
Hukun Passenger Railway Line (Hunan) Company Limited
Chairman of the
Supervisory Committee
Luo Jinglun
Hunan Railway Company Limited, Wuhan-Guangzhou
Passenger Railway Line Co., Ltd.
Vice Chairman of the
Board
Hukun Passenger Railway Line (Hunan) Company Limited
Director
Hainan Railway Company Limited, Guangdong Guangzhu
Intercity Rail Transportation Company Limited
Chairman of the
Supervisory Committee
Hu Dan
Shenzhen Pingnan Railway Company Limited
Vice Chairman of the
Board
Hukun Passenger Railway Line (Hunan) Company Limited
Director
Zhang Zhe
Beijing Zhongtie Commemorate Ticket Co., Ltd.
Supervisor
Tang Xiaofan
Guangzhou Zhonghui Jianyuan Investment Partnership (LP)
(廣州中匯建元投資合夥企業(有限合夥))
Partner
Guangdong Qili Aomei High-tech Materials Co., Ltd.,
Guangzhou Haote Energy Saving and Environmental
Protection Technology Co., Ltd.
Independent Non-
executive Director
Qiu Zilong
Shenzhen Changshang Investment Management Co., Ltd.
General Manager
Shenzhen Beida Soft Bank Investment Corporation Limited
Director
Wang Qin
Centennial Chishui (Hong Kong) Wine Company Limited
General Manager
Hong Kong Famous Brand Technology Limited
Honorary Director
The Hong Kong Jiangsu Association
Vice President
Name of
personnel
Name of company
Position at company
Meng Yong
Hunan Railway Company Limited, Guangzhou-Shenzhen-Hong
Kong Express Rail Link Company Limited, Qiwen Trade
Company Limited
Director
Wuhan-Guangzhou Passenger Railway Line Co., Ltd.,
Guangdong Railway Company Limited
Chairman of the
Supervisory Committee
Hukun Passenger Railway Line (Hunan) Company Limited,
Huai Shao Heng Railway Co., Ltd.
Supervisor
Tang Xiangdong
Shenzhen Guangshen Railway Economic and Trade Enterprise
Company Limited
Supervisor
Luo Xinpeng
Guangzhou Tiecheng Enterprise Company Limited
Director
Dongguan Changsheng Enterprise Company Limited,
Zengcheng Lihua Stock Company Limited
Chairman of the
Supervisory Committee
Shenzhen Pinghu Qun Yi Railway Store Loading and
Unloading Company Limited
Supervisor
Huang Wu
Shenzhen Pinghu Qun Yi Railway Store Loading and
Unloading Company Limited
Executive Director
Yang Yijian
Guangzhou Tiecheng Enterprise Company Limited
Director
Lin Wensheng
Zengcheng Lihua Stock Company Limited, Shenzhen
Guangzhou Railway Civil Engineering Company
Supervisor
Wei Hao
(Resigned)
CPC Dongguan Committee
Secretary of the
Dongguan Municipal
Party Committee,
First Secretary of the
Party Committee of
Dongguan Military
Division
Luo Jiancheng
(Resigned)
China Railway (HK) Holdings Ltd.
Director, General
Manager
Qiwen Trade Company Limited
Director
Dongguan Changsheng Enterprise Company Limited,
Zengcheng Lihua Stock Company Limited
Chairman of the Board
Shenzhen Guangshen Railway Economic and Trade Enterprise
Company Limited
Executive Director
048
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(3) Remuneration of Directors, Supervisors and senior management
✓ Applicable □Not applicable
Decision-making procedure of
the remuneration of Directors,
Supervisors and senior
management
None of the Directors and Supervisors other than the Independent
Directors shall be paid Directors’ (Supervisors’) remuneration; the
remuneration of Independent Directors shall be proposed by the
Remuneration Committee of the Board, which shall be submitted
to the shareholders’ general meeting for review and approval after
being reviewed and approved by the Board; the remuneration
of senior management shall be decided by the Board after being
proposed by the Remuneration Committee of the Board.
Whether the directors recuse
themselves from discussions on
their own remuneration at the
Board meeting
No
Details of recommendations
issued by the Remuneration
and Appraisal Committee or
the Specialized Meeting of
Independent Directors on matters
relating to the remuneration of the
Directors, Supervisors and senior
management
Taking into account the relevant national regulations, the
remuneration packages of similar companies, the time commitment
and the performance of duties, etc., to make proposal to the Board
in respect of the remuneration packages of Independent Directors
and senior management.
Basis for determination of the
remuneration of the Directors,
Supervisors and senior
management
Determined with reference to the level of remuneration in Shenzhen
where the Company is located, the job nature of individual staff, as
well as the annual objectives of the Company, the completion status
of work targets and the operating results of the Company.
Actual payment of remuneration of
Directors, Supervisors and senior
management
During the reporting period, none of the following Directors,
namely Jiang Hui, Wei Hao, Wu Yong, Luo Jinglun, Hu Dan, Zhang
Zhe, and the following Supervisors, namely Niu Jianfeng, Huang
Chaoxin, Li Songqing and Meng Yong, received any remuneration
from the Company. As far as the Company is aware, as at the date
of publication of this report, the Company had no arrangements
under which the Directors, Supervisors and senior management
had waived or agreed to waive any remuneration. For details of
the actual payment of remuneration to the Directors, Supervisors
and senior management during the reporting period, please see
the section headed “Changes in shareholdings and remunerations
of Directors, Supervisors and senior management (current and
resigned during the reporting period)” in this chapter.
Total actual amount of remuneration
received by all of the Directors,
Supervisors and senior
management at the end of the
reporting period
During the reporting period, the Directors, Supervisors and senior
management received a total remuneration of RMB5,139,170.
(4) Changes in directors, supervisors and senior management
✓ Applicable □ Not applicable
Name
Position(s)
Change(s)
Reason(s) for
the changes
Jiang Hui
Executive Director, Chairman of the Board
Elected
Adjustment of Board members
Chen Shaohong
Executive Director
Elected
Adjustment of Board members
General Manager
Appointed
Adjustment of management
personnel
Shareholder Representative Supervisor
Departure
from office
Resignation
Luo Jinglun
Non-executive Director
Elected
Adjustment of Board members
Niu Jianfeng
Shareholder Representative Supervisor,
Chairman of the Supervisory Committee
Elected
Adjustment of Supervisory
Committee members
Li Songqing
Shareholder Representative Supervisor
Elected
Adjustment of Supervisory
Committee members
Tang Xiangdong
Chairman of labor union
Elected
Adjustment of division of labor
Huang Wu
Deputy General Manager
Appointed
Adjustment of management
personnel
Yang Yijian
Deputy General Manager
Appointed
Adjustment of management
personnel
Wei Hao (Resigned)
Executive Director, Chairman of the Board
Departure
from office
Resignation
Executive Director, Chairman of the Board
Elected
Adjustment of Board members
Wu Yong (Resigned)
Executive Director, Chairman of the Board
Departure
from office
Reaching retirement age
Hu Lingling
(Resigned)
Executive Director, General Manager
Departure
from office
Reaching retirement age
Huang Chaoxin
(Resigned)
Shareholder Representative Supervisor,
Chairman of the Supervisory Committee
Departure
from office
Resignation
Luo Jiancheng
(Resigned)
Deputy General Manager
Dismissed
Resignation
Mr. Jiang Hui was appointed as Executive Director of the Company on 6 December 2024. He obtained
the legal opinion referred to in Rule 3.09D of the Listing Rules on 3 December 2024, and confirmed his
understanding of his responsibilities as a director.
Mr. Chen Shaohong was appointed as Executive Director of the Company on 18 June 2024. He obtained
the legal opinion referred to in Rule 3.09D of the Listing Rules on 17 June 2024, and confirmed his
understanding of his responsibilities as a director.
Mr. Wei Hao and Mr. Luo Jinglun were appointed as Executive Director and Non-executive Director of the
Company, respectively, on 6 February 2024. They obtained the legal opinion referred to in Rule 3.09D of
the Listing Rules on 5 February 2024, and both confirmed their understanding of their responsibilities as
directors. Mr. Wei Hao resigned as Executive Director of the Company on 11 November 2024, due to a job
change.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(5) Explanation of punishment by securities regulatory bodies for the past three years
□Applicable ✓ Not applicable
(6) Other information on directors, supervisors and senior management
1. Equity interests of Directors, Supervisors or Chief Executives
As of the end of the reporting period, there was no record of interests or short positions (including the
interests and short positions which were taken or deemed to have under the provisions of the SFO) of the
Directors, Supervisors or chief executives of the Company in the shares, underlying shares and debentures
of the Company or any associated corporation (within the meaning of the SFO) in the register required to be
kept under section 352 of the SFO. The Company did not receive any notification of such interests or short
positions from any Directors, Supervisors or chief executives of the Company as required to be made to the
Company and the SEHK pursuant to the Listing Rules of SEHK.
During the reporting period, none of the Company or its subsidiaries had entered into any arrangement such
that the Company’s Directors, Supervisors or chief executives or their respective spouses or children under
the age of 18 could obtain any right to subscribe for any shares or debentures of the Company or any other
legal entities.
Other companies in which the Directors and Supervisors of the Company were directors or employees did not
have interests in the shares and underlying shares of the Company that were required to be disclosed to the
Company under Sections 2 and 3 of Part XV of the SFO.
2. Service contracts of Directors and Supervisors
Each of the Directors and Supervisors of the Company has entered into a service contract with the Company.
The Company and its subsidiaries did not enter into any director’s or supervisor’s service contracts prior to
31 January 2004, which were exempt from complying with the shareholders’ approval requirement under the
Listing Rules of SEHK. None of the Directors or Supervisors has entered into any service contract with the
Company which cannot be terminated by the Company within one year without payment of compensation
(other than statutory compensation).
3. Interests of Directors and Supervisors in contracts
None of the Directors or Supervisors of the Company had any direct or indirect interests in any transaction,
contract or arrangement of significance subsisting during the year to which the Company or any of its
subsidiaries was a party.
V. BOARD MEETINGS HELD DURING THE REPORTING PERIOD
Session of meeting
Date
Resolutions
The fifth meeting of the tenth
session of the Board
6 February 2024
A total of 5 resolutions were considered and passed
at the meeting with no objection.
The sixth meeting of the tenth
session of the Board
28 March 2024
A total of 12 resolutions were considered and
passed at the meeting with no objection.
The seventh meeting of the
tenth session of the Board
29 April 2024
A total of 4 resolutions were considered and passed
at the meeting with no objection.
The eighth meeting of the tenth
session of the Board
18 June 2024
A total of 2 resolutions were considered and passed
at the meeting with no objection.
The ninth meeting of the tenth
session of the Board
28 August 2024
A total of 5 resolutions were considered and passed
at the meeting with no objection.
The tenth meeting of the tenth
session of the Board
30 October 2024
A total of 2 resolutions were considered and passed
at the meeting with no objection.
The eleventh meeting of the
tenth session of the Board
19 November 2024
A total of 2 resolutions were considered and passed
at the meeting with no objection.
The twelfth meeting of the
tenth session of the Board
6 December 2024
A total of 3 resolutions were considered and passed
at the meeting with no objection.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
VI. PERFORMANCE OF DUTIES BY DIRECTORS
(1) Attendance at Board meetings and shareholders’ general meetings by Directors
Name of Director
Whether the
Director is an
Independent
Director
Attendance at Board meetings
Attendance at
shareholders’
general meetings
Number of Board
meetings to be
attended this
year
Number of
meetings
attended in
person
Number of
meetings
attended by
way of
telecommunication
Number of
meetings
attended by
proxy
Number of
absences
Whether two
consecutive
Board meetings
were not
attended in
person
Number of
shareholders’
general meetings
attended
Jiang Hui
No
2
2
2
0
0
No
1
Chen Shaohong
No
6
6
0
0
0
No
2
Luo Jinglun
No
8
8
7
0
0
No
3
Hu Dan
No
8
8
7
0
0
No
3
Zhang Zhe
No
8
8
7
0
0
No
3
Zhou Shangde
No
8
8
1
0
0
No
3
Tang Xiaofan
Yes
8
8
1
0
0
No
3
Qiu Zilong
Yes
8
8
1
0
0
No
3
Wang Qin
Yes
8
8
1
0
0
No
3
Wei Hao
(Resigned)
No
6
6
5
0
0
No
2
Wu Yong
(Resigned)
No
0
0
0
0
0
No
0
Hu Lingling
(Resigned)
No
2
2
1
0
0
No
1
Explanation on the failure to attend two consecutive Board meetings in person
□ Applicable ✓ Not applicable
Number of Board meetings held during the year
8
Including: Number of on-site meetings
1
Number of meetings held by way of telecommunication
1
Number of meetings held on-site combined with telecommunication
6
(2) Directors’ objections to the Company-related matters
□ Applicable ✓ Not applicable
(3) Performance of duties by Independent Directors
1. Attendance at meetings
During the reporting period, the Company held 3 shareholders’ general meetings, 8 Board meetings, 8
Audit Committee meetings, 4 Nomination Committee meetings and 2 Remuneration Committee meetings.
All Independent Directors attended all the meetings in person. Please see the relevant part of “Attendance
at Board meetings and shareholders’ general meetings by Directors”, “Audit Committee”, “Remuneration
Committee” and “Nomination Committee” of this chapter for details.
2. Recommendations for the Company and approval
During the reporting period, all Independent Directors of the Company faithfully performed their
responsibilities and obligations stipulated by laws, regulations, the Articles and the Work Rules of
Independent Directors (《獨立董事工作制度》) with an attitude of responsibility towards all of the shareholders
of the Company. They showed solicitude for the Company’s operation and compliance with laws, actively
participated in Board meetings and related meetings, and carefully reviewed each of the resolutions proposed
at the meetings. They also raised independent opinions according to relevant rules and facts according to
their knowledge of the material affairs of the Company, such as the appointment of auditors and director
and senior management nomination. During the process of preparation and disclosure of the annual report,
the Independent Directors fulfilled the duties required by the securities regulatory authorities and the Annual
Report Working Rules of the Audit Committee and Independent Directors (《審核委員會及獨立董事年報工作制
度》). They performed their duties in a proactive manner, and communicated with the Company and finance
and auditing firms adequately and carefully and raised practical suggestions. The Independent Directors
exerted their independent functions adequately and ensured the legitimate rights and interests of the
shareholders, especially minority shareholders, of the Company.
Firstly, the Independent Directors recommended the Company to cooperate with the external auditor in
relation to the auditing of the 2023 Annual Report in accordance with the agreed audit arrangements. The
Company promptly provided the accounting information and other relevant information required for the audit
to ensure the audit quality of the 2023 Annual Report.
Secondly, they recommended the appointment of Deloitte Touche Tohmatsu Certified Public Accountants LLP
as the auditor of the Company for 2024. The above resolution was passed upon consideration at the Board
meeting and the shareholders’ general meeting of the Company.
054
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Thirdly, they recommended to nominate Mr. Chen Shaohong and Mr. Jiang Hui as the Directors of the
10th session of the Board of the Company. The Board and the shareholders’ general meeting successively
reviewed and passed the above resolution.
Fourthly, they recommended to nominate Mr. Huang Wu, Mr. Chen Shaohong and Mr. Yang Yijian as the
senior management of the Company. The Board reviewed and passed the above resolution.
3. On-site working and inspection
During the reporting period, the Independent Directors of the Company mainly participated in on-site
meetings to gain knowledge of the Company’s daily operations. They also communicated with other
Directors, senior management and related staff of the Company through telephone and emails as detailed
below:
Time
Matter
Venue
Participant
28 March, 29 April, 18 June,
28 August, 30 October, 19
November, and 6 December
2024
Attendance at the sixth,
seventh, eighth, ninth,
tenth, eleventh, and twelfth
meetings of the tenth session
of the Board of the Company
Headquarters of the
Company
Tang Xiaofan,
Qiu Zilong, and
Wang Qin
6 February, 18 June, and 6
December 2024
Attendance at the Company’s
2024 First Extraordinary
General Meeting, 2023
Annual General Meeting, and
2024 Second Extraordinary
General Meeting
Headquarters of the
Company
Tang Xiaofan,
Qiu Zilong, and
Wang Qin
3 April 2024
Attendance at the Company’s
2023 Annual Results
Presentation
Headquarters of the
Company
Tang Xiaofan, Qiu
Zilong
29 August 2024
Attendance at the Company’s
2024 Semi-annual Results
Presentation
Headquarters of the
Company
Tang Xiaofan,
Wang Qin
31 October 2024
Attendance at the Company’s
2024 Third Quarter Results
Presentation
Headquarters of the
Company
Tang Xiaofan, Qiu
Zilong
4. Expression of independent opinions
During the reporting period, the Independent Directors of the Company expressed independent opinions as
follows:
Time
Meeting
Matter
Type of opinion
5 February 2024
First meeting of
the Nomination
Committee in 2024
Independent opinion on the
nomination of Mr. Huang
Wu as the Company’s
deputy general manager
Agreeing to nominate Mr. Huang
Wu as the Company’s deputy
general manager and submitting
it to the Board for review.
11 March 2024
Third meeting of the
Audit Committee in
2024
Independent opinion on the
Company’s appointment of
auditor for 2024
Agreeing to appoint Deloitte
Touche Tohmatsu Certified
Public Accountants LLP as the
Company’s auditors for 2024 and
submitting it to the Board for
review.
26 April 2024
Second meeting of
the Nomination
Committee in 2024
Independent opinion on
the nomination of Mr.
Chen Shaohong as the
Company’s director and
general manager
Agreeing to nominate Mr. Chen
Shaohong as the Company’s
director and general manager
and submitting it to the Board
for review.
27 August 2024
Third meeting of
the Nomination
Committee in 2024
Independent opinion on the
nomination of Mr. Yang
Yijian as the Company’s
deputy general manager
Agreeing to nominate Mr. Yang
Yijian as the Company’s deputy
general manager and submitting
it to the Board for review.
14 November
2024
Fourth meeting of
the Nomination
Committee in 2024
Independent opinion on the
nomination of Mr. Jiang
Hui as the Company’s
director
Agreeing to nominate Mr. Jiang
Hui as the Company’s director
and submitting it to the Board
for review.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
VII. SPECIAL COMMITTEES UNDER THE BOARD
✓ Applicable □Not applicable
(1) Members of the special committees under the Board
Type of special
committee
Name of member
Audit Committee
Tang Xiaofan (Chairman), Qiu Zilong, Wang Qin
Nomination Committee
Qiu Zilong (Chairman), Jiang Hui, Chen Shaohong, Tang Xiaofan, Wang Qin
Remuneration Committee
Tang Xiaofan (Chairman), Jiang Hui, Chen Shaohong, Qiu Zilong, Wang Qin
(2) The Audit Committee held 8 meetings during the reporting period
Date
Matters
Key opinions and suggestions
Other
performance of
duties
19 January 2024
Getting to know the Company’s
audit work arrangements in
the Company’s 2023 annual
report, getting to know the
Company’s internal audit work
for 2023, communicating with
the Company’s auditors before
the audit, and studying the
selection of an accounting firm
for the Company in 2024.
Suggesting
the
Company
to
provide
information
to
the
auditors in a timely manner
according to the audit plan,
cooperating for the completion
of the audit work; and proposing
that the Company immediately
initiate
the
selection
process
and
clarifying
matters
such
as
procurement
content,
procurement methods, scope of
invitation,
procurement
price,
and evaluation criteria.
None
7 February 2024
Reviewing
the
bidding
documents for the selection
of an accounting firm of the
Company for 2024 and studying
the promotion of the selection
of an accounting firm.
Agreeing
to
the
Tender
Document for the Company’s
Financial
Report
for
2024
and
Internal
Control
Audit
Project
and
putting
forward
r e q u i r e m e n t s
f o r
t h e
advancement of the selection
work.
None
11 March 2024
Reviewing
the
Company’s
f i n a n c i a l
s t a t e m e n t s
(preliminary draft) for 2023 and
providing suggestions on the
selection of the accounting firm
for 2024 and the audit fees.
Agreeing
to
appoint
Deloitte
Touche
Tohmatsu
Certified
Public Accountants LLP as the
Company’s auditors for 2024,
with an audit fee of RMB3 million
(including tax), and submitting it
to the Board for review.
None
058
059
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Date
Matters
Key opinions and suggestions
Other
performance of
duties
19 March 2024
Reviewing
the
Company’s
annual
financial
statements
for
2023
for
the
second
time,
communicating
with
the Company’s annual audit
accountants
regarding
the
audit situation of the financial
statements
for
2023,
and
issuing the Audit Supervision
Letter to the auditors.
Requiring
the
auditors
to
complete
the
audit
work
according
to
the
audit
plan
to ensure that the Company’s
annual report is disclosed on
time.
None
27 March 2024
Reviewing
the
Company’s
annual
report
and
financial
report for 2023, the internal
control
evaluation
report
for
2023,
the
independent
directors’
work
report
for
2023, the Audit Committee’s
performance report for 2023,
the
Company’s
evaluation
report on the performance of
the accounting firm in 2023,
and
the
Audit
Committee’s
report on the accounting firm’s
performance
of
supervisory
responsibilities for 2023.
Agreeing to the above report
and submitting it to the Board
for review or external disclosure.
None
26 April 2024
Reviewing
the
Company’s
financial report for the first
quarter of 2024, and listening
to the presentation of the
Company’s management on the
business operation in the first
quarter of 2024.
Agreeing
to
the
Company’s
financial report for the first
quarter of 2024 and submitting
it to the Board for review.
None
Date
Matters
Key opinions and suggestions
Other
performance of
duties
27 August 2024
Reviewing
the
Company’s
semi-annual
financial
report
for 2024, and listening to the
presentation of the Company’s
management on the business
operation in the first half of
2024.
Agreeing to the Company’s semi-
annual financial report for 2024
and submitting it to the Board
for review.
None
29 October 2024
Reviewing
the
Company’s
financial report for the third
quarter of 2024, and listening
to the presentation of the
Company’s management on the
business operation in the third
quarter of 2024.
Agreeing
to
the
Company’s
financial report for the third
quarter of 2024 and submitting
it to the Board for review.
None
(3) The Nomination Committee held 4 meetings during the reporting period
Date
Matters
Key opinions and suggestions
Other
performance of
duties
5 February 2024
Reviewing the nomination of
Mr. Huang Wu as the candidate
for the deputy general manager
of the Company.
Agreeing to nominate Mr. Huang
Wu
as
the
deputy
general
manager of the Company and
submitting it to the Board for
review.
None
26 April 2024
Reviewing the nomination of
Mr. Chen Shaohong as the
candidate
for
the
director
and general manager of the
Company.
Agreeing to nominate Mr. Chen
Shaohong as the director and
general manager of the Company
and submitting it to the Board
for review.
None
27 August 2024
Reviewing
the
nomination
of Mr. Yang Yijian as the
candidate for deputy general
manager of the Company.
Agreeing to nominate Mr. Yang
Yijian as the deputy general
manager of the Company and
submitting it to the Board for
review.
None
14 November
2024
Reviewing the nomination of
Mr. Jiang Hui as the candidate
for
the
director
of
the
Company.
Agreeing
to
nominate
Mr.
Jiang Hui as the director of the
Company and submitting it to
the Board for review.
None
060
061
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(4) The Remuneration Committee held 2 meetings during the reporting period
Date
Matters
Key opinions and suggestions
Other
performance of
duties
19 June 2024
Reviewing
the
assessment
results
for
the
Company’s
operating performance in 2023.
Agreeing
to
the
assessment
results.
None
27 August 2024
Reviewing the revision plan
for the Company’s Business
Performance
Assessment
Measures.
Agreeing to the revision plan and
submitting it to the Board for
review.
None
(5) Explanation on the matters with objection
□Applicable ✓ Not applicable
VIII. RISKS IDENTIFIED BY THE SUPERVISORY COMMITTEE IN THE
COMPANY
□Applicable ✓ Not applicable
The Supervisory Committee had no objection to the supervisory matters during the reporting period.
IX. EMPLOYEES OF PARENT COMPANY AND MAJOR SUBSIDIARIES AT THE
END OF THE REPORTING PERIOD
(1) Information of employees
Total number of current employees
36,565
Number of disengaged and retired employees for whom the parent company and
major subsidiaries shall be liable to expenses
17
Professional constitution
Passenger, freight transportation and transit operation personnel
16,462
Engineering personnel
4,727
Driving personnel
3,023
Public works personnel
3,006
Electricity personnel
1,915
Electricity and water supplies personnel
2,292
Building construction personnel
1,262
Various operations and other employees of subsidiaries
87
Technical and administrative personnel
3,791
Total
36,565
Education level
Postgraduate or above
168
University graduate
5,320
College for professional training
17,248
Other (secondary vocational school, high school and vocational technical school, etc.)
13,829
Total
36,565
062
063
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(2) Remuneration policy
✓ Applicable □Not applicable
Salary for the Company’s staff mainly comprises basic salary, performance-based salary and benefit plans.
The basic salary includes salary in respect of the position, salary in respect of skills and various allowances
and subsidies accounted for under salary payable in accordance with regulations. Performance-based salary
refers to salary calculated on the basis of economic benefits and social benefits, or piece-rate pay calculated
on the basis of workload, or performance-based salary calculated on the basis of job performance. Benefit
plans include various social insurance and housing funds paid as required by relevant policies. Please refer
to Note V(22) to the financial statements for the total wages and benefits paid by the Company to its
employees during the reporting period.
The Company implements a salary distribution policy in which labor remuneration is closely linked to
economic benefits, labor efficiency and personal performance, and the total amount of employees’
remunerations is closely linked to the Company’s operating efficiency. The salary distribution of employees
is based on the post labor evaluation and the employee performance appraisal. That is, in the salary
distribution, the basic labor factors such as labor skills, labor responsibilities, labor intensity and labor
conditions of different positions are evaluated as the basis to determine the basic salary standards of
employees, and to determine the actual remunerations of employees based on the technical and professional
level of employees and the actual labor quantity and quality evaluation, thereby giving full play to the
important role of the distribution system in the Company’s incentive mechanism, and mobilizing the
enthusiasm of the employees.
(3) Retirement plan
The employees of the Company have participated in the basic pension insurance organized and implemented
by the local labor and social security authorities, and the Company determines the base based on the
average monthly income of the employees in the previous year within the upper and lower limits of the basic
pension insurance payment bases stipulated by the local authorities, and pays monthly pension insurance
premiums to the local basic pension insurance agencies according to the specified proportions. Except for
the above-mentioned contributions, the Company will no longer undertake any further payment obligations,
and the corresponding expenses shall be included in the current profit or loss when incurred. There are no
forfeited contributions for basic pension insurance, as all contributions are fully vested in the employees
upon payment.
The employees of the Company have also participated in the supplementary pension insurance organized
and implemented by GRGC. The Company pays the supplementary pension insurance premiums to the GRGC
on a monthly basis based on the payment bases and standards of the supplementary pension insurance
stipulated by GRGC. The contributions from entities and the investment income therefrom in the individual
account of the employee supplementary pension insurance shall be attributed to the individual employee
according to the relevant rules. The part of the contributions of the supplementary pension insurance that
is not attributed to the individual employee due to the employee’s resignation will not be used to offset the
existing contributions, but will be transferred to the public account of the supplementary pension insurance
fund, and then assigned to the members of the supplementary pension insurance fund after performing the
approval procedures as required.
(4) Training plan
✓ Applicable □Not applicable
During the reporting period, the Company had a total of 97 occupational education management personnel
and a total of 811,485 people participated in various vocational trainings, which mainly include training on
safety regulations, training on job standardization, adaptability, qualification and continuing education. The
annual training plan of the Company for the year was 100% completed and the training expenses amounted
to approximately RMB74.4415 million.
(5) Labor outsourcing
□Applicable ✓ Not applicable
X. PLANS FOR PROFIT DISTRIBUTION OR COMMON RESERVE CAPITALIZATION
(1) Formulation, implementation and adjustment of cash dividend distribution policy
✓ Applicable □Not applicable
Pursuant to the related requirements of the “Supervisory Guidelines for Listed Companies No. 3 – Cash
Dividends for Listed Companies (Revised in 2023)” (《上市公司監管指引第 3 號－上市公司現金分紅(2023 年
修訂)》and “Guidelines on the Articles of Association of Listed Companies (Revised in 2023)” (《上市公司章程
指引(2023 年修訂)》) by CSRC, the Company amended provisions related to profit distribution in the Articles.
The amended Articles clearly stipulate the standards, percentages and related decision-making procedures
for cash dividend distribution by the Company, and the detailed conditions, decision-making procedures
and mechanisms for adjustments to the profit distribution policy by the Company, which will provide
systematic guarantee for the due diligence of the Independent Directors, the full expression of the minority
shareholders’ demands, and full protection of the legal interests of minority shareholders.
The principal requirements of cash dividends under the profit distribution policy of the Company are: where
the conditions for cash dividend distribution are met, the Company, principally, shall distribute dividends
in cash once a year. The profit distributed in cash by the Company shall not be less than 30% of the
distributable profits realized in the relevant year, and the accumulated profits distributed in cash of the
Company within any three consecutive years shall not be less than 30% of the three-year annual average
distributable profits. The Company may distribute interim cash dividends. When the Company convenes the
annual general meeting to consider the annual profit distribution plan, it may also consider and approve
the conditions, upper limit ratio, and amount for the interim cash dividends of the next year. The upper
limit for interim dividends of the next year considered at the annual general meeting should not exceed
the net profits attributable to the shareholders of the listed company for the corresponding period. The
Board of Directors shall formulate a specific interim dividend distribution plan based on the resolution of the
shareholders’ general meeting, provided that it complies with the conditions for profit distribution.
064
065
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
The Company has consistently adhered to a sustained and stable profit distribution policy, emphasized
reasonable returns to investors and strived for the sustainable development of the Company. In 2024,
the Company implemented the cash dividend for 2023, distributing a cash dividend of RMB0.07 per share,
totaling approximately RMB496 million. Since its listing in 1996, the Company has cumulatively distributed
cash dividends of about RMB12.8 billion, with a dividend distribution ratio of 64.31%.
(2) Specific explanation on cash dividend policy
✓ Applicable □Not applicable
Whether it complies with the provisions of the Articles of Association or the
requirements of the resolutions at shareholders’ general meetings
✓ Yes □No
Whether the dividend standards and ratios are definite and clear
✓ Yes □No
Whether the relevant decision-making procedures and mechanisms are sound
✓ Yes □No
Whether the independent directors performed their duties and played their roles
✓ Yes □No
Whether minority shareholders have the opportunity to fully express their opinions and
demands, and whether their legitimate rights and interests have been fully protected
✓ Yes □No
(3) If profit was made during the reporting period and the parent company’s profit
available to shareholders for distribution was positive, but no cash profit distribution
plan or proposal has been made, the Company shall disclose the reasons in detail and
the purpose and use plan of the undistributed profits
□Applicable ✓ Not applicable
(4) Profit distribution and transfer of capital reserve to share capital for the reporting
period
✓ Applicable □Not applicable
(Unit: RMB)
Number of bonus shares for every 10 shares (share)
0
Amount of dividend for every 10 shares (tax included)
0.70
Number of shares converted for every 10 shares (share)
0
Amount of cash dividend (tax included)
495,847,590
Net profit attributable to ordinary shareholders of the Company in the consolidated
financial statement
1,060,161,237
Ratio of cash dividend amount to net profit attributable to ordinary shareholders of
the Company in the consolidated financial statement (%)
46.77
The amount of cash used for the Share repurchase which was included in cash
dividend
0
Total amount of cash dividend (tax included)
495,847,590
Ratio of total dividend amount to net profit attributable to ordinary shareholders of
the Company in the consolidated financial statement (%)
46.77
(5) Cash dividends for the last three fiscal years
✓ Applicable □Not applicable
(Unit: RMB)
Cumulative amount of cash dividends distributed in recent three fiscal years
(including tax) (1)
991,695,180
Cumulative amount of repurchases and cancellations in recent three fiscal years (2)
0
Cumulative amount of cash dividends distributed and repurchases and cancellations
in recent three fiscal years (3) = (1) + (2)
991,695,180
Annual average net profit in recent three fiscal years (4)
41,261,748
Cash dividend ratio in recent three fiscal years (%) (5) = (3)/(4)
2,403.43
Net profit attributable to the ordinary shareholders of the listed company in the
consolidated financial statements for recent one fiscal year
1,060,161,237
Retained earnings at the end of the year in the Company’s financial statements in
recent one fiscal year
5,246,308,071
XI. THE COMPANY’S SHARE INCENTIVE SCHEME, EMPLOYEE STOCK
OWNERSHIP PLAN, OR OTHER EMPLOYEES’ INCENTIVE MEASURES AND
THEIR IMPACT
(1) Relevant incentives have been disclosed in temporary announcements and there
has been no progress or change in subsequent implementation
□ Applicable ✓ Not applicable
(2) Incentives not disclosed in temporary announcements or with follow-up progress
□Applicable ✓ Not applicable
(3) Share incentives granted to directors and senior executives during the reporting
period
□Applicable ✓ Not applicable
066
067
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(4)
Establishment and implementation of the Company’s appraisal mechanism and
incentive mechanism for senior management during the reporting period
✓ Applicable □Not applicable
In order to strengthen the incentives to and restrictions on senior management, motivate the senior
management to enhance their management capabilities and level, and review and evaluate the work and
performance of the individual members of senior management, the Company implements an objective
responsibility assessment mechanism for senior management, under which the Board and the senior
management of the Company and its subsidiaries signed target assessment responsibility letters at the
beginning of every year, and the indicators for such assessment include passenger and freight transportation
volume, revenue from transportation, safety, costs, profit and management. After the assessment period,
the Company provides incentive awards on an individual basis based on the completion of targets and tasks
by individual members of senior management and the assessment results.
XII. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROL
SYSTEM DURING THE REPORTING PERIOD
✓ Applicable □Not applicable
The Company has been striving to establish an internal control system in compliance with international
standards and regulatory requirements. Since 2006, the Company has started to establish and assess the
efficacy of internal control related to financial reporting in accordance with relevant requirements. Since
2011, the Company has started to consistently apply the Basic Regulations on Enterprise Internal Control (《企
業內部控制基本規範》) and Implementation Guidelines for Enterprise Internal Control (《企業內部控制配套指
引》) jointly promulgated by five ministries and commissions of the PRC, and has formed an internal control
system that centers on the different departments and units under the group companies, encompassing
finance management, information disclosure, budget management, fund management, contract management,
project management, procurement and payment, sales and payment collection, costs and expenses,
personnel management and preparation of financial reports. The Company has basically built up an internal
control system that strings up decision-making, implementation and supervision, an equalizing system that
separates different positions, and a management regulation and workflow that adapts to the operation
characteristics of the Company to form a relatively comprehensive assessment system for internal control.
During the reporting period, in accordance with national laws and regulations and the requirements of
various regulatory agencies, and in light of the Company’s own management needs, the Company continued
to implement the work division and collaboration among the three lines of defense of “self-inspection of
the effectiveness of internal control by business and functional departments, independent evaluation by the
internal audit department, and engagement of accounting firms to conduct internal control audits. “, while
organizing training and testing on risk management and internal control systems for all staff to consolidate
their risk management awareness, strengthening the ability of business departments to directly undertake
risk management and control, thereby realizing the daily operation mechanism of risk management internal
control of “risk management awareness of all staff, everyone participating in the internal control and the
responsibility of everyone to enforce compliance”, and promoting the overall sound operation of the internal
control mechanism.
During the reporting period, the Board of the Company continued to comply with the relevant domestic
and overseas requirements, and carried out a self-assessment of the effectiveness of its internal control.
For details of the assessment report, please refer to the Report on Internal Control 2024 disclosed on the
website of SSE (http://www.sse.com.cn), the HKExnews website of SEHK (http://www.hkexnews.hk) and the
website of the Company (http://www.gsrc.com).
Explanation on significant deficiencies in internal control during the reporting period
□Applicable ✓ Not applicable
XIII. MANAGEMENT AND CONTROL OVER THE SUBSIDIARIES DURING THE
REPORTING PERIOD
□Applicable ✓ Not applicable
XIV. INFORMATION ON THE AUDIT REPORT ON INTERNAL CONTROL
✓ Applicable □Not applicable
Deloitte Touche Tohmatsu Certified Public Accountants LLP has assessed the efficacy of the internal control
system related to the financial reporting by the Board, and has issued an unqualified audit report. For details
of the audit report, please refer to the 2024 Audit Report of Internal Control disclosed on the website of SSE
(http://www.sse.com.cn), the HKExnews website of SEHK (http://www.hkexnews.hk) and the website of the
Company (http://www.gsrc.com).
Will the Company disclose the audit report on internal control: Yes
Type of opinion on the Audit Report of Internal Control: Standard unqualified opinion
068
069
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. RECTIFICATION OF PROBLEMS IDENTIFIED DURING THE
SELF-EXAMINATION UNDER THE SPECIAL ACTION ON THE CORPORATE
GOVERNANCE OF LISTED COMPANIES
In 2021, in accordance with the requirements of the Announcement of the CSRC on Carrying out Special
Actions on the Corporate Governance of Listed Companies (CSRC Announcement [2020] No. 69) (《關於
開展上市公司治理專項行動的公告》(證監會公告[2020]69號)), the Company carried out comprehensive self-
examination on its corporate governance performance in 2018, 2019 and 2020, and no problems in corporate
governance were found in the Company. The relevant self-examination checklist had been filled out on 29
March 2021 through the government service platform of the CSRC (http://neris.csrc.gov.cn/portal).
XVI. CORPORATE GOVERNANCE REPORT
As far as the Company and its Directors are aware, during the reporting period, the Company has complied
with the relevant code provisions set out in the Corporate Governance Code in Appendix C1 to the Listing
Rules of SEHK with no material deviation or breach of the code provisions occurred. Meanwhile, the Company
has applied the principles set out in the Corporate Governance Code to corporate governance structure and
practices.
(1) Corporate goal, strategy and governance
1. Corporate strategy, business model and culture
The Company has set up a multi-tier corporate governance structure with the Board as the core. The
Board of the Company exercises management and decision-making powers according to the authorisations
granted at the shareholders’ general meeting in respect of development strategies, management structure,
investment and financing, planning, financial control, human resources and corporate governance, and
so forth. The Board is responsible for leading the Company’s development, ensuring the availability of
necessary resources for the Company to achieve preset development goals and supervising and inspecting
the Company’s development and operation.
The governance rules of the Company are based on the Articles, which covers overall policies, principles and
standards on corporate governance, compliance and code of conduct, aiming to clearly define the duties,
scope of authority and code of conduct of various parties, including the fiduciary and diligence duties of the
Directors of the Company.
The Company has discussed and analyzed the performance of the Company in its annual report every
year, including the impact of internal and external environment on the operation of the Company and its
movement trend, the actual operating results and its influencing factors for the year, the completion of
business plan and the plan for next year etc., in order to ensure the achievement of the development goals
of the Company.
2. Corporate governance function
The Board is responsible for performing corporate governance responsibilities, including but not limited to:
(i)
establishing and reviewing the Company’s policies and practices on corporate governance;
(ii)
reviewing and monitoring the training and continuous professional development of Directors and
senior management;
(iii)
reviewing and monitoring the Company’s policies and practices in compliance with legal and regulatory
requirements;
(iv)
establishing, reviewing and monitoring the code of conduct and compliance manual applicable to
employees and Directors;
(v)
reviewing the Company’s compliance with the Corporate Governance Code and disclosure in the
Corporate Governance Report.
The Board has also established 3 specialised committees, namely Audit Committee, Remuneration Committee
and Nomination Committee. The Articles and the Rules of Procedures for the Board Meetings have clearly
defined the powers of the Board in respect of development strategies, management structure, investment
and financing, planning, financial control, human resources and corporate governance, and so forth as well
as the supervision and inspection of the Company’s development and operation. Each specialised committee
has its terms of reference, which explicitly explains and defines its duties and powers, and has been
approved by the Board or the shareholders’ general meeting. The committees shall be authorised by the
Board to exercise their powers under the terms of reference. The committees shall be accountable to the
Board but shall not enjoy exclusive powers. They shall not replace the Board in exercising their decision and
management powers unless duly authorised.
(2) Composition and Nomination of the Board
1. Composition, succession and appraisal of the Board
According to the requirements of the Articles, the Board of the Company comprises 9 Directors. The Board
regularly evaluates its structure, number of members and composition (including their skills, knowledge,
experience, etc.) through the Nomination Committee.
As of the date of this report, the Board of the Company comprised Jiang Hui, Chen Shaohong and Zhou
Shangde as Executive Directors, Luo Jinglun, Hu Dan and Zhang Zhe as Non-executive Directors, and Tang
Xiaofan, Qiu Zilong and Wang Qin as Independent Non-executive Directors. The members of the Board
have various industry backgrounds and maintain diversity in terms of various aspects including experience,
skills and judgment, allowing the Board to analyse and discuss issues from different perspectives and make
decisions in a more cautious and careful manner.
070
071
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
The Company has published the latest list of Board members in a timely manner, which stated their roles
and functions, including their respective roles in each specialized committee, and indicated whether they
are Independent Directors. The capacity of each Director (Executive Directors, Non-executive Directors or
Independent Non-executive Directors) is identified in all corporate communications that disclose the names
of the Directors.
