Transcription

1 CHINA GAS HOLDINGS LIMITED ( ) 2017 年年度报告 CHINA GAS HOLDINGS LIMITED ( ) 承诺, 本报告不 存在虚假记载 误导性陈述或重大遗漏, 并对真实性 准确性 完整性承担法律 责任

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3 目录 第一章 报告期内企业主要情况 1 企业基本情况 2 募集资金使用情况 第二章 财年年报 1 于香港交易所披露易网站披露之 2017/18 财年年报 /18 财年年报简体中文版本 2

4 第一章 报告期内企业主要情况 1 企业基本情况 联系方式 : 序号信息披露要点内容 1 2 公司中文名称公司中文简称公司外文名称公司外文简称公司法定股本注册地址办公地址及邮编公司网址电子信箱 中国燃气 China Gas Holdings Limited China Gas 90,000,000 港元百慕达香港湾仔告士打道 151 号资本中心 16 楼 1601 室 384hk@chinagasholdings.com.hk 3 债务融资工具相关业务联系人 朱伟伟 周巧义 联系地址 香港湾仔告士打道 151 号资本中心 16 楼 160 室 电话 传真 电子信箱 zhouqy@chinagasholdings.com 2 募集资金使用情况 (1) 截至本报告出具之日止存续的非金融企业债务融资工具概况 : 债券全称债券简称主承销商起息日期到期日期 公开发行的非金融企业债务融资工具约定以公开方式披露信息的定向发行工具 中信证券股中国燃气控股份有限公司, 有限公司 中燃气 2017 年 8 月 3 中国工商银年度第一期中 MTN001 日行股份有限期票据公司 年 8 月 3 日 ( 如遇法定节假日或休息日, 则顺延至其后的第 1 个工作日 ) 3

5 (2) 截至本报告出具之日止存续的非金融企业债务融资工具使用情况 : 债券简称募集金额已使用金额剩余金额 公开发行的非金融企业债务融资工具约定以公开方式披露信息的定向发行工具 17 中燃气 MTN 亿元 15 亿元 0 亿元 (3) 截至本报告出具之日止存续的非金融企业债务融资工具用途的变更及 披露情况 : 品种 债券简称 已使用金额的用途 披露是否规定用途是否变更是否披露是否符合国家变更披露合规法律法规 公开发行归集至发行人开设的的非金融 17 中燃气 NRA 账户, 全部用于偿还企业债务 MTN001 发行人子公司境内债务. 融资工具 否 约定以公开方式披 露信息的定向发行工具

6 第二章 财年年报 1 于香港交易所披露易网站披露之 2017/18 财年年报 CHINA GAS HOLDINGS LIMITED ( ) 已于香港交易 所披露易网站发布 2017/18 财年年报 具体原文信息见链接地址如下: pdf 5

7 2 2017/18 财年年报简体中文版本 6

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9 关于中国燃气 /18 年报

10 目录 2017/18 财年回顾 /18 年报 1

11 财务概要 2017/18 财年 2016/17 52,831,958 31,993, % 11,671,024 8,376, % 6,669,054 4,694, % 6,095,153 4,147, % % % 9,674,428 6,934, % 10,848,714 7,893, % 82,058,007 60,221, % 8,537,051 5,242, % 28,455,996 20,550, % 2017/18 财年 2016/17 * 4.00% 4.08% % 26.2% 61.80% 76.70% * 13.1% 15.7% 28.5% 29.6% 27.3% 27.4% 释义 : 平均融资成本 流动比率 毛利率 纯利率 派息比率 净资产负债比率 /18 年报

12 营运概要 2017/18 财年 2016/17 管道燃气项目总数 可接驳居民用户数 ( 户 ) 40,983,038 38,931, % 渗透率 (%) 57.2% 53.1% 4.1% 天然气总销量 ( 百万立方米 ) 18, , % 11, , % 6, , % 城市与乡镇燃气项目天然气销量用户分类 ( 百万立方米 ) 3, , % 5, , % 2, , % 1, , % 新接驳用户 3,926,762 2,564, % 2,318 1, % 26,829 27, % 累计已接驳用户及拥有的加气站 24,570,321 20,681, % 9,721 7, % 168, , % 居民用户平均接驳收费 ( 人民币 ) 城市燃气项目 2,523 2, % 乡镇燃气项目 3,089 平均售气价 ( 除税 ) % % % % 2017/18 年报 5

13 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 城市燃气 安徽 3,670,000 2,356, , , ,574 2,053 3,456,000 2,169, , , ,486 1,288 1,372, , ,470 50, ,599,300 2,267, , , ,192 1, , ,340 72,264 53, , ,340 90,735 71, , ,554 46,518 34, , ,611 72,652 67, ,037, , ,213 72, ,209 46,351 14,350 7, ,247 38,312 12,771 11, ,278 26,760 8,285 8, , ,287 49,904 31, ,000 10,000 3,096 1, , , ,780 埇 116, ,000 35, , ,445 50,767 29, , ,676 50,460 18, , ,302 83,994 9, ,724 69,045 21,376 9, , , , , 湖北 4,130,000 1,295, , , ,505 1, , , , , ,678 1,039 1,116, ,261 91,304 71, , , ,396 80, , ,269 71,135 61, ,201,800 1,096, , , , ,286, , ,151 80, , ,679 59,343 54, , ,340 62, , , ,915 71, , ,948 78,931 67, , ,076 58,538 52, ,471 49,426 15,302 12, , ,052 31,905 5, , ,448 67,941 34, ,000 25,000 7,740 60,000 60,000 18,576 12, ,000 83,971 25, , , , , , , , ,553 92,431 36, , , ,392 31, , ,845 69,302 21, , ,483 76,898 39, ,900 60,702 20,234 13, ,335 49,986 27,770 17,966 50,000 30,000 9,288 4, , /18 年报

14 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 370, , , ,876 1,026, ,155 50,203 34, ,000 60,000 18,576 8,945 1,007, ,884 56,167 38,253 1,194, , , , ,839 68,096 21, ,000 69,000 21, , ,545 71, ,000 76,586 23,711 湖南 4,844,200 1,372, , , ,759 1, , , ,412 43, ,708, , ,601 56, ,400 55,542 17, , ,849 49,489 江苏 1,874, , , , , ,223 82,011 77, , ,719,890 1,719, , , ,588 1, , , , , ,034 75,862 57, ,126, , ,136 67, ,616,700 3,007, , , ,829 2,803 30,351 30,351 16,862 13, , ,000 74, ,562 48,562 13, ,620 53,620 15, , ,171 75,477 75, ,000 28,000 8,000 2, , ,270 50,628 25, ,000 52,000 16,099 淅江 1,275,900 1,013, , , , , , ,932 81, ,811, , , , , , ,000 74,303 35,410 35,410 10,000 河北 370, ,000 83,591 11, , ,223 59,512 40, , ,322 35,394 7, , ,170 40,468 38, ,000 78,913 32,880 30, ,320, , , , ,671 1, /18 年报 7

15 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 750, , ,198 1, ,000 90,000 27,864 5, , ,627 97,098 28, ,000 70,000 21,672 7, , ,825 70,774 37, , ,755 46,983 6, ,000 68,796 21, , , , , ,263 31,351 1, ,000 63,231 19,576 7, ,222, , , , ,049 62,709 52, , ,200 30, , ,898 61,537 36, , ,685 37,189 22, ,701 73,701 20,814 16, , ,139 48,614 16, ,968 87,968 24,843 13, , ,917 37,537 25, , ,532 39,123 17, ,159 87,159 24,615 13, ,790 21,790 6,154 4, ,474 54,474 15,384 7, , ,550 58,157 27, ,000 90,000 25,714 6, , ,037 56,493 32, ,819 55,819 15,764 7, ,252 32,252 10,100 10, ,000 31,000 8, , ,241 40, ,000 96,112 29,756 26, ,057 广西壮族自治区 7,173,200 1,431, , , , ,041, , , , ,856,700 1,485, , , ,884 1, , , , , , ,000 61,920 15, ,685,600 1,105, ,362 68, ,131, , ,171 51, ,822, , ,288 30, ,517,400 3,348,727 1,116,242 1,093, ,453 4,492 2,488, , ,474 32, ,996, ,410 84,338 20, ,719, , ,086 1,100, , ,518 1, /18 年报

16 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 460, ,382 98,570 1, ,326 94,309 29,198 5, ,245,400 1,233, ,034 15, ,000 26,146 8,095 3, , , ,700 41,277 12, , ,323 51, , ,732 40,474 陕西 3,775,000 1,938, , , ,862 3, , ,247 72,213 3,382, , ,725 14, ,357 30,871 9, , ,291 37,242 广东 7,988,500 1,234, , , , , ,343 74, ,237, , , , ,480, ,732 99,917 44, ,618, , ,646 26, , ,727 33,971 24, , ,393 79,379 17, ,256 84,417 26,135 15, , ,146 62,584 17, ,463, ,861 55,065 16, ,653, , ,872 27, , ,660 49,430 5, , ,742 42,335 辽宁 2,148,000 1,618, , , , , ,000 89,686 55, , , ,710 83, ,100, , , , ,790, , , , , ,370 90,207 28, , ,105 89,816 44, ,000 69,000 21, , , ,734 16, ,000 63,200 19, ,900 70,819 21, , ,755 46,983 5, ,000 25,293 12,646 7, , ,723 32,731 9, , ,766 36, , ,755 46,983 35,911 35,911 11, ,892 41,234 12, /18 年报 9

17 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 80,000 80,000 24, ,000 30,000 9,288 3,020,000 1,281, , , ,890 1,356 8,294,000 5,360,998 2,539,554 2,394,102 1,070 14,858 6, , ,404 37, , ,800 52,970 重庆 1,602,500 1,300, , , ,933 1,399 山东 5,792,300 2,003, , , , ,204,000 3,393,242 1,131,081 1,107, ,900 2, , , ,955 12, , , ,661 43, , ,977 52,934 18, , ,657 72,400 2, , ,000 46,440 4, , ,042 81, ,386,029 1,386, , , , , ,218 78,571 61, ,105 9,105 2, , , ,498 88, ,819,300 1,517, , , ,679 山西 354, , ,627 15, ,486 53,519 16,569 12, 天津 600, ,755 46,983 2, ,000 50,000 15,480 5, , ,401 50,898 1, 吉林 920,000 66,266 20,516 1, , ,067 97,733 59, , ,936 45,410 5, ,000 38,445 11,902 内蒙古自治区 3,089,000 2,529, , , ,474 3, ,360 91,326 41,512 28, , ,858,000 2,397, , , ,664 3, ,900 90,547 28, , ,766 37, , ,170 31, ,000 60,702 18, , ,289 58,603 30,000 30,000 9,288 13,000 6,000 1, /18 年报

18 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 558, , , , ,755 46, ,000 45,143 13,976 7,439 7,439 7,439 黑龙江 9,621,000 4,732,733 2,151,242 1,761, ,015 2,995 2,374,717 1,260, , , ,189 1, , ,556 80,048 2,751,000 1,582, , , , , ,000 49,536 10, , ,603 42,911 15, , ,334 35,707 11, , ,638 43,851 9, , ,170 31,322 2, , ,543 36,391 4, ,000 70,000 21, , ,542 46,917 5, , ,170 31,322 5, ,000 22,257 22,000 16, , ,404 37, , ,317 56,571 5, , ,404 37,586 2, , ,022 34,063 6, , ,591 42, ,104 59,104 18, , ,320 56,755 24, ,180 92,341 28,589 8, ,679, , ,246 3, ,555 69,920 21, , ,457 65, ,498 38,252 11, , ,089 45,229 5, ,200 58,679 18,167 1,462, , ,039 宁夏回族自治区 1,141, , ,727 67, , ,501, , ,759 18, 福建 30 4,502,065 4,502,065 1,402,743 1,254, ,554 9,028 2,550,000 1,483, ,180 36, , ,931 47,143 8, , ,575 39, ,000 63,705 19, ,994 36,393 11, ,000 80,000 24, , ,064 56, , ,203 53, ,543 61,274 18,568 30,000 15,000 4, /18 年报 11

19 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 江西 90,000 50,585 45,986 34, , ,042 81,437 33, , ,170 31, , ,404 37,586 16, ,000 70,819 21,925 11, ,000 2, 甘肃 232, ,521 40, , ,544 33, , ,962 45, ,100 59,006 18, ,500 41,455 12,834 1, ,000 71,083 22,007 2, 河南 708, , , , ,021,817 1,021, , , , , ,521 37,143 34, , , ,571 33, ,053 91,053 25,714 12, ,310,152 1,310, , , , ,184 33,184 9, , , , , , , , ,429 91, ,620 53,620 15, , ,404 34,286 5, , ,755 42,857 36, , , ,286 96, ,000 35,000 10, , ,925 71,429 62, , , ,291 2, ,820 58,140 18, ,000 39,213 12,140 5, ,105 9,105 2,571 1, , ,000 65, ,000 35,000 10,000 贵州 1,060, , ,621 46, ,143 云南 80,936 80,936 25,058 6, , ,989 53,247 14, ,700 47,085 14,577 2 新疆维吾尔自治区 85,000 85,000 26, , ,000 30,960 4, 海南 228,000 92,267 27,960 乡镇气代煤项目 1,149, , /18 年报

20 营运统计资料 省 / 自治区 / 直辖市 营运地点 总人口 市区人口 可接驳住宅用户 累计已接驳住宅用户 累计已接驳工业用户 累计已接驳商业用户 管道长度 ( 公里 ) 重庆 103, ,424 2,356 内蒙古自治区 4, , , 天津 2 36 湖北 , 河北 重庆 7, 山西 49 辽宁 江苏 广西壮族自治区 272,704, ,894,824 40,983,038 24,570,321 9, , , /18 年报 13

21 天然气天气然 /18 年报

22 165 3,926,762 天然气 29, /18 年报 15

23 天然气 天然气 % , % ( ) % %2040 小科普 天然气是化石燃料之一, 主要成分是甲烷, 无色 无味 热值高 燃烧充分及无杂质, 是一种优良的气体燃料, 它具有清洁 无毒 发热量高 使用方便等特点 主要用作加热及发电, 通常埋藏于石油田附近 /18 年报

24 天然气 拥有专营权的管道燃气项目总数管道燃气销量 已接驳家庭总数 ,868 24,570,321 20,681, ,014 8,169 9,114 10,022 12,407 14,691,200 12,590,944 10,306,995 8,438, / / / / / / / / / / / / / / / / / / /18 年报 17

25 1 河北 2 内蒙古自治区 3 甘肃 4 宁夏回族自治区 5 陕西 6 湖北 7 重庆 8 湖南 9 广西壮族自治区 10 黑龙江 11 辽宁 12 新疆维吾尔自治区 13 天津 14 山东 15 河南 7 16 江苏 17 安徽 埇 浙江 19 江西 20 福建 广东 22 山西 23 吉林 24 贵州 25 云南 26 海南 3

26 国内主要天然气管道 天然气营运位置 26

27 乡镇气代煤 乡镇 气代煤 /18 年报

28 乡镇气代煤 2017/18 年报 21

29 乡镇气代煤 中国燃气是最积极参与乡镇气代煤业务的燃气分销商 乡镇 气代煤 /18 年报

30 乡镇气代煤 /18 年报 23

31 乡镇气代煤 PM % /18 年报

32 乡镇气代煤 % % /18 年报 25

33 车船燃气 压缩 / 液化 天然气 /18 年报

34 车船燃气 2017/18 年报 27

35 车船燃气 车船燃气 CNG LNG % 24% 97%72%14%100% 80% /18 年报

36 车船燃气 CNG/LNG LNG LNG LNG LNG LNG 2017/18 年报 29

37 分布式能源 分布式能源 /18 年报

38 分布式能源 2017/18 年报 31

39 分布式能源 分布式能源 /18 年报

40 分布式能源 2018~ % /18 (112N) 2017/18 年报 33

41 8 300, , LPG /18 年报

42 石液化油气 2017/18 年报 35

43 液化石油气 液化石油气 21 小科普 液化石油气亦称液化气, 是炼油精制过程中产生并回收的气体在常温下经加压而成的液态产品 主要成分是丙烷 丁烷 丙烯 丁烯 主要用途是作石油化工原料, 脱硫后可直接做燃料 液化石油气深加工 : 是指以液化石油气为原料, 并利用其中烯烃成分为路线的芳构化 异构化 甲乙酮 醋酸仲丁酯项目和以烷烃为路线的顺酐 丁二烯 异丁烯等的项目, 是利用低附加值的液化石油气产品生产高附加值产品的化工生产过程 /18 年报

44 液化石油气 100 1, /18 VLGCLPG LPG LPG 销量 889, /13 4,030,394 1,756, /14 2,413, /15 3,699,000 3,103, / / / /18 年报 37

45 液化石油气 本集团液化石油气业务流程的产业链整合策略 码头 / 炼油厂 仓储 活化优势资产 /18 年报

46 液化石油气 批发及物流 提升物流效率 下游零售 以终端零售为核心的业务发展策略 W HOTEL 2017/18 年报 39

47 新疆 青海 西藏 液化石油气营运位置

48 13 黑龙江 吉林 12 辽宁 16 内蒙古 北京 河北 19 天津 山西 宁夏 11 山东 15 甘肃 14 陕西 5 江苏 17 河南 上海 6 安徽 1 湖北 18 四川 7 浙江 重庆 江西 2 湖南 8 福建 3 贵州 液化石油气码头 4 云南 9 广东 10 广西 台湾 液化石油气批发 液化石油气零售 液化石油气储存设施 海南