The Board reviews and concludes the performance of the Board annually in terms of its major tasks,
operation and financial information, as well as the actual implementation of corporate governance during
the year, and ultimately formulates the Work Report of the Directors to report to shareholders at the
shareholders’ general meetings. The Independent Non-executive Directors report their duties at the
shareholders’ general meetings annually. The Work Report of the Directors is reviewed at the annual general
meeting of the Company annually so as to evaluate the Board’s performance of duties.
During the reporting period, the Board of the Company comprises 3 Independent Non-executive Directors,
representing no less than one-third of the number of members of the Board, which complies with the
relevant requirements. In accordance with the requirements under Rule 3.13 of the Listing Rules of SEHK,
the Company believes that all Independent Non-executive Directors have complied with the relevant
guidelines as stipulated in such rule and are regarded as independent parties during the reporting period.
2. Appointment, re-election and removal
In accordance with the Articles, Directors are elected or replaced by shareholders’ general meetings.
Directors serve for a term of 3 years, and upon expiry of the term, their appointments are subject to re-
submission for consideration at a shareholders’ general meeting and they may offer themselves for re-
election. Independent Directors are eligible for re-election, subject to a maximum term of 6 years. A
cumulative voting system is adopted for the election of the Directors of the Company, and the Independent
Directors and Non-independent Directors vote separately. The requirements of the Company on the
qualifications and basic qualities of the Directors, the ways of nomination and the proposing procedures are
set out in the Articles. The Nomination Committee is responsible for qualification inspections and quality
assessments on the candidates for directorship, as well as making proposals to the Board and providing
explanations at the shareholders’ general meetings.
3. Nomination Committee
The Board has established the Nomination Committee, whose members are appointed by the Board and
the majority of which are Independent Directors. It currently consists of three Independent Non-executive
Directors and two Executive Directors. The Chairman of the committee is an Independent Director. Mr. Tang
Xiangdong, secretary to the Board of the Company, serves as the secretary to the Nomination Committee.
The Work Rules of Nomination Committee approved by the shareholders’ general meeting has been
published on the websites of the SEHK and the Company. According to the Work Rules of Nomination
Committee, the main duties of the Nomination Committee are to discuss and make recommendations on the
candidates, selection criteria and procedures for Directors, general managers and other senior management
of the company. The Nomination Committee has obtained sufficient resources from the Company to perform
its duties. During the reporting period, there was no circumstance where the Nomination Committee asked
to seek professional independent advice for the purpose of performing duties.
During the reporting period, the Nomination Committee held a total of 4 meetings, where all members
attended all meetings in person to make recommendations to the Board on the nomination of candidates for
directors and senior management.
For the composition of the Nomination Committee during the date of disclosure of this report and the annual
performance of duties of the Nomination Committee during the reporting period, please refer to the “Special
Committees under the Board” in this chapter.
4. Diversity
(1) Board diversity policy
The Company has established the Board diversity policy. According to the policy, when the Board selects,
evaluates and nominates Director candidates, it must consider, under the principle of meritocracy, a series of
diversified factors, including but not limited to gender, cultural and educational background, region, industry
and professional experience, knowledge reserve and service seniority, and take full consideration of the
actual situation and development needs of the Company and follow the diversity principle when forming the
Board.
The Board authorizes the Nomination Committee to monitor the implementation of the policy and to review
the policy, expand and review the measurable objectives when appropriate. As of the date of this report, the
diversity analysis of the nine members of the Board based on measurable objectives is set out as follows:
Gender
Male: 8
Female: 1
Age
51-55: 6
56-60: 3
Position
Executive Directors: 3
Non-executive Directors: 3
Independent Non-executive Directors: 3
Region
Mainland China: 8
Hong Kong: 1
Cultural and educational background
Masters: 4
Undergraduates: 5
Industry and professional experience
Accounting and finance: 2
Corporate management: 2
With experience related to the Company’s business: 5
After review, during the reporting period, the Company’s Board has demonstrated the principle of diversity
relatively well in terms of professional experience and background, service term, age, cultural background
and independence of the members, and met the Company’s goal for Board diversity.
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(2) Gender diversity of staff
The Company has been committed to the gender diversity of all staff (including senior management), and
strives to achieve gender diversity and gender equality among the staff. As at the end of the reporting
period, the total number of staff (including senior management) in the Company was 36,565, of which
76.18% (27,857) were male and 23.82% (8,708) were female. With consideration of the Company’s industry
characteristics, after review, the Company had achieved gender diversity of the staff during the reporting
period.
(3) Responsibilities of Directors, delegation of powers and procedures of the Board
1. Responsibilities of Directors
The Rules of Procedure of the Board Meetings, the work rules of each specialised committee and the Work
Rules of Independent Directors prepared by the Company have clearly stated the responsibilities of the
Directors to ensure their complete understanding on their roles and responsibilities.
Please refer to “Performance of Duties by Directors” in this chapter for the details of the attendance of
Directors and the annual overview of the performance of duties of the Independent Directors during the
reporting period.
During the reporting period, the Company’s Directors attended Board meetings and specialised committee
meetings in a prudent, responsible, proactive and serious manner. After gaining an understanding of the
Company’s operation and operating development, they capitalised on their respective professional experience
and expertise and provided independent judgments, knowledge and experience towards the matters
discussed, thereby enabling the Board to carry out effective discussions and make prompt yet prudent
decisions. They produced proactive and encouraging effect in ensuring the Board to work in the best interest
of the Company as its objective.
Upon the acceptance of the appointment and after the appointment, each Director and Supervisor of the
Company has to provide the information about their services in other companies in time. The relevant
information has been disclosed in the announcements and the shareholder documents relating to the
nomination and election of the Directors/Supervisors, and is available in the “Directors, Supervisors, Senior
Management” in this chapter.
In accordance with Appendix C3 to the Listing Rules of SEHK titled “Model Code for Securities Transactions
by Directors of Listed Issuers” and the relevant requirements of domestic securities regulatory authorities,
the Board formulated the “Securities Transaction Code” of the Company as a written guideline for securities
transactions of the Company by the Directors, the Supervisors and relevant staff members. After making
specific inquiry to all of the Directors, Supervisors and senior management, the Company confirms that all of
them have complied with the standards on securities transactions as stipulated in the aforementioned code
during the reporting period.
The Company places high importance on the continuing training of the Directors. Upon joining the Board,
each Director receives materials on training of directors which contains guidance on conduct and other
important matters related to governance. Apart from this, the Company provides the latest Directors’
responsibilities handbook to all Directors to inform them of the latest requirements and amendments of
the Listing Rules, and encourages all Directors to participate in related training courses and documents the
training record of the Directors. During the reporting period, Mr. Jiang Hui, Mr. Luo Jinglun and Mr. Chen
Shaohong, the newly appointed director of the Company, and Mr. Wei Hao (Resigned), had attended the
relevant training conducted by Hong Kong Law Firms and obtained the legal opinions required under Rule
3.09D of the Listing Rules of SEHK prior to their appointment taking effect. Tang Xiangdong, the Board
secretary of the Company, attended the “7th Follow-up Training of the Listed Company Board Secretaries in
2024” organized by the SSE.
2. Chairman and Chief Executive Officer
The Company does not establish the position of chief executive officer, and the duties of chief executive
officer are in charge by the general manager of the Company. The Company clearly defines the duties
between the Chairman and the general manager, so that the functions of the Board and management are
separated to ensure the balance of power and authority. As of the date of this report, the Chairman of the
Company is Mr. Jiang Hui, and the general manager of the Company is Mr. Chen Shaohong. There is no
affiliation or interest relationship between the Chairman and the President, including financial, business,
family or any other related relationships. The Chairman is responsible for taking charge and coordinating
the operation of the Board, providing leadership in the Board to set the Company’s overall development
strategies and directions and to achieve the Company’s goals, ensuring effective operation of the Board and
assuring good corporate governance practices and procedures for the Company. The general manager, with
the support and assistance of the Board and other senior management of the Company, is responsible for
coordinating and managing the Company’s business and operation, implementing the strategies laid down by
the Board and making day-to-day operating decisions.
The Board has established information reporting and delivery mechanism to ensure that the Directors can
obtain various information and messages required for their performance of duties on a timely basis. Please
refer to “Procedures of Board meetings and provision of and access to data” in this chapter for details.
The Board encourages the Directors to maintain a prudent and doubtful attitude as expected, to create an
open-minded discussion atmosphere to encourage any dissenting Directors to fully express their point of
views, and to motivate the Directors, especially Non-executive Directors to have effective contributions to
the Board.
The Company has set up a well-established governance structure and formulated multi-tier governance rules.
Please refer to “Corporate Governance” in this chapter for details.
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3. Management function
The functions of the Board and senior management of the Company are separated (details are set out in the
Articles, the Rules of Procedure of the Board Meetings and the Work Rules of General Manager) to protect
the relative independence of the decision-making of the Board and operating and management activities of
the Company.
The Board is responsible for leading the Company’s development, determining the strategic goals of the
Company and ensuring the availability of necessary financial and other resources for the Company to achieve
pre-set strategic goals. The Articles and the Rules of Procedure of the Board Meetings have clearly defined
the powers of the Board in respect of development strategies, management structure, investment and
financing, planning, financial control, human resources and corporate governance, and so forth as well as
the supervision and inspection of the Company’s development and operation.
Without material prejudice to or impairment of the overall capability to perform duties and authorities of the
Board, the Board has granted Executive Directors and the management certain authorities, so as to enhance
the overall quality and efficiency of decision-making of the Company. Specific information and management
procedures relating to the authorisation have been clearly set out in the Articles and the Rules of Procedure
of the Board Meetings.
4. Committees under the Board
Three specialised committees have been set up under the Board, namely the Audit Committee, Remuneration
Committee and Nomination Committee, and each committee has its terms of reference, which explicitly
explain and define their duties and powers, and they have been approved by the Board or shareholders’
general meeting. These committees are responsible for reviewing and monitoring specific matters of
the Company, such as the financial reports, accounting policies, and the nomination, assessment and
remuneration of the management, and making corresponding recommendations to the Board. Each
specialised committee has appointed a designated member of the management to be the secretary of
the committee and clearly defined the meeting and reporting procedures with reference to the rules of
procedures for the Board. The meeting minutes of the committees contain the details of the matters
discussed in the meetings and are maintained properly according to the file management system of the
Company upon the confirmation of all members.
Please refer to the “Special Committees under the Board” in this chapter for the composition of the special
committees of the Company’s Board as at the date of disclosure of this report and the annual performance
of duties of each specialised committee during the reporting period.
5. Procedures of Board meetings and provision of and access to data
The Board holds one regular meeting each quarter and convenes extraordinary meetings when necessary.
Every regular Board meeting is convened with the active participation of a majority of Directors who are
entitled to attend the meeting either in person or through electronic means of communication. Before
a regular meeting is held, the Company sends out the date of the meeting and a list of matters to be
submitted for consideration to all Directors to ensure that they have the opportunity to propose matters
for discussion and include them in the meeting agenda. Formal notice of all regular meetings is sent to all
Directors 14 days before the meeting and notice of extraordinary meetings is given within a reasonable
time in advance. If substantial shareholders or Directors have material conflicts of interest in the matters
discussed, the Company will hold a Board meeting for deliberation, and resolutions cannot be reached in
the form of written resolutions. When deliberating related matters, Directors who are connected or have
interests shall abstain from voting.
The meeting minutes of the Board and Board committees contain the details of the matters discussed in the
meeting, which include the factors taken into consideration, the questions proposed or the objection and the
decision made by each Director. The draft of the meeting minutes should be delivered to all Directors for
review within reasonable time after each meeting. The final version should be maintained properly according
to the file management system of the Company and the copy of which should be delivered to all Directors
for filing. The meeting minutes are also available for Directors’ access at any time through the secretary of
the Board.
According to the consideration and decision making needs, the Company may engage the professional
institutions including the accountants firms, lawyers and assessment institutions based on the actual situation
to issue a written report for Directors’ review. In addition, in accordance with the Rules of Procedure of the
Board Meeting and the relevant requirements, the Directors and the specialised committees may engage
professional institutions or professionals through established procedures to obtain professional advice,
and the fees so incurred shall be borne by the Company. To ensure the independence of the professional
institutions, the specific selection and employment work is conducted by the Independent Directors or
Audit Committee for the engagement of independent financial advisor for the connected transactions. The
selection and employment shall be determined by a majority of votes of the members and the members with
connected relationship or conflict of interest shall avoid from voting and shall not constitute a quorum.
The management of the Company has provided the Board, the specialised committees of the Board and
the Supervisory Committee with the materials and information necessary for the consideration of each
resolution within a reasonable period. After the Directors or Supervisors have raised reasonable inquiries,
the management shall make appropriate response or provide further information as soon as possible. Under
normal circumstances, the relevant documents containing the matters to be proposed for consideration
and discussion on the Board shall be delivered to all Directors and Supervisors at least 3 days before the
meetings. In addition, each Director and Supervisor is provided with channels to independently contact and
communicate with the Company’s senior management and secretaries of the specialised committees when
necessary.
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6. Company Secretary
The Secretary to the Board of the Company, who is appointed by the Board and reports to the Chairman of
the Board for daily routines, is a senior management member of the Company. The Secretary to the Board
is responsible for the communication and coordination among the Company, Directors and the shareholders,
giving advice to the Board and the management on corporate governance, information disclosure and
investor relationship management and the arrangement of specific matters. During the reporting period,
the Secretary to the Board of the Company is Mr. Tang Xiangdong. During the reporting period, Mr. Tang
Xiangdong had completed a total of not less than 15 hours of related training sessions so as to keep his
professional knowledge and skills up-to-date and better support the operation of the Board.
During their respective terms of office, all Directors of the Company are able to obtain from the Secretary to
the Board the relevant information and updates on the statutory, regulatory and other continuing obligations
of directors of listed companies on a timely manner, and directly contact the Secretary to the Board
individually and independently when necessary to obtain more detailed information and opinions.
(4) Audit, internal control and risk management
1. Financial reporting
In the regular financial reporting over the years, the Board has made efforts to comply with the
requirements of the relevant laws and the Listing Rules and prepared documents and disclosed information
under the principle of more and stricter as possible so as to fit the regulatory requirements of both Shanghai
and Hong Kong markets. Apart from an in-depth analysis on the operational and financial positions and the
major factors affecting the business performance, the Company also provided the information in relation
to the risks that faced in operating activities, responsive measures, development strategies and plans,
etc. in annual reports to enhance investors’ understanding on the Company’s business, management and
development trends. The Company has also prepared and published reports on quarterly results within
1 month upon the conclusion of the first quarter and the third quarter each year in compliance with the
requirements of the CSRC and the SSE. The Board shall be able to assess the Company’s performance and
make decisions on the basis of fully understanding the required information.
The Directors of the Company acknowledge their responsibility for preparing the accounts and supervising
the preparation of the accounts for each financial period, so that the accounts can accurately and fairly
reflect the business position, results and cash flow of the Company during the period. In the course of
preparing the accounts for the year ended at the end of the reporting period, the Directors adopted and
consistently applied appropriate accounting policies, made scrupulous judgments and estimates, and
prepared the accounts on a going concern basis.
The responsibility statements of the Directors and the auditors in respect of the preparation of the financial
statements of the Company are set out in the “Audit Report” in Chapter 10 “Financial Statements” in this
annual report.
2. Risk management and internal controls
A sound and operable internal control system is the foundation of good corporate governance. The Board is
responsible for the establishment and maintenance of the Company’s internal control system to review the
effectiveness of all important control measures for finance, operation, compliance and risk management,
and safeguard the rights and interests of shareholders and the Company’s assets. In accordance with the
requirements of laws and regulations such as the Company Law, Securities Law, the Basic Regulations
on Enterprise Internal Control (《企業內部控制基本規範》) and its related guidelines, and the Guidelines for
Internal Control of Listed Companies (《上市公司內部控制指引》), the Board established and enhanced risk
control measures of each part of the operation and management of the Company based on a risk-oriented
approach, i.e. the internal control management system of risk management. Such system aims at managing
instead of eliminating the risk of failure to achieve business objectives, and the Board shall only give
reasonable but not absolute assurance against material misstatements or loss.
The Board is responsible for continuous supervision of the Company’s risk management and internal control
system, and reviews the efficiency of the internal control systems of the Company and its subsidiaries at
least once a year. During the reporting period, the Board reviewed the soundness and effectiveness of the
Company’s internal control system and issued a self-evaluation report on internal control. The content of
the review included but was not limited to the relevant code provisions set out in the Corporate Governance
Code in Appendix C1 to the Listing Rules of the SEHK. In addition, the Company also engaged auditors
to audit the effectiveness of internal control related to the Company’s financial reports, and provide
independent and objective evaluations and suggestions in the form of audit reports. For the construction of
the Company’s internal control and risk management system, the responsibility statement of the Board, self-
evaluation, major defects (if any) and audit status, please refer to the relevant content of internal control
in this chapter and the 2024 Evaluation Report on Internal Control and the Audit Report on Internal Control
disclosed by the Company.
The Audit Department was established by the Company to operate an independent internal audit system.
Under the leadership of the Board and the supervision of the Audit Committee, the Audit Department of the
Company is responsible for supervision, examination, evaluation and implementation of internal controls
for risk management by the Company and its controlling subsidiaries, coordination of internal control and
audit, and conducting independent audits on the adequacy and effectiveness of the Company’s operating
and managing activities and internal control system. Audit plans for each year shall be discussed and
determined by the Audit Committee, and key auditing results shall be discussed with the Audit Committee
each time. The Audit Department must principally report to the General Manager and may report to the
Chairman of the Audit Committee directly. All internal audit reports shall be submitted to the Chairman of
the Board, General Manager, Chief Financial Officer, audited departments and related management of such
departments. The Board and the Audit Committee of the Company will actively monitor the quantity and
significance of inspection results submitted by internal audit department, and remedial actions adopted by
relative departments.
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The Company established an internal control system of material information, procedures and internal
control measures for addressing and disseminating price identification-sensitive information. The Company
has established systems relating to information disclosure, registration and management of insiders
and prevention of misuse and dissemination of sensitive information. The Company has established
comprehensive procedures and internal control measures ranging from reporting, identification, auditing and
disclosures to the final announcement of inside information, for the purpose of inside information processing
and dissemination. The Secretary of the Board assists the Board in managing information in relation to inside
information. Meanwhile, the Company carries out information disclosure in a true, accurate, complete, and
timely manner pursuant to the laws and regulations and requirements under the Listing Rules, the Articles of
Association, and Management Measures of Information Disclosure (《信息披露管理辦法》) of the Company, so
as to ensure equal opportunities of all investors to promptly access relevant information of the Company.
The Company has established the Anti-fraudulent Work Regulation (《反欺詐舞弊工作條例》) and specified
the key areas of anti-fraudulent work and the matters including the division of roles, fraud prevention and
control, procedures for accusing, investigating, handling and reporting on fraud cases. The Company has set
up independent hotlines and email boxes for reporting any suspected cases which are posted on the internal
and external websites of the Company as channels for staff at all levels and stakeholders of the Company to
reflect and report the violation of the ethical issues or suspected fraud cases in connection to the Company
or its staff.
During the reporting period, the Board confirmed that the Company has developed sufficient and adequate
identification, management and reporting systems and procedures for the material risks it is subject to in
achieving its strategic objectives. The Board continued to monitor risks and receive support from various
professional committee and senior management.
3. Audit Committee
The Board has established the Audit Committee, whose members are appointed by the Board, currently
consisting of three Independent Non-executive Directors. All members of the Audit Committee have
appropriate academic and professional qualifications or relevant financial management skills. Mr. Tang
Xiangdong, Secretary to the Company’s Board, is the secretary to the Audit Committee.
The Working Rules of the Audit Committee (《審核委員會工作條例》) approved by the Board of Directors
has been published on the websites of the SEHK and the Company. According to the requirements of
the Working Rules of the Audit Committee of the Company, the principal duties of the Audit Committee
include but are not limited to reviewing the financial performance of the Company and its subsidiaries and
confirming the nature and scope of audit, as well as supervising the establishment of the internal control and
compliance of the Company with the relevant laws and regulations. The Audit Committee shall also discuss
matters raised by the internal auditors and external auditors of the Company and regulatory authorities to
ensure that all appropriate recommendations are implemented. The Audit Committee has been provided with
adequate resources from the Company to perform its duties. The Board has no disagreement in relation
to the Audit Committee’s advice on the selection, appointment, resignation or removal of auditors of the
Company. During the reporting period, there was no circumstance where the Audit Committee asked to seek
professional independent advice for the purpose of performing duties.
During the reporting period, the Audit Committee held 8 meetings, where all members attended in person,
to examine, review and supervise the Company’s internal control work related to financial reporting, review
the Company’s financial statements and auditing results of the auditors, and recommend the appointment of
external auditors to the Board.
For the composition of the Audit Committee as of the date of disclosure of this report and the annual
performance of duties of the Audit Committee during the reporting period, please refer to the “Special
Committees under the Board” in this chapter.
4. Auditor’s remuneration and auditor-related matters
During the reporting period, the Company appointed Deloitte Touche Tohmatsu Certified Public Accountants
LLP as its auditor. As of the end of the reporting period, the Company’s auditor has served a term of
one year. The rotation of people in charge of auditing affairs and endorsing certified public accountant is
in compliance with the China’s CPA Independence Standard No. 1 – Requirements for Independence of
Financial Statement Audit and Review Business (Cai Kuai [2024] No. 29) of the Ministry of Finance of the
PRC.
During the reporting period, the Company paid the auditor a remuneration of RMB3 million (including an
internal control audit fee of RMB0.30 million) for the audit business, and a remuneration of RMB0.48 million
for the non-audit business. The main service provided for the non-audit business was to issue a special audit
report on the Company’s disposal of certain assets.
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(5) The Remuneration Committee and Remuneration
The Board has established the Remuneration Committee, whose members are appointed by the Board and
the majority of which are Independent Directors, currently consisting of three Independent Non-executive
Directors and two Executive Directors, with an Independent Director serving as the Chairman. Mr. Tang
Xiangdong, Secretary to the Company’s Board, is the secretary to the Remuneration Committee.
The Working Rules of the Remuneration Committee (《薪酬委員會工作條例》) approved by the Board of
Directors has been published on the websites of the SEHK and the Company. According to the requirements
of the Working Rules of the Remuneration Committee of the Company, the principal duties of the
Remuneration Committee include reviewing and making recommendations to the Board in respect of the
remuneration packages for the Directors and the Supervisors of the Company, as well as approving the terms
and conditions of the Executive Directors’ service contracts. The remuneration policy of the Company seeks
to provide, in accordance with the Company’s business development strategies, reasonable remuneration to
attract and retain high caliber executives. The Remuneration Committee shall obtain benchmark information
from internal and external sources in relation to the market standard for remuneration and packages offered
in the industry, and consider the overall performance of the Company when determining the Directors’ and
the Supervisors’ emoluments and recommending the Directors’ and the Supervisors’ emoluments to the
Board. The Remuneration Committee is provided with adequate resources from the Company to perform its
duties. During the reporting period, there was no circumstance where the Remuneration Committee asked to
seek professional independent advice for the purpose of performing duties.
During the reporting period, the Remuneration Committee held 2 meetings, where all members attended in
person, to examine the assessment results of the Company’s operating performance for 2023 and review the
revision plan for the Company’s Business Performance Assessment Measures.
For the composition of the Remuneration Committee during the date of disclosure of this report and the
annual performance of duties of the Remuneration Committee during the reporting period, please refer to
the “Special Committees under the Board” in this chapter.
The Company discloses the remunerations of Directors, supervisors and senior management by name. For
details, please refer to the “Directors, Supervisors and Senior Management” in this chapter.
(6) Shareholder engagement
1. Effective communication
The Secretary to the Board of the Company is in charge of the Company’s information disclosure and
investor relations. The Company has formulated Working Rules of Secretary to the Board (《董事會秘書工作條
例》), Management Measures of Information Disclosure (《信息披露管理辦法》) and the Management System for
Investor Relations (《投資者關係管理制度》). The Company has strictly fulfilled its disclosure obligations and
commenced management of investor relations in accordance with the relevant requirements.
The Company advocates a corporate culture that respects investors and holds itself accountable to investors.
The Company has established a smooth communication channel with investors and has enhanced mutual
trust and interaction by disclosing sufficient information to investors, initiating various investor relations
activities, and maintaining respect for investors’ right to knowledge and freedom of choice, and rewarding its
shareholders.
(1) Information disclosure
Credible information disclosure can effectively build a bridge of communication and understanding between
investors, regulatory authorities, the public and the Company. This can facilitate a broader and more
thorough understanding of the Company’s values. For years, according to the basic principles of openness,
impartiality and fairness, the Company has been striving to comply with the requirements of the relevant
laws and the Listing Rules, and fulfilling its information disclosure obligations in a timely and accurate
manner. The Company takes the initiative to understand investors’ concerns and voluntarily discloses
information in response to these concerns so as to increase its transparency.
During the reporting period, the Company promptly completed the preparation and disclosure of its annual,
interim and quarterly reports and released various announcements and other shareholders’ documents and
information, disclosing in detail of the following information of the Company: operations of the Board, the
Supervisory Committee and shareholders’ general meetings, operating conditions, investments, dividends
and distribution, corporate governance, and so forth. Moreover, the Company consistently provided in-depth
and comprehensive analyses on its operating and financial positions as well as the major factors affecting
its business performance in its annual reports and interim reports with a view to strengthening investors’
understanding on the operation, management, and development trends of the Company.
(2) Shareholder communication policy
On the basis of competent disclosure of information, the Company maintains effective two-way
communication with investors through various channels and conveys information that investors are concerned
with, so as to boost their confidence in the Company’s future development. Meanwhile, the Company
extensively collects feedback from the market to elevate the standards of the Company’s governance and
operations management.
A.
Making the investor hotline, investor relations e-mail box, and the Investors’ Message section on the
Company’s website publicly known, and promptly responding to investors’ enquiries.
B.
Holding performance briefings on a regular basis to actively conduct positive interactions with
investors, and earnestly responding to investors’ general concerns and the questions raised on site.
C.
Allowing investors and the public to check information such as the Company’s basic information, rules
for corporate governance, information disclosure documents, and profiles of Directors, Supervisors
and the senior management at any time on the Company’s website.
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D.
Promptly handling and replying to investors’ messages through the “e-interaction” platform developed
by SSE for listed companies and investors.
The Board of the Company has reviewed the implementation of the Company’s shareholder communication
policy during the reporting period. Considering the aforesaid communication channels with investors,
the steps taken and the activities held by the Company, the Company believes that the shareholder
communication policy of the Company has been effectively implemented during the reporting period.
(3) Shareholders’ returns
Since its listing, the Company has always insisted on rendering returns to shareholders. During the reporting
period, the Company implemented the cash dividend for 2023, has distributed cash dividends of RMB0.07
per share, totaling cash dividends of approximately RMB496 million, with an aggregate cash dividend amount
of approximately RMB12.8 billion since its listing in 1996, and a dividend distribution rate of 64.31%. For
details of the Company’s cash dividend policy, please refer to the “Plans for Profit Distribution or Common
Reserve Capitalization” in this chapter.
(4) Changes in the Articles of Association
On 18 June 2024, the Company convened the 2023 Annual General Meeting to consider and approve
the amendments to the Articles of Association. For details of amendments of articles, please refer to the
announcement in relation to the Amendments to the Articles of Association published by the Company on
the website of SSE (http://www.sse.com.cn) on 29 March 2024 and the shareholders' circular in relation
to Proposed Appointment of Executive Director, Proposed Appointment of Shareholder Representative
Supervisor, Proposed Amendments to the Articles of Association and Notice of 2023 Annual General Meeting
published by the Company on the HKExnews website of the SEHK (http://www.hkexnews.hk) on 29 April
2024.
2. Shareholders’ General meetings
The Company encourages all shareholders to attend the shareholders’ general meetings. During the reporting
period, a total of 3 shareholders’ general meetings were held by the Company. For details, please refer to
the “Summary of Shareholders’ General Meetings” in this chapter.
The Company serves a notice of at least 21 days prior to the date of the annual general meeting and at
least 15 days prior to the date of the extraordinary general meeting, and provides the shareholders with
any information necessary for them to attend and make decision at the meeting. Each separate matter in
substance submitted to the shareholders’ general meeting for consideration is put forth respectively as a
separate resolution. In accordance with the requirements of the Articles, two or more shareholders holding,
in aggregate, 10% or more of the shares of the Company carrying the right to vote at the meeting sought
shall have the right, by delivery of one or more written requests signed in counterparts through mail or
electronic mail to the Board or the company secretary, to require an extraordinary general meeting or a
class meeting to be called by the Board for the business specified in such request. The Board shall proceed
as soon as possible to convene an extraordinary general meeting or a class meeting after receiving such
request. Shareholders individually or collectively holding 3% or more of the shares of the Company carrying
the right to vote at the meeting sought shall have the right, by delivery of one or more written requests
signed in counterparts through mail or electronic mail to the Board or the company secretary, to require the
proposal set forth in the written request to be considered at the meeting sought.
Shareholders shall attend general meetings to raise questions or opinions in relation to the results, operation,
strategies and/or management of the Company. The Chairman of the Board or authorized representatives,
appropriate management and administrative personnel and the external auditors of the Company shall attend
shareholders’ general meetings to answer questions from the shareholders. Each shareholders’ general
meeting shall make reasonable arrangements for a questioning session for the shareholders. At any other
time other than at the shareholders’ general meeting, the shareholders may make their inquiries and express
their opinions to the Board by calling the investor hotline of the Company or in writing (including facsimile,
letter, e-mail, online message, etc.). The Company has published detailed methods of contact through its
website, notices of the shareholders’ general meeting, circulars to the shareholders and annual reports for
the shareholders to express their opinions or make any inquiries.
The Company provides detailed explanations on the documents for convening a shareholders’ general
meeting on such matters as the way of filling in voting forms, rights of the shareholders, voting procedures
and method of vote counting to ensure that the shareholders are familiar with the voting procedures by way
of poll. A shareholder who is unable to attend the general meeting in person may appoint his or her proxy
(the proxy needs not to be a shareholder of the Company) to attend and vote at the general meeting.
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Chapter 5
Environmental and Social Responsibilities
I. EXPLANATION OF ENVIRONMENTAL PROTECTION EFFORTS
Whether relevant mechanism has been established for environmental protection
Yes
Fund invested in environmental protection during the reporting period (unit: RMB ten
thousand)
107.60
(1) Explanation of environmental protection efforts taken by companies and their
substantial subsidiaries which are the key discharging units announced by the
environmental protection department
✓ Applicable □Not applicable
The Company’s locomotive maintenance depot in Guangzhou is a key waste discharging unit for water
environment and the key unit under supervision for environment risks of Guangzhou for the year of 2024
as announced by the Bureau of Environmental Protection of Guangzhou Municipality. The locomotive
maintenance depot in Guangzhou will strictly follow the requirements of relevant laws and regulations,
fully implement the ecological environment protection measures and requirements, earnestly fulfill the
main responsibility of ecological environment protection, and publicly disclose environmental information in
accordance with the law and consciously accept social supervision.
1. Information on discharge
✓ Applicable □Not applicable
For details of the information on discharge, construction and operation of pollution prevention and control
facilities, environmental protection administrative license, contingency plan for environmental emergencies
and environmental self-monitoring program of the locomotive maintenance depot in Guangzhou in 2024,
please refer to the “2024 Corporate Environmental Information Disclosure Annual Report” publicly disclosed
by the locomotive maintenance depot in Guangzhou through the “System for the Corporate Disclosure of
Environmental Information” of the Guangdong Provincial Department of Ecology and Environment at the
following website: https://www-app.gdeei.cn/gdeepub/front/dal/report/list.
2. Administrative penalties due to environmental issues during the reporting period
□ Applicable ✓Not applicable
During the reporting period, the Company and its major subsidiaries did not receive any administrative
penalties due to environmental issues.
(2) Explanation on the environmental protection efforts by the companies other than
the key discharging units
□ Applicable ✓ Not applicable
(3) Relevant information conducive to protecting ecology, preventing pollution, and
fulfilling environmental responsibilities
✓ Applicable □ Not applicable
Please refer to the relevant content of “Environmental Protection and Technological Innovation” section in the
Social Responsibility Report 2024 disclosed by the Company on the website of SSE (http://www.sse.com.cn), the
HKExnews website of SEHK (http://www.hkexnews.hk) and the website of the Company (http://www.gsrc.com).
(4) Measures taken to reduce carbon emissions during the reporting period and their
effects
Whether carbon reduction measures are taken
Yes
Emission reduction in carbon dioxide equivalent
(unit: ten thousand tonne)
3.42
Types of carbon reduction measures (such as
using clean energy to generate electricity,
using carbon reduction technologies in the
production process, developing and producing
new products that help reduce carbon
emissions, etc.)
Prioritize the use of electric locomotives during
transportation, and minimize the use of diesel
locomotives; replace more environmentally friendly
facilities and equipment on trains and production
sites, exert great efforts on the treatment of
dirt, sewage, waste gas and noise; continue the
greening and planting of trees along railway lines
to increase carbon absorption through natural
ecosystems; promote paperless office and paperless
communication,
advocate
the
use
of
double-
sided printing paper to reduce paper consumption;
continue saving electricity, strengthen the use of
natural light in production and living places, install
energy-saving lighting equipment, and advocate
turning off lights at will to avoid unnecessary use
of lights, preferential procurement and use of new-
energy vehicles, and effectively reduce electricity
consumption; and advocate green travel, etc.
086
087
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
II. INFORMATION ON THE WORK TO FULFILL SOCIAL RESPONSIBILITIES
(1) Whether to separately disclose social responsibility report, sustainable development
report or ESG report
✓ Applicable □Not applicable
During the reporting period, the Company had no major environmental protection or other major social
security issues. For the performance of the Company’s social responsibilities in transportation safety,
environmental protection, social welfare and other aspects during the reporting period, please refer to the
Social Responsibility Report 2024 disclosed by the Company on the website of SSE (http://www.sse.com.cn)
and the HKExnews website of SEHK (http://www.hkexnews.hk) and the website of the Company
(http://www.gsrc.com).
(2) Social responsibility work
✓ Applicable □ Not applicable
Please refer to the Social Responsibility Report 2024 disclosed by the Company on the website of SSE
(http://www.sse.com.cn), the HKExnews website of SEHK (http://www.hkexnews.hk) and the website of the
Company (http://www.gsrc.com).
III. PARTICULAR EFFORTS IN CONSOLIDATING AND EXPANDING THE
ACHIEVEMENTS OF POVERTY ALLEVIATION AND RURAL REVITALIZATION
✓ Applicable □ Not applicable
Please refer to the relevant content of “Employee Rights and Social Welfare” section in the Social Responsibility
Report 2024 disclosed by the Company on the website of SSE (http://www.sse.com.cn), the HKExnews website
of SEHK (http://www.hkexnews.hk) and the website of the Company (http://www.gsrc.com).
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 6
Matters of Importance
I. FULFILLMENT OF COMMITMENTS
(1) Commitments made by related parties, including de facto controllers of the
Company, shareholders, related parties, purchasers and the Company during or
continued into the reporting period
✓ Applicable □Not applicable
Background
Type
Party
Contents of the commitment
Date of
commitment
Execution
time limit
Term of
commitment
Strict
compliance
in time
Commitment related
to initial public
offering
Resolve
industry
competition
GRGC
GRGC and any of its subsidiaries will not engage,
directly or indirectly, by any means, in any
business activities that may compete with the
railway transportation and related businesses of
the Company within the service territory of the
Company. After the acquisition of the transportation
operational assets and businesses of Guangzhou-
Pingshi section, GRGC and any of its subsidiaries will
not compete with the Company either.
–
No
–
Yes
Resolve
related party
transactions
GRGC
GRGC will reduce the number of related party
transactions as much as practicable in its operation
relations with the Company. For necessary related
party transactions, GRGC will perform these related
party transactions on the basis of openness, justice
and fairness without abusing its position as the
largest shareholder of the Company and behaving in
a manner that is detrimental to the interests of the
Company.
–
No
–
Yes
Other commitments
Other
GRGC
GRGC leased the occupied land in the Guangzhou-
Pingshi section to the Company after acquiring
such land by means of authorized operation. The
leasing agreement entered into by the Company
and GRGC became officially effective on 1 January
2007, pursuant to which the land use right for the
Guangzhou-Pingshi Railway line was leased to the
Company by GRGC for a term of 20 years. It has
been agreed by the two parties that the annual land
rent should not exceed RMB74 million.
December 2006
Yes
20 years
Yes
Other
GRGC
GRGC has issued a letter of commitment to the
Company in October 2007, in relation to the
enhancement of the management of undisclosed
information.
October 2007
No
–
Yes
089
088
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(2) The Company’s explanation of whether the original profit forecast has been met
with respect to the assets or projects and the reasons therefor, where such assets or
projects are subject to profit forecast and remain within the forecast period during the
reporting period
□ Achieved □ Not achieved ✓ Not applicable
(3) Fulfillment of performance commitment and its impact on goodwill impairment test
□ Applicable ✓ Not applicable
II. APPROPRIATION OF FUNDS BY CONTROLLING SHAREHOLDER AND OTHER
RELATED PARTIES FOR NON-OPERATING PURPOSES DURING THE REPORTING
PERIOD
□ Applicable ✓ Not applicable
III. ILLEGAL GUARANTEE
□ Applicable ✓ Not applicable
IV. EXPLANATION OF ACCOUNTANT’S “NON-STANDARD AUDIT REPORT”
BY THE BOARD OF THE COMPANY
□ Applicable ✓ Not applicable
V. THE COMPANY’S ANALYSIS AND EXPLANATION OF THE REASONS FOR
AND IMPACT OF CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES OR RECTIFICATION OF SIGNIFICANT ACCOUNTING ERRORS
✓ Applicable □ Not applicable
Changes in the Company’s accounting policies during the reporting period are set out in Note III(31) to the
financial statements.
VI. ENGAGEMENT AND DISMISSAL OF ACCOUNTING FIRM
(Unit: RMB ten thousand)
Originally engaged
Currently engaged
Name of domestic accounting firm
PricewaterhouseCoopers
Zhong Tian LLP
Deloitte Touche Tohmatsu
Certified Public Accountants LLP
Remuneration of domestic accounting firm
295
270
Term of engagement of domestic
accounting firm (years)
16
1
Names of certified public accountants in
domestic accounting firm
/
Huang Tianyi, Chen Wanlin
Cumulative number of years of audit services
provided by certified public accountants of
domestic accounting firm
/
1
Name of international accounting firm
PricewaterhouseCoopers
/
Remuneration of international accounting firm
200
/
Term of engagement of international
accounting firm (years)
22
/
Name
Remuneration
Accounting firm for internal control
Deloitte Touche Tohmatsu Certified
Public Accountants LLP
30
Explanation of the appointment and dismissal of the accounting firms
✓Applicable □ Not applicable
Upon completion of the annual audit work for the Company for 2023, PricewaterhouseCoopers Zhong Tian
LLP has provided audit services to the Company for 16 consecutive years, and PricewaterhouseCoopers has
provided audit services to the Company for 22 consecutive years. According to the relevant provisions of the
Administrative Measures for State-owned Enterprises and Listed Companies to Select and Engage Accounting
Firms (Cai Kuai [2023] No. 4) jointly issued by the Ministry of Finance of the People’s Republic of China, the
State-owned Assets Supervision and Administration Commission of the State Council and the China Securities
Regulatory Commission, state-owned enterprises shall not, in principle, retain the same accounting firm for
more than 8 consecutive years. In order to ensure the independence and objectivity of the audit work, the
Company was required to change the accounting firm and conducted an open selection through a bidding
process.
090
091
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Explanation of the decrease in audit fees by more than 20% (inclusive) compared to
the previous year
✓ Applicable □ Not applicable
As the Company’s securities were deregistered in the United States and exempted from disclosure obligations
in January 2023, and the Listing Rules of SEHK recognize China Accounting Standards for Business
Enterprises, the Company adopted China Accounting Standards for Business Enterprises uniformly for
preparing a single set of financial statements for each fiscal year beginning on or after 1 January 2024. The
Company engaged a domestic accounting firm that is recognized by the Ministry of Finance of the People’s
Republic of China and the CSRC and is authorized to provide audit services under Chinese Mainland auditing
standards to Chinese Mainland-incorporated issuers listed in Hong Kong.
VII. RISK OF DELISTING
□ Applicable ✓ Not applicable
VIII. BANKRUPTCY AND RESTRUCTURING
□ Applicable ✓ Not applicable
IX. MATERIAL LITIGATION AND ARBITRATION
□ The Company had material litigation and arbitration during this year
✓ The Company did not have any material litigation and arbitration during this year
X. ALLEGED VIOLATIONS, PENALTIES, AND RECTIFICATION MEASURES
INVOLVING THE LISTED COMPANY AND ITS DIRECTORS, SUPERVISORS,
SENIOR MANAGEMENT, CONTROLLING SHAREHOLDER, AND DE FACTO
CONTROLLER
□ Applicable ✓ Not applicable
XI. EXPLANATION OF THE INTEGRITY OF THE COMPANY AND ITS
CONTROLLING SHAREHOLDER AND DE FACTO CONTROLLER DURING THE
REPORTING PERIOD
□ Applicable ✓Not applicable
XII. MATERIAL RELATED PARTY (CONNECTED) TRANSACTIONS
(1) Related party (connected) transactions related to daily operations
✓ Applicable □Not applicable
To facilitate the operations of the Company, the Company has entered into a comprehensive service
framework agreement with CSRG (including GRGC and its subsidiaries) on 28 September 2022 for a term of
three years from 2023 to 2025, which had been approved by independent shareholders at the extraordinary
general meeting of the Company on 6 December 2022. As the largest shareholder holding 37.12% shares
of the Company, GRGC is the Company’s controlling shareholder according to the Listing Rules, and CSRG is
the de facto controller of the Company, and is, therefore, a related (connected) party of the Company.