49 服增增值服务值 务 3, /18 年报

50 增值服务 2017/18 年报 43

51 增值服务 增值服务 PNG 3, ; APPAPP LPG O2O /18 年报

52 主席报告书 尊敬的股东 : 本人谨代表董事会向股东提呈 2017/18 年报 周思先生 业绩 LPG 65.1% 52,831,958 11,671,024, % 47.0% 6,095,153, % 股息 /18 年报 45

53 主席报告书 暂停办理股份过户登记手续 符合出席即将举行之股东周年大会及于会上投票的资格 符合获派建议末期股息的资格 主席展望 2017/18 112N LPG /18 年报

54 主席报告书 2018/ /18 年报 47

55 管理层之讨论与分析 刘明辉先生 公司简介 业务回顾 2, %6.6% /18 年报

56 管理层之讨论与分析 4G PNGCNGLNGLPG 112N LPG LNG LPG 52.6% 18,659,299,0003,926, %65.1% 52,831,958,00011,671,024, % 47.0% 6,095,153, % 新项目拓展 /18 年报 49

57 管理层之讨论与分析 20 省 市 / 区 , % 燃气业务回顾 /18 年报

58 管理层之讨论与分析 天然气管道网络建设与用户接驳 172,540 天然气用户 居民用户 35% 3,926,7622,777,629 1,149,133 2,564, % 2,523 2,540 3,089 24,570,321 23,421,188 1,149, % 57.2% 80% 2017/18 年报 51

59 管理层之讨论与分析 工商业用户 2,31826,829 9,721168, % 19.0% 197,020 30,569 交通运输业用户 ( 压缩天然气 / 液化天然气车船用加气站 ) CNG LNGLNG e LNG CNG/LNG /18 年报

60 管理层之讨论与分析 乡镇 气代煤 天然气销售 18,659,299, % 11,786,459, %254,641,0006,872,840, % 209,340, /18 年报 53

61 管理层之讨论与分析 液化石油气业务 LPG 2014 LPGLPGLPG LPG LPG LPG 4,030,3949.0% 2,944, % 1,085,9016.8% 15,969,830,000 11,654,633, % 608,479, ,218,000478,398, ,635,000 终端增值服务 3, ,946,681, % 1,000,664, % 774,522, % 新业务拓展 /18 年报

62 管理层之讨论与分析 人力资源 48, % 集团管理与企业管治 2017/18 年报 55

63 管理层之讨论与分析 /18 年报

64 管理层之讨论与分析 财务回顾 52,831,958,000 31,993,323, %11,671,024,000 8,376,826, %22.1% 26.2%6,095,153,000 4,147,732, % % 经营开支 2,904,746, % 3,603,524,000 财务费用 705,116, % 807,781,000 应占联营公司之业绩 496,822, ,060, % 应占合营公司之业绩 758,313, ,187, % 所得税开支 1,930,711,000 1,207,506,000 流动资金 82,058,007, % 8,537,051,000 5,242,322, ,221,245,00032,372,421,000LPG 3,614,125,0008,537,051,00032,730,100, /18 年报 57

65 管理层之讨论与分析 财务资源 (ADB) (HSBC) 二零一八年千港元 11,079,288 10,873,256 13,636,482 4,739,895 5,889,718 4,486,561 1,766,933 3,518,723 32,372,421 23,618,435 32,372,421, % LPG 3,614,125, /18 年报

66 管理层之讨论与分析 外汇及利率 16.4% 抵押资产 31,267,000 72,200,000290,729, ,676,00068,323,000 资本承担 134,766, ,324,000 54,934,000 81,825,000 或然负债 2017/18 年报 59

67 董事及高级管理层履历 董事会成员 执行董事 周思先生 XV 刘明辉先生 55 DBA XV /18 年报

68 董事及高级管理层履历 黄勇先生 55 朱伟伟先生 45 马金龙先生 51 李晶女士 60 Fortune Oil LimitedFortune Oil PLC XV23 Fortune Oil Limited15Fortune Oil Limited /18 年报 61

69 董事及高级管理层履历 非执行董事 俞柾准先生 55 SKSKSK E&S Co., Ltd SK E&SXV23 Urbana-Champaign (AICPA) 金容仲先生 柾 56 柾 SK SK E&S XV23 权沄相先生 柾 54 柾 柾 SK SK E&S SK SK Holdings Co., Ltd. SK Holdings SK E&S SK Holdings XV23 刘明兴先生 45 (OECD) /18 年报

70 董事及高级管理层履历 刘畅女士 29 *(Vitol Inc) XV2 3 * (Cornell Law School) Arun Kumar MANCHANDA 先生 59 MANCHANDAGAIL (India) Limited GAIL MANCHANDAGAIL MANCHANDAPunjab University New Delhi YMCA Rajeev Kumar MATHUR 先生 57 MATHUR GAIL MATHURPHD*(PHD Chamber of Commerce and Industry)*(The Federation of Indian Chambers of Commerce & Industry) *(Natural Gas Society) MATHURGAIL30 Mahanagar Gas Limited GAILMATHUR MATHUR The University of Jodhpur 2017/18 年报 63

71 董事及高级管理层履历 姜新浩先生 Tramford International Limited 925 XV23 独立非执行董事 赵玉华先生 50 毛二万博士 55 黄倩如女士 Societe Generale Deutsche Morgan Grenfell Samuel Montague Bear Stearns Asia /18 年报

72 董事及高级管理层履历 陈燕燕女士 何洋先生 63 张凌先生 /18 年报 65

73 董事及高级管理层履历 高级管理层 陈新国先生 50 邓耀波先生 46 * /18 年报

74 企业管治报告 14 A.4.1 董事会 /18 年报 67

75 企业管治报告 董事姓名 出席定期会议次数 / 举行定期会议次数 执行董事 4/4 4/4 4/4 4/4 2/4 4/4 非执行董事 柾 0/4 柾 1 2/2 沄 柾 2 2/2 2/4 3 2/2 Arun Kumar MANCHANDA 2/4 4/4 独立非执行董事 4/4 4/4 4/4 4 0/3 4/4 5 2/2 董事会的组成 /18 年报

76 企业管治报告 3.13 主席及董事总经理兼总裁 委任 重选及罢免董事 2017/18 年报 69

77 企业管治报告 A.4.1 A.4.187(1) 董事委员会 执行委员会 100,000, /18 年报

78 企业管治报告 审核委员会 成员姓名 出席会议次数 / 会议举行次数 2/2 2/2 2/2 4 0/2 2/ / /18 年报 71

79 企业管治报告 审计服务金额 ( 港元 ) 9,688,000 9,000,000 非审计服务金额 ( 港元 ) 20, /18 年报

80 企业管治报告 提名委员会 董事人数性别职位种族年龄组别技能 / 行业经验 于本公司担任董事 ( 年数 ) /18 年报 73

81 企业管治报告 成员姓名 出席会议次数 / 会议举行次数 2/2 2/2 6 1/2 2/2 2/2 7 薪酬委员会 /18 年报

82 企业管治报告 2017/ 成员姓名 出席会议次数 / 会议举行次数 2/2 2/ /2 2/ /18 年报 75

83 企业管治报告 高级管理层数目 1,000,0012,000, ,000,0013,000,000 1 企业管治及风险控制委员会 柾 Arun Kumar MANCHANDA 成员姓名 出席会议次数 / 会议举行次数 1/2 2/2 柾 0/2 柾 1 1/1 沄 柾 2 1/2 3 Arun Kumar MANCHANDA 2/2 2/2 2/2 2/2 4 1/2 2/ /18 年报

84 企业管治报告 公司秘书 3.29 就职培训及持续专业发展 2017/18 年报 77

85 企业管治报告 董事姓名 阅读材料 出席研讨会 / 座谈会 执行董事 非执行董事 柾 柾 1 沄 柾 2 3 Arun Kumar MANCHANDA 独立非执行董事 /18 年报

86 企业管治报告 董事就综合财务报表所承担之责任 进行证券交易的标准守则 10 内部监控及风险管理 2017/18 年报 79

87 企业管治报告 投资者关系及股东通讯 /18 年报

88 企业管治报告 董事姓名 出席会议次数 / 举行会议次数 执行董事 0/1 1/1 0/1 1/1 0/1 1/1 非执行董事 柾 0/1 柾 1 1/1 沄 柾 2 0/1 3 Arun Kumar MANCHANDA 0/1 0/1 独立非执行董事 0/1 1/1 1/1 4 0/1 1/1 5 股东权利 /18 年报 81

89 企业管治报告 1. 柾 柾 2. 沄 柾 柾 /18 年报

90 董事会报告书 2017/18 主要业务 业务回顾 /18 业绩及股息分派 2017/ ,341,500, /18 年报 83

91 董事会报告书 银行及其他借贷 2017/1831 年内发行的债券 % 105 财务摘要 2017/ 投资物业及物业 厂房及设备 38,490, / 主要物业 2017/ 股本 2017/18 32 储备 2,157,247, / /18 年报

92 董事会报告书 董事 执行董事 非执行董事 柾 柾 1 沄 柾 2 3 Arun Kumar MANCHANDA 独立非执行董事 (2) 87(1)A.4.2 柾 1. 柾 2. 沄 柾 /18 年报 85

93 董事会报告书 根据上市规则第 13.51B(1) 条规定之披露 13.51B(1) (1)(a) 14 (b)11 (c) (d) (2) 柾 Arun Kumar MANCHANDA 董事之服务合约 退休福利计划 2017/1844 董事及最高行政人员于股份之权益 571XV(a)XV 78 (b)352 (c) /18 年报

94 董事会报告书 (A) 本公司每股面值 0.01 港元之普通股 ( 股份 ) 董事姓名 权益性质 所持股份数目 ( 长仓 *) 占本公司已发行股份总数概约百分比 (%)( 附注 1) 1,036,544, ,278, ,000, , ,400, ,800, ,200, (B) 富中海运有限公司 ( 本公司之相联法团 ) 每股面值 1.00 港元之普通股 董事姓名 权益性质 所持股份数目 ( 长仓 *) 占公司已发行股份总数概约百分比 (%)( 附注 1) 2,808, (C) 购股权 董事姓名购股权数目权益性质相关股份数目 占本公司已发行股份总数概约百分比 (%)( 附注 1) 50,000,000 50,000, ,000,000 50,000, ,000,000 2,000, ,000,000 2,000, ,000,000 2,000, 柾 4,000,000 4,000, 柾 5 2,000,000 2,000, , , Arun Kumar MANCHANDA 800, , ,000,000 1,000, ,000,000 1,000, ,000,000 1,000, ,000,000 1,000, ,000,000 1,000, /18 年报 87

95 董事会报告书 XV(a)XV7 8 (b)352 (c) 购股权 2017/1836 承授人 姓名或类别 授出日期 行使期 行使价 ( 港元 ) 二零一七年四月一日结余 于年内授出 于年内行使 于年内失效 二零一八年三月三十一日结余 董事 ,000,000 50,000, ,000,000 50,000, ,000,000 2,000, ,000,000 2,000, ,000,000 2,000,000 柾 ,000,000 4,000,000 柾 ,000,000 2,000, , ,000 Arun Kumar MANCHANDA , , ,000,000 1,000, /18 年报

96 董事会报告书 承授人 姓名或类别 授出日期 行使期 行使价 ( 港元 ) 二零一七年四月一日结余 于年内授出 于年内行使 于年内失效 二零一八年三月三十一日结余 ,000,000 1,000, ,000,000 1,000, ,000,000 1,000, ,000,000 1,000,000 小计 118,600, ,600, ,000, ,000,000 总计 345,600, ,600,000 * 1. 4,968,519, ,036,544,028 (i) (ii) 281,636, ,908,00050% , ,808,000 50% 5. 柾 柾 % 主要股东及其他人士于本公司股份及相关股份之权益 /18 年报 89

97 董事会报告书 于本公司股份及相关股份之长仓 : 名称 / 姓名身份所持股份数目 1,237,663,143 2 占本公司已发行股份总数之概约百分比 (%)( 附注 1) BVI BVI 1,237,663, ,237,663, ,164,911, ,086,544, ,908, ,908, ,723, First Level Holdings Limited First Level 976,723, Fortune Dynasty Holdings Limited Fortune Dynasty 975,723, Fortune Oil Limited Fortune Oil 975,723, ,409, /18 年报

98 董事会报告书 名称 / 姓名身份所持股份数目 CHEY Taewon CHEY 780,908,500 6 占本公司已发行股份总数之概约百分比 (%)( 附注 1) SK Holdings Co., Ltd. SK Holdings 780,908, SK E&S Co., Ltd. SK E&S 780,908, The Capital Group Companies, Inc. 398,018, ,968,519, BVI1,237,663,14372,752,0001,164,911,143 BVI41.06%Modern Orient Limited Modern Orient 7.93% 12.97%Modern OrientBVI72.72%BVI 3. 1,086,544,028 (i) (ii) (iii) 281,636,028 50,000, ,908,00050% ,908,000 50% 5. First Level 976,723,435 (i) (ii) (iii) (iv) (v) 754,908,00050% 156,501,544 Fortune OilFortune Oil Fortune DynastyFortune Dynasty First Level70% First Marvel Investment Limited 27,617,919 First Marvel Investment Limited Fortune Oil 36,695,972Fortune Oil First Level1,000,000 First Level99% 2017/18 年报 91

99 董事会报告书 6. CHEYSK Holdings SK E&S 780,908,500 (a) (b) (c) SK E&S 705,034,500SK E&S SK Holdings100%SK HoldingsCHEY23.4% Busan City Gas Co., Ltd. Busan City Pusan City Gas Co., Ltd.73,008,000 Busan City SK E&S76.40% SK E&S Hong Kong Co., Ltd 2,866,000 SK E&S Hong Kong Co., Ltd Busan City50%SK E&S50% 7. The Capital Group Companies, Inc. Capital Research and Management Company 398,018, 股票挂钩协议 36 购买股份或债券的安排 关连交易 (1) 组建合资公司 China Gas Group Limited CGGLA CGGLA60:40 50% CGGLA50%CGGLA 14A /18 年报

100 董事会报告书 (2) 关联方交易 2017/ A 董事于交易 安排或重要合约之权益 董事于竞争业务之权益 主要客户及供应商 30% 35.2%17.2% 5% 购买 出售或赎回本公司股份 薪酬政策 2017/18 年报 93

101 董事会报告书 2017/18 36 优先购买权 捐款 5,299,135 独立非执行董事之独立性 3.13 维持足够公众持股量 结算日后事项 环境 社会及管治报告 /18 年报

102 董事会报告书 获准许弥偿条文 核数师 周思 1. Arun Kumar MANCHANDAGAIL (India) LimitedRajeev Kumar MATHUR MATHUR86(2)MATHUR 柾 沄 柾 87(1) 2017/18 年报 95

103 公司资料 董事会 执行董事 非执行董事 柾 沄 柾 Rajeev Kumar MATHUR 独立非执行董事 公司秘书 核数师 主要往来银行 总办事处及香港主要营业地点 注册办事处 Clarendon House 2 Church Street Hamilton HM11 Bermuda 主要股份登记及过户办事处 MUFG Fund Services (Bermuda) Limited The Belvedere Building 69 Pitts Bay Road Pembroke HM 08 Bermuda 香港股份登记及过户办事处 股份代号 384 网址 /18 年报

104 CONTENTS 2 Independent Auditor s Report 9 Consolidated Statement of Profit or Loss and Other Comprehensive Income 10 Consolidated Statement of Financial Position 12 Consolidated Statement of Changes In Equity 15 Consolidated Statement of Cash Flows 18 Notes to the Consolidated Financial Statements 215 Financial Summary 216 Particulars of Major Properties 2017/18 财务报告 1

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121 For the year ended 31 March GENERAL 1. The Company is a public limited company incorporated in Bermuda as an exempted company with limited liability and its shares are listed on the Stock Exchange of Hong Kong Limited (the Stock Exchange ). The address of its registered office and principal place of business are disclosed in the section headed Corporate Information of the Group s annual report. The Company acts as an investment holding company. The activities of its principal subsidiaries are set out note The consolidated financial statements are presented in Hong Kong dollars ( HK$ ) and the functional currency of the Company and majority of its subsidiaries is Renminbi ( RMB ). As the Company is a listed entity in Hong Kong, the directors of the Company consider that it is appropriate to present the consolidated financial statements in HK$. 2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) 2. 财务报 财务报 The Group has applied the following amendments to HKFRSs issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) for the first time in the current year: Amendments to HKAS 7 Amendments to HKAS 12 Amendments to HKFRS 12 Disclosure Initiative Recognition of Deferred Tax Assets for Unrealized Losses As part of the Annual Improvements to HKFRSs Cycle Except as described below, the application of the amendments to HKFRSs in the current year has had no material impact on the Group s financial performance and financial positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements. 18 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

122 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) Amendments to HKAS 7 Disclosure Initiative The Group has applied these amendments for the first time in the current year. The amendments require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both cash and non-cash changes. In addition, the amendments also require disclosures on changes in financial assets if cash flows from those financial assets were, or future cash flows will be, included in cash flows from financing activities. Specifically, the amendments require the following to be disclosed: (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes. A reconciliation between the opening and closing balances of these items is provided in note 41. Consistent with the transition provisions of the amendments, the Group has not disclosed comparative information for the prior year. Apart from the additional disclosure in note 41, the application of these amendments has had no impact on the Group s consolidated financial statements. 2. 财务报 财务报 7 (i) (ii) (iii) (iv) (v) /18 财务报告 19

123 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) The Group has not early applied the following new and revised HKFRSs and HKASs that have been issued but are not yet effective: HKFRS 9 Financial Instruments 1 HKFRS 15 Revenue from Contracts with Customers and the related Amendments 1 HKFRS 16 Leases 2 HKFRS 17 Insurance Contracts 4 HK(IFRIC) Int 22 Foreign Currency Transactions and Advance Consideration 1 HK(IFRIC) Int 23 Uncertainty over Income Tax Treatments 2 Amendments to Classification and HKFRS 2 Measurement of Share-based Payment Transactions 1 Amendments to HKFRS 4 Amendments to HKFRS 9 Amendments to HKFRS 10 and HKAS 28 Amendments to HKAS 19 Amendments to HKAS 28 Amendments to HKAS 28 Amendments to HKAS 40 Amendments to HKFRSs Applying HKFRS 9 Financial Instruments with HKFRS 4 Insurance Contracts 1 Prepayment Features with Negative Compensation 2 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 3 Plan Amendment, Curtailment or Settlement 2 Long-term Interests in Associates and Joint Ventures 2 As part of the Annual Improvements to HKFRSs Cycle 1 Transfers of Investment Property 1 Annual Improvements to HKFRSs Cycle 2 2. 财务报 财务报 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

124 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) 1 Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after a date to be determined. 4 Effective for annual periods beginning on or after 1 January HKFRS 9 Financial Instruments HKFRS 9 introduces new requirements for the classification and measurement of financial assets, financial liabilities, general hedge accounting and impairment requirements for financial assets. Key requirements of HKFRS 9 relevant to the Group are described below: all recognised financial assets that are within the scope of HKFRS 9 are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are generally measured at fair value through other comprehensive income ( FVTOCI ). All other financial assets are measured at their fair value at subsequent accounting periods. In addition, under HKFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss. 2. 财务报 财务报 财务报 /18 财务报告 21

125 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 9 Financial Instruments in relation to the impairment of financial assets, HKFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under HKAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised. Based on the Group s financial instruments and risk management policies as at 31 March 2018, the directors of the Company anticipate the following potential impact on initial application of HKFRS 9: Classification and measurement: Listed equity securities classified as available-for-sale investments carried at fair value as disclosed in note 21: the Group will elect to continue measuring these securities at FVTOCI as they qualify for designation as measured at FVTOCI under HKFRS 9; however, the fair value gains or losses accumulated in the investments revaluation reserve amounting to HK$13,977,000 as at 1 April 2018 will no longer be subsequently reclassified to profit or loss under HKFRS 9, which is different from the current treatment. This will affect the amounts recognised in the Group s profit or loss and other comprehensive income but will not affect total comprehensive income. 2. 财务报 财务报 财务报 ,977, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

126 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 9 Financial Instruments The unlisted equity securities as included in available-for-sale investments carried at cost less impairment as disclosed in note 21: these investments will qualify for designation as measured at FVTOCI under HKFRS 9 and the Group will designate these investments at initial recognition at FVTOCI and measure them at fair value at the end of subsequent reporting periods with fair value gains or losses to be recognised as other comprehensive income and accumulated in the investments revaluation reserve and such investments are not subject to impairment. Upon initial application of HKFRS 9, the fair value gain relating to these investments would be adjusted to investments revaluation reserve as at 1 April The fair value changes accumulated in other comprehensive income will not be subsequently reclassified to profit or loss. Amounts due from associates and joint ventures as disclosed in notes 24 and 20 respectively: the balances are under assessment as to whether they should be measured at amortised costs or fair value through profit or loss. The balances will continue to be measured at amortised costs if the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets and financial liabilities will continue to be measured on the same bases as are currently measured under HKAS 39. Impairment In general, the directors of the Company anticipate that the application of the expected credit loss model of HKFRS 9 result in earlier provision of credit losses which are not yet incurred in relation to the Group s financial assets measured at amortised costs and other items that are subject to the impairment provisions upon application of HKFRS 9 by the Group. 2. 财务报 财务报 财务报 /18 财务报告 23

127 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 9 Financial Instruments Impairment Based on the assessment by the directors of the Company, if the expected credit loss model were to be applied by the Group, the accumulated amount of impairment loss to be recognised by Group as at 1 April 2018 may be increased as compared to the accumulated amount recognised under HKAS 39 mainly attributable to expected credit losses provision on trade and other receivables, amounts due from associates and joint ventures. Such further impairment recognised under expected credit loss model may reduce the opening accumulated profits and increase in deferred tax assets at 1 April HKFRS 15 Revenue from Contracts with Customers HKFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. HKFRS 15 will supersede the current revenue recognition guidance including HKAS 18 Revenue, HKAS 11 Construction Contracts and the related interpretations when it becomes effective. The core principle of HKFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition: 2. 财务报 财务报 财务报 9 39 财务报 15 合 Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price 24 Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

128 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 15 Revenue from Contracts with Customers Under HKFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when control of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in HKFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by HKFRS 财务报 财务报 财务报 15 合 In 2016, the HKICPA issued Clarifications to HKFRS 15 in relation to the identification of performance obligations, principal versus agent considerations, as well as licensing application guidance. The directors of the Company anticipate that the application of HKFRS 15 may result in change of the identification of performance obligations and allocation of total consideration (including connection fee received from the customers for the construction of the Group s main gas pipeline) to the respective performance obligations which may affect the timing and amounts of revenue recognition. In addition, application of HKFRS 15 may result in adjustment to the presentation of amounts due from (to) customers for contact work and advances received from customers. The application of HKFRS 15 may also result in more disclosures in the consolidated financial statements. HKFRS 16 Leases HKFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees. HKFRS 16 will supersede HKAS 17 Leases and the related interpretations when it becomes effective 财务报 /18 财务报告 25

129 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 16 Leases HKFRS 16 distinguishes lease and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases and finance leases are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees, except for short-term leases and leases of low value assets. The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. For the classification of cash flows, the Group currently presents upfront prepaid lease payments as investing cash flows in relation to leasehold lands for owned use and those classified as investment properties while other operating lease payments are presented as operating cash flows. Upon application of HKFRS 16, lease payments in relation to lease liability will be allocated into a principal and an interest portion which will be presented as financing cash flows by the Group. Under HKAS 17, the Group has already recognised an asset and a related finance lease liability for finance lease arrangement and prepaid lease payments for leasehold lands where the Group is a lessee. The application of HKFRS 16 may result in potential changes in classification of these assets depending on whether the Group presents right-of-use assets separately or within the same line item at which the corresponding underlying assets would be presented if they were owned. 2. 财务报 财务报 财务报 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

130 For the year ended 31 March APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS ( HKFRSs ) HKFRS 16 Leases In contrast to lessee accounting, HKFRS 16 substantially carries forward the lessor accounting requirements in HKAS 17, and continues to require a lessor to classify a lease either as an operating lease or a finance lease. As at 31 March 2018, the Group has non-cancellable operating lease commitments of HK$302,820,000 as disclosed in note 42. A preliminary assessment indicates that these arrangements will meet the definition of a lease. Upon application of HKFRS 16, the Group will recognise a right-of-use asset and a corresponding liability in respect of all these leases unless they qualify for short-term or low-value leases. In addition, the Group currently considers certain refundable rental deposits paid as rights and obligations under leases to which HKAS 17 applies. Based on the definition of lease payments under HKFRS 16, such deposits are not payments relating to the right to use the underlying assets, accordingly, the carrying amounts of such deposits may be adjusted to amortised cost. Adjustments to refundable rental deposits paid would be included in the initial measurement of right-of-use assets. 2. 财务报 财务报 财务报 ,820, Furthermore, the application of new requirements may result in changes in measurement, presentation and disclosure as indicated above. The directors of the Company anticipate that the application of the other new and amendments to HKFRSs and Interpretations will have no material impact on the consolidated financial statements. 2017/18 财务报告 27

131 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with HKFRSs issued by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ( Listing Rules ) and by the Hong Kong Companies Ordinance. The consolidated financial statements have been prepared on the historical cost basis except for investment properties and certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies set out below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of HKFRS 2 Share-based Payment, leasing transactions that are within the scope of HKAS 17 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realizable value for the purposes of measuring inventories in HKAS 2 Inventories or value in use in HKAS 36 Impairment of Assets CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

132 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES A fair value measurement of a non-financial asset takes into account a market participant s ability 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. 3. In addition, for financial reporting purposes, 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 quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs for the asset or liability. The principal accounting policies are set out below. Basis of consolidation 综合 The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. 2017/18 财务报告 29

133 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. 3. 综合 Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary. Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group s accounting policies. All intra group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. 30 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

134 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation Changes in the Group s ownership interests in existing subsidiaries Changes in the Group s ownership interests in existing subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group s relevant components of equity and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries, including re-attribution of relevant reserves between the Group and the non-controlling interests according to the Group s and the non-controlling interests proportionate interests. 3. 综合 附 Any difference between the amount by which the non-controlling interests are adjusted, and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. Business combinations Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred. 务合 At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that: deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with HKAS 12 Income taxes and HKAS 19 Employee benefits respectively; /18 财务报告 31

135 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Business combinations liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with HKFRS 2 Share-based payment at the acquisition date (see the accounting policy below); and 3. 务合 2 assets (or disposal groups) that are classified as held for sale in accordance with HKFRS 5 Non-current assets held for sale and discontinued operations are measured in accordance with that Standard. 5 Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer s previously held equity interest in the acquiree (if any) over the net amount of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed as at acquisition date. If, after re-assessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the relevant subsidiary s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests proportionate share of the recognised amounts of the acquiree s identifiable net assets or at fair value. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at their fair value. 32 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

136 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Business combinations When a business combination is achieved in stages, the Group s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control), and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of. 3. 务合 If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), and additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. Acquisition of a subsidiary not constituting a business When the Group acquires a group of assets that do not constitute a business, the Group identifies and recognises the individual identifiable assets acquired and liabilities assumed by allocating the purchase price first to the financial assets and financial liabilities at the respective fair values, the remaining balance of the purchase price is then allocated to the other individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction does not give rise to goodwill or bargain purchase gain. 附 务 2017/18 财务报告 33

137 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Goodwill Goodwill arising on the acquisition of a business is carried at cost as established at the date of acquisition of the business (see the accounting policy above) less accumulated impairment losses, if any. 3. For the purposes of impairment testing, goodwill is allocated to each of the cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination, which represent the lowest level at which the goodwill is amortised for internal management purposes and not larger than an operating segment. A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired. For goodwill arising on an acquisition in a reporting period, the cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is tested for impairment before the end of that reporting period. If the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis based on the carrying amount of each asset in the unit (or group of cash-generating units). On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the amount of profit or loss on disposal (or any of the cash-generating unit within group of cash-generating units in which the Group monitors goodwill). 34 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

138 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Investments in associates and joint ventures An associate is an entity over which the Group has significant influence. 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. 3. 合 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. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The results and assets and liabilities of associates and joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. The financial statements of associates and joint ventures used for equity accounting purposes are prepared using uniform accounting policies as those of the Group for like transactions and events in similar circumstances. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group s share of the profit or loss and other comprehensive income of the associate or joint venture. Changes in net assets of the associate/joint venture other than profit or loss and other comprehensive income are not accounted for unless such changes resulted in changes in ownership interest held by the Group. When the Group s share of losses of an associate or a joint venture exceeds the Group s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group s net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. 2017/18 财务报告 35

139 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Investments in associates and joint ventures 3. 合 An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired. The requirements of HKAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with HKAS 36 Impairment of assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with HKAS 36 to the extent that the recoverable amount of the investment subsequently increases When the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in the investee with a resulting gain or loss being recognised in profit or loss. 36 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

140 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Investments in associates and joint ventures 3. 合 When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset within the scope of HKAS 39, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition. The difference between the carrying amount of the associate or joint venture and the fair value of any retained interest and any proceeds from disposing the relevant interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) upon disposal/partial disposal of the relevant associate or joint venture. 39 When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group. 2017/18 财务报告 37

141 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. 3. Revenue is recognised when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the Group and when specific criteria have been met for each of the Group s activities, as described below. Revenue from the sale of goods is recognised when goods are delivered and title has passed, at which time all the following conditions are satisfied: the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the Group; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from sales of natural gas and liquefied petroleum gas ( LPG ) are recognised when the gas or goods are delivered and titles have passed. 38 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

142 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Revenue recognition Deposits received by the Group prior to meeting the above criteria for revenue recognition are included in the consolidated statement of financial position under current liabilities. 3. Connection revenue from gas pipeline construction is recognised when the outcome of a contract can be estimated reliably and the stage of completion at the end of the reporting period can be measured reliably. Revenue from gas connection contracts is recognised on the percentage of completion method, measured by reference to the proportion of contract cost incurred for work performed to date compared to the estimated total contract costs. When the outcome of a gas connection contract cannot be estimated reliably, revenue is recognised only to the extent of contract cost incurred that it is probable to be recoverable. The Group s policy for the recognition of revenue from construction services is described in the accounting policy for construction contracts below. Rental income under operating leases is recognised on a straight-line basis over the terms of the relevant leases. Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset s net carrying amount on initial recognition. Dividend income from investments is recognised when the shareholders rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably). 2017/18 财务报告 39

143 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Property, plant and equipment Property, plant and equipment including leasehold land (classified as finance leases) and buildings held for use in the production or supply of goods and services, or for administrative purposes, (other than construction in progress and described below) are stated in the consolidated statement of financial position at cost less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any. 3. Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Costs include professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Depreciation is recognised so as to write off the cost of assets other than construction in progress less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. 40 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

144 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Property, plant and equipment Building under development for future owner-occupied purpose When buildings are in the course of development for production or for administrative purposes, the amortisation of prepaid lease payments provided during the construction period is included as part of costs of buildings under construction. Buildings under construction are carried at cost, less any identified impairment losses. Depreciation of buildings commences when they are available for use (i.e. when they are in the location and condition necessary for them to be capable of operating in the manner intended by management). Investment properties Investment properties are properties held to earn rentals or for capital appreciation. Investment properties include land held for undetermined future use, which is regarded as held for capital appreciation purpose. 3. Investment properties are initially measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their fair values. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the period in which the item is derecognised. 2017/18 财务报告 41

145 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Investment properties Transfer from investment property to owner-occupied property An item of investment property becomes an owner-occupied property because its use has changed as evidenced by commencement of owner-occupation. When an investment property carried at fair value is transferred to owner-property, the property s deemed cost for subsequent accounting is measured at its fair value of the date of change in use. Furthermore, the property interests held under an operating lease that is transferred to property, plant and equipment continues to be accumulated for as if it were a finance lease. Intangible assets Other intangible assets acquired in a business combination Other intangible assets acquired in a business combination are recognised separately from goodwill and are initially recognised at their fair values at the acquisition date (which is regarded as their cost). 3. 务合 Subsequent to initial recognition, intangible assets with finite useful lives are reported at costs less accumulated amortisation and any accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Amortisation for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised. 42 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

146 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Construction contracts Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. 3. 合 Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expense in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statement of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statement of financial position under trade and other receivables. 2017/18 财务报告 43

147 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Inventories Inventories, including construction materials, gas appliances and gas for sales, LPG, coke, consumables and spare parts, are stated at the lower of cost and net realizable value. Cost of inventories are determined on a weighted average method. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. 3. The Group as lessor Rental income from operating lease is recognised in profit or loss on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense on a straight-line basis over the lease term. The Group as lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. 44 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

148 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Leasehold land and building When the Group makes payments for a property interest which includes both leasehold land and building elements, the Group assesses the classification of each element as a finance or an operating lease separately based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Group, unless it is clear that both elements are operating leases in which case the entire lease property is accounted as an operating lease. Specifically, the entire consideration (including any lump-sum upfront payments) are allocated between the leasehold land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element at initial recognition. 3. To the extent the allocation of the relevant payments can be made reliably, interest in leasehold land that is accounted for as an operating lease is presented as prepaid lease payments in the consolidated statement of financial position and is amortised over the lease term on a straight-line basis, except for those that are classified and accounted for as investment properties under the fair value model and those that are transferred from investment properties under the fair value model to property, plant and equipment. When the lease payments cannot be allocated reliably between the leasehold land and building elements, the entire property is generally classified as if the leasehold land is under a finance lease. 2017/18 财务报告 45

149 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Foreign currencies In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recognised at the rates of exchanges prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. 3. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings. For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group s foreign operations are translated into the presentation currency of the Group (i.e. Hong Kong dollar) using exchange rates prevailing at the end of each reporting period. Income and expenses are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity under the heading of translation reserve (attributable to non-controlling interests as appropriate). 46 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

150 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Foreign currencies On the disposal of a foreign operation (i.e. a disposal of the Group s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. 3. In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss. Goodwill and fair value adjustments on identifiable assets acquired arising on an acquisition of a foreign operation before 1 January 2005 is treated as non-monetary foreign currency items of the acquirer and reported using the historical cost prevailing at the date of acquisition. Goodwill and fair value adjustments on identifiable assets acquired arising on an acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of that foreign operation and retranslated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income. 2017/18 财务报告 47