The related party transactions related to daily operations entered into by the Company during the reporting
period are set out in Note XI(5) to the financial statements. The Company confirms that these transactions
constitute connected transactions (including continuing connected transactions) described under Chapter
14A of the Listing Rules of SEHK, have complied with the rules and requirements of Chapter 14A of the
Listing Rules of SEHK, and have been implemented in accordance with the comprehensive service framework
agreement entered into between the Company and CSRG and strictly complied with the pricing principles of
the relevant transactions.
092
093
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
1. Transactions in relation to purchase of goods and receipt of services
(Unit: RMB)
Parties
Related party (connected)
relationship
Type of
transaction
Description of transaction
Basis of pricing
Amount of
transaction
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Receipt of services
Receipt of railway network settlement
services provided by GRGC and its
subsidiaries
Settled according to the prices
determined by CSRG
4,013,579,350
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Receipt of services
Train services provided by GRGC and
its subsidiaries
By consultation according to
full cost pricing, or settled
according to the prices
determined by CSRG
862,019,334
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Purchase of goods
Purchase of materials and supplies
from GRGC and its subsidiaries
Pricing based on agreement
815,047,087
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Receipt of services
Repair and maintenance services
provided by GRGC and its
subsidiaries
By consultation according to
full cost pricing
265,938,569
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Receipt of services
Receipt of construction work services
provided by GRGC and its
subsidiaries
Based on fixed budget amount
approved for national
railway works
203,010,365
Associates
Associates
Receipt of services
Receipt of construction work services
provided by associates
Based on fixed budget amount
approved for national
railway works
79,344,366
Associates
Associates
Receipt of services
Repair and maintenance services
provided by associates
By consultation according to
full cost pricing
615,502
Associates
Associates
Receipt of services
Train services provided by associates
By consultation according to
full cost pricing, or settled
according to the prices
determined by CSRG
4,428,674
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Receipt of services
Receipt of railway network settlement
services provided by CSRG and its
subsidiaries
Settled according to the prices
determined by CSRG
1,344,328,073
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Purchase of goods
Purchase of materials and supplies
from CSRG and its subsidiaries
Pricing based on agreement
81,848,645
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Receipt of services
Train services provided by CSRG and
its subsidiaries
By consultation according to
full cost pricing, or settled
according to the prices
determined by CSRG
18,625,783
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Receipt of services
Repair and maintenance services
provided by CSRG and its
subsidiaries
By consultation according to
full cost pricing
1,591,313
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Receipt of services
Receipt of construction work
services provided by CSRG and its
subsidiaries
Based on fixed budget amount
approved for national
railway works
26,593,783
2. Transactions in relation to sales of goods and provision of services
(Unit: RMB)
Parties
Related party (connected)
relationship
Type of transaction
Description of transaction
Basis of pricing
Amount of
transaction
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Provision of services
Provision of train services and railway
operation services to GRGC and its
subsidiaries
Train services: By consultation
according to full cost
pricing, or settled
according to the prices
determined by CSRG;
Railway operation service:
Based on agreement
according to cost plus
pricing
5,370,152,595
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Provision of services
Provision of railway network
settlement services to GRGC and its
subsidiaries
Settled according to the prices
determined by CSRG
1,619,456,744
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Sales of goods
Sales of materials and supplies to
GRGC and its subsidiaries and other
services
Pricing based on agreement
54,257,887
GRGC and its
subsidiaries
Controlling shareholder and
its subsidiaries
Provision of services
Provision of construction work services
to GRGC and its subsidiaries
Based on fixed budget amount
approved for national
railway works
78,187,994
Associates
Associates
Sales of goods
Sales of materials and supplies to
associates
Pricing based on agreement
5,425,718
Associates
Associates
Provision of services
Provision of train services to
associates
By consultation according to
full cost pricing, or settled
according to the prices
determined by CSRG
2,121,600
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Provision of railway network
settlement services to CSRG and its
subsidiaries
Settled according to the prices
determined by CSRG
2,619,679,456
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Provision of railway operation services
to CSRG and its subsidiaries
Based on agreement according
to cost plus pricing
1,787,756,700
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Provision of truck maintenance
services to CSRG and its
subsidiaries
Settled according to the prices
determined by CSRG
602,257,095
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Provision of train services to CSRG
and its subsidiaries
By consultation according to
full cost pricing, or settled
according to the prices
determined by CSRG
297,100,364
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Provision of construction work services
to CSRG and its subsidiaries
Based on fixed budget amount
approved for national
railway works
349,755,421
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Revenue from passenger
transportation
Settled according to the prices
determined by CSRG
10,978,764,616
CSRG and its
subsidiaries
De facto controller and its
subsidiaries
Provision of services
Revenue from freight transportation
Settled according to the prices
determined by CSRG
1,622,820,308
094
095
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
3. Confirmation of continuing connected transactions by Independent Non-executive Directors
The Company has established its internal control procedures to ensure that continuing connected transactions
are conducted in compliance with the relevant connected transaction requirements pursuant to the Listing
Rules of SEHK. The internal auditors of the Company also reviewed these transactions and ensured the
adequacy and effectiveness of the internal control procedures, and provided its findings to the Independent
Non-executive Directors. After making appropriate enquiries with the management, the Independent Non-
executive Directors of the Company confirmed that the continuing connected transactions entered into by
the Company during the reporting period were entered into in the ordinary and usual course of its business
and conducted on normal commercial terms, in accordance with the relevant agreements governing them on
terms that are fair and reasonable and in the interests of the Company and its shareholders as a whole, and
did not exceed the caps disclosed in the previous announcements.
4. Confirmation of continuing connected transactions by the auditors
The auditors of the Company have carried out procedures on the connected transactions for the year ended
at the end of the reporting period in accordance with the Hong Kong Standard on Assurance Engagements
3000 “Assurance Engagement Other Than Audits or Reviews of Historical Financial Information” and with
reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong
Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants, and reported that, with
respect to the above connected transactions:
(i)
nothing has come to the attention of the Company’s auditors that would cause them to believe
that the disclosed continuing connected transactions have not been approved by the Board of the
Company;
(ii)
for transactions involving the provision of goods or services by the Company, nothing has come to
the attention of the Company’s auditors that would cause them to believe that such transactions were
not, in all material respects, in accordance with the pricing policies of the Company;
(iii)
nothing has come to the attention of the Company’s auditors that would cause them to believe that
such transactions were not entered into, in all material respects, in accordance with the terms of the
agreements governing such transactions;
(iv)
with respect to the aggregate amount of each of the continuing connected transactions, nothing has
come to the attention of the Company’s auditors that would cause them to believe that the aggregate
amounts of such continuing connected transactions have exceeded the maximum aggregate annual
caps as disclosed in the previous announcements issued by the Company.
(2) Related party transactions related to acquisitions or disposals of assets or equity
□ Applicable ✓ Not applicable
(3) Material related party transactions in relation to joint external investments
□ Applicable ✓ Not applicable
(4) Related claims and debts
✓ Applicable □ Not applicable
Unit: RMB ten thousand
Related parties
Relationship
Fund provided to related parties
Opening
balance
Amount
incurred
Closing
balance
Zengcheng Lihua Stock
Company Limited
Controlling subsidiary
1,231
–
1,231
Total
1,231
–
1,231
Impact of related claims and debts on the Company
No material impact on the operating results and
financial condition of the Company.
Note: Due to the deterioration of the operating conditions of Zengcheng Lihua Stock Company Limited, the Company
expects that all the balances maintained with Zengcheng have become uncollectible, so full provision for bad debts
has been made against it in previous years.
096
097
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
(5) Financial business between the Company and any related financial company, any
financial company controlled by the Company and any related party
□ Applicable ✓ Not applicable
(6) Contracts entered into with the controlling shareholder and its subsidiaries
During the reporting period, except as disclosed in this annual report, there was no other material contract
between the Company or any of its subsidiaries and the controlling shareholder or its subsidiaries.
(7) Other material related party transactions
□ Applicable ✓ Not applicable
XIII. MATERIAL CONTRACTS AND THE IMPLEMENTATION THEREOF
(1) Trust, contracted businesses and leasing affairs
□ Applicable ✓ Not applicable
(2) Guarantees
□ Applicable ✓ Not applicable
(3) Entrusted cash asset management carried out by other person(s)
□ Applicable ✓ Not applicable
(4) Pledges
During the reporting period, the controlling shareholder and the de facto controller of the Company had
not pledged the interests in all or part of the shares of the Company held as support for the Company’s
indebtedness, guarantees or other liabilities.
(5) Loan agreements and their performance
During the reporting period, the Company and its subsidiaries did not enter into any loan agreements or
violate any terms of any loan agreements which had a significant impact on its operation.
(6) Other material contracts
□ Applicable ✓ Not applicable
XIV. PROGRESS OF THE USE OF PROCEEDS
□ Applicable ✓ Not applicable
XV. EXPLANATION OF OTHER MAJOR EVENTS OF SIGNIFICANT IMPORTANCE
TO INVESTORS’ VALUE JUDGMENTS AND INVESTMENT DECISIONS
□ Applicable ✓ Not applicable
098
099
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 7
Changes in Shares and Particulars of Shareholders
I. PARTICULARS OF CHANGES IN SHARE CAPITAL
(1) Changes in shares
During the reporting period, there was no change in the Company’s total number of shares or to the
structure of its share capital.
(2) Changes in shares with selling restrictions
□ Applicable ✓ Not applicable
II. PARTICULARS OF SECURITIES ISSUED AND LISTINGS
□ Applicable ✓ Not applicable
III. PARTICULARS OF SHAREHOLDERS AND DE FACTO CONTROLLER
(1) Total number of shareholders
Total number of ordinary shareholders as of the end of the reporting period
156,402
Total number of ordinary shareholders as of the end of the previous month before the
date of disclosure of the annual report
158,010
(2) Shareholdings of the top ten shareholders and top ten holders of tradable shares (or
holders of shares without selling restrictions) as of the end of the reporting period
Unit: shares
Particulars of the shareholding of the top ten shareholders (excluding shares lent through refinancing)
Name of shareholder (in full)
Increase/
decrease
during the
reporting
period
Number of
shares held
at the end of
the period
Percentage
(%)
Number of
shares held
with selling
restrictions
Shares pledged,
marked or frozen
Nature of
shareholder
Status
Number
China Railway Guangzhou Group Co.,
Ltd.
–
2,629,451,300
37.12
–
Nil
–
State-owned legal person
HKSCC NOMINEES LIMITED (Note)
1,313,700
1,418,756,999
20.03
–
Nil
–
Foreign legal person
Lin Naigang
–
124,000,000
1.75
–
Nil
–
Domestic natural person
Industrial and Commercial Bank
of China Limited — Baoying
Quality Selected Mixed Securities
Investment Fund
68,000,000
80,000,000
1.13
–
Nil
–
Other
Agricultural Bank of China Limited —
Dacheng Rui Xiang Mixed Securities
Investment Fund
(2,165,600)
77,998,901
1.10
–
Nil
–
Other
Hong Kong Securities Clearing Company
Limited
(130,249,762)
51,155,035
0.72
–
Nil
–
Foreign legal person
China Everbright Bank Corporation —
Dacheng Strategic Return Mixed
Securities Investment Fund
3,165,200
45,933,347
0.65
–
Nil
–
Other
China Merchants Bank Co., Ltd.
— Baoying New Value Flexible
Allocation Mixed Securities
Investment Fund
19,000,000
40,000,000
0.56
–
Nil
–
Other
Industrial and Commercial Bank
of China Limited — Dacheng
Competitive Advantage Mixed
Securities Investment Fund
(864,100)
39,930,500
0.56
–
Nil
–
Other
China Construction Bank Corporation
— Baoying Enhanced Income Bond
Securities Investment Fund
26,000,001
36,000,001
0.51
–
Nil
–
Other
100
101
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Particulars of the shareholding of the top ten
holders of shares without selling restrictions
(excluding shares lent through refinancing)
Name of shareholder
Number of shares
held without
selling restrictions
Class and number of shares
Class
Number
China Railway Guangzhou Group Co., Ltd.
2,629,451,300
RMB ordinary shares
2,629,451,300
HKSCC NOMINEES LIMITED (Note)
1,418,756,999
Overseas listed
foreign shares
1,418,756,999
Lin Naigang
124,000,000
RMB ordinary shares
124,000,000
Industrial and Commercial Bank of China Limited — Baoying
Quality Selected Mixed Securities Investment Fund
80,000,000
RMB ordinary shares
80,000,000
Agricultural Bank of China Limited — Dacheng Rui Xiang Mixed
Securities Investment Fund
77,998,901
RMB ordinary shares
77,998,901
Hong Kong Securities Clearing Company Limited
51,155,035
RMB ordinary shares
51,155,035
China Everbright Bank Corporation — Dacheng Strategic Return
Mixed Securities Investment Fund
45,933,347
RMB ordinary shares
45,933,347
China Merchants Bank Co., Ltd. — Baoying New Value Flexible
Allocation Mixed Securities Investment Fund
40,000,000
RMB ordinary shares
40,000,000
Industrial and Commercial Bank of China Limited — Dacheng
Competitive Advantage Mixed Securities Investment Fund
39,930,500
RMB ordinary shares
39,930,500
China Construction Bank Corporation — Baoying Enhanced
Income Bond Securities Investment Fund
36,000,001
RMB ordinary shares
36,000,001
Explanation of designated repurchase account among the top
ten shareholders
Nil.
Explanation on the above-mentioned shareholders’ voting rights
by and on behalf of others, and abstention from voting rights
Nil.
Statement regarding the connected relationship or acting in
concert arrangements of the above shareholders
Among the shareholders mentioned above, (1) “HKSCC NOMINEES LIMITED
and Hong Kong Securities Clearing Company Limited” are subsidiaries of Hong
Kong Exchanges and Clearing Limited; (2) “Industrial and Commercial Bank of
China Limited — Baoying Quality Selected Mixed Securities Investment Fund,
China Merchants Bank Co., Ltd. — Baoying New Value Flexible Allocation
Mixed Securities Investment Fund, and China Construction Bank Corporation
— Baoying Enhanced Income Bond Securities Investment Fund” are under the
management of Baoying Fund Management Co., Ltd.; (3) “Agricultural Bank of
China Limited — Dacheng Rui Xiang Mixed Securities Investment Fund, China
Everbright Bank Corporation — Dacheng Strategic Return Mixed Securities
Investment Fund, and Industrial and Commercial Bank of China Limited —
Dacheng Competitive Advantage Mixed Securities Investment Fund” are under
the management of Dacheng Fund Management Company Limited. Except
for the above, the Company is not aware of any of other shareholders being
related parties or parties acting in concert as defined in the “Administrative
Measures on Acquisitions of Listed Companies (《上市公司收購管理辦法》)”.
Note: HKSCC NOMINEES LIMITED represents 香港中央結算(代理人)有限公司 and the H Shares of the Company held by
it were held on behalf of various clients. The A shares of the Company held by Hong Kong Securities Clearing
Company Limited were held on behalf of various clients.
Particulars of participation in lending of shares by way of securities lending and refinancing by
the shareholders holding more than 5% of the shares, top ten shareholders and top ten holders
of shares without selling restrictions
□ Applicable ✓ Not applicable
Changes in shareholdings of the top ten shareholders and the top ten holders of shares without
selling restrictions as compared with the previous period due to lending of shares by way of
securities lending and refinancing/share return
□ Applicable ✓ Not applicable
Shareholdings and selling restrictions of top ten shareholders with selling restrictions
□ Applicable ✓ Not applicable
(3) So far as the Directors, Supervisors and senior management of the Company
are aware, as of the end of the reporting period, the following persons, other than
Directors, Supervisors and senior management of the Company, held interests or
short positions in the shares and underlying shares of the Company as recorded in the
register required to be kept under Section 336 of Part XV of the SFO, as follows:
Unit: shares
Name of shareholder
Class of
shares
Number of
shares held
Capacity
Percentage
of share
capital of the
same class (%)
Percentage
of total share
capital (%)
China Railway Guangzhou
Group Co., Ltd.
A Shares
2,629,451,300(L)
Beneficial owner
46.52(L)
37.12(L)
Kopernik Global
Investors LLC
H Shares
114,897,054(L)
Investment manager
8.03(L)
1.62(L)
Note: The letter ‘L’ denotes a long position.
(4) Strategic investors or general legal persons becoming top 10 shareholders by way
of placing of new shares
□ Applicable ✓ Not applicable
102
103
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IV. INFORMATION OF THE CONTROLLING SHAREHOLDER AND DE FACTO
CONTROLLER
(1) Information on the controlling shareholder
1. Legal person
✓ Applicable □ Not applicable
Name
China Railway Guangzhou Group Co., Ltd.
Person in charge or Legal
Representative
Jiang Hui
Date of incorporation
5 December 1992
Principal businesses
Organization and management of railway passenger and freight
transportation, technologies and other industrial development, etc.
Equity interests in other domestic
and overseas listed controlling and
invested companies during the
reporting period
Nil
2. Chart on the property rights and controlling relationship between the Company and the
controlling shareholder
✓ Applicable □ Not applicable
China Railway Guangzhou Group Co., Ltd.
Guangshen Railway Company Limited
37.12%
(2) Information on the de facto controller
1. Legal person
✓ Applicable □ Not applicable
Name
China State Railway Group Co., Ltd.
Person in charge or Legal
Representative
Guo Zhuxue
Date of incorporation
14 March 2013
Principal businesses
Diversified operations with railway transportation services of
passengers and freights as its main business.
Equity interests in other domestic
and overseas listed controlling and
invested companies during the
reporting period
China Railway Tielong Container Logistics Co. Ltd. (600125), Daqin
Railway Co. Ltd. (601006), Beijing-Shanghai High Speed Railway
Co., Ltd. (601816), Beijing Tieke Shougang Railway-Tech Co., Ltd.
(688569), Gemac Engineering Machinery Co., Ltd. (301048), China
Railway Special Cargo Logistics Co., Ltd. (001213) and China Railway
Harbin Group of Technology Corporation (688459).
2. Chart on the property rights and controlling relationship between the Company and the de
facto controller
✓ Applicable □ Not applicable
Guangshen Railway Company Limited
China State Railway Group Co., Ltd.
China Railway Guangzhou Group Co., Ltd.
100%
37.12%
104
105
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
3. Companies controlled by the de facto controller through trust or other asset management
methods
□ Applicable ✓ Not applicable
(3) Other information on controlling shareholder and de facto controller
□ Applicable ✓ Not applicable
V. CIRCUMSTANCES WHERE THE CUMULATIVE PLEDGED SHARES OF THE
COMPANY’S CONTROLLING SHAREHOLDER OR LARGEST SHAREHOLDER
AND THEIR PERSONS ACTING IN CONCERT ACCOUNT FOR MORE THAN
80% OF THEIR TOTAL SHAREHOLDINGS IN THE COMPANY
□ Applicable ✓ Not applicable
VI. OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDING OF 10%
OR ABOVE
□ Applicable ✓ Not applicable
VII. EXPLANATION OF SHARE SALE RESTRICTIONS
□ Applicable ✓ Not applicable
VIII. PARTICULARS OF SHARE REPURCHASE DURING THE REPORTING
PERIOD
□ Applicable ✓ Not applicable
IX. PUBLIC FLOAT
As of the end of the reporting period, the public float of the Company was 4,454,085,700 shares,
representing 62.88% of the total share capital of the Company. Calculated at RMB3.43 per Share, which
is equal to the closing price of the Company’s A Shares as at the end of the reporting period, the market
capitalization of the public float was approximately RMB15.278 billion. The public float of the Company was
in compliance with the requirements of the relevant rules on the sufficiency of public float.
X. OVERLAP OF INTERESTS
During the reporting period, there was no overlap of interests among the Directors, chief executive and such
other persons of the Company.
XI. REPURCHASE, SALE OR REDEMPTION OF THE LISTED SHARES OF THE
COMPANY
As of the end of the reporting period, there was no repurchase, sale or redemption by the Company, or any
of its subsidiaries, of the listed shares of the Company. During the reporting period and as at the end of
the reporting period, the Company did not hold any treasury shares (including any treasury shares held or
deposited with the Central Clearing and Settlement System).
XII. PRE-EMPTIVE RIGHTS
Under the Articles and the PRC laws, there is no pre-emptive right which requires the Company to offer new
shares to its existing shareholders on a pro rata basis.
XIII. TRANSACTIONS INVOLVING ITS OWN SECURITIES
During the reporting period, neither the Company nor its subsidiaries had issued or granted any convertible
securities, options, warrants or other similar warrants, or had any redeemable securities or share option
schemes.
XIV. TAX DEDUCTION FOR HOLDERS OF LISTED SECURITIES
As of the end of the reporting period, holders of listed securities of the Company were not entitled to obtain
any tax relief due to their holding of such securities pursuant to the laws of the PRC.
106
107
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 8
Information Regarding Preference Shares
□ Applicable ✓ Not applicable
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 9
Information Regarding Bonds
I. CORPORATE BONDS (INCLUDING ENTERPRISE BONDS) AND DEBT
FINANCING INSTRUMENTS OF NON-FINANCIAL ENTERPRISES
□ Applicable ✓ Not applicable
II. CONVERTIBLE CORPORATE BONDS
□ Applicable ✓ Not applicable
109
108
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
AUDITOR’S REPORT
De Shi Bao (Shen) Zi (25) No.P03681
To the Shareholders of Directors of Guangshen Railway Company Limited
1.
OPINION
We have audited the financial statements of Guangshen Railway Company Limited (“Guangshen
Railway”), which comprise the consolidated and Company’s balance sheets as at 31 December 2024,
and the consolidated and Company’s income statements, the consolidated and Company’s statements
of cash flow and the consolidated and Company’s statements of changes in owners’ equity for the
year then ended, and the notes to the financial statements.
In our opinion, the accompanying financial statements of Guangshen Railway is prepared and present
fairly, in all material respects, the consolidated and Company’s financial position as of 31 December
2024, and the consolidated and the Company’s results of operations and cash flows for the year then
ended in accordance with Accounting Standards for Business Enterprises.
2.
BASIS FOR OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of Guangshen Railway in accordance with
the code of ethics for Chinese Certified Public Accountants, and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
3.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements for the current year. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. The followings are key audit matters that we
have determined to communicate in the auditor’s report.
Recognition for income from entrusted transportation service
As disclosed in Note (V) 35 and Note (XV) 4 to the financial statements, in 2024, income from
entrusted transportation service presented by Guangshen Railway in the consolidated and the
Company’s financial statements both amounted to RMB8,023,161,992, accounting for 29.62% and
29.65% of the total consolidated and the Company’s operating income, respectively. Given the
significance of income from entrusted transportation service to the financial statements, there is an
inherent risk that the management manipulates the revenue recognition for specific objectives or
expectations. Accordingly, we identify the recognition for income from entrusted transportation service
as a key audit matter during the audit of the consolidated and the Company’s financial statements.
Audit procedures we performed for the audit matters mainly include:
(1)
Test the operating effectiveness of critical internal controls related to recognition for income
from entrusted transportation service.
(2)
Perform analytical procedure on income from entrusted transportation service and analyse
reasonableness of movements in income from entrusted transportation service.
(3)
Check the entrusted transportation service contracts using sampling method, understand the
main terms and conditions of the contracts, and assess whether the recognition method of
the income from entrusted transportation service meets the requirements of the Accounting
Standards for Business Enterprises.
110
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
3.
KEY AUDIT MATTERS (continued)
Recognition for income from entrusted transportation service (continued)
(4)
Check supporting documents (including contracts, settlement bills and collection records, etc.)
related to income from entrusted transportation service using sampling method.
(5)
Analyse whether the unit cost of labour for the workload of the customer’s entrusted routes is
reasonable by comparing the unit cost of labour for the workload of Guangshen Railway’s own
routes using sampling method.
(6)
Perform confirmation procedures for the balance of accounts receivable and the transaction
amount for the current year with major customers.
4.
OTHER INFORMATION
The management of Guangshen Railway is responsible for other information. The other information
comprises the information included in the annual report for 2024, but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
5.
RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED
WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS
The management of Guangshen Railway is responsible for the preparation and fair presentation of the
financial statements in accordance with Accounting Standards for Business Enterprises, and designing,
implementing and maintaining internal control that is necessary to enable the financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing Guangshen
Railway’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the management either intends to
liquidate Guangshen Railway or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Guangshen Railway’s financial reporting
process.
6.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion solely to you. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with China Standards on Auditing will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
112
113
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
6.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS (continued)
As part of an audit in accordance with China Standards on Auditing, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
(1)
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than that resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(2)
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3)
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(4)
Conclude on the appropriateness of the management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on Guangshen Railway’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause Guangshen Railway to cease to continue as a going concern.
(5)
Evaluate the overall presentation, structure and content of the financial statements (including
the disclosures), and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
(6)
Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within Guangshen Railway to express an opinion on the financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Chapter 10
Financial Statements
6.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS (continued)
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current year and are
therefore the key audit matters. We describe these matters in our independent auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Deloitte Touche Tohmatsu CPA LLP
Chinese Certified Public Accountant
(Engagement Partner)
Shanghai, China
Chinese Certified Public Accountant
27 March 2025
This auditor’s report of the financial statements and the accompanying financial statements are English
translations of the independent auditor’s report and the financial statements prepared under accounting
principles and practices generally accepted in the People’s Republic of China. These financial statements
are not intended to present the financial position and results of operations and cash flows in accordance
with accounting principles and practices generally accepted in other countries and jurisdictions. In case the
English version does not conform to the Chinese version, the Chinese version prevails.
114
115
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2024
RMB
Item
Notes
31 December
2024
31 December
2023
Current Assets:
Cash and bank balances
V.1
1,934,900,900
1,482,463,336
Notes receivable
V.2
192,750,000
—
Accounts receivable
V.3
5,940,313,417
6,239,551,856
Prepayments
V.4
37,261,405
22,693,639
Other receivables
V.5
957,959,832
632,761,629
Including: Interest receivable
—
—
Dividends receivable
—
—
Inventories
V.6
328,302,221
289,526,749
Non-current assets due within one year
V.8
63,900,000
1,950,000
Other current assets
V.7
199,010,404
129,331,991
Total Current Assets
9,654,398,179
8,798,279,200
Non-current Assets:
Debt investments
V.8
—
60,000,000
Long-term receivables
—
16,743,981
Long-term equity investments
V.9
326,702,449
298,743,058
Investments in other equity instruments
V.10
478,375,517
462,695,717
Fixed assets
V.11
21,978,835,338
22,785,584,687
Construction in progress
V.12
415,115,695
561,177,814
Right-of-use assets
V.13
1,288,501,143
1,304,747,553
Intangible assets
V.14
1,635,464,141
1,690,250,686
Goodwill
V.15
281,254,606
281,254,606
Long-term prepaid expenses
1,148,304
32,708,669
Deferred tax assets
V.16
465,724,288
883,835,180
Other non-current assets
V.17
41,736,069
58,925,815
Total Non-current Assets
26,912,857,550
28,436,667,766
TOTAL ASSETS
36,567,255,729
37,234,946,966
RMB
Item
Notes
31 December
2024
31 December
2023
Current Liabilities:
Short-term borrowings
V.18
300,176,917
700,385,000
Notes payable
V.19
—
200,000,000
Accounts payable
V.20
2,650,474,072
4,913,237,216
Receipts in advance
5,133,304
11,490,275
Contract liabilities
V.21
322,663,026
228,525,571
Employee benefits payable
V.22
404,444,410
408,683,620
Taxes payable
V.23
105,456,864
90,622,733
Other payables
V.24
3,014,436,331
1,373,640,812
Including: Interest payable
—
—
Dividends payable
12,881,200
13,744,301
Non-current liabilities due within one year
V.25
66,779,309
76,105,907
Other current liabilities
8,917,024
19,549,633
Total Current Liabilities
6,878,481,257
8,022,240,767
Non-current Liabilities:
Long-term borrowings
V.26
500,000,000
780,000,000
Lease liabilities
V.27
1,328,652,169
1,326,891,951
Deferred income
V.28
741,960,624
702,384,062
Deferred tax liabilities
V.16
48,941,663
51,434,387
Total Non-current Liabilities
2,619,554,456
2,860,710,400
TOTAL LIABILITIES
9,498,035,713
10,882,951,167
116
117
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
RMB
Item
Notes
31 December
2024
31 December
2023
SHAREHOLDERS’ EQUITY:
Share capital
V.29
7,083,537,000
7,083,537,000
Capital reserve
V.30
11,641,244,237
11,577,380,553
Other comprehensive income
V.31
193,700,790
181,940,940
Special reserve
V.32
160,640,794
81,228,476
Surplus reserve
V.33
3,300,227,369
3,194,362,899
Retained profits
V.34
4,729,884,867
4,271,435,690
Total equity attributable to shareholders of the Company
27,109,235,057
26,389,885,558
Minority interests
(40,015,041)
(37,889,759)
TOTAL SHAREHOLDERS’ EQUITY
27,069,220,016
26,351,995,799
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
36,567,255,729
37,234,946,966
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
BALANCE SHEET OF THE COMPANY
AT 31 DECEMBER 2024
RMB
Item
Notes
31 December
2024
31 December
2023
Current Assets:
Cash and bank balances
1,934,900,900
1,482,463,336
Notes receivable
192,750,000
—
Accounts receivable
XV.1
5,939,974,390
6,237,999,729
Prepayments
37,248,255
22,686,047
Other receivables
XV.2
1,372,372,877
1,026,481,958
Including: Interest receivable
—
—
Dividends receivable
—
—
Inventories
328,297,541
289,515,249
Non-current assets due within one year
63,900,000
1,950,000
Other current assets
197,727,549
127,498,981
Total Current Assets
10,067,171,512
9,188,595,300
Non-current Assets:
Debt investments
—
60,000,000
Long-term receivables
—
16,743,981
Long-term equity investments
XV.3
388,733,908
360,774,517
Investments in other equity instruments
476,657,638
460,977,838
Fixed assets
21,929,850,128
22,733,042,848
Construction in progress
415,115,695
561,177,814
Right-of-use assets
1,288,501,143
1,304,747,553
Intangible assets
1,412,208,945
1,455,663,982
Goodwill
281,254,606
281,254,606
Long-term prepaid expenses
1,148,304
32,449,713
Deferred tax assets
477,306,222
895,428,410
Other non-current assets
12,260,086
29,449,830
Total Non-current Assets
26,683,036,675
28,191,711,092
TOTAL ASSETS
36,750,208,187
37,380,306,392
119
118
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
RMB
Item
Notes
31 December
2024
31 December
2023
Current Liabilities:
Short-term borrowings
300,176,917
700,385,000
Notes payable
—
200,000,000
Accounts payable
2,649,393,563
4,903,794,993
Receipts in advance
5,133,304
11,482,436
Contract liabilities
322,663,026
228,525,571
Employee benefits payable
403,171,158
403,875,321
Taxes payable
102,905,568
87,420,989
Other payables
2,692,993,103
1,028,869,323
Including: Interest payable
—
—
Dividends payable
5,699
868,801
Non-current liabilities due within one year
66,779,309
76,105,907
Other current liabilities
8,917,024
20,941,382
Total Current Liabilities
6,552,132,972
7,661,400,922
Non-current Liabilities:
Long-term borrowings
500,000,000
780,000,000
Lease liabilities
1,328,652,169
1,326,891,951
Deferred income
741,960,624
702,384,062
Total Non-current Liabilities
2,570,612,793
2,809,276,013
TOTAL LIABILITIES
9,122,745,765
10,470,676,935
RMB
Item
Notes
31 December
2024
31 December
2023
SHAREHOLDERS’ EQUITY:
Share capital
7,083,537,000
7,083,537,000
Capital reserve
11,643,048,398
11,579,184,714
Other comprehensive income
193,700,790
181,940,940
Special reserve
160,640,794
81,228,476
Surplus reserve
3,300,227,369
3,194,362,899
Retained profits
5,246,308,071
4,789,375,428
TOTAL SHAREHOLDERS’ EQUITY
27,627,462,422
26,909,629,457
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
36,750,208,187
37,380,306,392
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
120
121
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
Notes
2024
2023
I.
Operating income
V.35
27,090,074,926
26,194,897,332
Less: Operating costs
V.35
25,382,787,574
24,552,915,441
Taxes and levies
V.36
91,811,343
48,312,602
Selling expenses
74,970
—
Administrative expenses
V.37
167,698,640
175,146,280
Financial expenses
V.38
49,218,498
50,491,943
Including: Interest expenses
104,227,316
109,082,298
Interest income
55,929,161
54,846,265
Add: Other income
V.39
41,369,148
90,353,774
Investment income
V.40
31,156,729
39,739,933
Including: Investment income in associates
and joint ventures
21,718,707
23,454,446
Gains (losses) on credit impairment
V.41
(13,010,985)
(5,506,202)
Gains (losses) on assets impairment
V.42
(2,330,205)
(120,818,857)
Gains on disposal of assets
V.43
17,610,387
96,646,068
II.
Operating profit
1,473,278,975
1,468,445,782
Add: Non-operating income
V.44
23,245,761
34,986,144
Less: Non-operating expenses
V.45
24,551,104
46,856,017
III. Total profit
1,471,973,632
1,456,575,909
Less: Income tax expenses
V.46
413,447,676
399,681,566
IV.
Net profit
1,058,525,956
1,056,894,343
(I)
Categorised by operation continuity
1.
Net profit from continuing operations
1,058,525,956
1,056,894,343
2.
Net profit from discontinued operations
—
—
(II) Categorised by ownership
1.
Net profit attributable to shareholders of
the Company
1,060,161,237
1,058,289,071
2.
Profit or loss attributable to minority
interests
(1,635,281)
(1,394,728)
V.
Other comprehensive income, net of tax
V.31
11,759,850
10,589,799
(I)
Other comprehensive income attributable to
shareholders of the Company, net of tax
11,759,850
10,589,799
1.
Other comprehensive income that cannot
be reclassified subsequently to profit
or loss
11,759,850
10,589,799
(1)
Changes arising from remeasurement
of defined benefit plans
—
—
(2)
Other comprehensive income that
cannot be reclassified to profit or
loss under the equity method
—
—
Item
Notes
2024
2023
V.
Other comprehensive income, net of tax (continued)
(3)
Changes in fair value of investments
in other equity instruments
11,759,850
10,589,799
(4)
Changes in fair value of the
Company’s own credit risk
—
—
2.
Other comprehensive income that will be
reclassified to profit or loss
—
—
(1)
Other comprehensive income that
can be reclassified to profit or
loss under the equity method
—
—
(2)
Changes in fair value of other debt
investments
—
—
(3)
Amounts included in other
comprehensive income from
reclassification of financial assets
—
—
(4)
Allowance for credit impairment of
other debt investments
—
—
(5)
Reserve for cash flow hedges
—
—
(6)
Translation differences of financial
statements denominated in
foreign currencies
—
—
(7)
Others
—
—
(II) Other comprehensive income attributable to
minority interests, net of tax
—
—
VI.
Total comprehensive income
1,070,285,806
1,067,484,142
(I)
Total comprehensive income attributable to
shareholders of the Company
1,071,921,087
1,068,878,870
(II) Total comprehensive income attributable to
minority interests
(1,635,281)
(1,394,728)
VII. Earnings per share:
(I)
Basic earnings per share (RMB/share)
0.15
0.15
(II) Diluted earnings per share (RMB/share)
0.15
0.15
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
RMB
122
123
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
INCOME STATEMENT OF THE COMPANY
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
Notes
2024
2023
I.
Operating income
XV.4
27,055,670,487
26,142,371,894
Less: Operating costs
XV.4
25,365,459,557
24,503,344,073
Taxes and levies
89,716,605
45,709,209
Selling expenses
74,970
—
Administrative expenses
154,379,373
146,740,156
Financial expenses
49,810,386
50,960,408
Including: Interest expenses
104,227,317
109,082,298
Interest income
55,328,553
54,213,240
Add: Other income
41,333,585
90,143,532
Investment income
XV.5
34,472,638
39,739,933
Including: Investment income in associates
and joint ventures
21,718,707
23,454,446
Gains (losses) on credit impairment
(13,010,985)
(5,506,202)
Gains (losses) on assets impairment
(2,330,205)
(120,818,857)
Gains on disposal of assets
17,610,387
96,646,068
II.
Operating profit
1,474,305,016
1,495,822,522
Add: Non-operating income
22,834,331
33,368,178
Less: Non-operating expenses
24,292,406
40,733,886
III. Total profit
1,472,846,941
1,488,456,814
Less: Income tax expenses
414,202,238
400,264,879
IV.
Net profit
1,058,644,703
1,088,191,935
(I)
Net profit from continuing operations
1,058,644,703
1,088,191,935
(II) Net profit from discontinued operations
—
—
V.
Other comprehensive income, net of tax
11,759,850
10,589,799
(I)
Other comprehensive income that cannot be
reclassified to profit or loss
11,759,850
10,589,799
1.
Changes arising from remeasurement of
defined benefit plans
—
—
2.
Other comprehensive income that cannot
be reclassified to profit or loss under
the equity method
—
—
3.
Changes in fair value of investments in
other equity instruments
11,759,850
10,589,799
4.
Changes in fair value of Company’s own
credit risk
—
—
Item
Notes
2024
2023
V.
Other comprehensive income, net of tax (continued)
(II) Other comprehensive income that will be
reclassified to profit or loss
—
—
1.
Other comprehensive income that can be
reclassified to profit or loss under the
equity method
—
—
2.
Changes in fair value of other debt
investments
—
—
3.
Financial assets reclassified into other
comprehensive income
—
—
4.
Allowance for credit impairment of other
debt investments
—
—
5.
Reserve for cash flow hedges
—
—
6.
Translation differences of financial
statements denominated in foreign
currencies
—
—
7.
Others
—
—
VI.
Total comprehensive income
1,070,404,553
1,098,781,734
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
RMB
124
125
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
Notes
2024
2023
I.
Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the
rendering of services
18,447,745,526
16,309,460,904
Receipts of tax refunds
—
34,893,962
Other cash receipts relating to operating activities
V.47(1)
238,946,912
459,029,609
Sub-total of cash inflows from operating activities
18,686,692,438
16,803,384,475
Cash payments for goods purchased and services
received
5,476,800,663
5,147,220,991
Cash payments to and on behalf of employees
9,674,438,317
9,763,830,648
Payments of various types of taxes
802,362,061
679,112,639
Other cash payments relating to operating activities
V.47(1)
22,791,123
96,855,855
Sub-total of cash outflows from operating activities
15,976,392,164
15,687,020,133
Net Cash Flow from Operating Activities
V.48(1)
2,710,300,274
1,116,364,342
II.
Cash Flows from Investing Activities:
Cash receipts from investment income
9,438,022
71,261,492
Net cash receipts from disposals of fixed assets,
intangible assets and other long-term assets
9,616,428
16,285,487
Other cash receipts relating to investing activities
V.47(2)
—
177,986,567
Sub-total of cash inflows from investing activities
19,054,450
265,533,546
Cash payments to acquire or construct fixed assets,
intangible assets and other long-term assets
1,294,830,513
1,022,308,696
Other cash payments relating to investing activities
V.47(2)
—
66,064,518
Sub-total of cash outflows from investing activities
1,294,830,513
1,088,373,214
Net Cash Flow from Investing Activities
(1,275,776,063)
(822,839,668)
III. Cash Flows from Financing Activities:
Cash receipts from borrowings
400,000,000
1,200,000,000
Other cash receipts relating to financing activities
V.47(3)
57,623,000
—
Sub-total of cash inflows from financing activities
457,623,000
1,200,000,000
Cash repayments of borrowings
1,090,000,000
1,205,000,000
Cash payments for distribution of dividends or
settlement of interest expenses
349,597, 400
41,284,708
Including: Payments for distribution of dividends or
profits to minority shareholders by
subsidiaries
490,001
—
Other cash payments relating to financing activities
V.47(3)
270,053
64,411,934
Sub-total of cash outflows from financing activities
1,439,867,453
1,310,696,642
Net Cash Flow from Financing Activities
(982,244,453)
(110,696,642)
Item
Notes
2024
2023
IV. Effect of Foreign Exchange Rate Changes on
Cash and Cash Equivalents
157,806
—
V.
Net Increase in Cash and Cash Equivalents
452,437,564
182,828,032
Add: Opening balance of cash and cash equivalents
V.48(2)
1,482,463,336
1,299,635,304
VI. Closing Balance of Cash and Cash Equivalents
V.48(2)
1,934,900,900
1,482,463,336
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
RMB
126
127
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
CASH FLOW STATEMENT OF THE COMPANY
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
Notes
2024
2023
I.
Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the
rendering of services
18,447,745,526
16,256,952,281
Receipts of tax refunds
—
34,893,962
Other cash receipts relating to operating activities
238,490,398
450,118,124
Sub-total of cash inflows from operating activities
18,686,235,924
16,741,964,367
Cash payments for goods purchased and services
received
5,818,312,977
5,138,459,786
Cash payments to and on behalf of employees
9,322,369,688
9,712,322,169
Payments of various types of taxes
802,362,061
670,713,385
Other cash payments relating to operating activities
33,160,977
105,029,269
Sub-total of cash outflows from operating activities
15,976,205,703
15,626,524,609
Net Cash Flow from Operating Activities
2,710,030,221
1,115,439,758
II.
Cash Flows from Investing Activities:
Cash receipts from investment income
9,438,022
16,852,569
Net cash receipts from disposals of fixed assets,
intangible assets and other long-term assets
9,616,428
70,989,637
Other cash receipts relating to investing activities
—
177,986,567
Sub-total of cash inflows from investing activities
19,054,450
265,828,773
Cash payments to acquire or construct fixed assets,
intangible assets and other long-term assets
1,294,830,513
1,021,677,728
Other cash payments relating to investing activities
—
66,064,518
Sub-total of cash outflows from investing activities
1,294,830,513
1,087,742,246
Net Cash Flow from Investing Activities
(1,275,776,063)
(821,913,473)
III. Cash Flows from Financing Activities:
Cash receipts from borrowings
400,000,000
1,200,000,000
Other cash receipts relating to financing activities
57,623,000
—
Sub-total of cash inflows from financing activities
457,623,000
1,200,000,000
Cash repayments of borrowings
1,090,000,000
1,205,000,000
Cash payments for distribution of dividends or profits
or settlement of interest expenses
349,597,400
41,284,708
Other cash payments relating to financing activities
—
64,411,934
Sub-total of cash outflows from financing activities
1,439,597,400
1,310,696,642
Net Cash Flow from Financing Activities
(981,974,400)
(110,696,642)
Item
Notes
2024
2023
IV. Effect of Foreign Exchange Rate Changes on
Cash and Cash Equivalents
157,806
—
V.
Net Increase in Cash and Cash Equivalents
452,437,564
182,829,643
Add: Opening balance of cash and cash equivalents
1,482,463,336
1,299,633,693
VI. Closing Balance of Cash and Cash Equivalents
1,934,900,900
1,482,463,336
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
RMB
128
129
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
For the year ended 31 December 2024
Equity attributable to shareholders of the Company
Minority
interests
Total
shareholders’
equity
Share capital
Capital reserve
Other
comprehensive
income
Special
reserve
Surplus
reserve
Retained
profits
I.
Closing balance of the prior year
7,083,537,000
11,577,380,553
181,940,940
81,228,476
3,194,362,899
4,271,435,690
(37,889,759) 26,351,995,799
Add: Changes in accounting policies
—
—
—
—
—
—
—
—
Corrections of prior period errors
—
—
—
—
—
—
—
—
Others
—
—
—
—
—
—
—
—
II.
Opening balance of the current year
7,083,537,000
11,577,380,553
181,940,940
81,228,476
3,194,362,899
4,271,435,690
(37,889,759) 26,351,995,799
III. Changes for the year
—
63,863,684
11,759,850
79,412,318
105,864,470
458,449,177
(2,125,282)
717,224,217
(I)
Total comprehensive income
—
—
11,759,850
—
—
1,060,161,237
(1,635,281)
1,070,285,806
(II)
Shareholders’ contributions and reduction
in capital
—
—
—
—
—
—
—
—
1. Ordinary shares contributed by
shareholders
—
—
—
—
—
—
—
—
2. Capital contribution from holders of other
equity instruments
—
—
—
—
—
—
—
—
3. Share-based payment recognised in
shareholders’ equity
—
—
—
—
—
—
—
—
4. Others
—
—
—
—
—
—
—
—
(III) Profit distribution
—
—
—
—
105,864,470
(601,712,060)
(490,001)
(496,337,591)
1. Transfer to surplus reserve
—
—
—
—
105,864,470
(105,864,470)
—
—
2. Transfer to general risk reserve
—
—
—
—
—
—
—
—
3. Distribution to shareholders
—
—
—
—
—
(495,847,590)
(490,001)
(496,337,591)
4. Others
—
—
—
—
—
—
—
—
(IV) Transfers within shareholders’ equity
—
—
—
—
—
—
—
—
1. Transfer of capital reserve to capital
(or share capital)
—
—
—
—
—
—
—
—
2. Transfer of surplus reserve to capital
(or share capital)
—
—
—
—
—
—
—
—
3. Loss offset by surplus reserve
—
—
—
—
—
—
—
—
4. Retained earnings carried forward from
changes in defined benefit plans
—
—
—
—
—
—
—
—
5. Retained earnings carried forward from
other comprehensive income
—
—
—
—
—
—
—
—
6. Others
—
—
—
—
—
—
—
—
(V)
Special reserve
—
—
—
79,412,318
—
—
—
79,412,318
1. Transfer to special reserve in the year
—
—
—
235,890,550
—
—
—
235,890,550
2. Amount utilised in the year
—
—
—
(156,478,232)
—
—
—
(156,478,232)
(VI) Others (Note. V.30)
—
63,863,684
—
—
—
—
—
63,863,684
IV. Closing balance of the current year
7,083,537,000
11,641,244,237
193,700,790
160,640,794
3,300,227,369
4,729,884,867
(40,015,041) 27,069,220,016
RMB
Item
For the year ended 31 December 2023
Equity attributable to shareholders of the Company
Minority
interests
Total
shareholders’
equity
Share capital
Capital reserve
Other
comprehensive
income
Special
reserve
Surplus
reserve
Retained
profits
I.
Closing balance of the year
7,083,537,000
11,576,692,841
181,940,940
50,605,471
3,084,484,726
3,312,434,993
(36,495,031)
25,253,200,940
Add: Changes in accounting policies
—
—
—
—
—
—
—
—
Corrections of prior period errors
—
—
—
—
—
—
—
—
Others
—
—
—
—
—
—
—
—
II.
Opening balance of the current year
7,083,537,000
11,576,692,841
181,940,940
50,605,471
3,084,484,726
3,312,434,993
(36,495,031)
25,253,200,940
III. Changes for the year
—
687,712
—
30,623,005
109,878,173
959,000,697
(1,394,728)
1,098,794,859
(I)
Total comprehensive income
—
—
10,589,799
—
—
1,058,289,071
(1,394,728)
1,067,484,142
(II)
Shareholders’ contributions and reduction
in capital
—
—
—
—
—
—
—
—
1. Ordinary shares contributed by
shareholders
—
—
—
—
—
—
—
—
2. Capital contribution from holders of other
equity instruments
—
—
—
—
—
—
—
—
3. Share-based payment recognised in
shareholders’ equity
—
—
—
—
—
—
—
—
4. Others
—
—
—
—
—
—
—
—
(III) Profit distribution
—
—
—
—
108,819,194
(108,819,194)
—
—
1. Transfer to surplus reserve
—
—
—
—
108,819,194
(108,819,194)
—
—
2. Transfer to general risk reserve
—
—
—
—
—
—
—
—
3. Distribution to shareholders
—
—
—
—
—
—
—
—
4. Others
—
—
—
—
—
—
—
—
(IV) Transfers within shareholders’ equity
—
—
(10,589,799)
—
1,058,979
9,530,820
—
—
1. Transfer of capital reserve to capital
(or share capital)
—
—
—
—
—
—
—
—
2. Transfer of surplus reserve to capital
(or share capital)
—
—
—
—
—
—
—
—
3. Loss offset by surplus reserve
—
—
—
—
—
—
—
—
4. Retained earnings carried forward from
changes in defined benefit plans
—
—
—
—
—
—
—
—
5. Retained earnings carried forward from
other comprehensive income
—
—
(10,589,799)
—
1,058,979
9,530,820
—
—
6. Others
—
—
—
—
—
—
—
—
(V)
Special reserve
—
—
—
30,623,005
—
—
—
30,623,005
1. Transfer to special reserve in the year
—
—
—
159,485,486
—
—
—
159,485,486
2. Amount utilised in the year
—
—
—
(128,862,481)
—
—
—
(128,862,481)
(VI) Others
—
687,712
—
—
—
—
—
687,712
IV. Closing balance of the current year
7,083,537,000
11,577,380,553
181,940,940
81,228,476
3,194,362,899
4,271,435,690
(37,889,759)
26,351,995,799
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
130
131
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY OF THE COMPANY
FOR THE YEAR ENDED 31 DECEMBER 2024
RMB
Item
For the year ended 31 December 2024
Share
capital
Capital
reserve
Other
comprehensive
income
Special
reserve
Surplus
reserve
Retained
profits
Total
shareholders’
equity
I.
Closing balance of the year
7,083,537,000
11,579,184,714
181,940,940
81,228,476
3,194,362,899
4,789,375,428
26,909,629,457
Add: Changes in accounting policies
—
—
—
—
—
—
—
Corrections of prior period errors
—
—
—
—
—
—
—
Others
—
—
—
—
—
—
—
II. Opening balance of the current year
7,083,537,000
11,579,184,714
181,940,940
81,228,476
3,194,362,899
4,789,375,428
26,909,629,457
III. Changes for the year
—
63,863,684
11,759,850
79,412,318
105,864,470
456,932,643
717,832,965
(I)
Total comprehensive income
—
—
11,759,850
—
—
1,058,644,703
1,070,404,553
(II)
Shareholders’ contributions and reduction
in capital
—
—
—
—
—
—
—
1. Ordinary shares contributed by
shareholders
—
—
—
—
—
—
—
2. Capital contribution from holders of
other equity instruments
—
—
—
—
—
—
—
3. Share-based payment recognised in
shareholders’ equity
—
—
—
—
—
—
—
4. Others
—
—
—
—
—
—
—
(III)
Profit distribution
—
—
—
—
105,864,470
(601,712,060)
(495,847,590)
1. Transfer to surplus reserve
—
—
—
—
105,864,470
(105,864,470)
—
2. Distribution to shareholders
—
—
—
—
—
(495,847,590)
(495,847,590)
3. Others
—
—
—
—
—
—
—
(IV)
Transfers within shareholders’ equity
—
—
—
—
—
—
—
1. Transfer of capital reserve to capital
(or share capital)
—
—
—
—
—
—
—
2. Transfer of surplus reserve to capital
(or share capital)
—
—
—
—
—
—
—
3. Loss offset by surplus reserve
—
—
—
—
—
—
—
4. Retained earnings carried forward from
changes in defined benefit plans
—
—
—
—
—
—
—
5. Retained earnings carried forward from
other comprehensive income
—
—
—
—
—
—
—
6. Others
—
—
—
—
—
—
—
(V)
Special reserve
—
—
—
79,412,318
—
—
79,412,318
1. Transfer to special reserve in the year
—
—
—
235,890,550
—
—
235,890,550
2. Amount utilised in the year
—
—
—
(156,478,232)
—
—
(156,478,232)
(VI)
Others (Note. V.30)
—
63,863,684
—
—
—
—
63,863,684
IV. Closing balance of the current year
7,083,537,000
11,643,048,398
193,700,790
160,640,794
3,300,227,369
5,246,308,071
27,627,462,422
RMB
Item
For the year from 1 January to 31 December 2023
Share capital
Capital reserve
Other
comprehensive
income
Special
reserve
Surplus
reserve
Retained
profits
Total
shareholders’
equity
I.
Closing balance of the year
7,083,537,000
11,578,497,002
181,940,940
50,605,471
3,084,484,726
3,800,471,867
25,779,537,006
Add: Changes in accounting policies
—
—
—
—
—
—
—
Corrections of prior period errors
—
—
—
—
—
—
—
Others
—
—
—
—
—
—
—
II. Opening balance of the current year
7,083,537,000
11,578,497,002
181,940,940
50,605,471
3,084,484,726
3,800,471,867
25,779,537,006
III. Changes for the year
—
687,712
—
30,623,005
109,878,173
988,903,561
1,130,092,451
(I)
Total comprehensive income
—
—
10,589,799
—
—
1,088,191,935
1,098,781,734
(II)
Shareholders’ contributions and reduction
in capital
—
—
—
—
—
—
—
1. Ordinary shares contributed by shareholders
—
—
—
—
—
—
—
2. Capital contribution from holders of other
equity instruments
—
—
—
—
—
—
—
3. Share-based payment recognised in
shareholders’ equity
—
—
—
—
—
—
—
4. Others
—
—
—
—
—
—
—
(III)
Profit distribution
—
—
—
—
108,819,194
(108,819,194)
—
1. Transfer to surplus reserve
—
—
—
—
108,819,194
(108,819,194)
—
2. Distribution to shareholders
—
—
—
—
—
—
—
3. Others
—
—
—
—
—
—
—
(IV)
Transfers within shareholders’ equity
—
—
(10,589,799)
—
1,058,979
9,530,820
—
1. Transfer of capital reserve to capital
(or share capital)
—
—
—
—
—
—
—
2. Transfer of surplus reserve to capital
(or share capital)
—
—
—
—
—
—
—
3. Loss offset by surplus reserve
—
—
—
—
—
—
—
4. Retained earnings carried forward from
changes in defined benefit plans
—
—
—
—
—
—
—
5. Retained earnings carried forward from
other comprehensive income
—
—
(10,589,799)
—
1,058,979
9,530,820
—
6. Others
—
—
—
—
—
—
—
(V)
Special reserve
—
—
—
30,623,005
—
—
30,623,005
1. Transfer to special reserve in the year
—
—
—
159,485,486
—
—
159,485,486
2. Amount utilised in the year
—
—
—
(128,862,481)
—
—
(128,862,481)
(VI)
Others
—
687,712
—
—
—
—
687,712
IV. Closing balance of the current year
7,083,537,000
11,579,184,714
181,940,940
81,228,476
3,194,362,899
4,789,375,428
26,909,629,457
The accompanying notes form part of the financial statements.
Jiang Hui
Chen Shaohong
Luo Xinpeng
Liu Qiyi
Board Chairman
General Manager
Chief Accountant
Head of the
Finance Department
132
133
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
(All amounts expressed in Renminbi unless otherwise stated)
I.
BASIC INFORMATION OF THE COMPANY
1.
Company profile
Guangshen Railway Company Limited (the “Company”) was established as a joint stock
limited company in the People’s Republic of China (the “PRC”) on 6 March 1996 in Shenzhen
Municipality, Guangdong Province, with its headquarters located in Shenzhen Municipality,
Guangdong Province. In accordance with the Tie Zheng Ce Han No. 522 [1995] of Ministry
of Railways of the PRC (“Ministry of Railways”), Guangzhou Railway (Group) Corporation
(“Guangzhou Railway Group”) established and invested in the Company with assets discounted,
netting of relevant liabilities, of the passenger and freight transportation business and several
business units related to transportation and facilities operated by its wholly owned subsidiary,
Guangzhou Railway (Group) Guangshen Railway General Corporation.
On 9 April 1996, with the approval of the Document (Zheng Quan Fa No. 7 [1996]) issued by
the State Council Securities Commission, the Company issued 1,431,300,000 foreign shares
listed overseas to the public, including 217,812,000 H Shares and 24,269,760 American
Depositary Shares (“ADRs”), with each ADR representing 50 H Shares. On 14 May 1996, the
Company’s shares were listed on the Stock Exchange of Hong Kong and the New York Stock
Exchange.
On 19 December 2006, as approved by China Securities Regulatory Commission (“CSRC”) with
the Notice on Approval of the Initial Public Offering of Shares of Guangshen Railway Company
Limited (Zheng Jian Fa Xing Zi No. 146 [2006]), the Company issued 2,747,987,000 RMB
Ordinary Shares (“A Shares”) to the public and listed on the Shanghai Stock Exchange. The
funds raised from the issuance of A Shares were mainly used to acquire the Guangzhou-Pingshi
railway business operated in Southern China by Guangdong Yangcheng Railway Industrial Co.,
Ltd. (“Yangcheng Railway”) and associated operating assets and liabilities (“Yangcheng Railway
Business”). On 1 January 2007, the Company acquired the control of Yangcheng Railway
Business at a consideration of RMB10,169,924,967.
On 25 November 2020, the Company’s ADRs were delisted from the New York Stock Exchange.
On 25 October 2022, the Company submitted the Form 15F to the United States Securities and
Exchange Commission to deregister the Company’s ADRs and terminate the related reporting
obligations under the Securities Exchange Act. The action had come into effect after 90 days
upon the submission.
The Company and its subsidiaries (the “Group”) mainly engaged in railway passenger and
freight transportation services.
As at 31 December 2024, Guangzhou Railway Group became the Company’s holding shareholder
with 37.12% of the Company’s shares. China State Railway Group Co., Ltd. (“CSRG”) is the
actual controller of the Company.
I.
BASIC INFORMATION OF THE COMPANY (continued)
2.
Approval for issuance of financial statements
The consolidated and the Company’s financial statements were approved by the Board of
Directors of the Company on 27 March 2025.
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
1.
Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises issued by the
Ministry of Finance and related regulations. In addition, the Group has disclosed relevant
financial information in accordance with Information Disclosure and Presentation Rules for
Companies Offering Securities to the Public No. 15 – General Provisions on Financial Reporting
(2023 Revision), Hong Kong Companies Ordinance and Listing Rules of the Stock Exchange of
Hong Kong.
2.
Going concern
The Group assessed its ability to continue as a going concern for the 12 months from 31
December 2024 and did not notice any events or circumstances that may cast significant doubt
upon its ability to continue as a going concern. Therefore, the financial statements have been
prepared on a going concern basis.
3.
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instruments
which are measured at fair value, the Group adopts the historical cost as the principle of
measurement in the financial statements. Where assets are impaired, allowances for impairment
are made in accordance with relevant requirements.
Where the historical cost is adopted as the measurement basis, assets are recorded at the
amount of cash or cash equivalents paid or the fair value of the consideration given to acquire
them at the time of their acquisition. Liabilities are measured at the amount of proceeds or
assets received or the contractual amounts for assuming the present obligation, or, at the
amounts of cash or cash equivalents expected to be paid to settle the liabilities in the normal
course of business.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. Regardless of
whether that price is directly observable or estimated using another valuation technique, fair
values measured and disclosed in these financial statements are determined on such a basis.
134
135
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (continued)
3.
Basis of accounting and principle of measurement (continued)
When measuring non-financial assets at fair value, consideration is given to the ability of a
market participant to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best
use.
For financial assets of which the transaction price is used as the fair value at initial recognition
and for which a valuation technique involving unobservable inputs is used in the subsequent
measurement of fair value, the valuation technique is corrected during the valuation process
so that the initial recognition result determined by the valuation technique is equal to the
transaction price.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the
fair value measurement in its entirety, which are described as follows:
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
•
Level 2 inputs are inputs, other than inputs included within Level 1, that are observable
for the asset or liability, either directly or indirectly.
•
Level 3 inputs are unobservable inputs for the asset or liability.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1.
STATEMENT OF COMPLIANCE WITH THE ACCOUNTING STANDARDS FOR
BUSINESS ENTERPRISES (“ASBE”)
The financial statements of the Company have been prepared in accordance with the ASBE,
and present truly and completely, the consolidated and the Company’s financial position as at
31 December 2024, and the consolidated and the Company’s results of operations, changes in
shareholders’ equity and cash flows for the year then ended.
2.
Accounting year
The Group has adopted the calendar year as its accounting year, i.e., from 1 January to 31
December.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
3.
Operating cycle
An operating cycle refers to the year since when an enterprise purchases assets for processing
purpose till the realisation of those assets in cash or cash equivalents. The Company’s operating
cycle is 12 months.
4.
Functional currency
Renminbi (“RMB”) is the currency of the primary economic environment in which the Company
and its domestic subsidiaries operate. The Company adopts RMB to prepare its financial
statements.
5.
Method for determination of materiality criteria and basis for selection
Item
Materiality criteria
Significant Prepayments aged over 1 year
Amount not less than RMB30,000,000
Significant construction in progress
Amount not less than RMB30,000,000
Significant accounts payable aged over 1
year
Amount not less than RMB30,000,000
Significant other payables aged over 1
year
Amount not less than RMB30,000,000
Contract liabilities with significant changes
Amount not less than RMB30,000,000
Cash receipts relating to significant
investing activities
Amount more than 10% of the sub-total of cash
inflows from investing activities and not less
than RMB100,000,000
Cash payments relating to significant
investing activities
Amount more than 10% of the sub-total of cash
outflows from investing activities and not less
than RMB100,000,000
136
137
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
6.
The accounting treatment of business combinations involving enterprises
under common control and business combinations not involving enterprises
under common control
Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
6.1
Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business
combination in which all of the combining enterprises are ultimately controlled by the
same party or parties both before and after the combination, and that control is not
transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts
as recorded by the combined entities at the date of the combination. The difference
between the carrying amount of the net assets obtained and the carrying amount of the
consideration paid for the combination (or the aggregate face value of shares issued) is
adjusted to the share premium in capital reserve. If the share premium is not sufficient
to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss for
the period in which they are incurred.
6.2
Business combinations not involving enterprises under common control and
goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the
same party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of
the assets given, liabilities incurred or assumed, and equity securities issued by the
acquirer in exchange for control of the acquiree. Where a business combination not
involving enterprises under common control is achieved in stages that involve multiple
transactions, the cost of combination 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 acquiree. The intermediary expenses incurred by the acquirer
in respect of auditing, legal services, valuation and consultancy services, etc. and
other associated administrative expenses attributable to the business combination are
recognised in profit or loss when they are incurred.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
6.
The accounting treatment of business combinations involving enterprises
under common control and business combinations not involving enterprises
under common control (continued)
6.2
Business combinations not involving enterprises under common control and
goodwill (continued)
The acquiree’s identifiable assets, liabilities and contingent liabilities, acquired by the
acquirer in a business combination, that meet the recognition criteria shall be measured
at fair value at the acquisition date.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference is treated as an asset and recognised as
goodwill, which is measured at cost on initial recognition. Where the cost of combination
is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, the acquirer firstly reassesses the measurement of the fair values of the
acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of
the cost of combination. If after that reassessment, the cost of combination is still less
than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
acquirer recognises the remaining difference immediately in profit or loss for the period.
Goodwill arising on a business combination is measured at cost less accumulated
impairment losses, and is presented separately in the consolidated financial statements.
7.
Determination criteria of control and preparation of consolidated financial
statements
7.1
Determination criteria of control
Control is the power over the investee, exposures 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. The Group reassesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to the elements of
control.
138
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
7.
Determination criteria of control and preparation of consolidated financial
statements (continued)
7.2
Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the
basis of control.
The combination of subsidiaries begins with the Group’s control over a subsidiary, and
ceases with the Group’s losing control of the subsidiary.
For a subsidiary disposed of by the Group, the operating results and cash flows before
the date of disposal (the date when control is lost) are included in the consolidated
income statement and consolidated cash flow statement, as appropriate.
For a subsidiary acquired through a business combination not involving enterprises under
common control, the operating results and cash flows from the acquisition date (the
date when control is obtained) are included in the consolidated income statement and
consolidated cash flow statement, as appropriate.
No matter when the business combination occurs in the reporting period, subsidiaries
acquired through a business combination involving enterprises under common control
or the party being absorbed under merger by absorption are included in the Group’s
scope of consolidation as if they had been included in the scope of consolidation from
the date when they first came under the common control of the ultimate controlling
party. Their operating results and cash flows from the beginning of the earliest reporting
period or from the date when they first came under the common control of the ultimate
controlling party are included in the consolidated statement of profit or loss and other
comprehensive income and consolidated cash flow statement, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries
are determined based on the uniform accounting policies and accounting years set out
by the Company.
Influence over the consolidated financial statements arising from significant intra-group
transactions are eliminated on consolidation.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
7.
Determination criteria of control and preparation of consolidated financial
statements (continued)
7.2
Preparation of consolidated financial statements (continued)
The portion of subsidiaries’ equity that is not attributable to the Company is treated as
minority interests and presented as “minority interests” in the consolidated balance sheet
within shareholders’ equity. The portion of net profit or loss of subsidiaries for the period
attributable to minority interests is presented as “Profit or loss attributable to minority
interests” in the consolidated income statement below the “net profit” line item.
When the amount of loss for the period attributable to the minority shareholders of a
subsidiary exceeds the minority shareholders’ portion of the opening balance of owners’
equity of the subsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not
result in the loss of control over the subsidiary is accounted for as equity transactions.
The carrying amounts of the shareholders’ equity of parent company and minority
interests are adjusted to reflect the changes in their relative interests in the subsidiary.
The difference between the amount by which the minority interests are adjusted and
the fair value of the consideration paid or received is adjusted to capital reserve under
owners’ equity. If the capital reserve is not sufficient to absorb the difference, the excess
is adjusted against retained earnings.
For the stepwise acquisition of equity interest till acquiring control after a few
transactions and leading to business combination not involving enterprises under common
control, it should be dealt with based on whether this belongs to ‘package deal’: if it
belongs to ‘package deal’, transactions will be dealt as transactions to acquire control.
If it does not belong to ‘package deal’, transactions to acquire control on acquisition
date will be under accounting treatment, the fair value of acquirees’ shares held before
acquisition date will be re-measured, and the difference between the fair value and the
carrying amount will be recognised in profit or loss of the current period; if acquirees’
shares held before acquisition date involve in changes of other comprehensive income
and other equity of owners under equity method, this will be transferred to income of
acquisition date.
140
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
7.
Determination criteria of control and preparation of consolidated financial
statements (continued)
7.2
Preparation of consolidated financial statements (continued)
When the Group loses control over a subsidiary due to disposal of certain equity interest
or other reasons, any retained equity interest is re-measured at its fair value at the
date when control is lost. The difference between (i) the aggregate of the consideration
received on disposal and the fair value of any retained equity interest and (ii) the share
of the former subsidiary’s net assets cumulatively calculated from the acquisition date
according to the original proportion of ownership interest is recognised as investment
income in the period in which control is lost and offset against goodwill. Other
comprehensive income associated with investment in the former subsidiary is reclassified
to investment income in the period in which control is lost.
When the Group loses control of a subsidiary in two or more arrangements (transactions),
terms and conditions of the arrangements (transactions) and their economic effects are
considered. One or more of the followings indicate that the Group shall account for the
multiple arrangements as a ‘package deal’: (i) they are entered into at the same time
or in contemplation of each other; (ii) they form a complete transaction designed to
achieve an overall commercial effect; (iii) the occurrence of one transaction is dependent
on the occurrence of at least one other transaction; (iv) one transaction alone is not
economically justified, but it is economically justified when considered together with
other transactions. Where the transactions of disposal of equity investments in a
subsidiary until the loss of control are assessed as a package deal, these transactions are
accounted for as one transaction of disposal of a subsidiary with loss of control. Before
losing control, the difference of consideration received on disposal and the share of net
assets of the subsidiary continuously calculated from acquisition date is recognised as
other comprehensive income. When losing control, the cumulated other comprehensive
income is transferred to profit or loss of the period of losing control. If the transactions
of disposal of equity investments in a subsidiary are not assessed as a package deal,
these transactions are accounted for as unrelated transactions.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
8.
Classification of joint arrangements and accounting treatments of joint
operations
A joint arrangement is classified into joint operation and joint venture, depending on the
rights and obligations of the parties to the arrangement, which is assessed by considering
the structure and the legal form of the arrangement, the terms agreed by the parties in the
contractual arrangement and, when relevant, other facts and circumstances. A joint operation is
a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is
a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement.
The Group’s joint arrangements are all joint ventures. The Group accounts for investments in
joint ventures using equity method. Refer to Note III 16.3.2 “Long-term equity investments
accounted for using the equity method” for details.
9.
Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group’s short-term (generally due within three months from the acquisition
date), highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
142
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
10.
Transactions denominated in foreign currencies
10.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot
exchange rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional
currency using the spot exchange rates at the balance sheet date. Exchange differences
arising from the differences between the spot exchange rates prevailing at the balance
sheet date and those on initial recognition or at the previous balance sheet date
are recognised in profit or loss for the period, except that (1) exchange differences
related to a specific-purpose borrowing denominated in foreign currency that qualify
for capitalisation are capitalised as part of the cost of the qualifying asset during the
capitalisation period; (2) exchange differences related to hedging instruments for
the purpose of hedging against foreign currency risks are accounted for using hedge
accounting; (3) exchange differences arising from changes in the gross carrying amounts
(other than the amortised cost) of monetary items classified as at FVTOCI are recognised
as other comprehensive income.
Foreign currency non-monetary items measured at historical cost are translated to
the amounts in functional currency at the spot exchange rates on the dates of the
transactions. Foreign currency non-monetary items measured at fair value are re-
translated at the spot exchange rate on the date the fair value is determined. Difference
between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate)
and is recognised in profit or loss or as other comprehensive income.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.
For financial assets purchased or sold in a regular way, the Group recognises assets acquired
and liabilities assumed on a trade date basis, or derecognises the assets sold on a trade date
basis.
Financial assets and financial liabilities are initially measured at fair value (the method for
determining fair values of financial assets and financial liabilities is set out in related disclosures
under “basis of accounting and principle of measurement” in Note II). For financial assets
and financial liabilities at fair value through profit or loss, transaction costs are immediately
recognised in profit or loss for the period. For other financial assets and financial liabilities,
transaction costs are included in their initial recognised amounts. Upon initial recognition
of accounts receivable that does not contain significant financing component or without
considering the financing component included in the contract with a term not exceeding one
year under the Accounting Standards for Business Enterprises No. 14 – Revenue (hereinafter
referred to as the “Revenue Standards”), the Group adopts the transaction price as defined in
the Revenue Standards for initial measurement.
When the fair value of a financial asset or financial liability initially recognised differs from the
transaction price, no gain or loss is recognised on initial recognition of the financial asset or
financial liability if the fair value is not determined based on the quoted prices in active markets
for identical assets or liabilities, or on the valuation techniques that use observable market data
only.
The effective interest method is a method of calculating the amortised cost of a financial
asset or a financial liability and of allocating the interest income or interest expenses over the
relevant accounting periods.
The effective interest rate is the rate that exactly discounts estimated future cash flows through
the expected life of the financial asset or financial liability to the gross carrying amount of the
financial asset or to the amortised cost of the financial liability. When determining the effective
interest rate, the Group estimates future cash flows by considering all contractual terms of the
financial asset or financial liability (such as repayment in advance, extension, call option, or
other similar options, etc.), without considering the expected credit losses.
144
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
The amortised cost of a financial asset or a financial liability is the amount of the financial asset
or the financial liability initially recognised net of principal repaid, plus or less the cumulative
amortised amount arising from amortisation of the difference between the amount initially
recognised and the amount at the maturity date using the effective interest method, net of
cumulative loss allowance (only applicable to financial assets).
11.1 Classification, recognition and measurement of financial assets
After initial recognition, the Group’s financial assets of various types are subsequently
measured at amortised cost, at fair value through other comprehensive income
(“FVTOCI”) or at fair value through profit or loss (“FVTPL”), respectively.
If the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding,
and the financial asset is held within a business model whose objective is achieved by
collecting contractual cash flows, the Group classifies such financial asset as financial
assets measured at amortised cost, which include cash and bank balances, notes
receivable, accounts receivable, other receivables, debt investments and long-term
receivables, etc.
Financial assets that meet the following conditions are classified as at FVTOCI: the
financial asset is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling the financial assets; and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. Financial assets
of such type are presented as other debt investments if they are due after one year
since the acquisition, or presented under non-current assets due within one year if they
are due within one year (inclusive) since the balance sheet date; accounts receivable and
notes receivable classified as at FVTOCI upon acquisition are presented under receivables
financing, while the remaining items due within one year (inclusive) upon acquisition are
presented under other current assets.
Upon initial recognition, the Group may irrevocably designate the non-held-for-trading
equity instrument investments other than contingent considerations recognised in
business combination not involving enterprises under common control as financial
assets at FVTOCI on an individual basis. Such type of financial assets is presented as
investments in other equity instruments.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.1 Classification, recognition and measurement of financial assets (continued)
A financial asset is classified as held-for-trading if any of the following criteria is
satisfied:
•
It has been acquired principally for the purpose of selling it in the near term.
•
On initial recognition, it is part of a portfolio of identifiable financial instruments
that the Group manages together and there is objective evidence that the Group
has a recent actual pattern of short-term profit-taking.
•
It is a derivative that is neither a financial guarantee contract nor designated as
an effective hedging instrument.
Financial assets at FVTPL include financial assets classified as at FVTPL and financial
assets designated as at FVTPL:
•
Financial assets not satisfying the criteria of classification as financial assets at
amortised cost and financial assets at FVTOCI are classified as financial assets at
FVTPL.
•
Upon initial recognition, the Group may irrevocably designate the financial assets
as at FVTPL if doing so eliminates or significantly reduces accounting mismatch.
Financial assets at FVTPL other than derivative financial assets are presented as held-for-
trading financial assets. Financial assets with a maturity over one year since the balance
sheet date (or without a fixed maturity) and expected to be held for over one year are
presented under other non-current financial assets.
11.1.1 Financial assets at amortised cost
Financial assets at amortised cost are subsequently measured at amortised cost
using effective interest method. Any gains or losses arising from impairment or
derecognition are included in profit or loss.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.1 Classification, recognition and measurement of financial assets (continued)
11.1.1 Financial assets at amortised cost (continued)
For financial assets at amortised cost, the Group recognises interest income
using the effective interest method. Interest income is determined by applying an
effective interest rate to the gross carrying amount of the financial asset, except
for the following circumstances:
•
For a purchased or originated credit-impaired financial asset, the Group
calculates and recognises its interest income based on the amortised cost
of the financial asset and the credit-adjusted effective interest rate since
initial recognition.
•
For a financial asset that is not a purchased or originated credit-impaired
financial asset but subsequently has become credit-impaired, the Group
subsequently recognises their interest income based on amortised costs and
effective interest rate of such financial assets. If the financial instrument
is no longer credit-impaired due to improvement of credit risk, and the
improvement is linked with an event occurred after application of above
provisions, the Group will calculate the interest income by applying effective
interest rate to the gross carrying amount of the financial assets.
11.1.2 Financial assets at FVTOCI
For financial assets classified as at FVTOCI, except for the impairment losses or
gains and the interest income and exchange losses or gains calculated using the
effective interest method which are included in profit or loss for the period, the
fair value changes are included in other comprehensive income. The amounts
included in profit or loss for each period are equivalent to that as if it has been
always measured at amortised cost. Upon derecognition, the accumulated gains or
losses previously included in other comprehensive income are included in profit or
loss for the period.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.1 Classification, recognition and measurement of financial assets (continued)
11.1.2 Financial assets at FVTOCI (continued)
Changes in fair value of non-held-for-trading equity instrument investments
designated as financial assets at FVTOCI are recognised in other comprehensive
income. When the financial asset is derecognised, the cumulative gains or losses
previously recognised in other comprehensive income are transferred and included
in retained earnings. During the period in which the Group holds the non-held-for-
trading equity instrument, revenue from dividends is recognised in profit or loss
for the period when the Group has established the right of collecting dividends, it
is probable that the associated economic benefits will flow to the Group, and the
amount of dividends can be measured reliably.
11.1.3 Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value, with gains or
losses on fair value changes and related dividends and interest income included in
profit or loss for the period.
11.2 Impairment of financial instruments
For financial asset at amortised cost, financial assets classified as at FVTOCI, lease
receivables, contract assets, and financial liabilities that are not at FVTPL and financial
guarantee contracts that are not qualified for derecognition due to the transfer of
financial assets or financial liabilities arising from continuing involvement of the
transferred financial assets, the Group accounts for the impairment and recognises the
loss allowance on the basis of expected credit loss (“ECL”).
For all contract assets, notes receivable and accounts receivable arising from transactions
regulated by Revenue Standards, and lease receivables arising from transactions
regulated by the Accounting Standards for Business Enterprises No. 21 – Leases, the
Group recognises the loss allowance at an amount equivalent to the lifetime ECL.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.2 Impairment of financial instruments (continued)
For other financial instruments (other than purchased or originated credit-impaired
financial assets), the Group assesses the changes in credit risk since initial recognition of
relevant financial instruments at each balance sheet date. If the credit risk has increased
significantly since initial recognition of the financial instruments, the Group recognises
the loss allowance at an amount equivalent to lifetime ECL; if the credit risk has not
increased significantly since initial recognition of the financial instruments, the Group
recognises the loss allowance at an amount equivalent to 12-month ECL. The increase
or reversal of credit loss allowance for financial assets other than those classified as
at FVTOCI is recognised as an impairment loss or gain and included in profit or loss
for the period. For financial assets classified as at FVTOCI, the credit loss allowance is
recognised in other comprehensive income and the impairment loss or gain is included in
profit or loss for the period without reducing the carrying amount of the financial assets
in the balance sheet.
Where the Group has measured the loss allowance at an amount equivalent to lifetime
ECL of a financial instrument in prior accounting period, but the financial instrument no
longer satisfies the criteria of significant increase in credit risk since initial recognition at
the current balance sheet date, the Group recognises the loss allowance of the financial
instrument at an amount equivalent to 12-month ECL at the current balance sheet date,
with any resulting reversal of loss allowance recognised as impairment gains in profit or
loss for the period.
11.2.1 Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial
recognition, the Group compares the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the
financial instrument as at the date of initial recognition. For financial guarantee
contracts, the date that the Group becomes a party to the irrevocable commitment
is considered to be the date of initial recognition in the application of criteria
related to the financial instrument for impairment.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.2 Impairment of financial instruments (continued)
11.2.1 Significant increase in credit risk (continued)
In particular, the following information is taken into account when assessing
whether credit risk has increased significantly:
(1)
Significant changes in internal price indicators as a result of a change in
credit risk.
(2)
Significant changes in the rates or other terms of an existing financial
instrument if the instrument was newly originated or issued at the balance
sheet date (such as more stringent covenants, increased amounts of
collateral or guarantees, or higher rate of return, etc.);
(3)
Significant changes in the external market indicators of credit risk of the
same financial instrument or similar financial instruments with the same
expected duration. These indicators include credit spreads, credit default
swap prices against borrower, length of time and extent to which the
fair value of financial assets is less than their amortised cost, and other
market information related to the borrower (such as the borrower’s debt
instruments or changes in the price of equity instruments);
(4)
An actual or expected significant change in the financial instrument’s
external credit rating;
(5)
An actual or expected decrease in the internal credit rating for the debtor;
(6)
Adverse changes in business, financial or economic conditions that are
expected to cause a significant decrease in the debtor’s ability to meet its
debt obligations;
(7)
An actual or expected significant change in the operating results of the
debtor;
(8)
Significant increase in the credit risk of other financial instruments issued
by the same debtor;
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.2 Impairment of financial instruments (continued)
11.2.1 Significant increase in credit risk (continued)
(9)
Significant adverse changes in regulatory, economic, or technological
environment of the debtor;
(10)
Significant changes in the value of collaterals or the quality of guarantees
or credit enhancements provided by third parties, which are expected
to reduce the debtor’s economic motives to repay within the time limit
specified in contract or affect the probability of default;
(11)
Significant change in the debtor’s economic motives to repay within the
time limit specified in contract;
(12)
Expected changes to loan contract, including the exemption or revision of
contractual obligations, the granting of interest-free periods, the jump in
interest rates, the requirement for additional collateral or guarantees, or
other changes in the contractual framework for financial instruments that
may result from the breach of contract;
(13)
Significant changes in expected performance and repayment of the debtor;
(14)
Changes in the Group’s credit management approach in relation to the
financial instrument;
Irrespective of the outcome of the above assessment, the Group presumes that
the credit risk has increased significantly when contractual payments are more
than 30 days (inclusive) past due.
At the balance sheet date, if the Group determines that the financial instrument
has only lower credit risk, the Group assumes that the credit risk of such financial
instrument has not increased significantly since initial recognition. The financial
instrument is deemed as having lower credit risk if it has a low risk of default, the
borrower has a strong capacity to meet its contractual cash flow obligations in the
near term, and adverse changes in economic and business conditions in the longer
term may, but will not necessarily, reduce the ability of the borrower to fulfil its
contractual cash obligations.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.2 Impairment of financial instruments (continued)
11.2.2 Credit-impaired financial assets
When one or more events that are expected to have adverse impact on the future
cash flows of the financial assets have occurred, the financial assets become
credit impaired. The evidence of credit impairment of financial assets includes the
following observable information:
(1)
Significant financial difficulty of the issuer or debtor;
(2)
Breach of contract by the debtor, such as a default or delinquency in
interest or principal payments;
(3)
The creditor, for economic or contractual reasons relating to the debtor’s
financial difficulty, has granted to the debtor a concession that the creditor
would not otherwise consider;
(4)
It is probable that the debtor will enter bankruptcy or other financial
reorganisations;
(5)
The disappearance of an active market for that financial asset because of
financial difficulties of the issuer or debtor;
(6)
Purchase or origination of a financial asset at a significant discount that
reflects the fact of credit loss.
Based on the Group’s internal credit risk management, the Group considers an
event of default occurs when information developed internally or obtained from
external sources indicates that the debtor is unlikely to pay its creditors, including
the Group, in full (without taking into account any collaterals held by the Group).
Irrespective of the outcome of the above assessment, the Group presumes that
an event of default on the financial instrument has occurred if the contractual
payment of the financial instrument has been more than 90 days (inclusive) past
due.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.2 Impairment of financial instruments (continued)
11.2.3 Determination of ECL
The Group determines the ECL of relevant financial instruments using the following
method:
•
For a financial asset and lease receivables, the credit loss represents the
present value of the difference between the contractual cash flow receivable
by the Group and the cash flow expected to be received by the Group.
•
For financial guarantee contracts (see Note III, 11.4.1.2.1 for specific
accounting policies), credit losses are the present value of the difference
between the expected payment to be made by the Group to the contract
holder for the credit losses incurred, and the amount the Group expects to
receive from the contract holder, the debtor or any other parties.
The factors reflected by the Group’s measurement of ECL of financial instruments
include unbiased probability weighted average amount recognised by assessing
a series of possible results; time value of money; reasonable and supportable
information related to historical events, current condition and forecast of future
economic position that is available without undue cost or effort at the balance
sheet date.
11.2.4 Write-down of financial assets
The Group shall directly reduce the gross carrying amount of a financial asset
when the Group has no reasonable expectations of recovering a financial asset
in its entirety or a portion thereof, which constitutes derecognition of relevant
financial assets.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.3 Transfer of financial assets
The Group derecognises a financial asset if one of the following conditions is satisfied:
(1) the contractual rights to the cash flows from the financial asset expire; or (2)
the financial asset has been transferred and substantially all the risks and rewards of
ownership of the financial asset is transferred to the transferee; or (3) although the
financial asset has been transferred, the Group neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset but has not retained control
of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of
ownership of a financial asset, and it retains control of the financial asset, it recognises
the financial asset to the extent of its continuing involvement in the transferred financial
asset and recognises an associated liability. Relevant liabilities are measured using the
following methods:
•
For transferred financial assets carried at amortised cost, the carrying amount
of relevant liabilities is the carrying amount of financial assets transferred with
continuing involvement less amortised cost of the Group’s retained rights (if the
Group retains relevant rights upon transfer of financial assets) with addition
of amortised cost of obligations assumed by the Group (if the Group assumes
relevant obligations upon transfer of financial assets). Relevant liabilities are not
designated as financial liabilities at FVTPL.
•
For transferred financial assets carried at fair value, the carrying amount of
relevant financial liabilities is the carrying amount of financial assets transferred
with continuing involvement less fair value of the Group’s retained rights (if the
Group retains relevant rights upon transfer of financial assets) with addition of
fair value of obligations assumed by the Group (if the Group assumes relevant
obligations upon transfer of financial assets). Accordingly, the fair value of
relevant rights and obligations shall be measured on an individual basis.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria,
the difference between the carrying amount of the financial asset transferred and the
sum of the consideration received from the transfer and any cumulative gain or loss
that has been recognised in other comprehensive income, is recognised in profit or loss.
Where the transferred assets are non-held-for-trading equity instrument investments
designated as at FVTOCI, cumulative gains or losses previously recognised in other
comprehensive income are transferred out and included in retained earnings.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.3 Transfer of financial assets (continued)
If a part of the transferred financial asset qualifies for derecognition, the overall
carrying amount of the financial asset prior to transfer is allocated between the part
that continues to be recognised and the part that is derecognised, based on the
respective fair value of those parts at the date of transfer. The difference between the
carrying amount allocated to the part derecognised on the date of derecognition and
the sum of the consideration received for the part derecognised and any cumulative
gain or loss allocated to the part derecognised which has been previously recognised in
other comprehensive income, is recognised in profit or loss for the period. Where the
transferred assets are non-held-for-trading equity instrument investments designated
as at FVTOCI, cumulative gains or losses previously recognised in other comprehensive
income are transferred out and included in retained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition
criteria, the Group continues to recognise the transferred financial asset in its entirety.
The consideration received from transfer of assets is recognised as a liability upon
receipt.
11.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group or their components are classified into
financial liabilities or equity instruments on the basis of not only the legal form but also
the contractual arrangements and their economic substance, together with the definition
of financial liability and equity instrument.
11.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at
FVTPL and other financial liabilities.
11.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL include held-for-trading financial liabilities
(including derivative financial liabilities) and financial liabilities designated
as at FVTPL. Except for derivative financial liabilities which are presented
separately, financial liabilities at FVTPL are presented as held-for-trading
financial liabilities.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.4 Classification of financial liabilities and equity instruments (continued)
11.4.1 Classification, recognition and measurement of financial liabilities (continued)
11.4.1.1 Financial liabilities at FVTPL (continued)
A financial liability is classified as held-for-trading if any of the following
criteria is satisfied:
•
It has been incurred principally for the purpose of repurchasing it in
the near term.
•
On initial recognition, it is part of a portfolio of identified financial
instruments that the Company manages together and has a recent
actual pattern of short-term profit-taking.
•
It is a derivative that is neither a financial guarantee contract nor
designated as an effective hedging instrument.
A financial liability may be designated as at FVTPL upon initial recognition
if: (1) such designation eliminates or significantly reduces accounting
mismatch; (2) the Group makes management and performance evaluation
on a fair value basis for a portfolio of financial liabilities or a portfolio of
financial assets and financial liabilities, in accordance with the Group’s
formally documented risk management or investment strategy, and reports
to key management personnel on that basis; (3) the qualified hybrid
contract that contains embedded derivatives.
Held-for-trading financial liabilities are subsequently measured at fair value.
Any gains or losses arising from changes in the fair value and any dividend
or interest expenses paid on the financial liabilities are recognised in profit
or loss for the period.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.4 Classification of financial liabilities and equity instruments (continued)
11.4.1 Classification, recognition and measurement of financial liabilities (continued)
11.4.1.1 Financial liabilities at FVTPL (continued)
For a financial liability designated as at FVTPL, the amount of changes in
the fair value of the financial liability that are attributable to changes in
the credit risk of that liability shall be presented in other comprehensive
income, while other changes in fair value are included in profit or loss
for the period. Upon the derecognition of such financial liability, the
accumulated amount of changes in fair value that is attributable to
changes in the credit risk of that liability, which is recognised in other
comprehensive income, is transferred to retained earnings. Any dividend or
interest cost on the financial liabilities is recognised in profit or loss for the
period. If the accounting treatment for the impact of the change in credit
risk of such financial liability in the above ways would create or enlarge an
accounting mismatch in profit or loss, the Group shall present all gains or
losses on that liability (including the effects of changes in the credit risk of
that liability) in profit or loss for the period.
For financial liabilities arising from contingent consideration recognised
by the Group as the buyer in the business combination not involving
enterprises under common control, the Group measures such financial
liabilities at FVTPL.
11.4.1.2 Other financial liabilities
Except for financial liabilities and financial guarantee contracts arising from
transfer of financial assets that do not meet the derecognition criteria
or those arising from continuing involvement in the transferred financial
assets, other financial liabilities are subsequently measured at amortised
cost, with gain or loss arising from derecognition or amortisation recognised
in profit or loss for the period.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.4 Classification of financial liabilities and equity instruments (continued)
11.4.1 Classification, recognition and measurement of financial liabilities (continued)
11.4.1.2 Other financial liabilities (continued)
If the modification or renegotiation for the contract by the Group and
its counterparties does not result in derecognition of a financial liability
subsequently measured at amortised cost but the changes in contractual
cash flows, the Group will recalculate the carrying amount of the financial
liability, with relevant gain or loss recognised in profit or loss. The Group
will determine the carrying amount of the financial liability based on the
present value of renegotiated or modified contractual cash flows discounted
at the original effective interest rate of the financial liability. For all costs
or expenses arising from modification or renegotiation of the contract, the
Group will adjust the modified carrying amount of the financial liability
and make amortisation during the remaining term of the modified financial
liability.
11.4.1.2.1 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer
to make specified payments to reimburse the holder of the contract
for a loss it incurs when a specified debtor fails to make payment
when due in accordance with the original or modified terms of a debt
instrument. Subsequent to initial recognition, financial liabilities that
are not designated as at FVTPL or financial guarantee contracts of
the financial liabilities arising from the transfer of financial assets
that does not meet the derecognition criteria or those arising
from continuing involvement in the transferred financial assets are
measured at the higher of: (1) amount of loss allowance; and (2)
the amount initially recognised less cumulative amortisation amount
determined according to relevant regulations in revenue standards.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
11.
Financial instruments (continued)
11.4 Classification of financial liabilities and equity instruments (continued)
11.4.2 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying
present obligation (or part of it) is discharged. An agreement between the Group
(an existing borrower) and an existing lender to replace the original financial
liability with a new financial liability with substantially different terms is accounted
for as an extinguishment of the original financial liability and the recognition of a
new financial liability.
When the Group derecognises a financial liability or a part of it, it recognises the
difference between the carrying amount of the financial liability (or part of the
financial liability) derecognised and the consideration paid (including any non-cash
assets transferred or new financial liabilities assumed) in profit or loss for the
period.
11.4.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
issued (including refinanced), repurchased, sold and cancelled by the Group are
recognised as changes of equity. Change of fair value of equity instruments is
not recognised by the Group. Transaction costs related to equity transactions are
deducted from equity.
The Group recognises the distribution to holders of the equity instruments
as distribution of profits, and dividends paid do not affect total amount of
shareholders’ equity.
11.5 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised
financial assets and financial liabilities, and intends either to settle on a net basis, or to
realise the financial asset and settle the financial liability simultaneously, a financial asset
and a financial liability shall be offset and the net amount is presented in the balance
sheet. Except for the above circumstances, financial assets and financial liabilities shall
be presented separately in the balance sheet and shall not be offset.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
12.
Notes receivable
12.1 Categories of portfolios for which bad debt provision is assessed on a portfolio
basis according to credit risk characteristics and the basis of determination
In addition to the notes receivable for which the credit loss is recognised on an individual
basis, the Group classifies other notes receivable into different portfolios based on their
credit risk characteristics:
Categories of
portfolios
Basis for determination
Portfolio I
Notes receivable endorsed by a bank with a higher credit rating
Portfolio II
Notes receivable endorsed by a bank with a lower credit rating
Portfolio III
Notes receivable endorsed by domestic enterprises
12.2 Determination criteria of accounts receivable for which bad debt provision is
made on an individual basis
The Group determines the credit losses on notes receivable for which the acceptor is
clearly insolvent on an individual basis as such notes receivable are not expected to be
recoverable.
13.
Accounts receivable
13.1 Categories of portfolios for which bad debt provision is assessed on a portfolio
basis according to credit risk characteristics and the basis for determination
Accounts receivable is grouped as below based on common credit risk characteristics.
The common credit risk characteristics adopted by the Group include historical credit
losses, nature of customers, etc.
Categories of
portfolio
Basis for determination
Portfolio I
Accounts receivable arising from the business of
liquidation by CSRG
Portfolio II
Accounts receivable arising from revenue from entrusted
transportation services and comprehensive services
Portfolio III
Accounts receivable arising from circumstances other than
Portfolio I and II
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
13.
Accounts receivable (continued)
13.1 Categories of portfolios for which bad debt provision is assessed on a portfolio
basis according to credit risk characteristics and the basis for determination
(continued)
The Group calculates and determines the expected credit losses for each portfolio of
accounts receivable by taking into account the exposure at default, probability of default,
loss given default and projections of forward-looking information.
13.2 Determination criteria for bad debt provision on an individual basis
The Group individually assessed credit losses on accounts receivable for which the debtor
has factual default, an increase in operating risk or a deterioration in financial situation
due to a significant change in credit risk.
14.
Other receivables
14.1 Categories of portfolios for which bad debt provision is assessed on a portfolio
basis according to credit risk characteristics and the basis for determination
In addition to the other receivables for which the credit loss is recognised on an
individual basis, the remaining other receivables are all grouped as non-trading
receivables portfolio based on common credit risk characteristics. The common credit
risk characteristics adopted by the Group include historical credit losses, nature of
receivables, category of debtors, etc.
The expected credit losses on other receivables are assessed by the Group by using the
exposure at default and the expected credit loss ratio within the next 12 months or over
the lifetime, taking into account the current situation and forecasts of future economic
conditions.
14.2 Determination criteria for bad debt provision on an individual basis
The Group individually assessed credit losses on other receivables for which the debtor
has factual default, an increase in operating risk or a deterioration in financial situation
due to a significant change in credit risk.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
15.
Inventories
15.1 Categories of inventories, valuation method of inventories upon delivery,
inventory count system, and amortisation method for low-cost and short-lived
consumables and packaging materials
15.1.1 Categories of inventories
The Group’s inventories mainly include raw materials (low-cost and short-lived
consumables), goods on hand, other interchangeable parts and used rail materials,
etc. Inventories are initially measured at cost. Cost of inventories comprises all
costs of purchase, costs of conversion and other expenditures incurred in bringing
the inventories to their present location and condition.
15.1.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the first-in-first-out
method.
15.1.3 Inventory count system
The perpetual inventory system is maintained for stock system.
15.1.4 Amortisation method for low-cost and short-lived consumables and packaging
materials
Packing materials, low-cost and short-lived consumables are amortised using the
immediate charge-off method.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
15.
Inventories (continued)
15.2 Recognition criteria and method of provision for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net
realisable value. If the net realisable value is below the cost of inventories, a provision
for decline in value of inventories is made.
Net realisable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion, the estimated expenses necessary to make the sale
and the relevant taxes. Net realisable value is determined on the basis of clear evidence
obtained, and takes into consideration the purposes of holding inventories and effect of
post balance sheet events.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that
the net realisable value of inventories is higher than their carrying amount, the original
provision for decline in value is reversed and the reversal is included in profit or loss for
the period.
16.
Long-term equity investments
16.1 Determination criteria of joint control and significant influence
Control is the power over the investee, exposures 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 over an economic activity, and exists only when the strategic financial
and operating policy decisions relating to the activity 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. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights
of the investee (for example, warrants and convertible debts) held by the investing
enterprises or other parties that are currently exercisable or convertible shall be
considered.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.2 Determination of initial investment cost
For a long-term equity investment acquired through business combination involving
enterprises under common control, shares of carrying amount of owners’ equity of
combined party in financial statements of ultimate controlling party is recognised as
initial investment cost of long-term equity investment at the date of combination.
The difference between initial investment cost of long-term equity investment and
cash paid, non-cash assets transferred and carrying amount of liabilities assumed, is
adjusted in capital reserve. If the balance of capital reserve is not sufficient to absorb
the difference, any excess is adjusted to retained earnings. If the consideration of the
combination is satisfied by the issue of equity securities, the initial investment cost of
the long-term equity investment is the share of carrying amount of owners’ equity of the
acquired entity in the ultimate controlling party’s consolidated financial statements at
the date of combination. The aggregate face value of the shares issued is accounted for
as share capital. The difference between the initial investment cost and the aggregate
face value of the shares issued is adjusted to capital reserve. If the balance of capital
reserve is not sufficient to absorb the difference, any excess is adjusted to retained
earnings. Where equity interests in an acquiree are acquired in stages through multiple
transactions ultimately constituting a business combination involving entities under
common control, the acquirer shall determine if these transactions are considered to be
a “package deal”. If yes, these transactions are accounted for as a single transaction
where control is obtained. If not, the initial investment cost of the long-term equity
investment is determined in accordance with shares of carrying amount of owners’ equity
of the acquiree in the consolidated financial statements of the ultimate controlling party
at the date of combination. The difference between the initial investment cost and the
sum of carrying amount of equity investments previously held in the acquiree and the
new investment cost is adjusted to capital reserve. If the balance of capital reserve
is not sufficient to absorb the difference, any excess is adjusted to retained earnings.
Other comprehensive income recognised for the previously held equity investments by
accounting treatment of equity method or investments in non-trading equity instruments
designated as at FVTOCI is not subject to accounting treatment temporarily.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.2 Determination of initial investment cost (continued)
For a long-term equity investment acquired through business combination not
involving enterprises under common control, the investment cost of the long-term
equity investment is the cost of acquisition. Where equity interests in an acquiree are
acquired in stages through multiple transactions ultimately constituting a business
combination not involving entities under common control, the acquirer shall determine
if these transactions are considered to be a “package deal”. If yes, these transactions
are accounted for as a single transaction where control is obtained. If not, the sum
of carrying amount of equity investments previously held in the acquiree and the new
investment cost is deemed as the initial investment cost of long-term equity investments
that was changed to be accounted for using cost method. If the equity previously held
was accounted for using the equity method, the corresponding other comprehensive
income is not subject to accounting treatment temporarily. If the equity investment
previously held is designated as non-held-for-trading equity instrument investment at
fair value through other comprehensive income, the difference between its fair value and
carrying amount, and the accumulated changes in fair value previously included in other
comprehensive income are transferred to retained earnings.
The intermediary expenses incurred by the combining party or acquirer in respect of
auditing, legal services, valuation and consultancy services, etc., and other associated
administrative expenses attributable to the business combination are recognised in profit
or loss when they are incurred.
Long-term equity investment acquired otherwise than through a business combination
is initially measured at its cost. When the entity is able to exercise significant influence
or joint control (but not control) over an investee due to additional investment, the cost
of long-term equity investments is the sum of the fair value of previously-held equity
investments determined in accordance with the Accounting Standards for Business
Enterprises No. 22 – Recognition and Measurement of Financial Instruments (ASBE No.
22) and the additional investment cost.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 Long-term equity investment accounted for using the cost method
The parent company’s financial statements adopted the cost method to account
for the long-term equity investments in subsidiaries. A subsidiary is an investee
that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial
investment cost. When additional investment is made or the investment is
recouped, the cost of the long-term equity investment is adjusted accordingly.
Investment income is recognised in the period in accordance with the attributable
share of cash dividends or profit distributions declared by the investee.
16.3.2 Long-term equity investment accounted for using the equity method
Except for investments in associates and joint ventures classified as held-for-
sale partly or wholly, the Group accounts for investment in associates and joint
ventures using the equity method. An associate is an entity over which the Group
has significant influence and a joint venture is an entity over which the Group
exercises joint control along with other investors.
Under 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 time of acquisition, no adjustment is made to 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 time of
acquisition, the difference is recognised in profit or loss for the period, and the
cost of the long-term equity investment is adjusted accordingly.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.3 Subsequent measurement and recognition of profit or loss (continued)
16.3.2 Long-term equity investment accounted for using the equity method (continued)
Under the equity method, the Group recognises its share of the net profit or loss
and other comprehensive income of the investee for the period as investment
income and other comprehensive income for the period. Meanwhile, carrying
amount of long-term equity investment is adjusted: the carrying amount of
long-term equity investment is decreased in accordance with its share of the
investee’s declared profit or cash dividends; Other changes in owners’ equity
of the investee other than net profit or loss and other comprehensive income
are correspondingly adjusted to the carrying amount of the long-term equity
investment, and recognised in the capital reserve. The Group recognises its
share of the investee’s net profit or loss based on the fair value of the investee’s
individual identifiable assets, etc. at the acquisition date after making appropriate
adjustments. When the investors’ accounting policies and accounting period are
inconsistent with those of the Company, the Company recognises investment
income and other comprehensive income after making appropriate adjustments to
conform to the Company’s accounting policies and accounting period. However,
unrealised gains or losses resulting from the Group’s transactions with its
associates and joint ventures, which do not constitute a business, are eliminated
based on the proportion attributable to the Group and then investment gains or
losses or is recognised. However, unrealised losses resulting from the Group’s
transactions with its associates and joint ventures which represent impairment
losses on the transferred assets are not eliminated. When assets investment by
the Group constitutes a business, resulting in the investor’s obtainment of long-
term equity investments but no control, the fair value of such investment is
the initial investment cost of the long-term equity investments; The difference
between the initial investment cost and invested assets is recognised, at the
full amount, in profit or loss for the period. When sales of assets by the Group
constitute a business, the difference between the consideration received and the
carrying amount of such business is recognised, at full amount, in profit or loss
for the period. When assets purchased from the Group’s associates and joint
ventures constitute a business, gains or loss related to such transaction should
be recognised in full in accordance with the Accounting Standards for Business
Enterprises No. 20 – Business Combination.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.3 Subsequent measurement and recognition of profit or loss (continued)
16.3.2 Long-term equity investment accounted for using the equity method (continued)
The Group discontinues recognising its share of net losses of the investee after
the carrying amount of the long-term equity investment together with any long-
term interests that in substance form part of its net investment in the investee
is reduced to zero. In addition, if the Group has incurred obligations to assume
additional losses of the investee, a provision is recognised according to the
expected obligation, and recorded as investment loss for the period. Where net
profit is subsequently made by the investee, the Group resumes recognising its
share of the profit only after its share of the profit exceeds the share of loss
previously not recognised.
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds
actually received and receivable and the carrying amount is recognised in profit or
loss for the period. For a long-term equity investment accounted for using the equity
method, if remaining shares after the disposal are still accounted for using the equity
method, other comprehensive income is accounted for on the same basis of directly
disposed related assets and liabilities of investee, and profit or loss is carried forward
proportionately; Other owners’ equity recognised from changes of owners’ equity except
for net profit or loss, other comprehensive income and profit distribution is recognised
in profit or loss for the period and carried forward proportionately. For a long-term
equity investment accounted for using the cost method, if remaining shares after the
disposal are still accounted for using the cost method, other comprehensive income
recognised before controlling the investee according to equity method or recognition and
measurement of financial instruments, accounted for on the basis of directly disposed
related assets and liabilities of the investee, and recognised in profit or loss for the
period and carried forward proportionately; changes of owners’ equity except for net
profit or loss, other comprehensive income and profit distribution are carried forward and
recognised in profit or loss for the period.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
16.
Long-term equity investments (continued)
16.4 Disposal of long-term equity investments (continued)
The Group loses control on investee due to disposal of part of shares, during preparing
separate financial statement, remaining shares after disposal can make joint control or
significant influence on investee, are accounted under equity method, and adjusted as
they are accounted under equity method since the acquisition date; If remaining shares
after disposal cannot make joint control or significant influence on investee, they are
accounted according to recognition and measurement of financial instruments, and the
difference between fair value on date of losing control and carrying amount is recognised
in profit or loss for the period. Before the Group obtained controls over the investee,
other comprehensive income recognised due to equity method or recognition and
measurement of financial instruments, is accounted on the basis of related assets and
liabilities, and recognised in profit or loss; changes of owners’ equity except for net profit
or loss, other comprehensive income and profit distribution are recognised in profit or
loss for the period. Remaining shares after disposal are accounted under equity method,
other comprehensive income and other owners’ equity are carried forward as proportion;
remaining shares after disposal are accounted due to recognition and measurement
of financial instruments other comprehensive income and other owners’ equity are all
carried forward.
For the Group loses joint control or significant influence on investee after part disposal
of shares, remaining shares after disposal are accounted according to recognition and
measurement of financial instruments, the difference between fair value at the date of
losing joint control or significant influence and carrying amount is recognised in profit
or loss for the period. Other comprehensive income recognised under equity method, is
accounted on the basis of related assets or liabilities when stop using equity method,
change of owners’ equity except for net profit or loss, other comprehensive income and
profit distribution is recognised in investment income for the period.
The Group loses control on subsidiaries through step-by-step transactions of disposal,
if transactions are “package deal”, all transactions are seemed as one transaction of
disposal investment on subsidiaries, difference between amount of disposal and carrying
amount of long-term equity investment, is recognised as other comprehensive income,
and recognised in profit or loss of for the period when losing control.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
17.
Fixed assets
17.1 Recognition criteria
Fixed assets are tangible assets that are held for use in the production or supply of
goods or services, for rental to others, or for administrative purposes, and have useful
lives of more than one accounting year. A fixed asset is recognised only when it is
probable that economic benefits associated with the asset will flow to the Group and the
cost of the asset can be measured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed
asset and if it is probable that economic benefits associated with the asset will flow to
the Group and the cost can be measured reliably. Meanwhile, the carrying amount of the
replaced part is derecognised. Other subsequent expenditures are recognised in profit or
loss in the period in which they are incurred.
17.2 Depreciation method
A fixed asset is depreciated over its useful life using the straight-line method since the
month subsequent to the one in which it is ready for intended use. The depreciation
method, depreciation year, estimated residual value rate and annual depreciation rate of
each category of fixed assets are as follows:
Category
Depreciation method
Depreciation
year (years)
Estimated
residual
value rate
(%)
Annual
depreciation
rate
(%)
Buildings
Straight-line method
20-40 years
4
2.40 – 4.80
Tracks, bridges and
other line assets
Straight-line method
16-100 years
0 – 4
1.00 – 6.00
Locomotives and
rolling stock
Straight-line method
20 years
4
4.80
Communications and
signalling systems
Straight-line method
8-20 years
4
4.80 – 12.00
Other machinery and
equipment
Straight-line method
4-25 years
0 – 4
3.84 – 25.00
Estimated net residual value of a fixed asset is the estimated amount that the Group
would currently obtain from disposal of the asset, after deducting the estimated costs of
disposal, if the asset were already of the age and in the condition expected at the end of
its useful life.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
17.
Fixed assets (continued)
17.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be
generated from its use or disposal, the fixed asset is derecognised. When a fixed asset
is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the
asset net of the carrying amount and related taxes is recognised in profit or loss for the
period.
The Group reviews the useful life and the estimated net residual value of a fixed asset
and the depreciation method applied at least once at each financial year-end, and
accounts for any change as a change in an accounting estimate.
18.
Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalised before it
is ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use. The
criteria and point in time for carrying forward each category of construction in progress to fixed
assets are as follows:
Category
Criteria for carrying
forward to fixed
assets
Point in time for
carrying forward to
fixed assets
Construction and overhaul works
When it is ready for
intended use
Based on asset acceptance
certificates, acceptance
reports and other
information and when it is
ready for intended use
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
19.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalised when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary
to prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing
costs ceases when the qualifying asset being acquired, constructed or produced becomes ready
for its intended use or sale. Capitalisation of borrowing costs is suspended during periods in
which the acquisition, construction or production of a qualifying asset is suspended abnormally
and when the suspension is for a continuous period of more than 3 months. Capitalisation
is suspended until the acquisition, construction or production of the asset is resumed. Other
borrowing costs are recognised as an expense when incurred.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be
capitalised is the actual interest expenses incurred on that borrowing for the period less any
bank interest earned from depositing the borrowed funds before being used on the asset
or any investment income on the temporary investment of those funds. Where funds are
borrowed under general-purpose borrowings, the Company determines the amount of interest
to be capitalised on such borrowings by applying a capitalisation rate to the weighted average
of the excess of cumulative expenditures on the asset over the amounts of specific-purpose
borrowings. The capitalisation rate is the weighted average of the interest rates applicable to
the general-purpose borrowings.
20.
Intangible assets
20.1 Useful life and the basis for determination, estimates, amortisation method or
review procedures
Intangible assets include land use rights and computer software.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
20.
Intangible assets (continued)
20.1 Useful life and the basis for determination, estimates, amortisation method or
review procedures (continued)
An intangible asset is measured initially at cost. When an intangible asset with a finite
useful life is available for use, its original cost is amortised over its estimated useful life
using the straight-line method. An intangible asset with an indefinite useful life is not
amortised. The amortisation method, useful life and residual value rate of each category
of intangible assets are as follows:
Category
Amortisation
method
Useful life
(years)
Basis for
determining the
useful life
Residual
value rate
(%)
Land use
rights
Straight-line method
36.5-50 years
Term of land use
right/Estimated
term of use
—
Computer
software
Straight-line method
5 years
Estimated term of use
—
For an intangible asset with a finite useful life, the Group reviews the useful life and
amortisation method at the end of the year, and makes adjustments when necessary.
21.
Impairment of long-term assets
The Group reviews the long-term equity investments, fixed assets, construction in progress,
right-of-use assets and the intangible assets with a finite useful life at each balance sheet date
to determine whether there is any indication that they have suffered an impairment loss. If
an impairment indication exists, the recoverable amount is estimated. Intangible assets with
indefinite useful life and intangible assets not yet available for use are tested for impairment
annually, irrespective of whether there is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which
the asset belongs will be estimated. The recoverable amount of an asset or asset group is the
higher of its fair value less costs of disposal and the present value of the future cash flows
expected to be derived from the asset or asset group.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
21.
Impairment of long-term assets (continued)
If such recoverable amount is less than its carrying amount, a provision for impairment losses
in respect of the deficit is recognised in profit or loss for the period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of
impairment testing, goodwill is considered together with the related assets group(s), i.e.,
goodwill is reasonably allocated to the related assets group(s) or each of assets group(s)
expected to benefit from the synergies of the combination. An impairment loss is recognised if
the recoverable amount of the assets group or sets of assets groups (including goodwill) is less
than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount
of any goodwill allocated to such assets group or sets of assets groups, and then to the other
assets of the group on the pro-rata basis of the carrying amount of each asset (other than
goodwill) in the group.
Once an impairment loss of such assets is recognised, it will not be reversed in any subsequent
period.
22.
Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortised
over the current and subsequent periods (together of more than one year). Long-term prepaid
expenses are amortised using the straight-line method over the expected periods in which
benefits are derived.
23.
Contract liabilities
Contract liabilities refer to the Group’s obligation to transfer goods or services to a customer for
consideration received or receivable from the customer. Contract assets and contract liabilities
under the same contract will be presented on a net basis.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
24.
Employee benefits
24.1 Accounting treatment of short-term benefits
Actually incurred short-term employee benefits are recognised as liabilities, with a
corresponding charge to the profit or loss for the period or in the costs of relevant assets
in the accounting period in which employees provide services to the Group. Staff welfare
expenses incurred by the Group are recognised in profit or loss for the period or the
costs of relevant assets based on the actually incurred amounts when they are actually
incurred. Non-monetary staff welfare expenses are measured at fair value.
Payment made by the Group of social security contributions for employees such as
premiums or contributions on medical insurance, work injury insurance and maternity
insurance, etc. and payments of housing funds, as well as union running costs and
employee education fund provided in accordance with relevant requirements, are
calculated according to prescribed bases and percentages in determining the amount of
employee benefits and recognised as relevant liabilities, with a corresponding charge to
the profit or loss for the period or the costs of relevant assets in the accounting period
in which employees provide services.
24.2 Accounting treatment of post-employment benefits
Post-employment benefits are all defined contribution plans.
In an accounting period in which an employee has rendered service to the Group, the
amount payable calculated in accordance with the defined contribution plan is recognised
as a liability by the Group and charged to profit or loss for the period, or included in cost
of related assets.
24.3 Accounting treatment of termination benefits
A liability for a termination benefit is recognised in profit or loss at the earlier of when
the Group cannot unilaterally withdraw from the termination plan or the redundancy
offer and when it recognises any related restructuring costs.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
25.
Revenue
25.1 Disclosure of accounting policies adopted for revenue recognition and
measurement by type of business
The Group’s revenue is mainly from railway transportation and other businesses.
The Group recognises revenue based on the transaction price allocated to the
performance obligation when the Group satisfies a performance obligation in the
contract, namely, when the customer obtains control over relevant goods or services.
A performance obligation is a commitment that the Group transfers a distinct good or
service to a customer in the contract.
The Group assesses a contract at contract inception, identifies each individual
performance obligation included in the contract, and determines whether the Group
satisfies the performance obligation over time or the Group satisfies the performance
obligation at a point in time. It is a performance obligation satisfied over time and the
Group recognises revenue over time according to the progress of performance if one
of the following conditions is met: (1) the customer obtains and consumes economic
benefits at the same time of the Group’s performance; (2) the customer is able to control
goods or services in progress during the Group’s performance; (3) goods or services
generated during the Group’s performance have irreplaceable utilisation, and the Group
is entitled to collect amounts of cumulative performance part which have been done up
to now. Otherwise, revenue is recognised at a point in time when the customer obtains
control over the relevant goods or services.
The Group adopts output method and input method to determine the progress of
performance. The output method is to determine the progress of performance based
on the value of goods or services transferred to customers. The input method is to
determine the progress of performance based on the Group’s inputs to satisfy such
performance obligations. Where the progress cannot be determined reasonably and the
cost already incurred is expected to be compensated, the revenue is recognised based on
the amount of cost already incurred, until the progress can be reasonably determined.
The transaction price is the amount of consideration to which the Group expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties and amounts expected to be refunded to a
customer. In determining the transaction price, the Group should consider the effects
of variable consideration, significant financing components in the contract, non-cash
consideration and consideration payable to customers, etc.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
25.
Revenue (continued)
25.1 Disclosure of accounting policies adopted for revenue recognition and
measurement by type of business (continued)
If there are two or more of performance obligations included in the contract, at the
contract inception, the Group allocates the transaction price to each single performance
obligation based on the proportion of stand-alone selling price of goods or services
promised in each stand-alone performance obligation. However, if there is conclusive
evidence indicating that the contract discount or variable consideration is only relative
with one or more (not the whole) performance obligations in the contract, the Group
will allocate the contract discount or variable consideration to relative one or more
performance obligations. Stand-alone selling price refers to the price of a single sale
of goods or services. If the stand-alone selling price cannot be observed directly, the
Group estimates the stand-alone selling price through comprehensive consideration of
all relative information that can be reasonably acquired and maximum use of observable
inputs.
In case of the existence of variable consideration in the contract, the Group shall
determine the best estimates of the variable consideration based on the expected
value or the most probably incurred amount. The transaction price including variable
consideration shall not exceed the amount of the cumulatively recognised revenue which
is unlikely to be significantly reversed when relevant uncertainty is eliminated. At each
balance sheet, the Group re-estimates the amount of variable consideration which should
be recognised in transaction price.
For sales with quality assurance terms, if the quality assurance provides a separate
service to the customer other than ensuring that the goods or services sold meet the
established standards, the quality assurance constitutes a single performance obligation.
Otherwise, the Group will account for the quality assurance responsibility in accordance
with the Accounting Standards for Business Enterprises No. 13 – Contingencies.
The additional purchase options of customers include customer award integral. The
Group regards the additional purchase option, which provides significant right to the
customer, as a single performance obligation, and recognises revenue when the customer
exercises the purchase option to acquire the control over relevant goods or services in
the future, or when the option loses effect. Where the stand-alone selling price of the
additional purchase option of customers cannot be observed directly, the Group makes
an estimate considering all the relevant information including the difference in discount
when the customer exercises or does not exercise the option, and the possibility of the
customer to exercise the option.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
25.
Revenue (continued)
25.1 Disclosure of accounting policies adopted for revenue recognition and
measurement by type of business (continued)
The Group assesses whether it controls each specified good or service before that good
or service is transferred to the customer to determine whether the Group is a principal
or an agent. If the Group controls the specified good or service before that good or
service is transferred to a customer, the Group is a principal and recognises revenue
in the gross amount of consideration received or receivable. Otherwise, the Group is
an agent and recognises revenue in the amount of any fee or commission to which it
expects to be entitled. The fee or commission is the net amount of consideration that
the Group retains after paying the other party the consideration received in exchange for
the goods or services to be provided by that party, or is determined in accordance with
the established commission amount or percentage, etc.
Where the Group receives receipts in advance from a customer for sales of goods or
rendering of services, the amount is first recognised as a liability and then transferred to
revenue when the related performance obligation has been satisfied. When the Group’s
receipts in advance are not required to be refunded and it is probable that the customer
will waive all or part of its contractual rights, the Group recognises the said amounts as
revenue on a pro-rata basis in accordance with the pattern of exercise of the customer’s
contractual rights, if the Group expects to be entitled to the amounts relating to the
contractual rights waived by the customer; otherwise, the Group reverses the related
balance of the said liabilities to revenue only when it is highly unlikely that the customer
will require performance of the remaining performance obligations.
The specific revenue recognition criteria of the Group are as follows:
(a)
Rendering of railway transportation services
The railway business operated by the Group forms part of CSRG’s system and is
subject to the unified supervision and management of CSRG. The Group’s revenue
from rendering of the passenger transportation and freight transportation services,
and the related services is collected by the Group from customer or other railway
companies. The central clearance system of CSRG centrally calculates the revenue
to be recognised and the expenses to be borne by each railway company on the
basis of established charging standards and allocation methods.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
25.
Revenue (continued)
25.1 Disclosure of accounting policies adopted for revenue recognition and
measurement by type of business (continued)
(a)
Rendering of railway transportation services (continued)
(i)
Income from passenger transportation
Income from passenger transportation generally includes those from
transportation business of Guangzhou-Shenzhen inter-city express trains
and long-distance trains. These services are provided by the Group as a
carrier, and the corresponding revenue is recorded and processed by CSRG
through the central clearance system.
Income from passenger transportation services provided by the Group is
recognised according to the progress of performance based on the monthly
clearing notice from CSRG.
(ii)
Income from freight transportation
The Group, as a carrier, provides freight transportation services. Relevant
information about freight transportation and the collection and calculation
of revenue are processed by the central clearance system of CSRG.
Income from freight transportation services rendered by the Group is
recognised according to the progress of performance based on the monthly
clearing notice from CSRG.
(iii)
Income from railway network clearing and other transportation related
services
Income from railway network clearing and other transportation related
services represents the income from the settlement of the railway network
and other transportation related services arising from other railway
companies using the locomotive traction service, railway lines, power supply
service, etc. provided by the Group. The information of the settlement of
the railway network and other transportation related services is recorded
and processed by the central clearance system of CSRG. Income from the
settlement of the railway network and other transportation related services
is recognised according to the progress of performance based on the
monthly clearing notice from CSRG.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
25.
Revenue (continued)
25.1 Disclosure of accounting policies adopted for revenue recognition and
measurement by type of business (continued)
(a)
Rendering of railway transportation services (continued)
(iv)
Income from entrusted transportation service
Income from entrusted transportation service represents income from
transportation equipment, facilities maintenance, station and passenger
service, as well as security and fire protection service within the scope of
entrusted lines as entrusted by other railway companies, and such revenue
is collected by the Group from the service recipients and recognised over
time based on the progress of performance.
The progress of performance is determined by the proportion of the costs
incurred to the estimated total costs or of the time completed to the
estimated total time. At the balance sheet date, the Group re-estimates the
progress of completed services to reflect changes in performance.
(b)
Sales of goods
The Group sells goods such as foods, beverages and products to customers
on trains and in stations, and recognises revenue when the control of goods is
transferred.
(c)
Rendering of other labour services
The Group also provides external services such as maintenance, loading
and unloading, and recognises revenue over time based on the progress of
performance, which is determined at the balance sheet date based on the
proportion of the costs incurred to the estimated total costs.
25.2 Similar operations under different business models which involve different
revenue recognition and measurement methods
The Group has no similar operations under different business models which involve
different revenue recognition and measurement methods.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
26.
Contract costs
26.1 Costs of obtaining a contract
For the incremental cost of obtaining the contract (cost that will not incur if the contract
is not obtained) that is expected to be recoverable, it is recognised as an asset, and shall
be amortised on a basis that is consistent with the revenue recognition of the goods or
services to which the asset relates and recognised in profit or loss for the period. If the
amortisation period of the asset does not exceed one year, it is recognised in profit or
loss for the period in which it incurs. Other expenses incurred for obtaining the contract
is included in profit or loss for the period when incurred, except for those explicitly
assumed by the customer.
26.2 Costs to fulfil a contract
If the costs incurred in fulfilling a contract are not within the scope of any standards
other than Revenue Standards, the Group recognises an asset from the costs incurred
to fulfil a contract only if those costs meet all of the following criteria: (1) the costs
relate directly to a contract or to an anticipated contract that the Group can specifically
identify; (2) the costs generate or enhance resources of the Group that will be used in
satisfying performance obligations in the future; and (3) the costs are expected to be
recovered. The asset mentioned above shall be amortised on a basis that is consistent
with the revenue recognition of the goods or services to which the asset relates and
recognised in profit or loss for the period.
26.3 Impairment loss of assets related to contract costs
In determining impairment loss on assets related to contract costs, impairment loss
should first be determined for the other assets related to the contract, which is
recognised in accordance with other relevant ASBEs; then, for assets related to contract
costs, where the carrying amount is higher than the difference between the two items
below, the impairment allowance will be made for the excess part with the impairment
loss of assets recognised: (1) the remaining consideration that the Group expects to
obtain for transfer of goods or services relating to the assets; and (2) the costs expected
to incur for transfer of those goods or services.
The Group shall recognise in profit or loss a reversal of an impairment loss of assets
related to contracts costs previously recognised when the impairment conditions have
changed owing to which the difference between the above two items is in excess of the
asset’s carrying amount. The reversed carrying amount of the asset at the reversal date
shall not exceed the amount that would have been determined if no impairment loss had
been recognised previously.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
27.
Government grants
Government grants are monetary assets and non-monetary assets from the government to the
Group at no consideration. A government grant is recognised only when the Group can comply
with the conditions attaching to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the
amount received or receivable. If a government grant is in the form of a non-monetary asset,
it is measured at fair value. If the fair value is not reliably determinable, it is measured at a
nominal amount. A government grant measured at a nominal amount is recognised immediately
in profit or loss for the period.
27.1 Determination basis and accounting treatment for government grants related
to assets
The Group’s government grants mainly consist of project-related grants, which are
government grants related to assets.
A government grant related to an asset is recognised as deferred income and included
in profit or loss over the expected useful life of the related asset using the straight-line
method at the commencement date after the completion of the related projects.
27.2 Determination basis and accounting treatment for government grants related
to income
The Group’s government grants mainly consist of tax refunds and government incentive
fund, which are government grants related to income.
For a government grant related to income, if the grant is a compensation for related
expenses or losses to be incurred in subsequent periods, the grant is recognised as
deferred income, and recognised in profit or loss over the period in which the related
expenses or losses are recognised. If the grant is a compensation for related expenses
or losses already incurred, the grant is recognised immediately in profit or loss for the
period.
A government grant related to the Group’s daily activities is recognised in other income
based on the nature of economic activities. A government grant not related to the
Group’s daily activities is recognised in non-operating income.