151 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Retirement benefits costs Payments to the Mandatory Provident Fund Scheme ( MPF Scheme ) and state-managed retirement benefits schemes are recognised as an expense when employees have rendered service entitling them to the contributions. Short-term and other long-term employee benefits Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid as and when employees rendered the services. All short-term employee benefits are recognised as an expense unless another HKFRS requires or permits the inclusion of the benefit in the cost of an asset. 3. A liability is recognised for benefits accruing to employees (such as wages and salaries, annual leave and sick leave) after deducting any amount already paid. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date. Any changes in the liabilities carrying amounts resulting from service cost, interest and remeasurements are recognised in profit or loss except to the extent that another HKFRS requires or permits their inclusion in the cost of an asset. 48 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

152 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. 3. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before taxation as reported in the consolidated statement of profit or loss and other comprehensive income because of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arise from the initial recognition of goodwill. 2017/18 财务报告 49

153 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Taxation 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 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 sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. 3. The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. 50 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

154 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Taxation For the purposes of measuring deferred tax for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. 3. Current and deferred tax are recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. Borrowing costs Borrowing costs directly attributable to the acquisition, construction on production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2017/18 财务报告 51

155 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument. 3. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets Financial assets are classified into one of the three categories, including financial assets at fair value through profit or loss ( FVTPL ), loans and receivables and available-for-sale financial assets. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. 52 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

156 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Effective interest method The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. 3. Interest income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL, for which interest income included in net gains or losses. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss of the Group comprise held for trading financial assets. A financial asset is classified as held for trading if: it has been acquired principally for the purpose of selling in the near future; or on initial recognition it is a part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument. 2017/18 财务报告 53

157 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Financial assets at fair value through profit or loss Financial assets at FVTPL are measured at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss excludes any dividend or interest earned on the financial assets and is included in the other gains and losses line item. Fair value is determined in the manner described in note Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables including trade and other receivables, amounts due from associates and joint ventures, pledged bank deposits and bank balances are carried at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial. 54 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

158 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or not classified as (a) loan and receivables, (b) held-to-maturity investments or (c) financial assets at FVTPL. 3. (a) (b) (c) Equity and debt securities held by the Group that are classified as available-for-sale financial assets are measured at fair value at the end of each reporting period except for unquoted equity investments whose fair value cannot be reliably measured. Changes in the carrying amount of available-for-sale debt instruments relating to interest income calculated using the effective interest method. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group s right to receive the dividends is established. Other changes in the carrying amount of available-for-sale financial assets are recognised in other comprehensive income and accumulated under the heading of investment revaluation reserve. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified impairment losses at the end of each reporting period. 2017/18 财务报告 55

159 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected. 3. For an available-for sale equity investment, a significant or prolonged decline in the fair value of that investment below its cost is considered to be objective evidence of impairment. For all other financial assets, objective evidence of impairment could include: significant financial difficulty of the issuer or counterparty; or breach of contract, such as default and delinquency in interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or financial re-organisation. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group s past experience of collecting payments and observable changes in national or local economic conditions that correlate with default on receivables. 56 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

160 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Impairment of financial assets For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset s carrying amount and the present value of the estimated future cash flows discounted at the financial assets original effective interest rate. 3. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss. When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period. For financial assets measured at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. 2017/18 财务报告 57

161 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial assets Impairment of financial assets In respect of available-for-sale equity investments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investment revaluation reserve. 3. Financial liabilities and equity instruments Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs. Repurchase of the Company s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company s own equity instruments. 58 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

162 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Financial liabilities and equity instruments Effective interest method The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premium or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest expense is recognised on an effective interest basis. 3. Financial liabilities at fair value through profit or loss Financial liabilities at FVTPL represent financial liabilities held for trading, which comprise derivatives that are not designated and effective as a hedging instrument. At the end of the reporting period subsequent to initial recognition, financial liabilities at FVTPL are measured at fair value, with changes in fair value arising on remeasurement recognised directly in profit or loss in the period in which they arise. Other financial liabilities Other financial liabilities including trade and other payables, amounts due to associates, joint ventures and non-controlling interests of subsidiaries and bank and other borrowings are subsequently measured at amortised cost, using the effective interest method. 2017/18 财务报告 59

163 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Financial instruments Derecognition The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire. 3. On derecognition of a financial asset, the difference between the asset s carrying amount and the sum of the consideration received and receivable. The Group derecognised financial liabilities when, and only when, the Group s obligation are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. Derivative financial instrument Derivatives are initially recognised at fair value at the date when derivative contracts are entered into and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is recognised in profit or loss immediately. Equity settled share-based payment transactions Share options granted to employees Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 36 to the Group s consolidation financial statements CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

164 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Equity settled share-based payment transactions Share options granted to employees The fair value of the equity-settled share-based payments determined at the grant date without taking into consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting period, based on the Group s estimate of equity instruments that will eventually vest, with a corresponding increase in equity (employee share-based compensation reserve). Market conditions are taken into account when estimating the fair value of the equity instruments granted. Vesting conditions other than market conditions are not taken into account when estimating the fair value of the shares or share options at the measurement date. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest based on an assessment of all relevant non-market vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity settled employee share-based compensation reserve. 3. For market conditions, the Group recognised share-based payment expense from employees who satisfy all other vesting conditions, inspective of whether the market conditions is satisfied. When share options are exercised, the amount previously recognised in employee share-based compensation reserve will be transferred to share premium. When the share options are forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognised in employee share-based compensation reserve will be transferred to accumulated profits. 2017/18 财务报告 61

165 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. 3. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as a deduction from the carrying amount of the relevant asset in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. Impairment losses on tangible and intangible assets other than goodwill (see the accounting policy in respect of goodwill above) At the end of the reporting period, the Group reviews the carrying amounts of its tangible and intangible assets with finite useful life to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. 62 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

166 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Impairment losses on tangible and intangible assets other than goodwill (see the accounting policy in respect of goodwill above) When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units (or a cash-generating unit) for which a reasonable and consistent allocation basis can be identified. 3. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or a cash-generating unit) for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. In allocating the impairment loss, the impairment loss is allocated first to reduce the carrying amount of any goodwill (if applicable) and then to the other assets on a pro-rata basis based on the carrying amount of each asset in the unit. The carrying amount of an asset is not reduced below the highest of its fair value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other assets of the unit. An impairment loss is recognised as an expense immediately. 2017/18 财务报告 63

167 For the year ended 31 March SIGNIFICANT ACCOUNTING POLICIES Impairment losses on tangible and intangible assets other than goodwill (see the accounting policy in respect of goodwill above) Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or a cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately. 4. RESTATEMENTS During the year ended 31 March 2017, the Group acquired businesses through purchase of subsidiaries of which the fair values of the identifiable assets, liabilities and contingent liabilities acquired were determined provisionally. During the year, the Group made certain fair value adjustments, with reference to the valuation reports, to the carrying amounts of the identifiable assets and liabilities of the subsidiaries acquired as a result of completing the initial accounting. The adjustments to the fair values at the acquisition date of the identifiable assets, liabilities and contingent liabilities were made as if initial accounting had been completed on the acquisition date CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

168 For the year ended 31 March RESTATEMENTS The cumulative effects of the above restatements on the consolidated statement of financial position as at 31 March 2017 are summarised below: 4. Subsequent fair value adjustments on acquisition of businesses through purchase of As at subsidiaries As at 31 March 2017 (note 38) 31 March HK$ 000 HK$ 000 HK$ 000 (originally stated) (restated) Property, plant and equipment 25,782,679 96,710 25,879,389 Prepaid lease payments 1,566,314 52,031 1,618,345 Goodwill 3,354,612 (629,008) 2,725,604 Other intangible assets 3,003, ,232 3,718,428 Deferred tax liabilities (734,667) (215,994) (950,661) Other assets and liabilities (9,044,526) (9,044,526) Net assets 23,927,608 18,971 23,946,579 Non-controlling interests 3,377,375 18,971 3,396,346 Other reserves items 20,550,233 20,550,233 23,927,608 18,971 23,946, KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group s accounting policies, which are described in note 3, the following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year /18 财务报告 65

169 For the year ended 31 March KEY SOURCES OF ESTIMATION UNCERTAINTY Revenue recognition of gas connection contract 5. 合 Construction income from gas connection contracts is recognised on the percentage of completion method, measured by reference to the proportion of the contract costs incurred for the work performed to date over the estimated total contract costs. Accordingly, any changes to the estimated total contract cost may have material impact on the contract revenue recognised in each accounting period over the contract term, including re-attribution of relevant reserves between the Group and the non-controlling interests according to the Group s and the non-controlling interests proportionate interests. Management of the Group is required to exercise significant judgements in the assessment of the extent of progress towards completion of the construction contracts, budgeted costs to complete, and the ability to deliver contracts within forecast timescales as at the end of the reporting period for gas connection income. Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the recoverable amount which is the higher of fair value less costs to sell and value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. When the actual future cash flows are less than expected, a material impairment loss may arise. As at 31 March 2018, the carrying amount of goodwill was HK$3,079,624,000 (2017: HK$2,725,604,000) with no impairment loss recognised. Details of the recoverable amount calculation disclosed in note 22. 3,079,624,000 2,725,604, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

170 For the year ended 31 March KEY SOURCES OF ESTIMATION UNCERTAINTY Depreciation of property, plant and equipment 5. Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives, after taking into account the estimated residual value. The Group assesses annually the residual value and the useful life of the property, plant and equipment and if the expectation differs from the original estimates, such differences from the original estimates will impact the depreciation charges in the year in which the estimates change. Deferred taxation As at 31 March 2018, the Group has unused tax losses of HK$6,012,195,000 (2017: HK$5,526,864,000) available for offset against future profits. A deferred tax asset has been recognised in respect of HK$157,423,000 (2017: HK$128,288,000) of the tax losses. No deferred tax asset in relation to these unused tax losses approximately to HK$5,854,772,000 (2017: HK$5,398,576,000) has been recognised in the consolidated statement of financial position. In cases where there are future profits generated to utilise the tax losses, a material deferred tax assets may arise, which would be recognised in the consolidated statement of profit or loss and other comprehensive income for the period in which the estimated future profits are expected. 6,012,195,000 5,526,864, ,423, ,288,000 5,854,772,000 5,398,576, /18 财务报告 67

171 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Revenue Revenue mainly represents the net amounts received and receivable for sales of piped gas, gas connection (including revenue from gas connection and other contracted construction), sales of LPG, and value-added services by the Group including the sales of gas appliances, gas corrugated pipes and gas alarms, provision of comprehensive gas insurance agency services, provision of maintenance and renovation services for the year and is analysed as follows: HK$ 000 HK$ 000 Sales of piped gas 22,612,904 13,778,572 Gas connection and other contracted construction 11,302,543 5,748,458 Sales of LPG 15,969,830 11,654,633 Value-added services 2,946, ,660 52,831,958 31,993,323 Segment information Information reported to the Group s chief operating decision maker ( CODM ), being the managing director of the Group, for the purposes of resources allocation and assessment of segment performance focuses on types of goods or services rendered which is also consistent with the basis of organisation of the Group. The CODM reviews the results of Zhongyu Gas Holdings Limited ( Zhongyu Gas ), an associate of the Group, being accounted for under equity accounting separately and thus Zhongyu Gas is presented as a single operating and reportable segment. 68 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

172 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment information The Group s reportable and operating segments under HKFRS 8 are as follows: 6. 8 (i) Sales of piped gas; (i) (ii) Gas connection; (ii) (iii) Sales of LPG; (iii) (iv) Value-added services; and (iv) (v) Zhongyu Gas (v) Information regarding the above segments is presented below. Segment revenues and results The following is an analysis of the Group s revenue and results by operating and reportable segment. For the year ended 31 March 2018 Sales of Gas Sales of Value-added Zhongyu Segment piped gas connection* LPG services Gas Total * 务 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue from external customers 22,612,904 11,302,543 15,969,830 2,946,681 52,831,958 Segment profit 2,463,320 4,761, , , ,671 8,853,518 Change in fair value of investment properties 38,490 Interest and other gains 153,580 Unallocated corporate expenses (210,915) Finance costs (807,781) Exchange gain on translation of foreign currency monetary items into functional currency 207,729 Share-based payments (644,320) Share of results of associates 251,151 Share of results of joint ventures 758,313 Profit before taxation 8,599, /18 财务报告 69

173 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment revenues and results For the year ended 31 March Sales of piped gas Gas connection* * Sales of LPG Value-added services Zhongyu Gas Segment Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue from external customers 13,778,572 5,748,458 11,654, ,660 31,993,323 Segment profit 1,989,072 3,207, , ,992 90,817 6,128,647 Change in fair value of investment properties 31,686 Interest and other gains 73,334 Loss on liquidation of subsidiaries (77,454) Litigation claim (87,376) Unallocated corporate expenses (205,300) Finance costs (705,116) Exchange loss on translation of foreign currency monetary items into functional currency (69,649) Share of results of associates 202,243 Share of results of joint ventures 611,187 Profit before taxation 5,902,202 * Including revenue from gas connection and other contracted construction. * 70 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

174 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment revenues and results All of the segment revenue reported above is from external customers and no inter-segment sales are noted for current and prior years. 6. The accounting policies of the operating segments are the same as the Group s accounting policies described in note 3. Except for segment profit of Zhongyu Gas, segment profit for remaining reportable segments represents the profit earned by each segment without allocation of interest income and other gains, head office administration costs, change in fair value of investment properties, litigation claim, loss on liquidation of subsidiaries, share-based payments, share of results of associates, share of results of joint ventures, exchange gain (loss) on translation of foreign currency monetary items into functional currency and finance costs. The segment profit of Zhongyu Gas represents share of results of Zhongyu Gas. This is the measure reported to the CODM for the purpose of resources allocation and performance assessment /18 财务报告 71

175 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment assets and liabilities The following is an analysis of the Group s segment assets and segment liabilities that are regularly reviewed by the CODM: At 31 March Sales of piped gas Gas connection Sales of LPG Value-added services Zhongyu Gas Segment Total 务 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Assets Segment assets 46,859,885 6,602,748 4,842, ,179 1,516,445 60,055,082 Investment properties 272,929 Property, plant and equipment (for corporate) 53,084 Prepaid lease payments (for corporate) 34,697 Investments in associates 4,408,345 Investments in joint ventures 6,423,615 Amounts due from associates 38,347 Amounts due from joint ventures 935,161 Available-for-sale investments 409,176 Deferred tax assets 224,325 Held-for-trading investments 48,077 Other receivables (for corporate) 618,118 Pledged bank deposits 290,729 Bank balances and cash 8,246,322 Consolidated total assets 82,058,007 Liabilities Segment liabilities 3,209,398 8,158,904 1,531, ,544 13,084,327 Other payables (for corporate) 1,903,275 Derivative financial instrument 2,338 Taxation 943,784 Bank and other borrowings 32,372,421 Amounts due to joint ventures 88,441 Amounts due to associates 125 Deferred taxation 933,196 Consolidated total liabilities 49,327, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

176 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment assets and liabilities At 31 March 2017 (restated) 6. Sales of piped gas Gas connection Sales of LPG Value-added services Zhongyu Gas Segment Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (restated) Assets Segment assets 35,135,579 3,998,695 4,312,045 75,781 1,396,611 44,918,711 Investment properties 219,221 Property, plant and equipment (for corporate) 55,868 Prepaid lease payments (for corporate) 31,740 Investments in associates 2,769,178 Investments in joint ventures 5,412,087 Amounts due from associates 255,015 Amounts due from joint ventures 304,156 Available-for-sale investments 324,304 Deferred tax assets 160,617 Held-for-trading investments 27,402 Other receivables (for corporate) 501,164 Pledged bank deposits 517,676 Bank balances and cash 4,724,646 Consolidated total assets 60,221,785 Liabilities Segment liabilities 2,433,155 5,451, ,064 91,626 8,880,729 Other payables (for corporate) 1,414,269 Derivative financial instrument 936 Taxation 511,844 Bank and other borrowings 23,618,435 Amounts due to joint ventures 797,393 Amounts due to associates 100,939 Deferred taxation 950,661 Consolidated total liabilities 36,275, /18 财务报告 73

177 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Segment assets and liabilities For the purposes of monitoring segment performance and allocating resources between segments: 6. All assets are allocated to operating segments, except for the investments in associates other than Zhongyu Gas, investments in joint ventures, amounts due from associates and joint ventures, available-for-sale investments, property, plant and equipment, investment properties and prepaid lease payments for corporate use, deferred tax assets, held-for-trading investments, pledged bank deposits and bank balances and cash of the Group, and corporate assets of the Group. All liabilities are allocated to operating segments other than taxation, derivative financial instrument, bank and other borrowings, amounts due to joint ventures and associates and deferred taxation of the Group, and corporate liabilities of the Group. 74 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