For the repayment of a government grant already recognised, if there is any related
deferred income, the repayment is offset against the gross carrying amount of the
deferred income, with any excess recognised immediately in profit or loss for the period.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
28.
Deferred tax assets/deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
28.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and
prior periods are measured at the amount expected to be paid (or recovered) according
to the requirements of tax laws.
28.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities
and their tax base, or between the nil carrying amount of those items that are not
recognised as assets or liabilities and their tax base that can be determined according
to tax laws, deferred tax assets and liabilities are recognised using the balance sheet
liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets
for deductible temporary differences are recognised to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can
be utilised. However, for temporary differences associated with the initial recognition of
goodwill and the initial recognition of an asset or liability arising from a transaction (not
a business combination) that affects neither the accounting profit nor taxable income
(or deductible losses) and does not give rise to equal taxable and deductible temporary
differences at the time of transaction, no deferred tax asset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognised to the extent that it is probable that future taxable profits will be available
against which the deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where
the Group is able to control the timing of the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such
investments and interests are only recognised to the extent that it is probable that there
will be taxable profits against which to utilise the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
28.
Deferred tax assets/deferred tax liabilities (continued)
28.2 Deferred tax assets and deferred tax liabilities (continued)
At the balance sheet date, deferred tax assets and liabilities are measured at the tax
rates, according to tax laws, that are expected to apply in the period in which the asset
is realised or the liability is settled.
Current income tax and deferred tax expenses or income are recognised in profit or
loss for the period, except when they arise from transactions or events that are directly
recognised in other comprehensive income or in owners’ equity, in which case they are
recognised in other comprehensive income or in owners’ equity; and when they arise
from business combinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and
reduced if it is no longer probable that sufficient taxable profits will be available in the
future to allow the benefit of deferred tax assets to be utilised. Such reduction in amount
is reversed when it becomes probable that sufficient taxable profits will be available.
28.3 Income tax offsetting
When the Group has a legal right to settle on a net basis and intends either to settle on
a net basis or to realise the assets and settle the liabilities simultaneously, current tax
assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net
basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different taxable
entities which intend either to settle current tax assets and liabilities on a net basis or to
realise the assets and liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax
assets and deferred tax liabilities are offset and presented on a net basis.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases
A lease is a contract whereby the lessor conveys to the lessee in return for a consideration the
right to use an asset for an agreed period of time.
The Group assesses whether a contract is or contains a lease at inception date. Such contract
will not be reassessed unless the terms and conditions of the contract are subsequently
changed.
29.1 The Group as a lessee
29.1.1 Separating components of a lease
If the contract contains one or more lease and non-lease components, the Group
will separate the individual lease and non-lease components and allocate contract
consideration according to the relative proportion of the sum of the stand-alone
prices of the lease components and the stand-alone prices of the non-lease
components.
29.1.2 Right-of-use assets
Except for short-term leases and leases of low-value assets, at the commencement
date of the lease, the Group recognises a right-of-use asset. The commencement
date of the lease is the date on which a lessor makes an underlying asset
available for use by the Group. The Group measures the right-of-use assets at
cost. The cost of the right-of-use assets comprises:
•
the amount of the initial measurement of the lease liabilities;
•
any lease payments made at or before the commencement date, less any
lease incentives received;
•
any initial direct costs incurred by the Group;
•
an estimate of costs to be incurred by the Group in dismantling and
removing the underlying asset, restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and
conditions of the lease, unless those costs incurred to produce inventories.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.1 The Group as a lessee (continued)
29.1.2 Right-of-use assets (continued)
The Group depreciates right-of-use assets by reference to the relevant
depreciation provisions of the Accounting Standards for Business Enterprises No.
4 – Fixed Assets. The right-of-use assets are depreciated over the remaining
useful lives of the leased assets where the Group is reasonably certain to obtain
ownership of the underlying assets at the end of the lease term. Otherwise, right-
of-use assets are depreciated over the shorter of the lease term and the remaining
useful lives of the leased assets.
The Group applies the Accounting Standards for Business Enterprises No. 8 –
Impairment of Assets, to determine whether the right-of-use assets are impaired
and to account for any impairment loss identified.
29.1.3 Lease liabilities
Except for short-term leases and leases of low-value assets, at the commencement
date of the lease, the Group measures the lease liabilities at the present value of
the lease payments that are not paid at that date. In calculating the present value
of lease payments, the Group uses the interest rate implicit in the lease as the
discount rate. The Group uses the incremental borrowing rate if the interest rate
implicit in the lease is not readily determinable.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.1 The Group as a lessee (continued)
29.1.3 Lease liabilities (continued)
Lease payments refer to payments relating to the right to use leased assets during
the lease term which are made by the Group to the lessor, including:
•
fixed payments and in-substance fixed payments, less any lease incentives
receivable (if any);
•
variable lease payments that depend on an index or a rate;
•
the exercise price of a purchase option reasonably certain to be exercised
by the Group;
•
payments of penalties for terminating a lease, if the lease term reflects the
Group exercising the option to terminate the lease; and
•
amounts expected to be paid under residual value guarantees provided by
the Group.
After the commencement date of the lease, the Group calculates interest expenses
of lease liabilities for each period of the lease term based on fixed periodic rate,
and recognises such expenses in profit or loss or cost of related assets.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.1 The Group as a lessee (continued)
29.1.3 Lease liabilities (continued)
After the commencement date of the lease, the Group re-measures the lease
liabilities and adjusts the right-of-use assets accordingly in the following cases. If
the carrying amount of the right-of-use asset has been reduced to zero, but the
lease liability needs to be reduced further, the Group will recognise the difference
in profit or loss for the period:
•
there is a change in the lease term, or in the assessment of an option to
purchase the underlying asset, in which case the related lease liability is
remeasured by discounting the revised lease payments using a revised
discount rate at the date of reassessment;
•
there is a change in the amounts expected to be payable under a residual
value guarantee, or in future lease payments resulting from a change in an
index or a rate used to determine those payments, in which case the related
lease liability is remeasured by discounting the revised lease payments
using the unchanged discount rate. If the change of lease payment comes
from the change of floating interest rate, the revised discount rate shall be
used to calculate the present value.
29.1.4 Determination basis and accounting treatment for short-term leases and leases of
low value assets under simplified approach as a lessee
The Group chooses not to recognise right-of-use assets and lease liabilities for
short-term leases and leases of low-value assets. A short-term lease is a lease
that at the commencement date, has a lease term of 12 months or less and does
not contain a purchase option. A lease of low-value assets is a lease that the
single underlying asset, when is new, is no more than RMB50,000.00. The Group
shall recognise the lease payments associated with short-term leases and leases of
low-value assets in profit or loss or cost of related assets on a straight-line basis
over the lease term.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.1 The Group as a lessee (continued)
29.1.5 Lease modifications
The Group accounts for a lease modification as a separate lease if:
•
the lease modification expanded the scope of the lease by adding the right-
of-use of one or more lease assets; and
•
the increased consideration is equivalent to the amount of stand-alone price
of the expanded lease scope adjusted according to the contract.
If the lease modification is not accounted for as an individual lease, on the
effective date of the lease modification, the Group reallocates the consideration
of the contract after the change, re-determines the lease term, and re-measures
lease liabilities based on the changed lease payments and the present value
calculated by the revised discount rate.
If the lease modification results in a reduction in the lease scope or lease term,
the carrying amount of the right-of-use assets will be reduced, and the gains or
losses relevant to the lease partially of fully terminated will be included in profit or
loss for the period; for other lease modifications resulting in the remeasurement of
lease liabilities, the carrying amount of right-of-use assets is adjusted accordingly.
29.2 The Group as lessor
29.2.1 Separating components of a lease
For a contract that contains lease components and non-lease components, the
Group allocates the contract consideration in accordance with the Revenue
Standards on apportionment of transaction prices, based on the respective stand-
alone prices of the lease components and the non-lease components.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.2 The Group as lessor (continued)
29.2.2 Classification criteria and accounting treatment of leases as a lessor
Leases are classified as finance leases whenever the terms of the leased assets
transfer substantially all the risks and rewards of ownership to the lessee. All
other leases are classified as operating leases.
29.2.2.1 The Group as lessor under operating leases
Receipts of lease under operating leases are recognised as rental income on
a straight-line basis over the term of the relevant lease. Initial direct costs
related to operating leases incurred by the Group are capitalised when
incurred, and are recognised in profit or loss for the period on the same
basis as recognition of rental income over the lease term.
Variable lease receipts acquired by the Group in connection with operating
leases that are not included in the lease receipts are recognised in profit or
loss when incurred.
29.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognises a finance lease receivable
at the amount equal to the net investment in the lease with finance lease
assets derecognised. The net investment in the lease is the sum of any
unguaranteed residual value and lease receipts from the commencement
date, discounted at the interest rate implicit in the lease.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.2 The Group as lessor (continued)
29.2.2 Classification criteria and accounting treatment of leases as a lessor (continued)
29.2.2.2 The Group as lessor under finance leases (continued)
The receipts of the lease refer to the amount that the Group should collect
from the lessee for the purpose of transferring the leased assets during the
lease term, including:
•
fixed payments (including in-substance fixed payments) paid by the
lessee, less any lease incentives;
•
variable lease payments that depend on an index or a rate;
•
the exercise price of a purchase option, provided that it is reasonably
determined that the lessee will exercise the option;
•
the amount to be paid by the lessee to exercise the option to
terminate the lease, provided that the lease term reflects the lessee’s
exercise of the option to terminate the lease;
•
the residual value of the guarantee provided by the lessee, the party
concerned with the lessee and the independent third party with the
financial ability to perform the guarantee obligation.
The variable lease receipts that are not included in the measurement of net
lease investment are recognised in profit or loss when incurred.
The Group calculates and recognises interest income for each period of the
lease term based on a fixed periodic interest rate.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.2 The Group as lessor (continued)
29.2.3 Subleases
As the lessor of a sublease, the Group accounts for the original lease contract
and the sublease contract as two separate contracts. The Group classifies the
subleases based on the right-of-use assets generating from the original lease
rather than the underlying assets of the original lease.
29.2.4 Lease modifications
The Group accounts for a modification to an operating lease as a new lease from
the effective date of the modification, considering any advances from customers
or lease receivable relating to the original lease as part of the lease receivable for
the new lease.
The Group will account for the lease modification to a finance lease as an
individual lease, when it satisfies all the following criteria:
•
The modification increases the scope of the lease by adding the right to use
one or more underlying assets; and
•
the increased consideration is equivalent to the amount of stand-alone price
of the expanded lease scope adjusted according to the contract.
For a modification to a finance lease that is not accounted for as a separate lease,
the Group shall account for the modification as follows:
•
If the lease would have been classified as an operating lease had the
modification been effect at the inception date, the Group shall account
for the lease modification as a new lease from the effective date of the
modification, and measure the carrying amount of the underlying asset
as the net investment in the lease before the effective date of the lease
modification.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
29.
Leases (continued)
29.2 The Group as lessor (continued)
29.2.4 Lease modifications (continued)
•
If the lease would have been classified as a finance lease if the modification
had been in effect at the inception date, the Group shall apply the
requirements of contract modification and renegotiation under the ASBE No.
22 Financial Instruments: Recognition and Measurement.
30.
Safety production cost
In accordance with the Administrative Measures for the Appropriation and Utilisation of
Enterprise Safety Production Costs (Cai Zi No. 136 [2022]) jointly issued by the Ministry
of Finance and the Ministry of Emergency Management on 13 December 2022, the Group
appropriates safety production cost to special reserve and includes it into costs of relevant
products or profit or loss for the period. Safety production cost is accrued by the Group based
on the actual operating income of the prior year at the following rates:
(1)
1% for general freight transportation;
(2)
1.5% for passenger transportation, pipeline transportation and special freight
transportation such as transportation of hazardous goods.
When the safety production cost appropriated is used as an expense, it shall directly be
offset against special reserve. When the utilisation of safety production cost generates fixed
assets, the expenditure shall be collected and recognised via “construction in progress” and
then recognised as fixed assets when the safety project is completed and ready for intended
use; costs related to the fixed assets generated will be offset against the special reserve and
recorded as accumulated depreciation equivalent to the same amount. Such fixed assets shall
not be depreciated in subsequent periods.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
31.
Significant changes in accounting policies
The Interpretation No. 17 of the Accounting Standards for Business Enterprises (“Interpretation
No. 17”) and The Interpretation No. 18 of the Accounting Standards for Business Enterprises
(“Interpretation No. 18”) was issued by the Ministry of Finance on 25 October 2023 and 6
December 2024, respectively.
Interpretation No. 17
The Interpretation No. 17 standardised accounting treatment concerning the classification of
current liabilities and non-current liabilities and sale and leaseback transactions, and came into
effect on 1 January 2024.
1.
Classification of current liabilities and non-current liabilities
The Interpretation No. 17 amended and improved the principles for classification
of current liabilities and non-current liabilities in Accounting Standards for Business
Enterprises No. 30 – Presentation of Financial Statements, specifying (1) that a liability
shall be classified as a current liability if the enterprise has no substantive right at
the balance sheet date to defer the settlement of the liability for more than one year
after the balance sheet date. The subjective likelihood of the enterprise’s exercise of
the aforesaid right does not affect the classification of a liability as current and non-
current; (2) that where a liability is arising from the enterprise’s loan arrangement and
the enterprise’s right to defer the settlement of the liability for more than one year after
the balance sheet date may depend on covenants, the enterprise should distinguish the
covenants to be complied with on or before the balance sheet date from those to be
complied with after the balance sheet date in determining whether it has the right to
defer the settlement of the liability at the balance sheet date; (3) that the associated
settlement terms of a liability are irrelevant to the classification of the liability as
current and non-current if the counterparty has the option to settle the liability with the
enterprise’s own equity instrument and the option is classified as an equity instrument
and separately recognised; and (4) the disclosure requirements relating to a loan
arrangement with covenants that is classified as a non-current liability, enabling the
users of the financial statements to understand the risk that the liability may be required
to be settled within one year after the balance sheet date. Meanwhile, enterprises are
also required to adjust the information for comparative period in accordance with the
provisions of the Interpretation upon initial application.
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GUANGSHEN RAILWAY 2024 ANNUAL REPORT
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
31.
Significant changes in accounting policies (continued)
Interpretation No. 17 (continued)
2.
Accounting treatment of sale and leaseback transactions
The Interpretation No. 17 stipulated that where the transfer of assets in a sale and
leaseback transaction is considered as a sale, in making subsequent measurement
of the lease liabilities arising from the sale and leaseback transaction after the lease
commencement date, the lessee shall not determine the lease payment or modified lease
payment in such a manner as to result in the lessee’s recognition of any gain or loss in
connection with the use right obtained from the sale and leaseback transaction. Where
a lease change results in a narrower lease scope or a shorter lease term, the lessee
shall include the relevant gain or loss of the partially or completely terminated lease
in the profit or loss for the period, and shall not be subject to restrictions prescribed
above. When an enterprise implements this Interpretation for the first time, it shall make
retrospective adjustments to the sale and leaseback transaction carried out after the
date of initial implementation of the Accounting Standards for Business Enterprises No.
21 – Leases.
The Group has applied the Interpretation since 1 January 2024, upon assessment, the
Group considers that the adoption of the above Interpretation has no significant impact
on the financial statements of the Group.
Interpretation No. 18
The Interpretation No. 18 stipulated the subsequent measurement of investment properties held
as underlying items under the variable fee method and the accounting treatment of assurance-
type warranties which are not separate performance obligations. The interpretation became
effective from 6 December 2024, and enterprises are allowed to implement it in advance from
the year of release.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
31.
Significant changes in accounting policies (continued)
Interpretation No. 18 (continued)
1.
Subsequent measurement of investment properties held as underlying items under the
variable fee method
Interpretation No. 18 stipulates that enterprises implementing Accounting Standards
for Business Enterprises No. 25 – Insurance Contracts may choose to adopt either the
fair value model or the cost model in its entirety for the subsequent measurement of
investment properties held as underlying items under the variable fee method when
the requirements of Accounting Standards for Business Enterprises No. 3 – Investment
Properties for subsequent measurement using the fair value model are met, provided
that those two measurement models cannot be used simultaneously for that portion of
investment properties, and the choice to use the fair value model cannot be converted
to the cost model. In the first implementation of the interpretation, enterprises should
treat the change from the cost model to the fair value model for investment properties
held as underlying items under the variable fee method mentioned above as changes in
accounting policies and make retrospective adjustments.
2.
Accounting treatment of assurance-type warranties which are not separate performance
obligations
Interpretation No. 18 stipulates that when accounting for provisions arising from
assurance-type warranties which are not separate performance obligations in
accordance with the Revenue Standards, the amount determined shall be debited to
“principal operating costs” or “other operating costs” and credited to “provisions”, and
presented accordingly under “operating costs” in the income statement and “other
current liabilities”, “non-current liabilities due within one year” and “provisions” in the
balance sheet in accordance with the Accounting Standards for Business Enterprises
No. 13 – Contingencies. When the interpretation is initially applied, the enterprise shall
retrospectively adjust the changes in accounts and items presented in the financial
statements involving the accounting treatment of above assurance-type warranties as
changes in accounting policies if such assurance-type warranties were included in “selling
expenses”.
The Group has applied the Interpretation since 6 December 2024, upon assessment, the
Group considers that the adoption of the above Interpretation has no significant impact
on the financial statements of the Group.
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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
32.
Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates
In the application of accounting policies as set out in Note III, the Group is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainties of the
operating activities. These judgments, estimates and assumptions are based on historical
experience of the Group’s management as well as other factors that are considered to be
relevant. Actual results may differ from these estimates. The aforementioned judgments,
estimates and assumptions are reviewed regularly on a going concern basis. The effect of a
change in accounting estimate is recognised in the period of the change, if the change affects
that period only; or recognised in the period of the change and future periods, if the change
affects both.
32.1 Key assumptions and uncertainties in accounting estimates
(1)
Measurement of ECL on accounts receivable
The Group classifies accounts receivable into several portfolios by credit risk
characteristics and recognises bad debt provision based on expected credit
losses calculated on a portfolio basis in conjunction with default risk exposures
and expected credit loss rates, including projections of probability of default,
default loss rates and forward-looking information. The management makes
comprehensive judgments and estimates based primarily on the credit status of
customers and the current condition of operations. The Group regularly monitors
and reviews the assumptions related to the calculation of expected credit losses.
In considering forward-looking information, the Group uses indicators such as the
risk of an economic downturn, the external market environment, the technological
environment, and changes in customer conditions.
Where the actual credit losses incurred differ from the original estimates, such
differences will affect the carrying amounts of the Group’s related financial assets
in future periods.
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(continued)
32.
Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates (continued)
32.1 Key assumptions and uncertainties in accounting estimates (continued)
(2)
Estimated useful lives of fixed assets
The estimated useful lives of fixed assets, particularly line assets, are determined
by the management with reference to: (1) historical use of the assets; (2)
expected actual loss of the assets; (3) results of recent durability assessments; (4)
technological or commercial obsolescence of fixed assets of the same category due
to changes or improvements in production; (5) estimated useful life or operating
lease term of the land to which the assets are attached; (6) changes in market
demand for the use of fixed assets and legal or similar restrictions. The estimated
useful lives are reviewed and adjusted as appropriate at the end of each year and
remained unchanged during the year ended 31 December 2024.
198
199
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IV. TAXATION
1.
Major categories and rates of taxes:
Category
Tax base
Tax rate
Value added tax (“VAT”)
(Note)
Income from engineering construction and
installation
9%
Income from passenger, freight, use of
high-speed trains and other transportation
9%
Income from railway network clearing,
catering, labour and other operations
6%
Urban maintenance and
construction tax
Turnover tax payable
7%, 5%
Education surcharge
Turnover tax payable
3%
Local education surcharge
Turnover tax payable
2%
Enterprise income tax
Taxable income
20% and 25%
Note: In accordance with the Announcement No. 6 [2014] of the State Taxation Administration on Interim
Measures for the Administration of Collection of Value-Added Tax on Railway Transport Enterprises,
where the Group provides railway transportation and auxiliary services, prepaid tax payable shall
be calculated based on the sales other than the railway construction funds (i.e. income derived
from the provision of railway transportation and auxiliary services for passengers, shippers,
consignees and other railway transportation enterprises) and the prepaid tax rate and declared to
the competent tax authorities on a monthly basis without deduction against input VAT. The Group’s
output and input VAT relating to railway transportation and auxiliary services are reported to the
CSRG, which will summarise and calculate the amount of VAT payable; taxes for taxable activities
other than railway transportation and auxiliary services will be declared by the Group to local
authorities.
IV. TAXATION (continued)
2.
Tax preference
Tax preference for small and micro enterprises
In accordance with the Announcement of the Ministry of Finance and the State Taxation
Administration on Further Implementing the Preferential Income Tax Policies for Micro
and Small Enterprises (Announcement No. 13 [2022] of the Ministry of Finance and the
State Taxation Administration) and the Announcement of the Ministry of Finance and the
State Taxation Administration on the Relevant Tax and Fee Policies for Further Supporting
the Development of Micro and Small Enterprises and Individual Industrial and Commercial
Households (Announcement No. 12 [2023] of the Ministry of Finance and the State
Administration of Taxation), the annual taxable income of small and micro enterprises that is
less than RMB3 million is included in taxable income at a reduced rate of 25% and is subject to
the enterprise income tax rate of 20% from 1 January 2022 and 31 December 2027.
The Company’s subsidiaries, Guangzhou Railway Huangpu Service Company Limited (“Huangpu
Service”) and Shenzhen Pinghu Qun Yi Railway Store Loading and Unloading Company
Limited (“Pinghu Qun Yi”) are small and micro-profit enterprises and are entitled to the above
preferential policies.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Cash and bank balances
RMB
Item
31 December
2024
31 December
2023
Cash on hand:
631,228
2,100,280
RMB
631,228
2,100,280
Bank deposits:
1,934,263,973
1,480,355,424
RMB
1,930,738,615
1,467,296,026
HKD
3,525,358
13,059,398
Other monetary funds:
5,699
7,632
HKD
5,699
7,632
Total
1,934,900,900
1,482,463,336
Including: Total amount deposited abroad
—
—
200
201
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
2.
Notes receivable
(1)
Categories of notes receivable
RMB
Categories
31 December
2024
31 December
2023
Bank acceptances
192,750,000
—
The Group considers that the accepting banks of the bank acceptances held are with
high credit ratings and the Group is not exposed to significant credit risk, therefore, no
bad debt provision is made.
(2)
The Group has no pledged notes receivable at the end of the year.
(3)
The Group has no notes receivable endorsed or discounted and not yet due at the
balance sheet date
(4)
As at 31 December 2024, the Group has no notes that transferred to accounts receivable
at the end of the year due to the default of the drawer.
(5)
The Group has no notes receivable that have been actually written off for the year.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3.
Accounts receivable
(1)
Disclosed by aging
RMB
Aging
31 December
2024
Gross carrying
amount
31 December
2023
Gross carrying
amount
Within 1 year
4,320,065,745
4,823,398,941
1 to 2 years
1,383,946,168
1,295,753,160
2 to 3 years
158,406,598
125,069,066
Over 3 years
124,728,569
29,153,367
Total
5,987,147,080
6,273,374,534
(2)
Disclosed by method of bad debt provision:
RMB
Category
31 December 2024
31 December 2023
Gross carrying amount
Bad debt provision
Carrying
amount
Gross carrying amount
Bad debt provision
Carrying
amount
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Bad debt provision assessed on a portfolio basis:
Including:
Portfolio I
187,670,219
3.13
—
—
187,670,219
269,407,292
4.29
—
—
269,407,292
Portfolio II
5,690,020,419
95.04
44,698,993
0.79
5,645,321,426
5,784,728,754
92.21
31,688,008
0.55
5,753,040,746
Portfolio III
109,456,442
1.83
2,134,670
1.95
107,321,772
219,238,488
3.50
2,134,670
0.97
217,103,818
Total
5,987,147,080
100.00
46,833,663
5,940,313,417
6,273,374,534
100.00
33,822,678
6,239,551,856
202
203
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3.
Accounts receivable (continued)
(2)
Disclosed by method of bad debt provision: (continued)
Bad debt provision assessed on a portfolio basis:
Items for which the bad debt provision is assessed on a portfolio basis: Portfolio I
Description
31 December 2024
Accounts
receivable
Bad debt
provision
Proportion
Portfolio I
187,670,219
—
—
Items for which the bad debt provision is assessed on a portfolio basis: Portfolio II
Description
31 December 2024
Accounts
receivable
Bad debt
provision
Proportion
Portfolio II
5,690,020,419
44,698,993
0.79%
Items for which the bad debt provision is assessed on a portfolio basis: Portfolio III
Description
31 December 2024
Accounts
receivable
Bad debt
provision
Proportion
Portfolio III
109,456,442
2,134,670
1.95%
Description of bad debt provision assessed on a portfolio basis:
The Group’s accounting policy for the bad debt provision is detailed in Note (III) 13. The
management calculates the expected credit loss of accounts receivable, which is adjusted
according to the specific factors of the borrowers at the balance sheet date and the
assessment on expectations of the current situation and future economic conditions.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3.
Accounts receivable (continued)
(3)
Measurement of expected credit losses at an amount equivalent to the lifetime
ECL:
RMB
Bad debt provision
Lifetime ECL
(not credit-
impaired)
Lifetime ECL
(credit-
impaired)
Total
Balance at 1 January 2024
33,822,678
—
33,822,678
Balance at 1 January 2024
– Transfer to those
credit-impaired
—
—
—
– Reverse to those not
credit-impaired
—
—
—
Provision for the year
13,010,985
—
13,010,985
Reversal for the year
—
—
—
Charge-off for the year
—
—
—
Write-off for the year
—
—
—
Other changes
—
—
—
Balance at 31 December
2024
46,833,663
—
46,833,663
(4)
Details of bad debt provision
RMB
Category
1 January
2024
Changes for the year
31 December
2024
Provision
Recovery
or reversal
Charge-off
or write-off
Other
changes
Accounts receivable for
which bad debt provision
is assessed on a portfolio
basis according to credit
risk characteristics
33,822,678
13,010,985
—
—
—
46,833,663
(5)
As at 31 December 2024, no accounts receivable had been written off.
204
205
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3.
Accounts receivable (continued)
(6)
Top five accounts receivable categorised by debtor:
RMB
Name of entity
Closing balance
of accounts
receivable
Proportion to
total closing
balance of
accounts
receivable (%)
Closing balance
of bad debt
provision
for accounts
receivable
Total top five accounts
receivable as at
31 December 2024
4,826,196,821
80.61
37,752,284
4.
Prepayments
(1)
Aging analysis of prepayments
RMB
Aging
31/12/2024
31/12/2023
Gross carrying
amount
Proportion
(%)
Gross carrying
amount
Proportion
(%)
Within 1 year
37,104,825
99.58
22,670,590
99.90
1-2 years
156,580
0.42
23,049
0.10
2-3 years
–
–
–
–
More than 3 years
–
–
–
–
Total
37,261,405
100.00
22,693,639
100.00
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
4.
Prepayments (continued)
As at 31 December 2024, the Group has no significant prepayments aged more than one year.
(2)
The top five balances of prepayments at the end of the year classified by
entities
RMB
Name of entity
Relationship
with the
Company
31/12/2024
Aging
Proportion of the
closing balance
to the total
prepayments (%)
Entity 1
Related party
32,443,706
Within 1 year
87.07
Entity 2
Non-related party
630,188
Within 1 year
1.69
Entity 3
Non-related party
442,493
Within 1 year
1.19
Entity 4
Non-related party
423,573
Within 1 year
1.14
Entity 5
Non-related party
324,000
Within 1 year
0.87
Total
34,263,960
91.96
5.
Other receivables
5.1
Presentation
RMB
Item
31 December
2024
31 December
2023
Interest receivable
—
—
Dividends receivable
—
—
Other receivables
957,959,832
632,761,629
Total
957,959,832
632,761,629
206
207
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5.
Other receivables (continued)
5.2
Other receivables
(1)
Disclosed by aging
RMB
Aging
31 December
2024
Gross carrying
amount
31 December
2023
Gross carrying
amount
Within 1 year
818,731,118
485,996,940
1 to 2 years
11,375,609
18,297,612
2 to 3 years
10,000
129,490,631
Over 3 years
129,062,764
196,105
Total
959,179,491
633,981,288
(2)
Classified by nature
RMB
Nature
31 December
2024
31 December
2023
Receipts and payments of construction
funds on behalf of others
798,811,680
445,186,668
Payment for land acquisition and
reserve receivable
128,902,764
128,902,764
Petty cash
12,141,373
16,138,137
Advances
6,509,280
15,504,196
Security deposits and deposits
2,235,112
1,427,137
Others
10,579,282
26,822,386
Sub-total
959,179,491
633,981,288
Less: Bad debt provision
1,219,659
1,219,659
Total
957,959,832
632,761,629
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5.
Other receivables (continued)
5.2
Other receivables (continued)
(3)
Disclosed by method of bad debt provision
RMB
Category
31 December 2024
31 December 2023
Gross carrying amount
Bad debt provision
Carrying
amount
Gross carrying amount
Bad debt provision
Carrying
amount
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Bad debt provision
assessed on a
portfolio basis:
Non-trading receivables
959,179,491
100.00
1,219,659
0.13
957,959,832
633,981,288
100.00
1,219,659
0.19
632,761,629
Total
959,179,491
100.00
1,219,659
957,959,832
633,981,288
100.00
1,219,659
632,761,629
208
209
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5.
Other receivables (continued)
5.2
Other receivables (continued)
(4)
Bad debt provision
RMB
Bad debt provision
Stage I
Stage II
Stage III
Total
12-month
ECL
Lifetime ECL
(not credit-
impaired)
Lifetime ECL
(credit-
impaired)
Balance at 1 January 2024
1,219,659
—
—
1,219,659
Balance at 1 January 2024
－ Transfer to Stage III
—
—
—
—
－ Reverse to Stage II
—
—
—
—
Provision for the year
—
—
—
—
Reversal for the year
—
—
—
—
Charge-off for the year
—
—
—
—
Write-off for the year
—
—
—
—
Other changes
—
—
—
—
Balance at 31 December
2024
1,219,659
—
—
1,219,659
(5)
Details of bad debt provision
RMB
Category
Balance at
1 January
2024
Changes for the year
Balance at
31 December
2024
Provision
Recovery
or reversal
Charge-off
or write-off
Other receivables for which bad debt
provision is assessed on a portfolio
basis according to credit risk
characteristics
1,219,659
—
—
—
1,219,659
(6)
As at 31 December 2024, no other receivables had been written off.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5.
Other receivables (continued)
5.2
Other receivables (continued)
(7)
Top five other receivables categorised by debtor:
RMB
Name of entity
Balance at
31 December
2024
Proportion to
total closing
balance of other
receivables (%) Nature
Aging
Balance of
bad debt
provision at
31 December
2024
Wuhan-Guangzhou
Railway Passenger
Dedicated Line
Co., Ltd.
439,168,839
45.79 Collection and payment
of construction funds
on behalf of others
Within one year
645,130
Guangzhou Tianhe
Land Development
Center
128,902,764
13.44 Land reserve funds
receivable
Over three years
—
Guangdong Guangzhu
Intercity Rail Transit
Co., Ltd.
74,630,442
7.78 Collection and payment
of construction funds
on behalf of others
Within one year
109,631
Guangzhou-Shenzhen-
Hong Kong
Passenger Dedicated
Line Co., Ltd.
67,852,425
7.07 Collection and payment
of construction funds
on behalf of others
Within one year
99,674
Guiyang-Guangzhou
Railway Co., Ltd.
65,550,281
6.83 Collection and payment
of construction funds
on behalf of others
Within one year
96,292
Total
776,104,751
80.91
950,727
210
211
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6.
Inventories
(1)
Category of inventories
RMB
Item
31 December 2024
31 December 2023
Gross
carrying
amount
Provision for
decline in
value of
inventories/
Provision for
impairment of
costs to fulfil
a contract
Carrying
amount
Gross
carrying
amount
Provision for
decline in
value of
inventories/
Provision for
impairment of
costs to fulfil
a contract
Carrying
amount
Raw materials
140,137,964
—
140,137,964
182,558,304
—
182,558,304
Used rail materials
35,891,751
2,330,205
33,561,546
34,993,235
—
34,993,235
Other interchangeable
parts
25,296,624
—
25,296,624
32,476,559
—
32,476,559
Goods on hand
288,590
—
288,590
318,115
—
318,115
Costs to fulfil a contract
129,017,497
—
129,017,497
39,180,536
—
39,180,536
Total
330,632,426
2,330,205
328,302,221
289,526,749
—
289,526,749
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6.
Inventories (continued)
(2)
Provision for decline in value of inventories
RMB
Items
1 January
2024
Provision
Reversal
Write-off
31 December
2024
Used rail materials
—
2,330,205
—
—
2,330,205
Provision for decline in value of inventories made on a portfolio basis
RMB
Description
31 December 2024
31 December 2023
Gross
carrying
amount
Provision for
decline in
value
Provision
proportion
(%)
Gross
carrying
amount
Provision for
decline in
value
Provision
proportion
(%)
Used rail materials
35,891,751
2,330,205
6.49
34,993,235
—
—
(3)
The closing balance of inventories does not include the capitalised amount of the
borrowing costs.
7.
Other current assets
RMB
Item
31 December
2024
31 December
2023
Input VAT to be deducted
198,986,665
129,038,125
Prepaid income tax
23,739
293,866
Total
199,010,404
129,331,991
212
213
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
8.
Debt investments
(1)
Details of debt investments
RMB
Item
31 December 2024
31 December 2023
Gross
carrying
amount
Provision for
impairment
Carrying
amount
Gross
carrying
amount
Provision for
impairment
Carrying
amount
3-year time deposits
(Note)
63,900,000
—
63,900,000
61,950,000
—
61,950,000
Less: Non-current
assets due within
one year
63,900,000
—
63,900,000
1,950,000
—
1,950,000
Total
—
—
—
60,000,000
—
60,000,000
Note: It refers to the Company’s 3-year time deposits, at an interest rate of 3.25% per annum.
9.
Long-term equity investments
RMB
Investee
1 January
2024
Changes for the year
31
December
2024
Provision for
impairment
at
31 December
2024
Addition
Reduction
Investment
gain or loss
recognised
under the
equity method
Adjustment
to other
comprehensive
income
Other
changes
in equity
Cash
dividend
or profit
declared
Provision
for
impairment
Others
I. Associates
Guangzhou Tiecheng
Enterprise Company
Limited (“Tiecheng”)
149,426,689
—
—
8,944,075
—
—
—
—
—
158,370,764
—
Shenzhen Guangzhou
Railway Civil Engineering
Company (“Shentu”)
149,316,369
—
—
12,774,632
—
6,240,684
—
—
—
168,331,685
—
Total
298,743,058
—
—
21,718,707
—
6,240,684
—
—
—
326,702,449
—
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
10.
Investments in other equity instruments
(1)
Details of investments in other equity instruments
RMB
Item
1 January
2024
Changes for the year
31 December
2024
Dividend
income
recognised for
the year
Gains
cumulatively
recognised
in other
comprehensive
income
Losses
cumulatively
recognised
in other
comprehensive
income
Reason for
designating as
at FVTOCI
Addition
Reduction
Gains
included
in other
comprehensive
income
Losses
included in
other
comprehensive
income
Others
－ Shenzhen Capital Group
Co., Ltd.
361,305,320
—
—
110,147,600
—
—
471,452,920
9,438,022
352,735,520
—
The Group plans to
hold it for a long
term and will not
sell it in the
foreseeable future.
－ China Railway Express
Co., Ltd. (“China
Railway Express”)
99,672,518
—
—
—
94,467,800
—
5,204,718
—
—
94,467,800
－ Guangzhou Huangpu
Yuehua Freight
Forwarding Union
Co., Ltd.
1,717,879
—
—
—
—
—
1,717,879
—
—
—
Total
462,695,717
—
—
110,147,600
94,467,800
—
478,375,517
9,438,022
352,735,520
94,467,800
(2)
In 2024, there were no investments in other equity instruments derecognised.
11.
Fixed assets
11.1 Summary of fixed assets
RMB
Item
31 December
2024
31 December
2023
Fixed assets
21,951,782,045
22,773,389,966
Disposal of fixed assets
27,053,293
12,194,721
Total
21,978,835,338
22,785,584,687
214
215
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
11.
Fixed assets (continued)
11.2 Fixed assets
(1)
Details of fixed assets
RMB
Item
Buildings
Tracks,
bridges and
other line
assets
Locomotives
and rolling
stock
Communications
and signalling
systems
Other
machinery and
equipment
Total
I.
Cost:
1. 1 January 2024
9,392,481,652
15,596,390,723
6,175,516,503
2,430,748,628
7,810,779,422
41,405,916,928
2. Increase for the year
107,652,788
1,186,444,448
680,837,250
162,413,413
383,369,166
2,520,717,065
(1) Addition
22,520,943
39,358
24,898,144
2,401,750
72,935,787
122,795,982
(2) Transfer from construction in progress
14,610,417
45,515,042
—
46,736,990
191,930,561
298,793,010
(3) Transfer from construction in progress upon
completion of upgrades
70,521,428
1,140,890,048
655,939,106
113,274,673
118,502,818
2,099,128,073
3. Reclassification
—
—
—
(131,721)
131,721
—
4. Decrease for the year
14,841,380
1,275,902,952
957,847,177
43,088,756
237,385,528
2,529,065,793
(1) Transfer to construction in progress for
upgrades
1,830,278
1,272,570,871
799,023,895
24,938,580
59,630,608
2,157,994,232
(2) Disposal or retirement
13,011,102
3,332,081
158,823,282
18,150,176
177,754,920
371,071,561
5. 31 December 2024
9,485,293,060
15,506,932,219
5,898,506,576
2,549,941,564
7,956,894,781
41,397,568,200
II. Accumulated depreciation
1. 1 January 2024
4,482,810,579
4,349,877,231
2,712,069,231
1,509,896,776
5,454,804,180
18,509,457,997
2. Increase for the year
342,287,416
246,258,386
685,237,731
182,027,436
447,536,344
1,903,347,313
(1) Provision
342,287,416
246,258,386
685,237,731
182,027,436
447,536,344
1,903,347,313
3. Reclassification
—
—
—
85,017
(85,017)
—
4. Decrease for the year
5,451,509
302,604,374
526,248,515
38,113,912
217,669,810
1,090,088,120
(1) Transfer to construction in progress for
upgrades
761,078
302,010,067
377,314,883
20,667,905
47,179,471
747,933,404
(2) Disposal or retirement
4,690,431
594,307
148,933,632
17,446,007
170,490,339
342,154,716
5. 31 December 2024
4,819,646,486
4,293,531,243
2,871,058,447
1,653,895,317
5,684,585,697
19,322,717,190
III. Provision for impairment
1. 1 January 2024
490,492
120,818,857
295,788
—
1,463,828
123,068,965
2. Increase for the year
—
—
—
—
—
—
(1) Provision
—
—
—
—
—
—
3. Decrease for the year
—
—
—
—
—
—
(1) Disposal or retirement
—
—
—
—
—
—
4. 31 December 2024
490,492
120,818,857
295,788
—
1,463,828
123,068,965
IV. Net book value
1. 31 December 2024
4,665,156,082
11,092,582,119
3,027,152,341
896,046,247
2,270,845,256
21,951,782,045
2. 1 January 2024
4,909,180,581
11,125,694,635
3,463,151,484
920,851,852
2,354,511,414
22,773,389,966
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
11.
Fixed assets (continued)
11.2 Fixed assets (continued)
(2)
Fixed assets without certificates of ownership
RMB
Item
Carrying
amount
Reason for not yet obtaining the
certificate of ownership
Buildings for which
the certificate of
ownership is being
applied for
1,165,381,847 It is in the process of obtaining
the certificate and has made some
progress, and the management
believes that there are no
substantial obstacles for the Group
to complete the remaining process
for the certificate.
Buildings for which
the certificate of
ownership can only
be applied for after
the certificate of land
use rights has been
obtained
41,066,762 Since the application for the
certificate of ownership of buildings
requires the certificate of use right
of the relevant land, the Group will
apply for the certificate of
ownership of the buildings within
one year after obtaining the
certificate of use right of such land.
Buildings attached to
land acquired by
lease
366,025,113 Since the Group does not have
the certificate of use right of such
leased land, the Group is not yet
able to apply for the certificate of
ownership of the buildings on such
land. However, based on the
relevant agreements and after
communicating with the land lessor
and consulting with legal advisers,
the management believes that the
Group has the use right or even
the ownership of these buildings in
substance and there is no risk
of not being able to utilise these
buildings in a normal manner.
216
217
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
11.
Fixed assets (continued)
11.3 Disposal of fixed assets
RMB
Item
31 December
2024
31 December
2023
Buildings
10,144,310
2,998,774
Locomotives and rolling stock
14,107,214
7,083,642
Other machinery and equipment
2,801,769
2,112,305
Total
27,053,293
12,194,721
12.
Construction in progress
(1)
Details of construction in progress
RMB
Item
31 December 2024
31 December 2023
Book value
Provision for
impairment
Net book
value
Book value
Provision for
impairment
Net book
value
Renovation of traction power
supply lines I and II and related
equipment and facilities on
Shipai-Chashan section of
Guangzhou-Shenzhen line
78,016,726
—
78,016,726
52,067,855
—
52,067,855
New construction of container
security inspection station in
Dalang freight yard
24,946,458
—
24,946,458
24,014,216
—
24,014,216
Adaptive transformation of traction
power supply system for
Pingshi-Guangzhou section of
Beijing-Guangzhou line
21,402,899
—
21,402,899
18,309,837
—
18,309,837
Item
31 December 2024
31 December 2023
Book value
Provision for
impairment
Net book
value
Book value
Provision for
impairment
Net book
value
Replacement of the main contact
line among Mawu, Dasha and
Yinglian of Beijing-Guangzhou
Railway Line
18,463,412
—
18,463,412
—
—
—
Update and capacity expansion of
power facilities and equipment
in Dalang freight yard
18,282,311
—
18,282,311
16,340,199
—
16,340,199
UM71 automatic block and
computer interlocking
reconstruction of Guangzhou
to Pingshi Section of
Beijing-Guangzhou Railway Line
17,360,836
—
17,360,836
—
—
—
Slope protection and yard
renovation of Pinghu-Nanjun
Special Line
14,060,966
—
14,060,966
14,060,966
—
14,060,966
Renovation of 10kV automatic
blocking system line from Yingde
to Wushi of Beijing-Guangzhou
Railway Line
11,324,447
—
11,324,447
—
—
—
New Construction of Traffic
Culvert on Guangzhou-Shenzhen
Line K48
9,943,621
—
9,943,621
9,943,621
—
9,943,621
Road renovation for Jiangcun
Station (phase II)
9,618,865
—
9,618,865
9,618,865
—
9,618,865
Drainage renovation for Jiangcun
Station (phase II)
9,461,612
—
9,461,612
6,926,894
—
6,926,894
The reconstruction project of
Nanshui resistance platform in
Guangzhou Locomotive Depot
9,133,066
—
9,133,066
2,319,368
—
2,319,368
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
12.
Construction in progress (continued)
(1)
Details of construction in progress (continued)
RMB
218
219
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
Item
31 December 2024
31 December 2023
Book value
Provision for
impairment
Net book
value
Book value
Provision for
impairment
Net book
value
Signal transformation and
supporting construction for
Chashan-Pinghu Station section
6,631,580
—
6,631,580
9,916,884
—
9,916,884
Renovation of traction power
supply facilities and equipment
for the operation of EMU trains
on the Guangzhou-Shenzhen line
4,216,929
—
4,216,929
48,764,214
—
48,764,214
Adaptive transformation of
power transmission lines on
Guangzhou-Pingshi section
3,790,664
—
3,790,664
73,060,770
—
73,060,770
Renovation of non-interlocked
switch of stations on
Guangzhou-Pingshi section
1,918,312
—
1,918,312
54,354,698
—
54,354,698
Update and renovation of the
hump control system in Xiayuan
—
—
—
10,017,735
—
10,017,735
Overhaul projects
47,142,072
—
47,142,072
151,267,986
—
151,267,986
Others
124,856,795
15,455,876
109,400,919
75,649,582
15,455,876
60,193,706
Total
430,571,571
15,455,876
415,115,695
576,633,690
15,455,876
561,177,814
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
12.
Construction in progress (continued)
(1)
Details of construction in progress (continued)
RMB
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
12.
Construction in progress (continued)
(2)
Changes in significant construction in progress for the year
RMB
Item
Budget
amount
1 January
2024
Transfer
from
overhaul
projects
Other
increase
Transfer to
fixed assets
31
December
2024
Proportion
of the
accumulated
project
investment
to total
budget
(%)
Project
progress
(%)
Cumulative
amount of
interest
capitalised
Including:
Interest
capitalised
for the year
Interest
capitalisation
rate for the
year (%)
Source of
funds
Adaptive transformation
of power transmission
lines on Guangzhou-
Pingshi section
95,924,900
73,060,770
—
5,617,641
74,887,747
3,790,664
82
82
—
—
—
Self-financed
Renovation of non-
interlocked switch of
stations on
Guangzhou-
Pingshi section
72,407,200
54,354,698
—
3,386,140
55,822,526
1,918,312
80
80
—
—
—
Self-financed
Renovation of traction
power supply lines I
and II and related
equipment and
facilities on
Shipai-Chashan
section of Guangzhou-
Shenzhen line
130,452,000
52,067,855
—
25,948,871
—
78,016,726
60
60
—
—
—
Self-financed
Renovation of traction
power supply facilities
and equipment for the
operation of EMU
trains on the
Guangzhou-
Shenzhen line
66,973,900
48,764,214
—
4,828,859
49,376,144
4,216,929
80
80
—
—
—
Self-financed
Overhaul projects
/
151,267,986
934,637,679
469,495,572
1,508,259,165
47,142,072
/
/
—
—
—
Self-financed
Total
/
379,515,523
934,637,679
509,277,083
1,688,345,582
135,084,703
/
/
—
—
/
/
220
221
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
12.
Construction in progress (continued)
(3)
Provision for impairment of construction in progress for the year
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Reason for
provision
Renovation of the site
and facilities at Honghai
station
6,359,047
—
—
6,359,047
Termination of
project
Video access project
for Shenzhen station,
Guangzhou East station,
and Guangzhou station
of Guangzhou-Shenzhen
Line
3,846,942
—
—
3,846,942
Termination of
project
Comprehensive service
building of Zengcheng
railway station
2,434,400
—
—
2,434,400
Termination of
project
New construction of
railway bearing and
accessory maintenance
centre in Guangzhou
North Rolling Stock
Depot
1,815,487
—
—
1,815,487
Termination of
project
Tangtouxia warehouse
1,000,000
—
—
1,000,000
Termination of
project
Total
15,455,876
—
—
15,455,876
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
13.
Right-of-use assets
(1)
Details of right-of-use assets
RMB
Item
Leased land
(Note)
I.
Cost:
1. 1 January 2024
1,380,242,361
2. 31 December 2024
1,380,242,361
II. Accumulated depreciation
1. 1 January 2024
75,494,808
2. Increase for the year
16,246,410
(1) Provision
16,246,410
3. Decrease for the year
—
(1) Disposal
—
4. 31 December 2024
91,741,218
III. Provision for impairment
1. 1 January 2024
—
2. 31 December 2024
—
IV. Net book value
1. 1 January 2024
1,304,747,553
2. 31 December 2024
1,288,501,143
Note: It refers to the land use right leased by the Group. On 15 November 2004, the Group entered
into an agreement with Guangzhou Railway Group for the lease of use rights of the land attached
to the assets of the acquiree, Yangcheng Railway. The agreement became effective on 1 January
2007 when the acquisition of Yangcheng Railway Business was completed, with a lease term of
20 years, and is renewable as required by the Group. The Group expects to continue to lease the
corresponding land by exercising the renewal option based on the estimated remaining useful life of
the fixed assets attached to the land, and the lease term is determined on such basis.
222
223
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
14.
Intangible assets
(1)
Details of intangible assets
RMB
Item
Land use rights
Computer
software
Total
I.
Cost
1.
1 January 2024
2,408,343,080
16,456,105
2,424,799,185
2.
Increase for the year
—
—
—
(1) Addition
—
—
—
3.
Decrease for the year
2,551,019
—
2,551,019
(1) Disposal
2,551,019
—
2,551,019
4.
31 December 2024
2,405,792,061
16,456,105
2,422,248,166
II. Accumulated amortisation
1.
1 January 2024
719,203,814
15,344,685
734,548,499
2.
Increase for the year
52,379,149
410,943
52,790,092
(1) Provision
52,379,149
410,943
52,790,092
3.
Decrease for the year
554,566
—
554,566
(1) Disposal
554,566
—
554,566
4.
31 December 2024
771,028,397
15,755,628
786,784,025
III. Provision for impairment
1.
1 January 2024
—
—
—
2.
31 December 2024
—
—
—
IV. Net book value
1.
1 January 2024
1,689,139,266
1,111,420
1,690,250,686
2.
31 December 2024
1,634,763,664
700,477
1,635,464,141
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
14.
Intangible assets (continued)
(2)
Land use rights without certificates of ownership
RMB
Item
Carrying
amount
Reason for not yet obtaining the
certificate of ownership
Land use rights acquired in
asset acquisitions or
business restructuring
29,072,181
The land use rights were acquired
by acquisition of assets or business
restructuring in years but not yet
transferred to the Group.
Land use rights associated
with the operation of
Guangzhou-Shenzhen
4 lines
1,062,741,558
As the Guangzhou-Shenzhen 4 lines
span a long distance and cover a
large number of districts, it is quite
difficult for the Group to coordinate
the relevant procedures, and the
processing of certificate is relatively
slow.
15.
Goodwill
(1)
Cost of goodwill
RMB
Name of investees or
matters generating
goodwill
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Goodwill arising from
the acquisition of
Yangcheng Railway
281,254,606
—
—
281,254,606
224
225
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
15.
Goodwill (continued)
(2)
Provision for impairment of goodwill
RMB
Name of investees or
matters generating
goodwill
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Goodwill arising from
the acquisition of
Yangcheng Railway
—
—
—
—
(3)
Information about the asset group or sets of asset groups to which the
goodwill is allocated
Name
Composition of
the asset group
or sets of asset
groups to which
it is allocated and
its basis (Note)
Operating segment
to which it is
allocated and its
basis
Is it consistent
with that of the
year?
Goodwill arising from
the acquisition of
Yangcheng Railway
Group railway asset
group
Railway transportation
business
Yes
Note: The goodwill was generated from the Group’s acquisition of Yangcheng Railway Business
on 1 January 2007. On 1 January 2009, in order to improve the operational efficiency of
the railway, the management integrated the assets of Yangcheng Railway with the Group’s
original railway assets, which constitutes the new smallest CGU.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
15.
Goodwill (continued)
(4)
Specific method for determination of recoverable amount
The recoverable amount is determined at the present value of expected future cash flows
Item
Carrying
amount
(Note 1)
Recoverable
amount
Amount of
impairment
Projection
period
Key parameters for
projection period
(Growth rate, profit
margin, etc.)
Basis to determine the key
parameters for projection
period
Key parameters for
steady period
(Growth rate, profit
margin, etc.)
Basis to determine
the key parameters
for steady period
Railway assets
of the group
25,600,319,227
28,796,283,091
—
2025-2029
Revenue growth rate:
3.3%
Pre-tax discount rate:
10.5%
Revenue growth rate is
determined based on factors
such as regional economic
development, route
planning, route traffic
capacity and inflation rate,
etc.
The discount rate reflects
the pre-tax interest rate of
current market time value of
money and specific risks of
the associated asset group.
Revenue growth rate:
0%
Pre-tax discount rate:
10.5%
Revenue growth rate
is determined based
on factors such as
regional economic
development in the
long-term future,
route planning,
route traffic capacity
and inflation rate,
etc.
Note 1: It represents the book value of the asset group including goodwill.
226
227
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
16.
Deferred tax assets/deferred tax liabilities
(1)
Deferred tax assets before offsetting
RMB
Item
31 December 2024
31 December 2023
Deductible
temporary
differences
Deferred tax
assets
Deductible
temporary
differences
Deferred tax
assets
Deductible losses
536,876,468
134,219,117
2,277,672,408
569,418,102
Provision for
impairment of
assets
188,908,368
47,227,092
173,567,179
43,391,795
Accruals of employee
education funds
363,373,782
90,843,446
355,090,352
88,772,588
Government grants
739,343,152
184,835,788
698,852,468
174,713,117
Losses on disposal of
fixed assets not
reported for approval
103,635,141
25,908,785
102,941,228
25,735,307
Funds for party
organisation
activities
99,675,336
24,918,834
118,308,460
29,577,115
Lease liabilities
1,395,156,478
348,789,120
1,392,431,052
348,107,763
Total
3,426,968,725
856,742,182
5,118,863,147
1,279,715,787
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
16.
Deferred tax assets/deferred tax liabilities (continued)
(2)
Deferred tax liabilities before offsetting
RMB
Item
31 December 2024
31 December 2023
Taxable
temporary
differences
Deferred tax
liabilities
Taxable
temporary
differences
Deferred tax
liabilities
Appreciation of fixed
assets due to the
acquisition of
Yangcheng Railway
7,536,292
1,884,073
9,490,236
2,372,559
Appreciation of
intangible assets due
to the acquisition
of Zengcheng Lihua
Stock Company
Limited (“Zengcheng
Lihua”)
195,766,653
48,941,663
205,737,548
51,434,387
Changes in fair value
of investments
in other equity
instruments
258,267,720
64,566,930
242,587,920
60,646,980
Right-of-use assets
1,288,501,143
322,125,286
1,304,747,553
326,186,888
Others
9,766,418
2,441,605
26,696,720
6,674,180
Total
1,759,838,226
439,959,557
1,789,259,977
447,314,994
228
229
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
16.
Deferred tax assets/deferred tax liabilities (continued)
(3)
Deferred tax assets or liabilities after offsetting presented on a net basis
RMB
Item
Offset amount
of deferred
tax assets and
liabilities at
the end of the
year
Deferred tax
assets or
liabilities after
offsetting as at
31 December
2024
Offset amount
of deferred
tax assets and
liabilities at
the beginning
of the year
Deferred tax
assets or
liabilities after
offsetting as at
31 December
2023
Deferred tax assets
391,017,894
465,724,288
395,880,607
883,835,180
Deferred tax liabilities
391,017,894
48,941,663
395,880,607
51,434,387
(4)
Details of unrecognised deferred tax assets
RMB
Item
31 December
2024
31 December
2023
Deductible temporary differences
13,041,790
17,754,329
Deductible losses
329,829,595
367,431,546
Total
342,871,385
385,185,875
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
16.
Deferred tax assets/deferred tax liabilities (continued)
(5)
Deductible losses for which deferred tax assets are not recognised will expire in the
following years:
RMB
Year
31 December
2024
31 December
2023
2024
—
37,601,951
2025
104,650,746
104,650,746
2026
94,545,972
94,545,972
2027
113,174,303
113,174,303
2028
17,458,574
17,458,574
2029
—
—
Total
329,829,595
367,431,546
17.
Other non-current assets
RMB
Item
31/12/2024
31/12/2023
Gross carrying
amount
Impairment
provision
Carrying
amount
Gross carrying
amount
Impairment
provision
Carrying
amount
Advance for construction
41,736,069
–
41,736,069
58,925,815
–
58,925,815
18.
Short-term borrowings
(1)
Category of short-term borrowings
RMB
Item
31 December
2024
31 December
2023
Unsecured borrowings
300,176,917
700,385,000
(2)
As at 31 December 2024, the Group had no overdue short-term borrowings with interest
rates ranging from 1.93%-2.28%.
230
231
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
19.
Notes payable
RMB
Category
31 December
2024
31 December
2023
Bank acceptances
—
200,000,000
Note: As at 31 December 2024, the Group had no outstanding notes payable.
20.
Accounts payable
(1)
Presentation of accounts payable
RMB
Item
31 December
2024
31 December
2023
Payables for material purchases
945,576,078
1,383,877,291
Labour costs payable
392,606,754
503,184,370
Repair costs payable
357,567,253
356,776,551
Payables for construction and equipment
342,501,032
1,931,404,633
Others
612,222,955
737,994,371
Total
2,650,474,072
4,913,237,216
(2)
Significant accounts payable aged over 1 year
RMB
Item
31 December
2024
Reason for failure
in repayment or
carry-forward
Total significant accounts payable
31,521,966
Payment is not yet
settled
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
21.
Contract liabilities
(1)
Details of contract liabilities
RMB
Item
31 December
2024
31 December
2023
Unused award integral
179,273,269
142,291,947
Payment for transportation services and
material purchases and sales received in
advance
143,389,757
86,233,624
Total
322,663,026
228,525,571
(2)
No significant contract liabilities aged over 1 year at the end of the year.
(3)
The amount for significant changes in book value in the current year and reasons
Item
Amount
changed
Reasons of changes
Unused award integral
36,981,322
Increase in points arising from sales
to frequent passengers in the
current year
Payment for transportation
services and material
purchases and sales
received in advance
57,156,133
Increase in payments for
transportation services received
in advance and purchase and sales
amounts of materials
232
233
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
22.
Employee benefits payable
(1)
Presentation of employee benefits payable
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
1. Short-term benefits
406,677,461
8,494,248,477
8,497,955,998
402,969,940
2. Post-employment benefits –
defined contribution plans
1,581
1,175,950,630
1,175,950,630
1,581
3. Termination benefits
2,004,578
—
531,689
1,472,889
Total
408,683,620
9,670,199,107
9,674,438,317
404,444,410
(2)
Presentation of short-term benefits
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
1. Wages or salaries, bonuses,
allowances and subsidies
—
6,518,004,926
6,518,004,926
—
2. Staff welfare
—
414,113,738
414,113,738
—
3. Social security contributions
81,585
535,076,199
535,156,276
1,508
Including: Medical
insurance
72,538
492,851,229
492,922,430
1,337
Work injury
insurance
55
39,471,933
39,471,933
55
Maternity
insurance
8,992
2,753,037
2,761,913
116
4. Housing funds
—
611,339,969
611,339,969
—
5. Union running costs and
employee education costs
404,425,193
196,958,224
200,582,425
400,800,992
6. Other short-term benefits
2,170,683
218,755,421
218,758,664
2,167,440
Total
406,677,461
8,494,248,477
8,497,955,998
402,969,940
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
22.
Employee benefits payable (continued)
(3)
Defined contribution plan
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
1. Basic pensions
—
749,609,109
749,609,109
—
2. Supplementary pensions
1,581
385,553,716
385,553,716
1,581
3. Unemployment insurance
—
40,787,805
40,787,805
—
Total
1,581
1,175,950,630
1,175,950,630
1,581
The Group participates, as required, in the pension insurance and unemployment
insurance plans established by government institutions. According to such plans, the
Group contributes monthly to such plans in accordance with the regulations of the
government institutions where the employees are insured. Except for above monthly
contributions, the Group does not assume further payment obligations. The related
expenditures are either included in cost of related assets or charged to profit or loss for
the period when they are incurred.
In the year, the Group should contribute pension insurance and unemployment insurance
plans amounting to RMB1,135,162,825 and RMB40,787,805 (2023: RMB1,239,837,069
and RMB32,549,564). As at 31 December 2024, the Group had outstanding contribution
to pension insurance plan that was due as of the reporting year amounting to RMB1,581
(31 December 2023: RMB1,581), which had been paid subsequent to the reporting
period.
234
235
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
23.
Taxes payable
RMB
Item
31 December
2024
31 December
2023
VAT
78,705,650
68,294,982
Individual income tax
16,992,748
13,500,240
Urban maintenance and construction tax
4,134,340
3,504,775
Education surcharge
2,696,769
2,276,711
Enterprise income tax
1,635,336
1,840,400
Others
1,292,021
1,205,625
Total
105,456,864
90,622,733
24.
Other payables
(1)
Presentation
RMB
Item
31 December
2024
31 December
2023
Dividends payable
12,881,200
13,744,301
Other payables
3,001,555,131
1,359,896,511
Total
3,014,436,331
1,373,640,812
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
24.
Other payables (continued)
(2)
Dividends payable
Presentation of dividends payable by nature
RMB
Item
31 December
2024
31 December
2023
Dividends payable – shareholders of the Company
5,699
868,801
Dividends payable – minority shareholders of
Zengcheng Lihua
12,875,501
12,875,500
Total
12,881,200
13,744,301
(3)
Other payables
(1)
Presentation of other payables by nature
RMB
Item
31 December
2024
31 December
2023
Payables for construction (Note)
1,048,927,539
—
Payables for current accounts with Shenzhen
Guangzhou Railway Group Guangshen
Railway Industry Development General
Company (“GIDC”)
351,568,451
351,558,436
Security deposits for construction
193,269,065
67,797,909
Notes deposits and other security deposits
437,023,325
312,683,067
Funds for party organisation activities
99,751,322
118,746,559
Union running costs deposited with the
Company’s accounts by other entities
81,941,853
73,422,728
Others
789,073,576
435,687,812
Total
3,001,555,131
1,359,896,511
Note: The Group presents payables for construction on 31 December 2024 in other
payables.
236
237
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
24.
Other payables (continued)
(3)
Other payables (continued)
(2)
Significant other payables aged over 1 year or expired
RMB
Item
31 December
2024
Reason for failure
in repayment or
carrying-forward
Total significant other payables
aged over 1 year or that are
overdue as at 31 December 2024
454,048,436
Payment is not yet
settled
25.
Non-current liabilities due within one year
RMB
Item
31 December
2024
31 December
2023
Long-term borrowings due within one year
(Note V, 26)
275,000
10,566,806
Lease liabilities due within one year (Note V, 27)
66,504,309
65,539,101
Total
66,779,309
76,105,907
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
26.
Long-term borrowings
(1)
Category of long-term borrowings
RMB
Item
31 December
2024
31 December
2023
Range of
interest rate
Unsecured borrowings
(Note)
500,275,000
790,566,806
1.8%-2.6%
Less: Non-current liabilities
due within one year
275,000
10,566,806
Long-term borrowings due
after one year
500,000,000
780,000,000
Note: It refers to the Company’s 3-year unsecured borrowings.
27.
Lease liabilities
RMB
Item
31 December
2024
31 December
2023
Lease liabilities
1,395,156,478
1,392,431,052
Less: Lease liabilities included in non-current
liabilities due within one year
66,504,309
65,539,101
Net book value
1,328,652,169
1,326,891,951
The following is the maturity analysis for lease liabilities of the Group which is based on
undiscounted remaining contractual obligations:
RMB
Within 1 year
1 to 2 years
2 to 5 years
Over 5 years
Total
31 December 2024
66,490,018
67,530,000
208,450,000
5,390,000,000
5,732,470,018
31 December 2023
65,539,101
66,490,018
205,980,000
5,460,000,000
5,798,009,119
238
239
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
28.
Deferred income
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
New Shilong station assets
612,999,210
—
22,787,070
590,212,140
Culverts (project of change
from level crossing to
interchange)
24,361,836
—
737,245
23,624,591
Shilong government donation
project (Shilong elevated
station)
16,262,418
—
694,416
15,568,002
Elevated platform of Buji
station
11,497,531
—
780,697
10,716,834
Guangzhou government
grants for draw-out track
and network area relocation
at Shipai
9,524,144
—
268,184
9,255,960
Shenzhen station renovation
and upgrading project
—
69,252,625
2,504,191
66,748,434
Other government grants
related to assets
27,738,923
1,284,000
3,188,260
25,834,663
Total
702,384,062
70,536,625
30,960,063
741,960,624
29.
Share capital
RMB
1 January
2024
Changes for the year
31 December
2024
New
shares
issued
Bonus
shares
Transfer
from
reserve
Others
Sub-total
Share capital
7,083,537,000
—
—
—
—
—
7,083,537,000
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
30.
Capital reserve
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Capital premium (Share
premium) (Note 1)
11,551,799,522
57,623,000
—
11,609,422,522
Other capital reserve –
Others (Note 2)
25,581,031
6,240,684
—
31,821,715
Total
11,577,380,553
63,863,684
—
11,641,244,237
Note 1: The Group received the subsidies amounting to RMB57,623,000 granted by CSRG, which was
exclusively for the purpose of upgrading and reconstructing railway equipment. The above
subsidies were fully utilised during the current period and recognised as railway equipment assets,
so there was an increase in capital reserve.
Note 2: The capital reserve increased by RMB6,240,684 based on the shareholding ratio as a result of the
changes in special reserve of the associates held by the Group.
240
241
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
31.
Other comprehensive income
RMB
Item
1 January
2024
Amount incurred in the current year
31 December
2024
Pre-tax
amount
incurred
during the
year
Less: Amount
included in other
comprehensive
income in the
prior period and
transferred to
profit or loss in
the current
period
Less: Amount
included in
other
comprehensive
income in the
prior period and
transferred to
retained
earnings in the
current period
Less:
Income tax
expenses
Amount
attributable
to the
Company,
net of tax
Amount
attributable
to minority
interests,
net of tax
I. Other comprehensive income that
cannot be reclassified to profit
or loss
181,940,940
15,679,800
—
—
3,919,950
11,759,850
—
193,700,790
Including: Changes in fair value of
investments in other
equity instruments
181,940,940
15,679,800
—
—
3,919,950
11,759,850
—
193,700,790
Total other comprehensive income
181,940,940
15,679,800
—
—
3,919,950
11,759,850
—
193,700,790
32.
Special reserve
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Safety production cost
81,228,476
235,890,550
156,478,232
160,640,794
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
33.
Surplus reserve
RMB
Item
1 January
2024
Increase for
the year
Decrease for
the year
31 December
2024
Statutory surplus reserve
2,890,304,377
105,864,470
—
2,996,168,847
Discretionary surplus reserve
304,058,522
—
—
304,058,522
Total
3,194,362,899
105,864,470
—
3,300,227,369
In accordance with the Company Law of the People’s Republic of China and the Company’s
Articles of Association, the Company should appropriate 10% of the net profit for the year to
the statutory surplus reserve, where the appropriation can cease when the statutory surplus
reserve reaches 50% of the registered capital. The statutory surplus reserve can be used
to make up for the loss or increase capital upon approval. The Company has appropriated
statutory surplus reserve of RMB105,864,470 (2023: RMB108,819,194).
The amount of the Company’s discretionary surplus reserve is proposed by the Board of
Directors and approved by the general meeting of shareholders. The discretionary surplus
reserve can be used to make up for prior years’ loss or increase capital upon approval. The
Company has not appropriated any discretionary surplus reserve in the current year.
243
242
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
34.
Retained profits
RMB
Item
2024
2023
Retained profits at the end of the prior year before
adjustment
4,271,435,690
3,312,434,993
Total adjusted retained profits at the beginning of
the year
—
—
Retained profits at the beginning of the year after
adjustment
4,271,435,690
3,312,434,993
Add: Net profit attributable to shareholders of the
Company in the current year
1,060,161,237
1,058,289,071
Transfer from other comprehensive income
—
9,530,820
Less: Transfer to statutory surplus reserve
105,864,470
108,819,194
Transfer to discretionary surplus reserve
—
—
Transfer to general reserve
—
—
Dividends payable on ordinary shares
495,847,590
—
Dividends on ordinary shares transferred to
share capital
—
—
Retained profits at the end of the year
4,729,884,867
4,271,435,690
According to the resolution of the annual shareholders’ meeting on 18 June 2024, the Company
distributed cash dividends for 2023 to all shareholders at RMB0.07 per share. Based on
7,083,537,000 shares issued, a total of RMB495,847,590 cash dividends (tax included) were
distributed, of which a cash dividend of RMB395,656,590 was distributed for 5,652,237,000 A
shares issued, and a cash dividend of HKD110,009,718 (equivalent to RMB100,191,000) was
distributed for 1,431,300,000 H shares issued. As at 31 December 2024, the above dividends
had been fully paid.
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
35.
Operating income and costs
(1)
Details of operating income and costs
RMB
Item
2024
2023
Income
Costs
Income
Costs
Principal operating
activities
25,304,356,566
23,924,481,032
24,649,140,727
23,171,516,192
Other operating activities
1,785,718,360
1,458,306,542
1,545,756,605
1,381,399,249
Total
27,090,074,926
25,382,787,574
26,194,897,332
24,552,915,441
(2)
Breakdown of operating income and costs
RMB
Item
2024
2023
Principal operating income:
Income from passenger transportation
10,995,498,561
10,727,769,021
Income from entrusted transportation
service
8,023,161,992
7,819,977,857
Income from the settlement of railway
network and other transportation
related services
4,662,696,606
4,273,092,250
Income from freight transportation
1,622,999,407
1,828,301,599
Total
25,304,356,566
24,649,140,727
244
245
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
35.
Operating income and costs (continued)
(2)
Breakdown of operating income and costs (continued)
RMB
Item
2024
2023
Principal operating costs:
Equipment rental and service fee
8,681,782,852
8,265,304,666
Salaries and welfare
9,087,467,858
8,896,834,493
Depreciation of fixed assets
1,740,058,293
1,835,315,273
Material and utilities consumption
1,559,174,557
1,461,137,042
Maintenance costs
1,357,976,727
1,298,231,131
Passenger service fee
881,819,334
693,980,980
Cargo handling costs
223,736,754
425,933,912
Depreciation of right-of-use assets
16,246,410
16,246,409
Others
376,218,247
278,532,286
Total
23,924,481,032
23,171,516,192
RMB
Item
2024
2023
Other operating income:
Train maintenance income
637,677,630
761,131,381
Income from sales of inventories and supplies
75,664,548
82,705,019
Train catering income
58,659,067
63,229,167
Income from sale of goods
7,204,040
14,434,460
Rental income
56,103,418
48,419,297
Others
950,409,657
575,837,281
Total
1,785,718,360
1,545,756,605
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
35.
Operating income and costs (continued)
(2)
Breakdown of operating income and costs (continued)
RMB
Item
2024
2023
Other operating costs:
Salaries and welfare
514,980,788
506,720,680
Material and utilities consumption
315,683,880
386,652,063
Depreciation of fixed assets
27,219,294
27,274,144
Others
600,422,580
460,752,362
Total
1,458,306,542
1,381,399,249
RMB
Item
2024
2023
Principal operating income:
25,304,356,566
24,649,140,727
Including: Recognised at a point in time
—
—
Recognised over time
25,304,356,566
24,649,140,727
Other operating income:
1,785,718,360
1,545,756,605
Including: Recognised at a point in time
141,527,655
160,368,646
Recognised over time
1,588,087,287
1,336,968,662
Rental income
56,103,418
48,419,297
Total
27,090,074,926
26,194,897,332
(3)
Descriptions on performance obligations
The principal operating activities of the Group are railway transportation and others.
Refer to Note III, 25 for details.
There is no significant financing component in the revenue contract of the Group.
(4)
Descriptions on allocation to remaining performance obligations
At the end of the year, the amount of revenue corresponding to the performance
obligation for which the Group has entered into a contract but which had not
been fulfilled or completely fulfilled was RMB322,663,026 (31 December 2023:
RMB228,525,571). The Group expects that all such amounts will be recognised as
revenue within the following year.
246
247
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
36.
Taxes and levies
Item
2024
2023
City construction and maintenance tax
47,689,085
23,950,303
Educational surcharges and local educational surcharges
33,067,737
15,036,132
Property tax
4,840,992
3,732,940
Land use tax
4,211,897
3,496,262
Others
2,001,632
2,096,965
Total
91,811,343
48,312,602
37.
Administrative expenses
RMB
Item
2024
2023
Salaries and welfare
64,252,969
77,154,635
Amortisation of intangible assets
52,790,092
52,566,929
Intermediary service fee
20,189,264
5,090,312
Office and travel expenses
3,064,561
3,264,760
Audit fees
3,000,000
5,250,000
Depreciation of fixed assets
1,280,032
1,089,869
Others
23,121,722
30,729,775
Total
167,698,640
175,146,280
38.
Financial expenses
RMB
Item
2024
2023
Interest income from banks
(25,745,720)
(33,659,578)
Income on funds used
(29,600,233)
—
Income from accrued interest on long-term receivables
(583,208)
(21,186,687)
Interest expenses on lease liabilities
68,278,497
68,114,145
Foreign exchange gains
(291,422)
(363,011)
Interest expenses on bank borrowings
35,948,819
40,968,153
Others
1,211,765
(3,381,079)
Total
49,218,498
50,491,943
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
39.
Other income
RMB
Classification by nature
2024
2023
Amortisation of government grants related to assets
30,160,063
47,412,328
Refund of individual income tax
2,615,387
2,145,905
Government grants related to income
8,593,698
40,516,325
Additional deduction of VAT
—
279,216
Total
41,369,148
90,353,774
40.
Investment income
RMB
Item
2024
2023
Income from long-term equity investments under
the equity method
21,718,707
23,454,446
Dividend income from investments in other equity
instruments during the holding period
9,438,022
16,285,487
Total
31,156,729
39,739,933
41.
Gains (losses) on credit impairment
RMB
Item
2024
2023
Bad debt losses on accounts receivable
(13,010,985)
(5,386,930)
Bad debt losses on other receivables
—
(119,272)
Total
(13,010,985)
(5,506,202)
248
249
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
42.
Gains (losses) on assets impairment
RMB
Item
2024
2023
Losses from impairment of inventory
(2,330,205)
–
Losses from impairment of fixed assets
–
(120,818,857)
Total
(2,330,205)
(120,818,857)
43.
Gains on disposal of assets
RMB
Item
2024
2023
Gains (losses) from disposal of intangible assets
(1,996,453)
93,440,100
Gains from disposal of fixed assets
19,606,840
3,205,968
Total
17,610,387
96,646,068
44.
Non-operating income
RMB
Item
2024
2023
Amount included
in non-recurring
profit or loss for
the current year
Gains from retirement or damage of non-
current assets
13,131,798
19,532,521
13,131,798
Income from unpayable amounts
4,093,387
6,814,465
4,093,387
Compensation received
393,553
523,366
393,553
Others
5,627,023
8,115,792
5,627,023
Total
23,245,761
34,986,144
23,245,761
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
45.
Non-operating expenses
Item
2024
2023
Amount included
in non-recurring
profit or loss for
the current year
Losses from retirement or damage of
non-current assets
10,966,616
35,650,114
10,966,616
Others
13,584,488
11,205,903
13,584,488
Total
24,551,104
46,856,017
24,551,104
46.
Income tax expenses
(1)
Statement of income tax expenses
RMB
Item
2024
2023
Current tax expenses
1,749,458
1,903,793
Deferred tax expenses
411,698,218
397,777,773
Total
413,447,676
399,681,566
250
251
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
46.
Income tax expenses (continued)
(2)
Reconciliation of income tax expenses to the accounting profit
RMB
Item
2024
2023
Total profit
1,471,973,632
1,456,575,909
Income tax expense calculated at 25%
367,993,408
364,143,977
Effect of different tax rates of subsidiaries
operating in other jurisdictions
(476,132)
(261,822)
Effect of reconciliation of income tax for the
year
1,915,120
3,625,599
Effect of non-deductible cost, expense and loss
56,393,472
37,798,116
Effect of tax-free income
(7,789,182)
(9,934,983)
Effect of utilising deductible loss for which
deferred tax assets are not recognised for
the prior periods
(850,560)
—
Effect of deductible temporary difference or
deductible loss for which deferred tax assets
are not recognised for the year
—
4,310,679
Effect of additional deduction
(3,738,450)
—
Income tax expenses
413,447,676
399,681,566
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
47.
Items in the statement of cash flows
(1)
Cash relating to operating activities
Other cash receipts relating to operating activities
RMB
Item
2024
2023
Net cash inflows of purchasing and
construction amounts received on behalf
of others
109,410,480
295,407,317
Receipt of government grants
79,130,323
43,006,538
Receipt of notes deposits and security deposits
5,786,655
19,708,069
Receipt of interest
25,745,720
31,709,578
Receipt of amounts related to Dabaoshan
project
17,327,189
—
Others
1,546,545
69,198,107
Total
238,946,912
459,029,609
Other cash payments relating to operating activities
RMB
Item
2024
2023
Net cash outflow of purchasing and
construction amounts received on behalf
of others
456,515
—
Office and travel expenses
3,064,561
3,264,760
Payment of notes deposits and security
deposits and petty cash
7,072,400
—
Intermediary service fee
5,523,551
7,553,335
Security services
—
11,132,887
Others
6,674,096
74,904,873
Total
22,791,123
96,855,855
252
253
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
47.
Items in the statement of cash flows (continued)
(2)
Cash relating to investing activities
Other cash receipts relating to investing activities
RMB
Item
2024
2023
Withdrawal of time deposits
—
160,000,000
Receipts of investments in other equity
instruments – liquidation amounts of
SinoRail Information
—
5,794,900
Receipt of interests on time deposits
—
12,191,667
Total
—
177,986,567
Other cash payments relating to investing activities
RMB
Item
2024
2023
Payments of investments in other equity
instruments – Investments to China Railway
Express
—
66,064,518
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
47.
Items in the statement of cash flows (continued)
(3)
Cash relating to financing activities
Other receipts relating to financing activities
RMB
Item
2024
2023
Receipts of subsidies granted by CSRG for
railway equipment
57,623,000
—
Other cash payments relating to financing activities
RMB
Item
2024
2023
Cash repayments for lease liabilities
270,053
64,411,934
Changes in liabilities arising from financing activities
RMB
Item
1 January
2024
Increase for the year
Decrease for the year
At 31
December
2024
Cash
changes
Non-cash
changes
Cash
changes
Non-cash
changes
Long-term borrowings
(Note V, 26)
790,566,806
—
16,456,042
306,747,848
—
500,275,000
Short-term borrowings
(Note V, 18)
700,385,000
400,000,000
19,492,778
819,700,861
—
300,176,917
Lease liabilities
(Note V, 27)
1,392,431,052
—
68,278,497
270,052
65,283,019
1,395,156,478
Dividend payable
(Note V.24)
13,744,301
—
496,337,591
313,148,692
184,052,000
12,881,200
Total
2,897,127,159
400,000,000
600,564,908
1,439,867,453
249,335,019
2,208,489,595
254
255
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
48.
Supplementary information to the cash flow statement
(1)
Supplementary information to the cash flow statement
RMB
Supplementary information
2024
2023
1. Reconciliation of net profit to cash
flows from operating activities
Net profit
1,058,525,956
1,056,894,343
Add: Credit loss allowance
13,010,985
5,506,202
Provision for impairment of assets
2,330,205
120,818,857
Depreciation of fixed assets
1,903,347,313
1,863,679,286
Depreciation of right-of-use assets
16,246,410
16,246,409
Amortisation of intangible assets
52,790,092
52,566,929
Amortisation of long-term prepaid
expenses
31,820,317
22,954,417
Losses (gains) on disposal of fixed
assets, intangible assets and other
long-term assets
(17,610,387)
(96,646,068)
Losses (gains) on retirement of
fixed assets
(2,165,182)
1,663,961
Financial expenses
103,935,894
85,945,612
Investment losses (income)
(31,156,729)
(39,739,933)
Decrease (increase) in deferred
tax assets
414,190,942
400,270,497
Increase (decrease) in deferred
tax liabilities
(2,492,724)
(2,492,724)
Decrease (increase) in inventories
(41,105,677)
(26,882,133)
Decrease (increase) in operating
receivables
231,736,241
(1,748,997,744)
Increase (decrease) in
operating payables
(1,023,103,382)
(595,423,569)
Net Cash Flow from Operating Activities
2,710,300,274
1,116,364,342
2. Net changes in cash and cash
equivalents
Closing balance of cash
1,934,900,900
1,482,463,336
Less: Opening balance of cash
1,482,463,336
1,299,635,304
Add: Closing balance of cash equivalents
—
—
Less: Opening balance of cash equivalents
—
—
Net increase in cash and cash equivalents
452,437,564
182,828,032
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
48.
Supplementary information to the cash flow statement (continued)
(2)
Composition of cash and cash equivalents
RMB
Item
31 December
2024
31 December
2023
I.
Cash
1,934,900,900
1,482,463,336
Including: Cash on hand
631,228
2,100,280
Bank deposits that are readily
available for payment
1,934,263,973
1,480,355,424
Other monetary funds that are
readily available for payment
5,699
7,632
II. Cash equivalents
—
—
Including: Investments in bond investment
due within three months
—
—
III. Closing balance of cash and cash
equivalents
1,934,900,900
1,482,463,336
Including: Restricted cash and cash
equivalents of the Company
and subsidiaries within the
Group
—
—
49.
Monetary items denominated in foreign currencies
(1)
Monetary items denominated in foreign currencies
RMB
Item
Closing balance
of foreign
currency
Exchange rate
Closing balances
equivalent to
RMB
Cash and bank balances
HKD
3,813,072
0.93
3,531,057
256
257
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
V.
NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
50.
Leases
(1)
As a lessee
RMB
2024
2023
Interest expenses for lease liabilities
(Note V, 38)
68,278,497
68,114,145
Short-term lease expenses included in profit
or loss for the period under the simplified
approach
2,001,620,930
2,121,759,221
Expenses for lease of low-value assets
included in profit or loss for the period
under the simplified approach (Other than
short-term leases)
—
—
Total cash outflows relating to leases
2,001,890,983
2,186,171,155
(2)
As a lessor
Operating leases
RMB
Item
2024
2023
Rental income
56,103,418
48,419,297
VI. CHANGES IN SCOPE OF CONSOLIDATION
The Group has no significant changes in scope of consolidation for the year.
VII. INTERESTS IN OTHER ENTITIES
1.
Interests in subsidiaries
(1)
Composition of enterprise group
Name of subsidiary
Place of
principal
operation
Registered
capital
Place of
incorporation
Nature of
business
Shareholding ratio (%)
Acquisition method
Direct
Indirect
Dongguan Changsheng
Dongguan
38,000,000
Dongguan
Transportation
51
—
Contribution by controlling
shareholders
Pinghu Qun Yi
Shenzhen
10,000,000
Shenzhen
Transportation
100
—
Contribution by controlling
shareholders
Shenzhen Guangshen Railway
Economic and Trade Enterprise
Company Limited (“Railway
Economic and Trade”)
Shenzhen
2,000,000
Shenzhen
Services
100
—
Incorporation
Huangpu Service
Guangzhou
379,000
Guangzhou
Services
100
—
Contribution by controlling
shareholders
Zengcheng Lihua (Note)
Guangzhou
107,050,000
Guangzhou
Services
44.72
—
Business combinations not
involving enterprises
under common control
Note: Except for the Company, the remaining shareholders of Zengcheng Lihua are natural person shareholders, and no
single natural person holds more than 0.5% of the shares. In accordance with the amended articles of association
of Zengcheng Lihua, special resolutions on the increase or reduction of capital, issuance of bonds, demerger,
dissolution or liquidation of the Company shall be passed by shareholders holding more than two-thirds of the
voting rights present at the shareholders’ meeting; other general resolutions shall only be passed by more than
half of the shareholders with voting rights present at the meeting; meanwhile, the directors appointed by the
Company hold all the seats in the board of directors of Zengcheng Lihua. Since it is difficult for the natural person
shareholders to jointly exercise their voting rights, the management of the Company believes that the Company
can control the financial and operating decisions of Zengcheng Lihua and has substantial control over it, and
therefore it is included in the scope of the consolidated financial statements.