178 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Other segment information 6. Sales of Gas Sales of Value-added Zhongyu Segment piped gas connection LPG services Gas total Unallocated Consolidated 务 综合 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Amounts included in the measure of segment profit or loss or segment assets: For the year ended 31 March 2018 Additions of prepaid lease payments 286,330 11, , ,262 Additions to goodwill 23,537 13,020 36,557 36,557 Additions to property, plant and equipment 6,459, ,417 6,601,937 49,733 6,651,670 Loss on disposal of property, plant and equipment (1,663) (1,663) (1,663) Amortisation of intangible assets (124,340) (124,340) (124,340) Release of prepaid lease payments (39,232) (16,722) (55,954) (55,954) Depreciation of property, plant and equipment (984,259) (57,314) (1,041,573) (8,373) (1,049,946) Allowance for trade receivables and other receivables (74,182) (170,066) (244,248) (244,248) Share of results of associates 245, , , ,822 For the year ended 31 March 2017 (restated) Additions of prepaid lease payments 139,693 1, , ,089 Additions to goodwill 373, , ,445 Additions to property, plant and equipment 3,179, ,869 3,372,873 10,516 3,383,389 Gain on disposal of property, plant and equipment 1, ,239 2,239 Amortisation of intangible assets (87,157) (87,157) (87,157) Release of prepaid lease payments (32,353) (16,009) (48,362) (48,362) Depreciation of property, plant and equipment (783,062) (80,908) (863,970) (8,670) (872,640) Reversal of allowance for trade receivables 1,289 1,289 1,289 Share of results of associates 90,817 90, , , /18 财务报告 75

179 For the year ended 31 March REVENUE AND SEGMENT INFORMATION Geographical information The Group s operations are mainly located in the PRC. All of the Group s revenue is contributed by external customers in the PRC. None of the customers contributed over 10% of total revenue of the Group. The following is the information about non-current assets other than financial instruments and deferred tax assets by the geographical area in which the assets are located: 6. 10% HK$ 000 HK$ 000 (restated) Hong Kong 207, ,267 PRC 56,339,881 44,191,723 56,547,201 44,373, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

180 For the year ended 31 March OTHER INCOME HK$ 000 HK$ 000 Interest income 100,427 69,386 Subsidies from PRC governmental a authorities (note a) 213, ,048 Tax refund (note b) b 82,107 48,604 Repair and maintenance services fee 4,251 2,583 Other services income 84,971 41,946 Income from gas storage containers 15,681 Income from leasing of equipment 48,626 40,608 Others 30,017 31, , ,644 Notes: (a) During the years ended 31 March 2018 and 2017, certain subsidiaries received subsidies for (1) the costs incurred for connection contracts relating to pipeline network for customers in new urban areas and replacement of old pipeline network of the natural gas users in the relevant cities; (2) the additional costs incurred in certain gas connection contracts in which the connection fee is fixed by the relevant government authorities in the PRC; and (3) the costs incurred in removing the coal gas pipelines and the coal gas storage and replacing with the newly built natural gas pipelines. All the required work has been completed by the relevant subsidiaries. All the costs incurred were recognised as cost of sales in profit or loss either during the current or prior years. (a) (1) (2) (3) (b) The PRC government authorities have granted tax incentives to certain subsidiaries in the PRC by way of tax refund for natural gas business operated in the PRC. (b) 2017/18 财务报告 77

181 For the year ended 31 March OTHER GAINS AND LOSSES HK$ 000 HK$ 000 Other gains and losses comprise: Loss on liquidation of subsidiaries i (Note i) (77,454) Change in fair value of investment properties 38,490 31,686 Change in fair value of held-for-trading investments 20,675 16,038 (Allowance for) reversal of allowance for trade and other receivables (244,248) 1,289 Litigation claim (Note ii) ii (87,376) Exchange gain (loss) 326,892 (101,075) Reversal of impairment loss on amounts due from associates and joint ventures 8,362 Others 15,157 2, ,328 (214,653) Notes: (i) During the year ended 31 March 2017, the Group resolved to dissolve two of its subsidiaries in the PRC which were dormant. As at 31 March 2017, the Group was in the process of voluntarily winding up these two subsidiaries and loss on liquidation of the subsidiaries of HK$77,454,000 was recognised during the year ended 31 March (i) 77,454, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

182 For the year ended 31 March OTHER GAINS AND LOSSES Notes: 8. (ii) In April 2011, two former directors initiated legal proceedings against the Company with regards to their respective purported exercise of share options of the Company. On 15 October 2015, the Court of Appeal of Hong Kong ordered the Company to pay the former directors a total sum of HK$279,291,000 as damages, plus interests and costs of the trial and appeal. During the year ended 31 March 2016, the Court of Appeal stayed enforcement of the judgment pending determination of the Company s application for leave to appeal to the Court of Final Appeal on condition that the Company made payment into court of the full judgment sum of HK$279,291,000, together with HK$8,019,000, being part of the post-judgment interests. The Company duly made the payment into the Court. The Company then applied to the Court of Final Appeal for leave to appeal. (ii) 279,291, ,291,000 8,019,000 On 18 August 2016, the Court of Final Appeal decided not to grant the Company a leave to appeal against the judgment and, as a result, the legal action was brought to an end. In addition to the sum of damages and interests of HK$287,310,000 paid during the year ended 31 March 2016, additional interest of HK$87,376,000 was paid during the year ended 31 March ,310,000 87,376, FINANCE COSTS 9. 财务 HK$ 000 HK$ 000 Interest on bank and other borrowings Interest capitalised to construction in progress 1,119, ,409 (311,483) (258,293) 807, ,116 Borrowing costs capitalised during the year arose on the general borrowing pool and are calculated by applying a capitalisation rate of 4.53% (2017: 4.46%) per annum to expenditure on qualifying assets. 4.53% 4.46% 2017/18 财务报告 79

183 For the year ended 31 March TAXATION HK$ 000 HK$ 000 PRC Enterprise Income Tax 2,022,350 1,229,483 Deferred taxation (note 35) 35 (91,639) (21,977) 1,930,711 1,207,506 No provision for Hong Kong Profits Tax has been made in the consolidated financial statements as the Group had no assessable profit derived from Hong Kong for both years. The tax rate of the PRC subsidiaries is 25% except for the tax relief explained below. Certain PRC group entities are entitled to the preferential tax rate pursuant to the relevant regulations applicable to enterprises situated in the western region of the PRC and high technology enterprises. The applicable tax rate of those PRC group entities is 15% for the year ended 31 March 2018 (2017: 15%). 25% 15% 15% 80 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

184 For the year ended 31 March TAXATION The taxation for the year can be reconciled to the (loss) profit before taxation per the consolidated statement of profit or loss and other comprehensive income as follows: 10. Hong Kong PRC Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (Loss) profit before taxation (764,596) (223,113) 9,364,361 6,125,315 8,599,765 5,902,202 Tax at the domestic income tax rate Tax effect of share of results of associates Tax effect of share of results of joint ventures Tax effect of expenses not deductible for tax purpose Tax effect of income not taxable for tax purpose Tax effect of estimated tax losses not recognised Tax effect of income tax at concessionary rate (126,158) (36,814) 2,341,090 1,531,329 2,214,932 1,494,515 (124,206) (73,265) (124,206) (73,265) (189,578) (152,796) (189,578) (152,796) 106,342 14,417 62,994 24, ,336 39,350 (4,592) (9,658) (86,147) (49,641) (90,739) (59,299) 24,408 32,055 77,067 90, , ,131 (150,509) (163,130) (150,509) (163,130) Taxation 1,930,711 1,207,506 1,930,711 1,207,506 Note: The applicable tax rate for Hong Kong and PRC are 16.5% (2017: 16.5%) and 25% (2017: 25%) respectively. 16.5% 16.5%25% 25% 2017/18 财务报告 81

185 For the year ended 31 March PROFIT FOR THE YEAR HK$ 000 HK$ 000 Profit for the year has been arrived at after charging (crediting): Auditor s remuneration 9,688 9,000 Depreciation of property, plant and equipment 1,049, ,640 Release of prepaid lease payments 55,954 48,362 Amortisation of intangible assets including in cost of sales 124,340 87,157 Minimum lease payments for operating leases in respect of: rented premises 176, ,044 equipment 29,400 32, , ,745 Loss (gain) on disposal of property, plant and equipment 1,663 (2,339) Share of tax of associates (included in share of results of associates) 186,321 76,485 Share of tax of joint ventures (included in share of results of joint ventures) 237, ,997 Staff costs: Directors emoluments (note 12) ,285 42,192 Salaries and allowances of other staff 1,826,788 1,477,332 Share-based payments of other staff 408,190 Contributions to retirement benefit scheme of other staff 487, ,883 Less: Amount capitalised in construction in progress (118,976) (43,508) Cost of inventories recognised as expenses in respect of: 2,889,505 1,860,899 Sales of piped gas 18,903,499 11,633,875 Sales of LPG 13,838,253 9,968,700 Contract costs recognised as expense in respect of gas connection construction contracts 4,711,834 1,205,810 Rental income from investment properties less outgoings of HK$599,000 (2017: HK$1,095,000) 37,453,586 22,808, ,000 1,095,000 (21,034) (25,300) 82 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

186 For the year ended 31 March DIRECTORS AND EXECUTIVE CHAIRMAN S EMOLUMENTS The emoluments paid or payable to each of the 19 (2017: 16) directors and the chief executive disclosed pursuant to the applicable Listing Rules and Companies Ordinance, were as follows: Performance Contributions Salaries related to retirement Directors and other incentive benefits Share-based Total fees benefits payments scheme payments emoluments 表 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (Note iv) 附注 iv Executive directors Mr. Zhou Si (Chairman) Mr. Liu Ming Hui (Executive Chairman and Managing Director) 8,340 7, , ,280 Mr. Huang Yong 7,798 6, , ,138 Mr. Zhu Weiwei 3,480 2, ,693 10,441 Mr. Ma Jinlong 2,400 1,800 4,693 8,893 Ms. Li Ching ,693 6,093 Non-executive directors Mr. Yu Jeong Joon (Vice Chairman) ,387 9,787 Mr. Kim Yong Joong (Note i) i 1,674 1,600 4,693 7,967 Mr. Liu Mingxing ,396 1,796 Mr. Arun Kumar Manchanda Arun Kumar Manchanda ,396 1,796 Mr. Jiang Xinhao Ms. Liu Chang (Note iii) iii Mr. Kwon Woonsang (Note iii) 沄 iii Independent non-executive directors Ms. Wong Sin Yue, Cynthia ,347 3,147 Mr. Zhao Yuhua ,347 3,067 Dr. Mao Erwan ,347 3,067 Mr. Ho Yeung (Note ii) ii ,347 2,707 Ms. Chen Yanyan ,347 2,868 Ms. Zhang Ling (Note iii) iii ,345 25,638 21, , , /18 财务报告 83

187 For the year ended 31 March DIRECTORS AND EXECUTIVE CHAIRMAN S EMOLUMENTS Performance Contributions Salaries related to retirement Directors and other incentive benefits Total fees benefits payments scheme emoluments HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (Note iv) iv Executive directors Mr. Zhou Si (Chairman) Mr. Liu Ming Hui (Executive Chairman and Managing Director) 7,770 4, ,588 Mr. Huang Yong 7,678 4, ,096 Mr. Zhu Weiwei 3,400 1, ,918 Mr. Ma Jinlong 2,400 1,200 3,600 Ms. Li Ching ,190 Non-executive directors Mr. Yu Jeong Joon (Vice Chairman) Mr. Kim Yong Joong (Note i) i 2,400 1,000 3,400 Mr. Liu Mingxing Mr. Arun Kumar Manchanda Arun Kumar Manchanda Mr. Jiang Xinhao Independent non-executive directors Ms. Wong Sin Yue Cynthia Mr. Zhao Yuhua Dr. Mao Erwan Mr. Ho Yeung (Note ii) ii Ms. Chen Yanyan ,300 24,488 14, ,192 Notes: (i) Removed on 7 November 2017 (ii) Resigned on 27 November 2017 (iii) Appointed on 27 November 2017 (iv) Performance related incentive payments were determined by the remuneration committee, having regard to the performance of directors and the Group s operating result. (i) (ii) (iii) (iv) 84 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

188 For the year ended 31 March DIRECTORS AND EXECUTIVE CHAIRMAN S EMOLUMENTS The executive directors emoluments shown above were mainly for their services in connection with the management of the affairs of the Company and the Group. The non-executive directors emoluments and independent non-executive directors emoluments shown above were mainly for their services as directors of the Company. Mr. Liu Ming Hui is also the Chief Executive of the Company and his emoluments disclosed above included those for services rendered by him as the Chief Executive. 13. EMOLUMENTS OF EMPLOYEES During the year ended 31 March 2018 and 2017, of the five individuals with the highest emoluments in the Group, all of them were directors which included the Executive Chairman of the Company whose emoluments are included in note 12. No emoluments were paid by the Group to the chief executive or the directors as an inducement to join the Group or as a compensation for loss of office for both years. Except for Mr. Zhou Si and Mr. Jiang Xinhao who have waived their rights to receive remuneration for the years ended 31 March 2018 and 2017, there was no arrangement under which the chief executive or a director waived or agreed to waive any emoluments during the years ended 31 March 2018 and /18 财务报告 85

189 For the year ended 31 March DIVIDENDS HK$ 000 HK$ 000 Final dividend paid in respect of year ended 31 March 2017 of HK$0.2 (2017: HK$ in respect of year ended 31 March 2016) per share Interim dividend paid in respect of six months ended 30 September 2017 of HK$0.08 (2017: HK$0.05 in respect of six months ended 30 September 2016) per share , , , ,775 1,391, ,816 A final dividend of HK$0.27 in respect of the year ended 31 March 2018 (2017: final dividend of HK$0.20 in respect of the year ended 31 March 2017) per share has been proposed by the directors and is subject to approval by the shareholders in the forthcoming general meeting. 15. EARNINGS PER SHARE The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data: HK$ 000 HK$ 000 Earnings for the purposes of basic and diluted earnings per share, being profit for the year attributable to owners of the Company 6,095,153 4,147, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

190 For the year ended 31 March EARNINGS PER SHARE Weighted average number of ordinary shares for the purpose of basic earnings per share Adjustment for effect of dilutive potential ordinary shares: 4,968,519 4,908,043 Share options (Note) 109,324 Weighted average number of ordinary shares for the purpose of diluted earnings per share 5,077,843 4,908,043 Note: The computation of diluted earnings per share for the year ended 31 March 2017 did not assume the exercise of the Company s outstanding share options as the exercise price of those share options was higher than the average market price of the shares for the 2017 financial year. 16. INVESTMENT PROPERTIES HK$ 000 At 1 April ,450 Exchange adjustments (2,915) Change in fair value 31,686 At 31 March ,221 Exchange adjustments 15,218 Change in fair value 38,490 At 31 March , /18 财务报告 87

191 For the year ended 31 March INVESTMENT PROPERTIES The Group s investment properties are analysed as follows: HK$ 000 HK$ 000 Properties held: in Hong Kong 172, ,200 in the PRC 100,429 74, , ,221 The fair value of the Group s investment properties in Hong Kong at 31 March 2018 has been arrived at on the basis of a valuation carried out as on the respective dates by LCH (Asia-Pacific) Surveyors Limited, an independent qualified professional valuer not connected to the Group. The resulting surplus of HK$27,300,000 (2017: HK$19,200,000) was credited to the consolidated statement of profit or loss and other comprehensive income. The valuation was arrived at by reference to comparable market transactions available in the relevant markets for similar properties in the similar locations and conditions. The fair value of the Group s investment properties in the PRC at 31 March 2018 has been arrived at on the basis of a valuation carried out at these dates by CHFT Advisory and Appraisal Ltd. (2017: Crowe Horwath (HK) Consulting & Valuation Limited), independent qualified professional valuers not connected to the Group. The resulting surplus of HK$11,190,000 (2017: HK$12,486,000) was credited to consolidated statement of profit or loss and other comprehensive income. The valuation was arrived at by reference to comparable market transactions available in the relevant markets for similar properties in the similar locations and conditions. 27,300,000 19,200,000 11,190,000 12,486, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

192 For the year ended 31 March INVESTMENT PROPERTIES All of the Group s property interests held under operating leases to earn rentals or for capital appreciation purposes are measured using the fair value model and are classified and accounted for as investment properties. Details of the Group s investment properties and information about the fair value hierarchy as 31 March 2018 and 2017 are as follows: 16. Fair value Level HK$ 000 HK$ 000 Commercial property units located in Hong Kong 172, ,200 Offices located in the PRC 100,429 74,021 There were no transfers into or out of Level 3 during the year. At the end of the reporting period, the management of the Group works closely with the independent qualified external valuers to establish and determine the appropriate valuation techniques and inputs for Level 3 fair value measurements. Where there is a material change in the fair value of the assets, the causes of the fluctuations will be reported to the directors of the Company. Information about fair value measurements using key unobservable inputs (Level 3) The following table shows the valuation techniques used in the determination of fair values for investment properties and the key unobservable inputs used in the valuation models. 2017/18 财务报告 89

193 For the year ended 31 March INVESTMENT PROPERTIES Information about fair value measurements using key unobservable inputs (Level 3) 16. Relationship of Valuation Unobservable Range of unobservable Description Fair value as at 31 March techniques inputs unobservable inputs inputs to fair value HK$ 000 HK$ 000 Commercial units located in Hong Kong 172, ,200 Comparison approach Adjusted transaction price to reflect market value of similar properties HK$28,957 - HK$46,613 per square foot (2017: HK$25,400 - HK$40,600 per square foot) 28,95746,613 25,40040,600 The higher the adjusted transaction price the higher the fair value Offices located in the PRC 100,429 74,021 Comparison approach Adjusted transaction price to reflect direction and height RMB8,272 - RMB68,756 per square meter (2017: RMB9,000 - RMB69,065 per square meter) 8,272 68,756 9,000 69,065 The higher the adjusted transaction price the higher the fair value 272, , For the purposes of measuring deferred taxation arising from investment properties that are measured using the fair value model, the directors of the Company have reviewed the Group s investment property portfolio and concluded that the Group s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, in measuring the Group s deferred taxation on investment properties, the directors of the Company have determined that the presumption that the carrying amounts of investment properties measured using the fair value model are recovered entirely through sale is rebutted. Accordingly, deferred taxation in relation to the Group s investment properties has been measured based on the tax consequences of recovering the carrying amounts entirely through use. CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