258
259
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
VII. INTERESTS IN OTHER ENTITIES (continued)
1.
Interests in subsidiaries (continued)
(2)
Significant not-wholly-owned subsidiaries
As at 31 December 2024 and 31 December 2023, the Group believed that there were no
significant non-wholly owned subsidiaries, taking into account factors such as whether
the subsidiaries are listed companies, the proportion of minority interests to the Group’s
consolidated shareholders’ equity, and the proportion of profit or loss attributable to
minority interests to the Group’s consolidated net profit.
2.
Interests in associates
(1)
Significant associates
Name
Place of
principal
operation
Place of
incorporation
Nature of
business
Shareholding ratio
(%)
Accounting
treatments for
investments in
associates
Direct
Indirect
Tiecheng
Guangzhou
Guangzhou
Real estate
49.00
—
Equity method
Shentu
Shenzhen
Shenzhen
Construction
24.42
—
Equity method
VII. INTERESTS IN OTHER ENTITIES (continued)
2.
Interests in associates (continued)
(2)
Major financial information of associates
RMB
2024
2023
Tiecheng
Shentu
Tiecheng
Shentu
Current Assets
162,213,078
3,655,787,861
141,047,186
4,152,798,108
Non-current assets
399,468,911
23,372,174
403,522,454
32,644,081
Total Assets
561,681,989
3,679,160,035
544,569,640
4,185,442,189
Current Liabilities
217,064,795
2,989,742,363
218,205,662
3,535,283,452
Non-current Liabilities
21,411,552
98,735
21,411,552
38,707,595
Total Liabilities
238,476,347
2,989,841,098
239,617,214
3,573,991,047
Net assets
323,205,642
689,318,937
304,952,426
611,451,142
Minority interests
—
—
—
—
Equity attributable to
shareholders of the
parent company
323,205,642
689,318,937
304,952,426
611,451,142
Share of net assets
calculated based on
shareholding ratio
158,370,764
168,331,685
149,426,689
149,316,369
Adjusting events
－Goodwill
—
—
—
—
－Unearned profits
from internal
transactions
—
—
—
—
－ Others
—
—
—
—
Carrying amount of
equity investments
in associates
158,370,764
168,331,685
149,426,689
149,316,369
260
261
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
2024
2023
Tiecheng
Shentu
Tiecheng
Shentu
Fair value of equity
investments in
associates where
there is quoted price
N/A
N/A
N/A
N/A
Operating income
50,767,435
1,957,666,110
50,278,459
3,030,540,073
Net profit
18,253,215
52,312,168
19,785,989
56,344,434
Net profit from
discontinued
operations
—
—
—
—
Other comprehensive
income
—
—
—
—
Total comprehensive
income
18,253,215
52,312,168
19,785,989
56,344,434
Dividends received
from associates in
the current year
—
—
—
—
VII. INTERESTS IN OTHER ENTITIES (continued)
2.
Interests in associates (continued)
(2)
Major financial information of associates (continued)
RMB
VIII. GOVERNMENT GRANTS
1.
Liabilities involving government grants
RMB
Item
Opening
balance
of the
current year
Increased
government
grants
for the year
Amount
recognised
in other
income
for the year
Other
changes
Closing
balance
of the
current year
Related to
assets/related
to income
New Shilong station assets
612,999,210
—
22,787,070
—
590,212,140
Related to assets
Culverts (project of change from
level crossing to interchange)
24,361,836
—
737,245
—
23,624,591
Related to assets
Shilong elevated station
16,262,418
—
694,416
—
15,568,002
Related to assets
Elevated platform of Buji station
11,497,531
—
780,697
—
10,716,834
Related to assets
Guangzhou government grants
for draw-out track and network
area relocation at Shipai
9,524,144
—
268,184
—
9,255,960
Related to assets
Shenzhen station renovation and
upgrading project
—
69,252,625
2,504,191
—
66,748,434
Related to assets
Other government grants related
to assets
27,738,923
1,284,000
2,388,260
(800,000)
25,834,663
Related to assets
Total
702,384,062
70,536,625
30,160,063
(800,000)
741,960,624
2.
Government grants included in profit or loss
RMB
Item
2024
2023
New Shilong station assets
22,787,070
24,600,885
Amortisation of other government grants related
to assets
7,372,993
22,811,443
Subsidy for job stabilisation
8,576,469
39,447,625
Others
17,229
1,068,700
Total
38,753,761
87,928,653
262
263
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group’s major financial instruments include accounts receivable, other receivables, debt
investments, long-term receivables, investments in other equity instruments, borrowings, notes
payable, accounts payable other payables, lease liabilities, etc. At the end of the year, the Group
has the following financial instruments. Please refer to Note V for details. The risks associated with
these financial instruments and the policies on how to mitigate these risks are set out below. The
management of the Group manages and monitors these exposures to ensure the risks are controlled
at a certain level.
RMB
31 December 2024
31 December 2023
Financial assets
At FVTOCI
Investments in other equity instruments
478,375,517
462,695,717
Measured at amortised cost
Cash and bank balances
1,934,900,900
1,482,463,336
Notes receivable
192,750,000
—
Accounts receivable
5,940,313,417
6,239,551,856
Other receivables
957,959,832
632,761,629
Non-current assets due within one year
63,900,000
1,950,000
Debt investments
—
60,000,000
Long-term receivables
—
16,743,981
Financial liabilities
Measured at amortised cost
Short-term borrowings
300,176,917
700,385,000
Notes payable
—
200,000,000
Accounts payable
2,650,474,072
4,913,237,216
Other payables
3,014,436,331
1,373,640,812
Non-current liabilities due within one year
66,779,309
76,105,907
Long-term borrowings
500,000,000
780,000,000
Lease liabilities
1,328,652,169
1,326,891,951
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued)
The Group adopts sensitivity analysis technique to analyse how the profit or loss for the period
or shareholders’ equity would have been affected by reasonably possible changes in the relevant
risk variables. As it is unlikely that risk variables will change in an isolated manner, and the
interdependence among risk variables will have significant effect on the amount ultimately influenced
by the changes in a single risk variable, the following are based on the assumption that the change in
each risk variable is on a stand-alone basis.
1.
Risk management objectives, policies and procedures, and changes during
the year
The Group’s risk management objectives are to achieve a proper balance between risks and
yield, minimise the adverse impacts of risks on the Group’s operation performance, and
maximise the benefits of the shareholders and other equity investors. Based on these risk
management objectives, the Group’s basic risk management strategy is to identify and analyse
the Group’s exposure to various risks, establish an appropriate maximum tolerance to risk,
implement risk management, and monitor regularly and effectively these exposures to ensure
the risks are monitored at a certain level.
1.1.
Market risk
1.1.1. Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange
rates. The Group’s exposure to the currency risk is primarily associated with HKD. A
small portion expenses of the Group are paid in HKD while the Group’s other principal
activities are denominated and settled in RMB. As at 31 December 2024, the balance of
the Group’s assets and liabilities are both denominated in RMB except that the assets
set out below are denominated in HKD. Currency risk arising from the assets and
liabilities denominated in foreign currencies may have impact on the Group’s operation
performance.
RMB
31 December 2024
31 December 2023
Cash and bank balances
3,531,057
13,067,030
264
265
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued)
1.
Risk management objectives, policies and procedures, and changes during
the year (continued)
1.1.
Market risk (continued)
1.1.1. Currency risk (continued)
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all hedges
of net investments in foreign operations and the cash flow hedges are highly
effective.
On the basis of the above assumption, where all other variables are held constant,
the reasonably possible changes in foreign exchange rates may have the following
after-tax effect on the profit or loss for the period and shareholders’ equity:
RMB
Item
Change in
exchange rate
2024
2023
Effect on
profits
Effect on
shareholders’
equity
Effect on
profits
Effect on
shareholders’
equity
HKD
Appreciation of
5% against RMB
132,000
132,000
490,000
490,000
HKD
Depreciation of
5% against RMB
(132,000)
(132,000)
(490,000)
(490,000)
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued)
1.
Risk management objectives, policies and procedures, and changes during
the year (continued)
1.1.
Market risk (continued)
1.1.2 Interest rate risk – risk of changes in cash flows
The Group’s cash flow interest rate risk of financial instruments relates primarily to
variable-rate bank borrowings. The Group continues to pay close attention to the
impact of interest rate changes on the Group’s interest rate risk. It is the Group’s
policy to keep its borrowings at floating rate of interests. At present, there is no
interest rate swap arrangement.
Sensitivity analysis on interest rate risk
Where all other variables are held constant, the reasonably possible changes in
interest rate may have the following after-tax effect on the profit or loss for the
period and shareholders’ equity:
RMB
Item
Changes in
interest rate
2024
2023
Effect on
profit
Effect on
shareholders’
equity
Effect on
profit
Effect on
shareholders’
equity
RMB
50 basis points
higher
(3,001,031)
(3,001,031)
(5,587,500)
(5,587,500)
RMB
50 basis points
lower
3,001,031
3,001,031
5,587,500
5,587,500
266
267
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued)
1.
Risk management objectives, policies and procedures, and changes during
the year (continued)
1.2.
Credit risk
As at 31 December 2024, the Group’s maximum exposure to credit risk which will cause
a financial loss to the Group is mainly losses on the Group’s financial assets due to the
counterparty’s failure to discharge an obligation and financial guarantees issued by
the Group (without consideration of available collateral or other credit enhancements),
including cash and bank balances, accounts receivable, other receivables, debt
investments, long-term receivables, etc. At the balance sheet date, the carrying amount
of the financial assets of the Group has represented its maximum credit risk exposure,
except for long-term receivables, for which the maximum credit risk exposure is the
undiscounted contractual cash flows.
In order to minimise the credit risk, the Group has business management department
and finance department responsible for determination of credit limits, credit approvals
and other monitoring procedures to ensure that follow-up action is taken to recover
overdue debts. In addition, the Group reviews the recovery of financial assets at each
balance sheet date to ensure that adequate credit loss allowance has been recognised
for relevant financial assets. Therefore, the management of the Group considers that the
Group’s credit risk is significantly reduced.
The credit risk on cash and bank balances is limited because they are deposited at banks
with high credit ratings.
1.3.
Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of
cash and cash equivalents deemed adequate by the management to finance the Group’s
operations and mitigate the effects of fluctuations in cash flows. The management
monitors the utilisation of bank borrowings and ensures compliance with loan covenants.
IX. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued)
1.
Risk management objectives, policies and procedures, and changes during
the year (continued)
1.3.
Liquidity risk (continued)
The following is the maturity analysis for financial liabilities held by the Group which is
based on undiscounted remaining contractual obligations:
RMB
Within 1 year
1 to 2 years
2 to 5 years
Over 5 years
Total
Short-term
borrowings
300,530,750
—
—
—
300,530,750
Accounts payable
2,650,474,072
—
—
—
2,650,474,072
Other payables
3,014,436,331
—
—
—
3,014,436,331
Non-current
liabilities due
within one year
66,779,309
—
—
—
66,779,309
Long-term
borrowings
9,400,000
500,750,000
—
—
510,150,000
Lease liabilities
—
67,530,000
208,450,000
5,390,000,000
5,665,980,000
Total
6,041,620,462
568,280,000
208,450,000
5,390,000,000
12,208,350,462
268
269
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
X.
DISCLOSURE OF FAIR VALUE
1.
Closing balance of fair value of assets and liabilities measured at fair value
At 31 December 2024
RMB
Fair value at the end of the year
Level 1
Fair value
measurement
Level 2
Fair value
measurement
Level 3
Fair value
measurement
Total
Fair value measurement on
an ongoing basis
Investments in other equity
instruments
—
—
478,375,517
478,375,517
For financial instruments at Level 3, market method is used to estimate fair value. The
unobservable inputs mainly include the price-to-book ratio and the liquidity discount, etc. The
Group believes that the fair value estimated using the valuation method and its changes are
reasonable and it is also the most appropriate value as at 31 December 2024.
There are no transfers of fair value measurements between Level 1 and Level 2 and no
transfers into or out of Level 3 for the year.
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1.
Information on the Company’s holding shareholder
RMB0’000
Name
Place of
incorporation
Nature of business
Registered
capital
Proportion of
shareholding
(%)
Proportion of
voting rights
(%)
Guangzhou
Railway Group
Guangzhou
Railway transportation
24,925,403
37.12
37.12
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
2.
Information on the Company’s subsidiaries
Information on the Company’s subsidiaries is set out in Note VII, 1.
3.
Information on the Company’s associates
Information on the Company’s associates is set out in Note VII, 2.
4.
Information on other related parties
Name
Actual controller of the Company
CSRG (Note)
Actual controller of the Company
Guangdong Railway Company Limited (“Guangdong Railway”)
Subsidiary of Guangzhou Railway Group
Guangzhou Railway Material Supply Company (“Material Company”)
Subsidiary of Guangzhou Railway Group
Guangzhou Railway Vehicles Co., Ltd. (“Vehicles Company”)
Subsidiary of Guangzhou Railway Group
Xiashen Railway Guangdong Company Limited (“Xiashen Railway)
Subsidiary of Guangzhou Railway Group
Guangdong Shenmao Railway Co., Ltd. (“Shenmao Railway”)
Subsidiary of Guangzhou Railway Group
Hunan Railway Lianchuang Technology Development Co., Ltd. (“Hunan Railway”)
Subsidiary of Guangzhou Railway Group
Guangzhou Northeast Freight Car Outer Winding Railway Co., Ltd.
(“Northeast Railway”)
Subsidiary of Guangzhou Railway Group
Hunan Changtie Loading & Unloading Co., Ltd. (“Hunan Changtie”)
Subsidiary of Guangzhou Railway Group
Guangzhou Railway Track Equipment Co., Ltd. (“Track Company”)
Subsidiary of Guangzhou Railway Group
Guangdong Tieqing International Cultural Tourism Group Co., Ltd.
(“Guangdong Tieqing Cultural Tourism”)
Subsidiary of Guangzhou Railway Group
Guangzhou Railway Real Estate Co., Ltd. (“Guangzhou Railway Real Estate”)
Subsidiary of Guangzhou Railway Group
GIDC
Subsidiary of Guangzhou Railway Group
Note: CSRG is the controller of Guangzhou Railway Group. The Group disclosed the transactions with
CSRG and its affiliated companies separately in the Notes. The disclosure of transactions in this
section excludes transactions between the Group and Guangzhou Railway Group and its subsidiaries,
unless otherwise stated.
270
271
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions
(1)
Related party transactions in the purchase and sale of goods, rendering and
receipt of labour services
Purchase of goods/Receipt of labour services
RMB
Name of related parties
Content of transaction
2024
2023
Guangzhou Railway Group
and its subsidiaries
Receipt of network clearing services provided by
Guangzhou Railway Group and its subsidiaries
4,013,579,350
3,910,427,999
Guangzhou Railway Group
and its subsidiaries
Train services provided by Guangzhou Railway Group
and its subsidiaries
862,019,334
721,819,338
Guangzhou Railway Group
and its subsidiaries
Materials and supplies purchased from Guangzhou
Railway Group and its subsidiaries
815,047,087
895,263,241
Guangzhou Railway Group
and its subsidiaries
Repair and maintenance services provided by
Guangzhou Railway Group and its subsidiaries
265,938,569
509,436,447
Guangzhou Railway Group
and its subsidiaries
Receipt of construction services provided by
Guangzhou Railway Group and its subsidiaries
203,010,365
143,995,084
Associates
Receipt of construction services provided by
associates
79,344,366
117,408,773
Associates
Repair and maintenance services provided by
associates
615,502
4,231,291
Associates
Train services provided by associates
4,428,674
3,688,498
CSRG and its affiliated
companies (Note 1)
Receipt of network clearing services provided by
CSRG and its affiliated companies
1,344,328,073
1,802,762,753
CSRG and its affiliated companies
Materials and supplies purchased from CSRG and
its affiliated companies
81,848,645
36,150,571
CSRG and its affiliated companies
Train services provided by CSRG and its affiliated
companies
18,625,783
22,285,235
CSRG and its affiliated companies
Repair and maintenance services provided by
CSRG and its affiliated companies
1,591,313
20,601,151
CSRG and its affiliated companies
Receipts of construction project services rendered
by CSRG and its affiliated companies
26,593,783
17,640,230
Total
7,716,970,844
8,205,710,611
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(1)
Related party transactions in the purchase and sale of goods, rendering and
receipt of labour services (continued)
Sale of goods/Rendering of labour services
RMB
Name of related parties
Content of transaction
2024
2023
Guangzhou Railway Group and
its subsidiaries
Train services and railway operation services
provided to Guangzhou Railway Group and
its subsidiaries
5,370,152,595
4,585,311,669
Guangzhou Railway Group and
its subsidiaries
Network clearing services provided to Guangzhou
Railway Group and its subsidiaries
1,619,456,744
1,345,046,371
Guangzhou Railway Group and
its subsidiaries
Materials and supplies sold to and other services
provided to Guangzhou Railway Group and
its subsidiaries
54,257,887
119,883,200
Guangzhou Railway Group and
its subsidiaries
Construction engineering services provided to
Guangzhou Railway Group and its subsidiaries
78,187,994
29,501,750
Associates
Materials and supplies sold to associates
5,425,718
5,436,497
Associates
Train services provided to associates
2,121,600
2,869,884
CSRG and its
affiliated companies (Note 1)
Network clearing services provided to CSRG and
its affiliated companies
2,619,679,456
2,594,242,181
CSRG and its affiliated companies
Railway operation services provided to CSRG and
its affiliated companies
1,787,756,700
2,556,323,800
Transactions with CSRG and
its affiliated companies
Truck repair services provided to CSRG and
its affiliated companies
602,257,095
621,012,657
CSRG and its affiliated companies
Train services provided to CSRG and its affiliated
companies
297,100,364
51,837,776
CSRG and its affiliated companies
Construction engineering services provided to
CSRG and its affiliated companies
349,755,421
202,312,131
CSRG and its affiliated companies
(Note 2)
Income from passenger transportation
10,978,764,616
10,614,847,577
CSRG and its affiliated companies
(Note 2)
Income from freight transportation
1,622,820,308
1,633,074,299
Total
25,387,736,498
24,361,699,792
272
273
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(1)
Related party transactions in the purchase and sale of goods, rendering and
receipt of labour services (continued)
Sale of goods/Rendering of labour services (continued)
Note 1: When the trains operated by the Group pass through railway lines owned by other railway
companies, the Group need to pay those companies for the services rendered (track
usage, locomotive traction and electric catenaries service, etc.), and vice versa. The
prices of such services are instructed by the CSRG and are captured and processed by the
central clearance system of CSRG (see Note III, 25 for details).
Note 2: The railway business operated by the Group forms part of CSRG’s system and is subject
to the unified supervision and management of CSRG. The Group’s receipts from the
provision of railway related services to third parties (the ultimate service recipients),
including income from passenger transportation, freight transportation and baggage and
parcel handling, are required to be aggregated, processed and settled through the central
clearance system of CSRG.
Note 3: Pursuant to the Comprehensive Service Framework Agreement entered into between
the Company and CSRG (hereinafter including the Guangzhou Railway Group and its
subsidiaries), which was approved at the extraordinary general meeting of the Company
on 6 December 2022, in 2024, the fees for railway transportation services, railway
related services, special entrusted railway transportation services and other special
railway services provided by the Group to CSRG shall not exceed RMB9,902,640,000,
RMB659,450,000, RMB5,528,320,000 and RMB478,330,000, respectively. The fees for
railway transportation services, railway related services and other services procured
by the Group from CSRG shall not exceed RMB13,324,340,000, RMB2,288,310,000 and
RMB478,330,000, respectively. In the year, the actual fees for such services are not
exceed the fore-mentioned amounts.
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(2)
Information on related party leases
The Group as a lessee
RMB
Lessor
Type of assets
leased
Lease payment for short-term leases
and leases of low-value assets
treated under simplified methods
Rent incurred on
lease liabilities
Interest costs incurred
on lease liabilities
2024
2023
2024
2023
2024
2023
Guangzhou
Railway Group
Land use rights
—
—
65,283,019
64,150,943
68,267,920
68,091,636
CSRG
Van compartments
1,634,820,556
1,777,608,976
—
—
Guangzhou
Railway Group
Van compartments
366,800,374
344,150,245
—
—
(3)
Compensation for key management personnel
RMB
Item
2024
2023
Compensation for key management personnel
5,139,170
4,525,824
Key management personnel include directors, supervisors, and senior management. The
Company had a total of 24 key management personnel during the year (2023: 22 key
management personnel).
274
275
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(3)
Compensation for key management personnel (continued)
(a)
Compensation for directors and supervisors
The compensation of each director and supervisor for the year 2024:
RMB
Name
Remuneration
Payroll and
bonus
Total
Jiang Hui
—
—
—
Wei Hao
—
—
—
Wu Yong
—
—
—
Chen Shaohong
—
524,050
524,050
Hu Lingling
—
305,453
305,453
Luo Jinglun
—
—
—
Zhou Shangde
—
498,426
498,426
Hu Dan
—
—
—
Zhang Zhe
—
—
—
Tang Xiaofan
112,000
—
112,000
Qiu Zilong
112,000
—
112,000
Wang Qin
153,408
—
153,408
Niu Jianfeng
—
—
—
Huang Chaoxin
—
—
—
Li Songqing
—
—
—
Meng Yong
—
—
—
Lin Wensheng
—
413,504
413,504
Song Min
—
413,504
413,504
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(3)
Compensation for key management personnel (continued)
(a)
Compensation for directors and supervisors (continued)
The compensation of each director and supervisor for the year 2023:
RMB
Name
Remuneration
Payroll
Total
Wu Yong
—
—
—
Hu Lingling
—
682,170
682,170
Zhou Shangde
—
507,463
507,463
Guo Jiming
—
—
—
Hu Dan
—
—
—
Zhang Zhe
—
—
—
Ma Shiheng
68,844
—
68,844
Tang Xiaofan
112,000
—
112,000
Qiu Zilong
112,000
—
112,000
Wang Qin
83,065
—
83,065
Lei Chunliang
—
—
—
Huang Chaoxin
—
—
—
Chen Shaohong
—
—
—
Xiang Lihua
—
—
—
Meng Yong
—
—
—
Huang Songli
—
176,374
176,374
Lin Wensheng
—
454,091
454,091
Song Min
—
262,064
262,064
The compensation of above directors and supervisors have been included in
Compensation for key management personnel.
276
277
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
5.
Information on related party transactions (continued)
(3)
Compensation for key management personnel (continued)
(b)
Top 5 key management personnel with highest compensation
The top five key main management personnel with highest compensation in the
Group for the year included 2 directors (2023: 1 director), whose remuneration is
reflected in the table above, and the aggregate amount of remuneration for the
other 3 directors (2023: 4 directors) is set out below:
RMB
Item
2024
2023
Basic salary, bonuses, housing allowances,
pensions and other allowances
1,495,466
2,067,752
RMB
Compensation range
Number of
persons
for 2024
Number of
persons for
2023
RMB 0–1,000,000
3
4
RMB 1,000,001–1,500,000
—
—
RMB 1,500,001–2,000,000
—
—
RMB 2,000,001 and above
—
—
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
6.
Information on receivables due from and payables due to related parties and
other outstanding items
(1)
Balance of receivables from and payables to associates, Guangzhou Railway
Group and its subsidiaries
RMB
Item
Name of related parties
31 December
2024
31 December
2023
Gross carrying
amount
Gross carrying
amount
Accounts receivable
Guangzhou Railway Group
1,758,038,027
1,804,643,607
Subsidiaries of Guangzhou
Railway Group
Guangdong Railway
Company Limited
2,220,177,018
2,364,491,559
Xiashen Railway
59,816,659
68,883,497
Northeast Railway
12,597,146
6,394,372
GIDC
—
34,030,000
Others
254,374,286
33,033,349
Associates
—
1,434,257
Total
4,305,003,136
4,312,910,641
Less: Bad debt provision
33,673,404
25,359,553
Carrying amount
4,271,329,732
4,287,551,088
Other receivables
Guangzhou Railway Group
3,909,424
6,432,049
Subsidiaries of Guangzhou
Railway Group
Guangdong Railway
Company Limited
30,223,912
45,284,076
Shenmao Railway
26,501,172
27,803,935
Xiashen Railway
40,625,593
33,156,234
Others
83,231,597
13,081,189
Associates
303,722
1,802,238
Total
184,795,420
127,559,721
Less: Bad debt provision
235,298
252,472
Carrying amount
184,560,122
127,307,249
Prepayments
Subsidiaries of Guangzhou
Railway Group
32,830,826
13,502,610
Other non-current assets
Subsidiaries of Guangzhou
Railway Group
9,749,297
26,951,442
278
279
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
6.
Information on receivables due from and payables due to related parties and
other outstanding items (continued)
(1)
Balance of receivables from and payables to associates, Guangzhou Railway
Group and its subsidiaries (continued)
RMB
Item
Name of related parties
31 December
2024
31 December
2023
Accounts payable
Guangzhou Railway Group
112,498,695
56,841,221
Subsidiaries of Guangzhou Railway Group
Material Company
690,364,461
1,215,565,491
Hunan Railway
300,626,444
327,432,003
Vehicles Company
34,198,234
93,230,325
Hunan Changtie
15,229,932
75,090,935
Track Company
14,228,822
32,531,892
Guangdong Tieqing Cultural Tourism
301,351
14,359,252
Guangzhou Railway Real Estate
17,453,764
36,087,525
Others
41,482,320
247,710,109
Associates
77,466,625
300,968,126
Total
1,303,850,648
2,399,816,879
Contract liabilities
Guangzhou Railway Group
2,862,525
—
Subsidiaries of Guangzhou Railway Group
15,442,623
1,179,537
Associates
68,200
176,200
Total
18,373,348
1,355,737
Other payables
Guangzhou Railway Group
186,338,459
160,136,190
Subsidiaries of Guangzhou Railway Group
GIDC
351,568,451
351,558,436
Hunan Changtie
85,783,039
32,202,583
Material Company
24,457,664
16,526,262
Vehicles Company
60,206,230
13,564,025
Hunan Railway
53,555,396
—
Others
87,814,327
33,149,231
Associates
65,500,699
13,781,301
Total
915,224,265
620,918,028
Lease liabilities
Guangzhou Railway Group
1,395,067,264
1,392,082,738
XI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (continued)
6.
Information on receivables due from and payables due to related parties and
other outstanding items (continued)
(2)
Balance of receivables from and payables to CSRG and other railway
transportation related enterprises
RMB
Item
Name of related
parties
31 December
2024
31 December
2023
Accounts receivable
CSRG
189,491,419
269,563,492
Affiliated companies to CSRG
386,597,444
767,946,619
Total
576,088,863
1,037,510,111
Less: Bad debt provision
5,929,004
4,676,151
Carrying amount
570,159,859
1,032,833,960
Other receivables
Affiliated companies to CSRG
531,817,082
251,440,935
Less: Bad debt provision
677,157
497,662
Carrying amount
531,139,925
250,943,273
Accounts payable
Affiliated companies to CSRG
81,043,848
160,896,676
Other payables
Affiliated companies to CSRG
99,079,163
5,024,438
7.
Commitments to related parties
The following are the commitments relating to related parties that have been contracted and
are not yet required to be presented on the balance sheet at the balance sheet day:
(1)
Receipt of labour services
RMB
Category
31 December
2024
31 December
2023
Guangzhou Railway Group and its subsidiaries
12,545,501
17,176,560
280
281
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XII. COMMITMENTS AND CONTINGENCIES
1.
Significant commitments
(1)
Capital commitments
RMB
31 December
2024
31 December
2023
Buildings and machinery and equipment
－Capital commitments that have been entered
into but have not been recognised in the
financial statements
34,997,000
61,359,000
－Capital commitments that have been
authorised but haven’t been entered into
and recognised in the financial statements
337,123,000
368,641,000
Total
372,120,000
430,000,000
2.
Contingencies
As at 31 December 2024, the Group had no significant contingencies that should have been
disclosed but were not.
XIII. OTHER SIGNIFICANT MATTERS
1.
Segment information
The Group is principally engaged in the railway transportation business, and all businesses
are occurred in the PRC (including Hong Kong). Since the management of the Group does
not separately account for the costs and expenses incurred by the passenger and freight
transportation business in the ordinary course of operation and does not separately evaluate
the operating results of the business, a segment report is not required.
XIV. EVENTS AFTER THE BALANCE SHEET DATE
1.
Pursuant to the resolution of the Board of Directors dated 27 March 2025, the Board of
Directors proposed to declare cash dividends of RMB0.07 per share, totalling RMB495,847,590
per share, to all shareholders in respect of the net profit for the year 2024, based on
7,083,537,000 shares in issue. The aforesaid proposal is subject to the approval of the general
meeting of shareholders.
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
1.
Accounts receivable
(1)
Disclosed by aging
RMB
Aging
31 December
2024
Gross carrying
amount
31 December
2023
Gross carrying
amount
Within 1 year
4,319,726,718
4,821,846,814
1 to 2 years
1,383,946,168
1,295,753,160
2 to 3 years
158,406,598
125,069,066
Over 3 years
124,728,569
29,153,367
Total
5,986,808,053
6,271,822,407
283
282
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
1.
Accounts receivable (continued)
(2)
Disclosed by method of bad debt provision:
RMB
Category
31 December 2024
31 December 2023
Gross carrying amount
Bad debt provision
Carrying
amount
Gross carrying amount
Bad debt provision
Carrying
amount
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Bad debt provision
assessed on a
portfolio basis:
Portfolio I
187,670,219
3.13
—
—
187,670,219
269,407,292
4.30
—
—
269,407,292
Portfolio II
5,690,027,664
95.04
44,698,993
0.79
5,645,328,671
5,641,293,534
89.95
31,688,008
0.56
5,609,605,526
Portfolio III
109,110,170
1.83
2,134,670
1.96
106,975,500
361,121,581
5.75
2,134,670
0.59
358,986,911
Total
5,986,808,053
100
46,833,663
5,939,974,390
6,271,822,407
100
33,822,678
6,237,999,729
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
1.
Accounts receivable (continued)
(2)
Disclosed by method of bad debt provision: (continued)
Measurement of expected credit losses at an amount equivalent to the lifetime ECL:
RMB
Bad debt provision
Lifetime ECL
(not credit-
impaired)
Lifetime ECL
(credit-
impaired)
Total
1 January 2024
33,822,678
—
33,822,678
– Transfer to those
credit-impaired
—
—
—
– Reverse to those not
credit-impaired
—
—
—
Provision for the year
13,010,985
—
13,010,985
Reversal for the year
—
—
—
Charge-off for the year
—
—
—
Write-off for the year
—
—
—
Other changes
—
—
—
31 December 2024
46,833,663
—
46,833,663
284
285
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
1.
Accounts receivable (continued)
(3)
Details of bad debt provision
RMB
Category
31 December
2023
Changes for the year
31 December
2024
Provision
Recovery
or reversal
Charge-off
or write-off
Other
changes
Accounts
receivable for
which bad debt
provision is
assessed on a
portfolio basis
according to
credit risk
characteristics
33,822,678
13,010,985
—
—
—
46,833,663
(4)
As at 31 December 2024, no accounts receivable had been written off.
(5)
Top five accounts receivable categorised by debtor:
RMB
Name of entity
Accounts
receivable
Closing balance
Proportion to
total closing
balance of
accounts
receivable (%)
Closing balance
of bad debt
provision
Total top five accounts
receivable as at
31 December 2024
4,826,196,821
80.61
37,752,284
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables
2.1
Presentation
RMB
Item
31 December
2024
31 December
2023
Interest receivable
—
—
Dividends receivable
—
—
Other receivables
1,372,372,877
1,026,481,958
Total
1,372,372,877
1,026,481,958
2.2
Other receivables
(1)
Disclosed by aging
RMB
Aging
31 December
2024
Gross carrying
amount
31 December
2023
Gross carrying
amount
Within 1 year
1,233,225,186
879,798,293
1 to 2 years
11,304,585
18,226,588
2 to 3 years
—
129,490,631
Over 3 years
141,375,082
12,498,422
Total
1,385,904,853
1,040,013,934
286
287
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables (continued)
2.2
Other receivables (continued)
(2)
Classified by nature
RMB
Nature
31 December
2024
31 December
2023
Receipts and payments of construction
funds on behalf of others
798,811,680
445,186,668
Payment for land acquisition and
reserve receivable
128,902,764
128,902,764
Petty cash
12,141,373
16,138,137
Advances
6,509,280
15,504,196
Security deposits and deposits
2,154,088
1,346,113
Amounts due from subsidiaries
and others
437,385,668
432,936,056
Sub-total
1,385,904,853
1,040,013,934
Less: Bad debt provision
13,531,976
13,531,976
Total
1,372,372,877
1,026,481,958
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables (continued)
2.2
Other receivables (continued)
(3)
Disclosed by method of bad debt provision
RMB
Category
31 December 2024
31 December 2023
Gross carrying amount
Bad debt provision
Carrying
amount
Gross carrying amount
Bad debt provision
Carrying
amount
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Bad debt provision
assessed on an
individual basis
12,312,317
0.89
12,312,317
100.00
—
12,312,317
1.18
12,312,317
100.00
—
Bad debt provision
assessed on a
portfolio basis
1,373,592,536
99.11
1,219,659
0.09
1,372,372,877
1,027,701,617
98.82
1,219,659
0.12
1,026,481,958
Including:
Portfolio I
1,373,592,536
99.11
1,219,659
0.09
1,372,372,877
1,027,701,617
98.82
1,219,659
0.12
1,026,481,958
Total
1,385,904,853
100.00
13,531,976
1,372,372,877
1,040,013,934
100.00
13,531,976
1,026,481,958
288
289
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables (continued)
2.2
Other receivables (continued)
(4)
Bad debt provision
RMB
Bad debt provision
Stage I
Stage II
Stage III
Total
12-month ECL
Lifetime ECL
(not credit-
impaired)
Lifetime ECL
(credit-
impaired)
1 January 2024
1,219,659
—
12,312,317
13,531,976
－ Transfer to Stage II
—
—
—
—
－ Transfer to Stage III
—
—
—
—
－ Reverse to Stage II
—
—
—
—
－ Reverse to Stage I
—
—
—
—
Provision for the year
—
—
—
—
Reversal for the year
—
—
—
—
Charge-off for the year
—
—
—
—
Write-off for the year
—
—
—
—
Other changes
—
—
—
—
31 December 2024
1,219,659
—
12,312,317
13,531,976
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables (continued)
2.2
Other receivables (continued)
(5)
Details of bad debt provision
RMB
Category
1 January
2024
Changes for the year
31 December
2024
Provision
Recovery
or reversal
Charge-off
or write-off
Other
changes
Other receivables for
which credit loss
allowance is assessed
on an individual basis
12,312,317
—
—
—
—
12,312,317
Other receivables for
which credit loss
allowance is assessed
on a portfolio basis
according to credit
risk characteristics
1,219,659
—
—
—
—
1,219,659
Total
13,531,976
—
—
—
—
13,531,976
(6)
As at 31 December 2024, no other receivables have been written off.
290
291
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
2.
Other receivables (continued)
2.2
Other receivables (continued)
(7)
Top five other receivables categorised by debtor:
RMB
Name of entity
31 December
2024
Proportion to
total closing
balance of other
receivables (%)
Nature
Aging
Balance of bad
debt provision
at 31 December
2024
Wuhan-Guangzhou
Railway Passenger
Dedicated Line
Co., Ltd.
439,168,839
31.69
Collection and
payment of
construction
funds on behalf
of others
Within one year
645,130
Guangzhou Tianhe
Land Development
Centre
128,902,764
9.30
Land reserve
funds receivable Over three years
—
Guangdong Guangzhu
Intercity Rail
Transit Co., Ltd.
74,630,442
5.38
Collection and
payment of
construction
funds on behalf
of others
Within one year
109,631
Guangzhou-Shenzhen-
Hong Kong
Passenger Dedicated
Line Co., Ltd.
67,852,425
4.90
Collection and
payment of
construction
funds on behalf
of others
Within one year
99,674
Guiyang-Guangzhou
Railway Co., Ltd.
65,550,281
4.73
Collection and
payment of
construction
funds on behalf
of others
Within one year
96,292
Total
776,104,751
56.00
950,727
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
3.
Long-term equity investments
RMB
Investee
1 January
2024
Changes for the year
31 December
2024
Provision for
impairment
at 31
December
2024
Addition
Reduction
Investment
gain or loss
recognised
under the
equity method
Adjustment
to other
comprehensive
income
Other
changes
in equity
Cash
dividend
or profit
declared
Provision for
impairment
Others
I. Subsidiaries
Dongguan Changsheng
48,204,994
—
—
—
—
—
—
—
—
48,204,994
—
Pinghu Qun Yi
11,447,465
—
—
—
—
—
—
—
—
11,447,465
—
Huangpu Service
379,000
—
—
—
—
—
—
—
—
379,000
—
Railway Economic
and Trade
2,000,000
—
—
—
—
—
—
—
—
2,000,000
—
Zengcheng Lihua
—
—
—
—
—
—
—
—
—
—
34,392,193
Sub-total
62,031,459
—
—
—
—
—
—
—
—
62,031,459
34,392,193
II. Associates
Tiecheng
149,426,689
—
—
8,944,075
—
—
—
—
—
158,370,764
—
Shentu
149,316,369
—
—
12,774,632
—
6,240,684
—
—
—
168,331,685
—
Sub-total
298,743,058
—
—
21,718,707
—
6,240,684
—
—
—
326,702,449
—
Total
360,774,517
—
—
21,718,707
—
6,240,684
—
—
—
388,733,908
34,392,193
292
293
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
XV. NOTES TO KEY ITEMS IN THE COMPANY’S FINANCIAL STATEMENTS
(continued)
4.
Operating income and costs
RMB
Item
2024
2023
Income
Costs
Income
Costs
Principal operating
activities (Note)
25,304,356,566
23,924,481,032
24,649,140,727
23,255,903,953
Other operating
activities
1,751,313,921
1,440,978,525
1,493,231,167
1,247,440,120
Total
27,055,670,487
25,365,459,557
26,142,371,894
24,503,344,073
Note: Revenue from entrusted transportation realised during the year amounted to RMB8,023,161,992
(2023: RMB7,819,977,857).
5.
Investment income
RMB
Item
2024
2023
Income from long-term equity investments under
the equity method
21,718,707
23,454,446
Dividend income from investments in other equity
instruments during the holding period
9,438,022
16,285,487
Income from long-term equity investments under
the cost method
3,315,909
—
Total
34,472,638
39,739,933
SUPPLEMENTARY INFORMATION
For the year ended 31 December 2024
1.
BREAKDOWN OF NON-RECURRING PROFIT OR LOSS FOR THE PERIOD
RMB
Item
Amount
Profit or loss on disposal of non-current assets, including those charged off for
which provision for impairment of assets has been made
19,775,569
Government grants recognised in profit or loss for the period (other than
government grants which are closely related to the Company’s business,
in line with the national regulations, enjoyed under established standards
and have a continuous impact on the Company’s profit or loss)
8,593,698
Income earned from lending funds to non-financial institutions and recognised
in profit or loss for the period
29,600,233
Other non-operating income or expenses other than the above
(3,470,525)
Less: Tax effects
17,112,706
Effects attributable to minority interests
168,020
Total
37,218,249
Basis for preparation of the breakdown of non-recurring profit or loss
Under the requirements in Explanatory Announcement on Information Disclosure by Companies
Offering Securities to the Public No. 1 – Non-Recurring Profits and Losses (2023 Revision) from the
CSRC, non-recurring profit or loss arises from the transactions or events that are not directly related
to daily operations, or the transactions or events that are associated with normal operations but
may affect users of the financial statements when making proper judgments on the performance and
profitability of an enterprise due to their special and incidental nature.
295
294
GUANGSHEN RAILWAY 2024 ANNUAL REPORT
2.
RETURN ON NET ASSETS AND EARNINGS PER SHARE (“EPS”)
The table of return on net assets and earnings per share has been prepared by the Group in
accordance with the Information Disclosure and Presentation Rules for Companies Making Public
Offering of Securities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per
Share (Revised in 2010) issued by the CSRC.
Profit for the reporting period
Weighted
average
return rate on
net assets (%)
Earnings per share
Basic
earnings
per share
Diluted
earnings
per share
Net profit attributable to ordinary
shareholders of the Company
3.96
0.1497
0.1497
Net profit after deducting non-recurring
profit or loss attributable to ordinary
shareholders of the Company
3.82
0.1444
0.1444
Chairman: Jiang Hui
Submission date for Board’s approval: 27 March 2025