194 For the year ended 31 March PROPERTY, PLANT AND EQUIPMENT 17. Leasehold Machinery Furniture land and Construction and and Motor buildings Pipelines in progress equipment fixtures vehicles Vessels Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 COST At 1 April ,904,060 13,830,331 6,072,449 3,320, , , ,762 27,310,383 Exchange adjustment (114,594) (736,920) (304,983) (205,695) (29,490) (39,352) (10,715) (1,441,749) Additions 78, ,681 2,880, ,354 17,726 82,687 12,560 3,383,389 Acquired on acquisitions of subsidiaries 358, , , ,631 7,790 24,827 1,820,484 Disposal for the year (11,952) (38,305) (48,563) (17,129) (43,484) (159,433) Reclassification 136,956 1,971,198 (2,195,008) 80,018 3,391 3,445 At 31 March 2017 (restated) 3,351,439 16,082,710 6,646,381 3,637, , , ,607 30,913,074 Exchange adjustment 262,247 1,663, , ,611 65,942 72,218 19,699 3,202,562 Additions 87, ,138 5,998, ,651 17, ,382 6,651,670 Acquired on acquisitions of subsidiaries 5,901 12,386 13,564 3,639 1, ,569 Disposal for the year (5,885) (10,143) (35,702) (16,191) (80,027) (147,948) Reclassification 39,710 2,750,547 (2,819,228) 25,280 3,691 At 31 March ,740,837 20,670,525 10,601,530 4,125, , , ,306 40,656,927 DEPRECIATION AND IMPAIRMENT At 1 April ,924 2,163,587 1,376, , ,431 54,357 4,460,775 Exchange adjustment (13,407) (125,325) (66,832) (17,489) (10,139) (3,000) (236,192) Provided for the year 87, , ,341 23,697 60,612 12, ,640 Eliminated on disposals (3,091) (4,556) (21,029) (7,210) (27,652) (63,538) At 31 March ,696 2,482,452 1,527, , ,252 64,331 5,033,685 Exchange adjustment 41, , ,092 42,366 26,186 6, ,309 Provided for the year 115, , ,942 28,883 76,654 13,469 1,049,946 Eliminated on disposals (1,101) (850) (14,993) (4,783) (46,699) (68,426) At 31 March 2018 CARRYING VALUES At 31 March 2018 At 31 March 2017 (restated) 682,731 3,351,550 1,894, , ,393 84,379 6,568,514 3,058,106 17,318,975 10,601,530 2,230, , , ,927 34,088,413 2,824,743 13,600,258 6,646,381 2,109, , , ,276 25,879, /18 财务报告 91

195 For the year ended 31 March PROPERTY, PLANT AND EQUIPMENT The pipelines of the Group are located in the PRC. 17. The above items of property, plant and equipment other than construction in progress are depreciated on a straight-line basis at the following rates per annum: Leasehold land and buildings Pipelines Machinery and equipment Over the shorter of the remaining terms of the leases or 50 years Over the shorter of 30 years or the operation period of the relevant company 5% 10% Furniture and fixtures 15% 50% Motor vehicles 25% Vessels 7% (new vessels acquired from suppliers) or 34% (acquired from second hand market) % 10% 15% 50% 25% 7% 34% During the year ended 31 March 2018, interest capitalised in construction in progress amounted to HK$311,483,000 (2017: HK$258,293,000). 311,483, ,293,000 During the year ended 31 March 2018, the Group is in the process of obtaining title deeds from relevant government authorities for its land and buildings in the PRC amounting to HK$19,319,000 (2017: HK$17,672,000). In the opinion of the directors of the Company, the Group is not required to incur additional cost in obtaining the title deeds for its land and buildings in the PRC. At 31 March 2018, the directors of the Company considered that in the leasehold land and building elements of certain properties located in the PRC with a carrying value of HK$96,005,000 (2017: HK$84,441,000) cannot be separately identified. 19,319,000 17,672,000 96,005,000 84,441, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

196 For the year ended 31 March PREPAID LEASE PAYMENTS HK$ 000 HK$ 000 (restated) The Group s prepaid lease payments comprise leasehold land in the PRC and are analysed for reporting purposes as: Non-current portion 1,996,978 1,568,354 Current portion 63,225 49,991 2,060,203 1,618,345 The leasehold land and land use rights are charged to consolidated statement of profit or loss and other comprehensive income on a straight-line basis over the term of the leases. During the year, the Group is in the process of obtaining title deeds from relevant government authorities for its prepaid lease payments in the PRC amounting to HK$40,951,000 (2017: HK$30,782,000). In the opinion of the directors of the Company, the Group is not required to incur additional cost in obtaining the title deeds for its prepaid lease payments in the PRC. 40,951,000 30,782, /18 财务报告 93

197 For the year ended 31 March INVESTMENTS IN ASSOCIATES HK$ 000 HK$ 000 Cost of investments in associates: Listed in Hong Kong 881, ,765 Listed in the PRC 39,272 39,272 Unlisted 2,970,043 1,945,510 Share of pre-acquisition dividend (1,296) (1,296) Share of post-acquisition profits and other comprehensive income (net of post-acquisition dividend received) 1,802,036 1,067,568 Discount on acquisition of associates 232, ,970 5,924,790 4,165,789 Fair value of listed investments, based on quoted market price 8,651,717 3,002, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

198 For the year ended 31 March INVESTMENTS IN ASSOCIATES The Group had interests in the following significant associates: 19. Proportion of nominal value of Form of Place of Principal registered/issued business registration/ place of Class of capital held Name of entity structure incorporation operations capital by the Group Principal activities 务 注 注 注 % % 务 () Sino-foreign PRC PRC Registered Gas pipeline construction equity joint venture Sino-foreign equity joint venture PRC PRC Registered Exploration, collection transportation, purification and sales of natural gas Sino-foreign PRC PRC Registered Sales of natural gas equity joint venture Sino-foreign equity joint venture PRC PRC Registered Sales of nature gas and gas pipeline construction Limited liability company PRC PRC Registered Refining process, storage of LPG Limited liability PRC PRC Registered Sales of natural gas and gas company pipeline construction 2017/18 财务报告 95

199 For the year ended 31 March INVESTMENTS IN ASSOCIATES 19. Proportion of nominal value of Form of Place of Principal registered/issued business registration/ place of Class of capital held Name of entity structure incorporation operations capital by the Group Principal activities 务 注 注 注 % % 务 Limited liability PRC PRC Registered Sales of LPG company Zhongyu Gas Limited liability company Cayman Island PRC Ordinary Investment holding, sales of natural gas and gas pipeline construction Limited liability company PRC PRC Registered Sales of natural gas and gas pipeline construction Limited liabilities PRC PRC Registered Sales of natural gas and gas company pipeline construction Limited liabilities PRC PRC Registered Sales of natural gas and gas company pipeline construction Rankam International Holdings Limited Limited liability company Bermuda Hong Kong Ordinary Investment holding Daily Pride Limited Limited liability company Bermuda Hong Kong Ordinary Holding of project companies for trading of heaters and boilers 96 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

200 For the year ended 31 March INVESTMENTS IN ASSOCIATES 19. Proportion of nominal value of Form of Place of Principal registered/issued business registration/ place of Class of capital held Name of entity structure incorporation operations capital by the Group Principal activities 务 注 注 注 % % 务 Limited liability company PRC PRC Registered Sales of gas meter, gas pressure regulator and gas pipeline construction Limited liability company PRC PRC Registered Development of energy technology and sales of natural gas Limited liability PRC PRC Registered Sales of LPG company Limited liability PRC PRC Registered Sales of natural gas and gas company pipeline construction Limited liability PRC PRC Registered Sales of natural gas and gas company pipeline construction Limited liability PRC PRC Registered Sales of natural gas and gas company pipeline construction 2017/18 财务报告 97

201 For the year ended 31 March INVESTMENTS IN ASSOCIATES 19. Proportion of nominal value of Form of Place of Principal registered/issued business registration/ place of Class of capital held Name of entity structure incorporation operations capital by the Group Principal activities 务 注 注 注 % % 务 ( ) Limited liability company PRC PRC Registered 12 (Note) 12 (Note) Development, production and sales of utility system 附注 () Limited liability PRC PRC Registered 25 Sales of natural gas and gas company pipeline construction Note: The Group held a 12% equity interest in. The investment in was classified as an investment in an associate as the Group has the right to appoint one out of four executive directors in. Thus, the Group can exercise significant influence over the financial and operating policies of. At 31 March 2018, included in the cost of investment in associates is goodwill of HK$1,700,850,000 (2017: HK$976,339,000). The financial year end date for Zhongyu Gas is 31 December. For the purpose of applying the equity method of accounting, the consolidated financial statements of Zhongyu Gas for the year ended 31 December 2017 have been used as the Group considers that it is impracticable for Zhongyu Gas with its shares listed on the Stock Exchange to provide a separate and complete set of financial statements as of 31 March. No significant transactions requiring adjustments took place during the intervening period. 12% 1,700,850, ,339, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

202 For the year ended 31 March INVESTMENTS IN ASSOCIATES Summarised financial information of material associates Summarised financial information in respect of each of the Group s material associates is set out below. The summarised financial information below represents amounts shown in the associate s financial statements prepared in accordance with HKFRSs for the purpose of preparation of these consolidated financial statements. All of the Group s associates are accounted for using the equity method in these consolidated financial statements: 19. 财务 HK$ 000 HK$ 000 Current assets 857,452 1,167,953 Non-current assets 3,743,847 2,638,207 Current liabilities (1,606,373) (1,136,440) Non-current liabilities (5,013) (17,283) Net assets 2,989,913 2,652,437 Revenue 1,789,316 1,589,988 Profit and total comprehensive income for the year 489, ,674 Dividend received from during the year 73, , /18 财务报告 99

203 For the year ended 31 March INVESTMENTS IN ASSOCIATES Summarised financial information of material associates Reconciliation of the above summarised financial information to the carrying amount of the investments in associates recognised in the consolidated financial statements: 19. 财务 HK$ 000 HK$ 000 Net assets of 2,989,913 2,652,437 Pr oportion of the Group s ownership interest in 48% 48% Ca rrying amount of the Group s interest in reflected in the Group s consolidated statement of financial position 1,435,158 1,273,170 Zhongyu Gas and its subsidiaries 附 HK$ 000 HK$ 000 Current assets 2,011,076 1,653,727 Non-current assets 9,789,655 7,969,936 Current liabilities (3,676,669) (2,709,103) Non-current liabilities (4,400,845) (4,108,629) Net assets 3,723,217 2,805,931 Non-controlling interests 549, ,725 Revenue 5,048,100 3,722,507 Profit and total comprehensive income for the year 1,074, , CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

204 For the year ended 31 March INVESTMENTS IN ASSOCIATES Summarised financial information of material associates Zhongyu Gas and its subsidiaries Reconciliation of the above summarised financial information to the carrying amount of the investments in associates recognised in the consolidated financial statements: 19. 财务 附 HK$ 000 HK$ 000 Equity attributable to owners of Zhongyu Gas reported in the consolidated financial statements Less: Fair value gain on revaluation of pipelines included in property, plant and equipment 3,173,952 2,553,206 (828,944) (480,240) 2,345,008 2,072,966 Proportion of the Group s ownership interest in Zhongyu Gas 44% 44% Goodwill 483, ,469 Carrying amount of the Group s interest in Zhongyu Gas reflected in the Group s consolidated statement of financial position 1,516,445 1,396, /18 财务报告 101

205 For the year ended 31 March INVESTMENTS IN ASSOCIATES Summarised financial information of material associates 19. 财务 2018 HK$ 000 Current assets 2,228,613 Non-current assets 4,942,863 Current liabilities (4,216,807) Non-current liabilities (1,222,107) Net assets 1,732,562 Non-controlling interests 215,382 Revenue 3,483,716 Profit and total comprehensive income for the year 280,558 Reconciliation of the above summarised financial information to the carrying amount of the investments in associates recognised in the consolidated financial statements: 2018 HK$ 000 Equity attributable to owners of 1,517,180 Proportion of the Group s ownership interest in 25% Goodwill 704,833 Carrying amount of the Group s interest in reflected in the Group s consolidated statement of financial position 1,084, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

206 For the year ended 31 March INVESTMENTS IN ASSOCIATES Summarised financial information of material associates Aggregate information of associates that are not individually material 19. 财务 合 HK$ 000 HK$ 000 The Group s share of profit 170,041 84,893 Aggregate carrying amount of the Group s interests in these associates 1,889,059 1,496, INVESTMENTS IN JOINT VENTURES 20. 合 HK$ 000 HK$ 000 Cost of investment in joint ventures unlisted Share of post-acquisition profits and other comprehensive income (net of post-acquisition dividend received) 3,182,735 3,154,253 3,189,830 2,206,784 Discount on acquisition of joint ventures 51,050 51,050 6,423,615 5,412, /18 财务报告 103

207 For the year ended 31 March INVESTMENTS IN JOINT VENTURES As at 31 March 2018 and 2017, the Group had interests in the following significant joint ventures: 20. 合 Proportion of nominal value Form of Place of Principal of registered/ business registration/ place of Class of issued capital Name of entity structure incorporation operations capital held by the Group Principal activities 务 注 注 % % 务 Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction ( ) Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction Sino-foreign equity joint venture PRC PRC Registered Nature gas refill service and gas station administration Equity joint PRC PRC Registered Sales of natural gas venture 104 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

208 For the year ended 31 March INVESTMENTS IN JOINT VENTURES 20. 合 Proportion of nominal value Form of Place of Principal of registered/ business registration/ place of Class of issued capital Name of entity structure incorporation operations capital held by the Group Principal activities 务 注 注 % % 务 Fu jian Anran Gas Investment Company Limited liability company PRC PRC Registered Investment holding Limited ( Fujian Anran ) Limited liability PRC PRC Registered Sales of natural gas and gas company pipeline construction Limited liability PRC PRC Registered Gas pipeline construction company Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction Sino-foreign equity joint venture PRC PRC Registered Retailing and wholesaling of gas accessories and provision of maintenance service Limited liability PRC PRC Registered Provision of pipe natural gas company 2017/18 财务报告 105

209 For the year ended 31 March INVESTMENTS IN JOINT VENTURES 20. 合 Proportion of nominal value Form of Place of Principal of registered/ business registration/ place of Class of issued capital Name of entity structure incorporation operations capital held by the Group Principal activities 务 注 注 % % 务 China Gas SK E&S LNG Trading Limited Sino-foreign PRC PRC Registered Sales and distribution of LPG equity joint venture Limited liability company PRC PRC Registered Sales of natural gas, petrochemical products and gas accessories Sino-foreign equity joint venture PRC PRC Registered Sales of natural gas and gas pipeline construction Limited liability Hong Kong Hong Kong Ordinary Investment holding company Limited liability company PRC PRC Registered Sales of nature gas and delivery of hazardous products Limited liability PRC PRC Registered Sales of natural gas company 106 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

210 For the year ended 31 March INVESTMENTS IN JOINT VENTURES 20. 合 Proportion of nominal value Form of Place of Principal of registered/ business registration/ place of Class of issued capital Name of entity structure incorporation operations capital held by the Group Principal activities 务 注 注 % % 务 China Insurance Investment China Gas (Shenzhen) Clean Energy Development Fund L.P (Note) Investment Fund L.P. PRC PRC Registered Investment in piped natural gas ( PNG ), liquefied natural gas ( LNG ), compressed natural gas ( CNG ) and LPG energy projects PNG LNG CNG Note: During the year ended 31 March 2017, the Group cooperated with China Insurance Investment Fund L.P. ( CIIF ) to establish the China Insurance Investment China Gas (Shenzhen) Clean Energy Development Fund L.P (the Fund ). The Fund is expected to have an aggregate capital commitment up to RMB10 billion in which RMB7 billion and RMB3 billion will be contributed by CIIF and the Group respectively. The Fund will provide capital support for investment in the PNG, LNG, CNG and LPG projects. Prior to CIIF having contributed its committed capital of RMB7 billion in full and the investment projects of the Fund having generated income or stable cash flow, the Fund shall not seek capital contribution of RMB3 billion from the Group. Up to 31 March 2018, CIIF contributed RMB5,800,000,000 (2017: RMB700,000,000) to the Fund. CIIF is entitled to a preferential return based on its actual capital contribution (after deducting any redeemed amount). In connection with the Fund, the Company made an undertaking to procure, among other things: (i) the divestment of CIIF in the Fund; (ii) the payment of the preferential return of CIIF from the Fund; and (iii) the preferential redemption of CIIF in the Fund in the event that the Fund does not have sufficient funding in satisfying the aforesaid requirements PNG LNG CNG LPG ,800,000, ,000,000 (i) (ii) (iii) 2017/18 财务报告 107

211 For the year ended 31 March INVESTMENTS IN JOINT VENTURES As all the relevant activities of the above entities require unanimous consent from all joint venture parties, they are accounted for as joint ventures. 20. 合 On 9 June 2017, the Group cooperated with BOCOM International Trust Company Limited ( BOCOM International ) to establish the China Gas BOCOM (Shenzhen) Clean Energy Equity Investment Fund L.P. (the BOCOM Fund ). The BOCOM Fund is expected to have an aggregate capital commitment of up to RMB10 billion in which RMB9 billion and RMB1 billion will be contributed by BOCOM International and its whollyowned subsidiaries and the Group respectively. The BOCOM Fund will provide capital support for investment in the Group s 4G (PNG, LNG, CNG and LPG) energy projects. Joint venture entity of the BOCOM Fund was yet to set up as at 31 March G PNG LNG CNG LPG At 31 March 2018, included in the cost of investment in joint ventures is goodwill of HK$265,806,000 (2017: HK$238,621,000). Summarised financial information of material joint ventures The summarised financial information below represents amounts shown in the joint ventures consolidated financial statements prepared in accordance with HKFRSs. 265,806, ,621,000 合 财务 All of the Group s joint ventures are accounted for using the equity method in these consolidated financial statements. 108 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

212 For the year ended 31 March INvESTMENTS IN JOINT ventures Summarised financial information of material joint ventures 20. 合 合 财务 HK$ 000 HK$ 000 Current assets 1,358,902 1,336,543 Non-current assets 3,529,153 2,974,780 Current liabilities (2,394,128) (2,108,494) Non-current liabilities (58,461) (288,463) Net assets 2,435,466 1,914, HK$ 000 HK$ 000 Revenue 1,686,670 1,626,386 Profit and total comprehensive income for the year 521, , /18 财务报告 109

213 For the year ended 31 March INVESTMENTS IN JOINT VENTURES Summarised financial information of material joint ventures Reconciliation of the above summarised financial information to the carrying amount of the investments in joint ventures recognised in the consolidated financial statements: 20. 合 合 财务 HK$ 000 HK$ 000 Net assets reported in the consolidated financial statements of Proportion of the Group s ownership interest in 2,435,466 1,914,366 51% 51% Carrying amount of the Group s interest in reflected in the Group s consolidated statement of financial position 1,242, ,327 Fujian Anran and its subsidiaries 附 HK$ 000 HK$ 000 Current assets 1,198, ,535 Non-current assets 3,050,715 2,397,338 Current liabilities (852,015) (755,793) Non-current liabilities (768,244) (567,023) Net assets 2,628,623 1,941, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

214 For the year ended 31 March INVESTMENTS IN JOINT VENTURES Summarised financial information of material joint ventures Fujian Anran and its subsidiaries 20. 合 合 财务 附 HK$ 000 HK$ 000 Revenue 2,114,245 1,497,447 Profit and total comprehensive income for the year 687, ,256 Reconciliation of the above summarised financial information to the carrying amount of the investments in joint ventures recognised in the consolidated financial statements: HK$ 000 HK$ 000 Net assets reported in the consolidated financial statements of Fujian Anran Proportion of the Group s ownership interest in Fujian Anran 2,628,623 1,941,057 49% 49% Carrying amount of the Group s interest in Fujian Anran reflected in the Group s consolidated statement of financial position 1,288, , /18 财务报告 111

215 For the year ended 31 March INVESTMENTS IN JOINT VENTURES Summarised financial information of material joint ventures Fujian Anran and its subsidiaries Aggregate information of joint ventures that are not individually material: 20. 合 合 财务 附 HK$ 000 HK$ 000 The Group s share of profit 448, ,617 Aggregate carrying amount of the Group s interest in these joint ventures 3,893,502 3,484, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

216 For the year ended 31 March INVESTMENTS IN JOINT VENTURES Summarised financial information of material joint ventures Included in the balance of amounts due from joint ventures are loans of HK$36,428,000 (2017: HK$38,636,000) which are unsecured, interest bearing at fixed rates 3.915% per annum. The remaining balance is unsecured, non-interest bearing and repayable on demand. The balance is expected to be repayable within twelve months from the end of the reporting period and shown under current assets. All balances are neither past due nor impaired at the reporting date as there has not been a significant change in credit quality and the Group believes that the amounts are considered recoverable. 20. 合 合 财务 36,428,000 38,636, As at 31 March 2018, included in the balance of amounts due to joint ventures of nil (2017: HK$794,653,000) were of non-trade nature, unsecured, non-interest bearing and repayable on demand. The remaining balance is of trade nature aged within 180 days based on invoice date. 21. AVAILABLE-FOR-SALE INVESTMENTS 794,653, HK$ 000 HK$ 000 Equity securities listed in Hong Kong, at fair value Unlisted equity securities, at cost less impairment 123, , , ,422 Other investments 2, , , /18 财务报告 113

217 For the year ended 31 March AVAILABLE-FOR-SALE INVESTMENTS Equity securities listed in Hong Kong are stated at fair value: The fair values of listed equity securities are based on quoted market bid price. Change in fair value of the listed equity securities classified as availablefor-sale investments for the year ended 31 March 2018 with a decrease of HK$22,959,000 (2017: decrease of HK$21,794,000) was recognised in the consolidated statement of profit or loss and other comprehensive income ,959,000 21,794,000 Unlisted equity securities issued by private entities incorporated in the PRC and Hong Kong. They are measured at cost less impairment at the end of the reporting period because the range of reasonable fair value estimates is so significant that the directors of the Company are of the opinion that their fair values cannot be measured reliably. 22. GOODWILL 22. HK$ 000 COST At 1 April ,479,992 Arising on acquisitions of businesses (note 38) ,445 Eliminated on disposal of subsidiaries (1,015) Exchange realignment (126,818) At 31 March 2017 (restated) 2,725,604 Arising on acquisitions of businesses (note 38) 38 36,557 Exchange realignment 317,463 At 31 March ,079,624 The Group tests for impairment of goodwill annually and in the financial year in which the acquisition takes place, or more frequently if there are indications that goodwill might be impaired. 114 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

218 For the year ended 31 March GOODWILL Impairment testing on goodwill Management considers that each subsidiary engaging in business of the sales of piped gas and sales of LPG business with each subsidiary represents a separate CGU for the purpose of goodwill impairment testing. The carrying amounts of goodwill as at 31 March 2018 and 2017 are allocated as follows: HK$ 000 HK$ 000 (restated) Sales of piped gas business within each of the following subsidiaries 附 务 Clever Decision Enterprise Limited Clever Decision Enterprise Limited 153, ,105 48,419 44,293 16,795 15,363 58,023 53,078 16,134 14,759 29,327 26,828 32,851 30, , ,719 34,901 31,927 China Gas SK Energy Holdings Co., Limited 98,464 90,072 Fortune Gas Investment Holdings Limited 927, ,307 20,120 18, , ,329 18,010 16,475 and China Gas Hong Kong Company Limited ( ) Beijing Gas Development Limited ( Beijing Gas ) China Gas Hong Kong Company Limited 197, , , ,808 ( ) 34,200 21,747 ( ) 8,999 Other CGUs 323, ,959 2,461,723 2,172, /18 财务报告 115

219 For the year ended 31 March GOODWILL HK$ 000 HK$ 000 (restated) Sales of LPG business within each of the following subsidiaries 附 务 227, ,447 27,101 24,791 45,747 41,848 Panva Gas Holdings Limited Panva Gas Holdings Limited 304, ,242 ( ) ( ) 9,051 3, , ,328 3,079,624 2,725,604 The recoverable amounts of the CGUs are determined based on value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessment of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectation of future changes in the market. 116 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

220 For the year ended 31 March GOODWILL The Group prepares cash flow forecasts derived from the most recent financial budgets approved by the management for the next five years. The CGUs cashflows beyond the 5-year period until the expiry of the relevant operation period or exclusive rights ranging from 15 to 30 years are extrapolated using a steady 3% (2017: 3%) growth rate for CGUs in the natural gas business and 5% (2017: 5%) for CGUs in the LPG business. The financial budgets and growth rates are estimated according to the stage of each operation with reference to the development curve of the natural gas business and LPG business in the PRC region. The pre-tax rates used to discount the forecast cash flows for CGUs are from 14% to 17% (2017: 14% to 17%). In the opinion of the directors, no material impairment loss is identified for both years. Management believes that any reasonably possible change in any of these assumptions would not cause the aggregate carrying amount of CGUs to exceed the aggregate recoverable amount of CGUs % 3%5% 5% 14% 17% 14% 17% 2017/18 财务报告 117

221 For the year ended 31 March OTHER INTANGIBLE ASSETS 23. Exclusive rights of natural gas operation Production sharing rights Technology rights Customer relationship Total 务 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 COST At 1 April ,155,561 1,151,940 56,716 15,629 3,379,846 Exchange adjustments (118,105) (58,906) (2,900) (799) (180,710) Addition 56 89,399 89,455 Acquired on acquisition of businesses (note 38) , ,270 At 31 March 2017 (restated) 2,857,782 1,182,433 53,816 14,830 4,108,861 Exchange adjustments 133, ,164 5,014 1, ,035 Addition ,785 50,318 Acquired on acquisition of businesses (note 38) 38 44,960 44,960 At 31 March ,036,750 1,342,382 58,830 16,212 4,454,174 AMORTISATION At 1 April ,911 10,038 4,886 13, ,624 Exchange adjustments (14,880) (513) (250) (705) (16,348) Charge for the year 73,002 7,170 5,485 1,500 87,157 At 31 March ,033 16,695 10,121 14, ,433 Exchange adjustments 32,520 1, ,359 36,377 Charge for the year 110,389 8,034 5, ,340 At 31 March ,942 26,284 16,712 16, ,150 CARRYING VALUES At 31 March ,544,808 1,316,098 42,118 3,903,024 At 31 March 2017 (restated) 2,508,749 1,165,738 43, ,718, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

222 For the year ended 31 March OTHER INTANGIBLE ASSETS Note: The exclusive rights of natural gas operation, technology rights and customer relationship are amortised on a straight-line method over the period of 30 years, 40 years and 10 years respectively. Production sharing right represents the right under the production contract entered between a subsidiary of the Group and a PRC entity for the exploitation and development of a coal-bed methane resource in the PRC ( CBM Project ) under an exclusive right granted by the PRC government to explore, develop and produced coal-bed methane with that PRC entity as joint operation partner up to The Group has a 50% participating stake in the CBM Project. Production sharing right is amortised by using the units of production method based on the expected proven reserve to be extracted during the contractual period. 24. AMOUNTS DUE FROM (TO) ASSOCIATES Included in the balance of amounts due from associates are loans of HK$7,703,000 (2017: HK$1,704,000) which are unsecured, interest bearing at fixed rates of 6% per annum (2017: 6% per annum). The remaining balance of HK$14,555,000 (2017: HK$13,493,000) are of trade nature aged within 180 days based on invoice date and a dividend receivable of HK$16,089,000 (2017: HK$239,818,000). A credit period of 30 to 180 days is granted to these trade customers. The balance is expected to be repayable within twelve months from the end of the reporting period and shown under current assets. All balances are neither past due nor impaired at the reporting date as there has not been a significant change in credit quality and the Group believes that the amounts are considered recoverable. As at 31 March 2017, balance of amounts due to associates of HK$100,939,000 were of trade nature and aged within 180 days based on invoice date. As at 31 March 2018, the amount due to an associate of HK$125,000 is of non-trade nature which is unsecured, non-interest bearing and repayable on demand % 24. 7,703,000 1,704, ,555,000 13,493, ,089, ,818, ,939, , /18 财务报告 119

223 For the year ended 31 March INVENTORIES HK$ 000 HK$ 000 Construction materials 1,389, ,076 Consumables, spare parts, gas appliances and other materials 864, ,499 Natural gas 201, ,973 LPG 613, ,340 3,069,246 1,678, AMOUNTS DUE FROM (TO) CUSTOMERS FOR CONTRACT WORK 26. 合 HK$ 000 HK$ 000 Contracts in progress at end of the reporting period: Contract costs incurred plus recognised profits less recognised losses 6,043,420 3,435,100 Less: Progress billings (3,819,084) (2,342,186) 2,224,336 1,092,914 Analysed for reporting purposes as: Amounts due from customers for contract work Amounts due to customers for contract work 3,166,968 1,738,107 (942,632) (645,193) 2,224,336 1,092,914 At 31 March 2018 and 2017, there was no retention monies held by customers for contract work performed. At 31 March 2018, advances received from customers for contract work not yet commenced amounted to HK$431,661,000 (2017: HK$377,169,000) which were included in trade and other payables in note ,661, ,169, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

224 For the year ended 31 March TRADE AND OTHER RECEIVABLES HK$ 000 HK$ 000 Trade receivables 3,409,101 2,407,026 Less: Accumulated allowances (473,333) (379,289) Trade receivables 2,935,768 2,027,737 Deposits paid for construction and other materials 448, ,795 Deposits paid for purchase of natural gas and LPG 1,786, ,187 Advance payments to sub-contractors 859, ,990 Rental and utilities deposits 262, ,736 Other tax recoverable 973, ,174 Other receivables and deposits 1,256,836 1,077,147 Prepaid operating expenses 460, ,223 Amounts due from non-controlling interests of subsidiaries 33,584 25,004 Total trade and other receivables 9,019,230 6,066,993 Other than certain major customers with good repayment history which the Group allows a longer credit period or settlement by instalment basis, the Group generally allows an average credit period of 30 to 180 days to its trade customers /18 财务报告 121

225 For the year ended 31 March TRADE AND OTHER RECEIVABLES The following is an aged analysis of trade receivables net of impairment losses presented based on invoice date at the end of the reporting period: HK$ 000 HK$ days ,532,433 1,794, days , ,785 Over 365 days ,671 64,325 2,935,768 2,027,737 The trade receivables with carrying amount of HK$2,532,433,000 (2017: HK$1,794,627,000) are neither past due nor impaired at the reporting date for which the Group believes that the amounts are considered recoverable. 2,532,433,000 1,794,627,000 The Group has policies for allowance of bad and doubtful debts which are based on the evaluation of collectability and age analysis of accounts and on the management s judgment including the current creditworthiness and the past collection history of each customer. During the year ended 31 March 2018, the Group made an allowance of HK$74,182,000 in respect of the trade receivables related to the gas pipeline construction business and LPG business, which was past due at the reporting date with long age and slow repayments having been received from respective customers since the due date. The Directors of the Company considered the related receivables may be impaired and specific allowance was made. 74,182, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

226 For the year ended 31 March TRADE AND OTHER RECEIVABLES During the year ended 31 March 2017, the Group made a reversal of allowance of HK$1,289,000 in respect of the trade receivables related to the gas pipeline construction business and LPG business, which was received during the year ended 31 March Movement in the allowance for bad and doubtful debts for trade receivables: 27. 1,289, HK$ 000 HK$ 000 Balance at the beginning of the year 379, ,188 Exchange differences 23,413 (13,610) Charge (credit) for the year 74,182 (1,289) Written off against trade receivables (3,551) Balance at the end of the year 473, ,289 In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. The trade receivables past due but not provided for impairment were either subsequently settled as at the date these consolidated financial statements were authorised for issuance or no historical default of payments by the respective customers. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors of the Company believe that there is no further credit provision required in excess of the allowance for bad and doubtful debts. 2017/18 财务报告 123

227 For the year ended 31 March TRADE AND OTHER RECEIVABLES Included in the Group s trade receivables are debtors, with a carrying amount of HK$403,335,000 (2017: HK$233,110,000) which are past due at the reporting date for which the Group has not provided for impairment as there has not been a significant change in credit quality and the amount are still considered recoverable. The Group does not hold any collateral over these balances. The average age of these trade receivable is 398 days (2017: 349 days) as at 31 March Ageing of trade receivables which are past due but not impaired: ,335, ,110, HK$ 000 HK$ days , ,785 Over 365 days ,671 64, , ,110 The non-trade balances of amounts due from noncontrolling interests of subsidiaries are unsecured, noninterest bearing and repayable on demand. 28. HELD-FOR-TRADING INVESTMENTS HK$ 000 HK$ 000 Equity securities at fair value listed in Hong Kong 48,077 27, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

228 For the year ended 31 March HELD-FOR-TRADING INVESTMENTS Held-for-trading investments as at 31 March 2018 and 31 March 2017, represent equity securities listed in Hong Kong. The fair values of the investments are determined based on the quoted market bid prices available on the Stock Exchange. The fair value of heldfor-trading investments was classified as Level 1 of the fair value hierarchy. 29. PLEDGED BANK DEPOSITS/BANK BALANCES AND CASH Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less and carry interest at market rates which range from 0.01% to 2.85% per annum (2017: 0.01% to 2.80% per annum). Pledged bank deposits represent deposits pledged to banks to secure banking facilities granted to the Group. Deposits amounting to HK$290,729,000 (2017: HK$517,676,000) have been pledged to secure shortterm bank loans and undrawn short-term facilities and are therefore classified as current assets. The pledged bank deposits carry fixed interest rates of 1.55% to 4.55% (2017: 1.55% to 4.79%) per annum. The details of the Group s pledged bank deposits and bank balances and cash which are denominated in currencies other than the functional currency of the respective group entities are set out below: ,729, ,676, United States Dollars ( USD ) HK$ 000 equivalent HK$ HK$ 000 At 31 March , ,563 At 31 March ,183 75, /18 财务报告 125

229 For the year ended 31 March TRADE AND OTHER PAYABLES Trade and other payables comprise amounts outstanding for trade purchases and ongoing costs. The following is an aged analysis of trade and other payables presented based on the invoice date at the end of the reporting period: HK$ 000 HK$ days ,252,218 3,078, days ,177, ,837 Over 180 days 180 3,040,546 1,368,979 Trade and bill payables 7,469,975 5,006,239 Other payables and accrued charges 867, ,243 Consideration payable 482, ,964 Construction fee payables 1,216, ,801 Other tax payables 156,066 84,143 Accrued staff costs 161,593 76,234 Loan interest payables 179, ,098 Advance payments from customers 2,778,969 2,013,342 Advances received from customers for contract work that have not yet been started Amounts due to non-controlling interests of subsidiaries 431, , , ,572 14,044,970 9,649,805 All of the balances were aged within 90 days based on invoice date and the average credit period is 90 days. The non-trade balances of amounts due to noncontrolling interests of subsidiaries are unsecured, noninterest bearing and repayable on demand CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

230 For the year ended 31 March BANK AND OTHER BORROWINGS HK$ 000 HK$ 000 Bank and other borrowings comprise the following: Bank borrowings 23,673,867 17,498,605 Other borrowings 8,698,554 6,119,830 32,372,421 23,618,435 Secured 2,960,714 2,733,449 Unsecured 29,411,707 20,884,986 32,372,421 23,618,435 The maturity profile of the above borrowings is as follows: Within one year 11,079,288 10,873,256 More than one year, but not exceeding two years 13,636,482 4,739,895 More than two years, but not exceeding five years 5,889,718 4,486,561 More than five years 1,766,933 3,518,723 Less: Amount due within one year shown under current liabilities 32,372,421 23,618,435 11,079,288 10,873,256 Amount due after one year 21,293,133 12,745,179 Borrowings comprise: Fixed-rate borrowings 12,778,824 7,738,621 Floating-rate borrowings London Interbank Offered Rate ( LIBOR ) plus 1.75% to 2.35% (2017: 0.80% to 2.12%) ,903,820 6,255,927 Base rate of People s Bank of China 11,689,777 9,623,887 32,372,421 23,618, /18 财务报告 127

231 For the year ended 31 March BANK AND OTHER BORROWINGS The details of the corporate bonds as included in the other borrowings are as follows: HK$ 000 HK$ 000 Corporate bond 1 (note 1) 11 1,174,773 1,170,848 Corporate bond 2 (note 2) 22 2,272,769 2,270,030 Corporate bond 3 (note 3) 33 1,740,717 5,188,259 3,440,878 Notes: (1) The listed corporate bond of RMB1 billion was issued with coupon and effective interest rate of 4.2% per annum and maturity date on 13 January 2019 through the private placement in the PRC on 13 January The corporate bond was listed on Shanghai Stock Exchange Comprehensive Electronic Platform of Fixed Income Securities on 19 February (2) The listed corporate bond of RMB2 billion was issued with coupon and effective interest rate of 3.05% per annum and maturity date on 27 October 2021 to qualified investors in the PRC on 27 October The corporate bond was listed on Shanghai Stock Exchange Comprehensive Electronic Platform of Fixed Income Securities on 8 November (3) The corporate bond of RMB1.5 billion was issued with coupon and effective interest rate of 4.75% per annum through the private placement in the PRC on 1 August The corporate bond of RMB1 billion and RMB0.5 billion are with maturity date on 3 August 2020 and 3 August 2022 respectively. The corporate bond is tradable on National Association of Financial Market Institutional Investors. (1) % (2) % (3) % 105 During the year ended 31 March 2017, amount of HK$11,522,131,000, which was denominated in USD was early repaid. 11,522,131, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

232 For the year ended 31 March BANK AND OTHER BORROWINGS The range of effective interest rates (which are also equal to contracted interest rates) on the Group s borrowings are as follows: Effective interest rate per annum: Fixed-rate borrowings 0.9% 4.91% 2.02% 4.59% Floating-rate borrowings 1.1% 9.38% 1.44% 8.13% The details of the Group s borrowings which are denominated in currencies other than the functional currency of the respective group entities are set out below: Japanese Euro dollar USD HK$ Yen ( JPY ) ( EURO ) HK$ 000 HK$ 000 HK$ 000 HK$ 000 equivalent equivalent equivalent equivalent At 31 March ,783,636 2,908, ,241 19,869 At 31 March , , ,511 18, /18 财务报告 129

233 For the year ended 31 March SHARE CAPITAL 32. Convertible Ordinary shares preference shares Total No. of shares No. of shares 000 HK$ HK$ 000 HK$ 000 at HK$0.01 at HK$1.00 each each Authorised 9,000,000 90, , , ,902 Issued and fully paid: At 1 April ,910,384 49,104 49,104 Issuance of shares 38(B)(v) (Note 38(B)(v)) 110,823 1,108 1,108 Repurchase of shares (Note) (52,688) (527) (527) At 31 March 2017 and 31 March ,968,519 49,685 49,685 The new shares issued rank pari passu with the existing shares in all respects. Note: During the year ended 31 March 2017, the Company repurchased its own shares through the Stock Exchange as follows: No. of ordinary Aggregated shares Price per share repurchased Month of repurchase of HK$0.01 highest lowest costs 0.01 HK$ 000 November ,264, ,416 December ,192, ,433 January ,232, , CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

234 For the year ended 31 March RESERVES HK$ 000 HK$ 000 Translation reserve At the beginning of the reporting period (1,104,712) (26,225) Exchange difference arising on translation 2,573,578 (1,078,487) At the end of the reporting period 1,468,866 (1,104,712) Investment revaluation reserve At the beginning of the reporting period 8,982 30,776 Decrease in fair value on available-forsale investments (22,959) (21,794) At the end of the reporting period (13,977) 8, /18 财务报告 131

235 For the year ended 31 March DERIVATIVE FINANCIAL INSTRUMENT HK$ 000 HK$ 000 Financial liabilities Cross currency interest rate swap contract 财务 2, In order to manage the Group s foreign currency exposure and interest rate exposure in relation to the Group s borrowings which are denominated in USD, the Group entered into a cross currency interest rate swap contract to buy US$ for RMB. At the end of the reporting period, the Group has an outstanding cross currency interest rate swap contract with an aggregate notional amount of USD21 million (2017: USD28 million) that requires the Group to buy USD for RMB at exchange rate of RMB6.534 (2017: RMB6.534) for USD1 and change from paying floating interest rate of 6 month LIBOR % per annum to paying fixed rate of 5.52% per annum with maturity periods to be matched with the maturity periods of the relevant borrowings. The cross currency interest rate swap is measured at fair value at the end of the reporting period which is determined by reference to the prices as quoted by the counterparty financial institution. 2,100 2, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

236 For the year ended 31 March DEFERRED TAXATION The following is the deferred tax liabilities (assets) recognised and movements thereon during the current and prior reporting years. 35. Fair value Impairment adjustment on trade on property, and other plant and receivables Revaluation equipment and amounts Impairment Accelerated on and prepaid due from on property, tax investment lease Tax Intangible customers for plant and depreciation properties payments losses assets contract work equipment Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April , ,858 (14,531) 605,379 (135,002) (31,104) 590,087 Exchange adjustments 130 (1,638) 1,933 1,562 1,987 Charge (credit) to profit or loss for the year (note 10) Acquisition of businesses (note 38) 10 6,289 (5,341) (6,637) (18,282) 307 1,687 (21,977) 38 37, , ,947 At 31 March 2017 (restated) , ,671 (21,168) 768,382 (132,762) (27,855) 790,044 Exchange adjustments 25 (303) 2,945 (1,847) (1,594) (774) Charge (credit) to profit or loss for the year 10 (note 10) 7,302 (7,297) (4,505) (26,872) (60,267) (91,639) Acquisition of 38 businesses (note 38) 11,240 11,240 At 31 March , ,399 (25,976) 755,695 (194,876) (29,449) 708, /18 财务报告 133

237 For the year ended 31 March DEFERRED TAXATION For the purpose of presentation in the consolidated statement of financial position, certain deferred tax assets and liabilities have been offset. The following is an analysis of the deferred tax balances for financial reporting purposes: HK$ 000 HK$ 000 (restated) Deferred tax assets 224, ,617 Deferred tax liabilities (933,196) (950,661) (708,871) (790,044) Under the Law of the PRC on Enterprise Income Tax, withholding tax is imposed on dividends declared in respect of profit earned by PRC subsidiaries from 1 January 2008 onward. No deferred taxation has been provided for in the consolidated financial statements in respect of temporary differences attributable to accumulated profits of the PRC entities amounting to HK$23,098,948,000 (2017: HK$16,239,199,000) as the Group is able to control the timing of reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. 23,098,948,000 16,239,199,000 Majority of joint ventures and associates established in the PRC are held directly by certain wholly-owned subsidiaries of the Group established in the PRC which are therefore not subject to the above-mentioned withholding tax. 134 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

238 For the year ended 31 March DEFERRED TAXATION At the end of the reporting period, the Group has estimated unused tax losses of HK$6,012,195,000 (2017: HK$5,526,864,000) available for offset against future profits. A deferred tax asset has been recognised in respect of HK$157,423,000 (2017: HK$128,288,000) of the tax losses. No deferred tax asset has been recognised for the remaining estimated tax losses of HK$5,854,772,000 (2017: HK$5,398,576,000) due to the uncertainty of future profits streams. Included in unrecognised estimated tax losses are losses of HK$3,669,876,000 (2017: HK$3,361,606,000) that will expire in 5 years from the year of origination which is ranged from 2018 to 2022 (2017: 2017 to 2021). Other losses may be carried forward indefinitely ,012,195,000 5,526,864, ,423, ,288,000 5,854,772,000 5,398,576, ,669,876,000 3,361,606, SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS A share option scheme was adopted by the Company pursuant to a resolution passed on 6 February 2003 (the Old Scheme ) for the primary purpose of providing incentives to any directors of the Company, any employees of the Group, or any employee, partner or director of any business consultant, joint venture partner, financial adviser or legal adviser of the Group /18 财务报告 135

239 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS 36. The total number of shares in respect of which options may be granted under the Old Scheme is not permitted to exceed 10% of the shares of the Company in issue at the date of shareholders approval of the Scheme ( Scheme Mandate Limit ) or, if such 10% limit is refreshed, at the date of shareholders approval of the renewal of the Scheme Mandate Limit. The maximum aggregate number of shares which may be issued upon the exercise of all outstanding options granted and yet to be exercised under the Old Scheme must not exceed 30% of the total number of shares of the Company in issue from time to time. The number of shares in respect of which options may be granted to any individual in any 12-month period is not permitted to exceed 1% of the shares of the Company then in issue. Each grant of options to any director, chief executive or substantial shareholder must be approved by independent non-executive directors. Where any grant of options to substantial shareholder or an independent nonexecutive director or any of their respective associates would result in the shares of the Company issued and to be issued upon exercise of options already granted and to be granted in excess of 0.1% of the Company s issued share capital at the relevant time of grant and with an aggregate value in excess of HK$5,000,000 in the 12-month period up to the date of grant must be approved in advance by the Company s independent shareholders. 10% 10% 10% 30% 12 1% 0.1% 12 5,000,000 Options granted must be taken up within 28 days from the date of grant, upon payment of HK$10 per grant. Options may be exercised at any time from the date to be determined by the board of directors to the tenth anniversary of the date of grant. The exercise price is determined by the directors of the Company, and will not be less than the highest of (i) the closing price of the Company s shares on the date of grant; (ii) the average closing price of the shares for the five business days immediately preceding the date of grant and (iii) the nominal value of a share (i) (ii) (iii) The life of the Old Scheme is effective for 10 years from the date of adoption until 5 February CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

240 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS 36. Since the Old Scheme expired on 6 February 2013, no further options can be granted thereunder. However, the provisions of the Old Scheme shall remain in force in all other respects and all options, granted prior to its expiration shall continue to be valid and exercisable in accordance therewith. A new share option scheme was adopted pursuant to a resolution passed on 20 August 2013 (the New Scheme ). The purpose of the New Scheme is to grant share options to eligible persons as incentives or rewards for their contribution to the Group. The New Scheme will expire on 19 August The eligible persons as defined in the New Scheme are individuals or entities who or which may participate in the New Scheme ( Eligible Persons ). The following individuals or entities who in the absolute discretion of the Board of Directors of the Company have contributed to the Group on the basis of their contribution to the development and growth of the Group may participate in the New Scheme: (i) an eligible employee; and (i) (ii) a non-executive director and an independent non-executive director of any member of the Group; and (ii) (iii) an agent or a consultant of any member of the Group; and (iii) (iv) a supplier of goods or services to any member of the Group or any director or employee of such supplier; and (iv) (v) a customer of any member of the Group or any director or employee of such customer; and (v) (vi) person or entity that provides research, development or other technological support or any advisory, consultancy or professional services to any member of the Group or any director or employee of any such entity; and (vi) 2017/18 财务报告 137

241 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS 36. (vii) a subsidiary of the Company; and (vii) (viii) a company in which the Company holds, either directly or indirectly, 20% or more of its equity interest. Maximum number of shares available for subscription (viii) 20% (i) Subject to the Listing Rules, the maximum number of the shares of the Company subject to outstanding unvested or vested options under the New Scheme ( New Options ) and outstanding options under other share option scheme of the Company ( Other Options ) must not exceed 30% of the shares of the Company in issue as at 20 August 2013 ( Overriding Limit ). No New Options or Other Options may be granted if it will result in this Overriding Limit being exceeded. (i) 30% (ii) Subject to the Overriding Limit, paragraphs (iii) and (iv) below, the total number of shares of the Company issued and to be issued upon exercise of all New Options and Other Options must not exceed 10% of the shares of the Company in issue as at the 20 August 2013 (subject to adjustment in the event of a capitalisation issue or rights issue or open offer of shares of the Company, or consolidation, sub-division or reduction of share capital of the Company (other than an issue of shares of the Company as consideration in respect of a transaction)) ( Mandate Limit ). Unless approved pursuant to paragraphs (iii) or (iv) below, no New Options or Other Options may be granted if such grant will result in the Mandate Limit being exceeded. New Options and Other Options lapsed according to the terms of the New Scheme or other share option scheme(s) will not be counted for the purpose of calculating the Mandate Limit. (ii) (iii) (iv) 10% (iii) (iv) 138 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

242 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS Maximum number of shares available for subscription 36. (iii) Subject to the Overriding Limit and an approval of shareholders of the Company, the Company may from time to time refresh a Mandate Limit provided that the total number of shares of the Company which may be issued upon exercise of all New Options or Other Options to be granted under the limit as refreshed must not exceed 10% of the shares of the Company in issue at the date of the resolution to approve the refreshed limit ( Refresher Date ). New Options and Other Options previously granted (whether outstanding, cancelled, lapsed (according to the New Scheme or the other share option schemes of the Company) or exercised) will not be counted for the purpose of calculating the limit as refreshed. The Company can seek the approval of shareholders of the Company to refresh a Mandate Limit any number of times as the Board of Directors of the Company considers appropriate. Unless approved pursuant to paragraph (iv) below, the board of directors of the Company cannot grant any New Options on or after the Refresher Date if such grant will result in the Mandate Limit as refreshed being exceeded. (iii) 10% (iv) (iv) Subject to the Overriding Limit and a specific approval of shareholders of the Company, the board of directors of the Company may grant New Options to Eligible Persons identified by the board of directors of the Company. If the approval of shareholders of the Company is obtained, the board of directors of the Company may grant New Options to any Eligible Person in respect of such number of shares of the Company and on such terms as specified in that approval of shareholders of the Company. (iv) 2017/18 财务报告 139

243 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS 36. Options granted under the New Scheme must be taken up within 20 business days of the date of grant and pay the Company the amount payable, if any, on acceptance of the option. Any option under the New Scheme which has vested, in respect of which all conditions attaching to it have satisfied and which has not lapsed may be exercised at any time, by no option may be exercised if such exercise would, in the opinion of the board of directors of the Company, be in breach of the New Scheme, any applicable law, rule or regulation or the terms and conditions of the relevant option granted under the New Scheme. 20 The exercise price is determined by the directors of the Company, and will not be less than the highest of (i) the closing price of the Company s shares on the date of grant, (ii) the average closing price of the shares for the five business days immediately preceding the date of grant; and (iii) the nominal value of the Company s share. (i) (ii)5 (iii) No share options were granted by the Company during the two years ended 31 March The Group estimates of the number of options that are expected to vest was based on an assessment of all relevant non-market vesting conditions. For the year ended 31 March 2018, the directors of the Company consider that options granted with non-market vesting conditions only are expected to vest as the non-market vesting conditions for exercising those share options are probable to be met. For options granted with market conditions, the Group recognised share-based payments expense from employees who satisfy all other vesting conditions, inspective of whether the market condition is satisfied. For the year ended 31 March 2018, share-based payments expense of HK$644,320,000 is recognised (2017: nil). 644,320, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

244 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS At 31 March 2018, the number of shares in respect of which options had been granted and remaining outstanding under the New Scheme is 345,600,000 (2017: 345,600,000) representing 6.96% (2017: 6.96%) of the shares of the Company in issue at that date. The following table discloses details of the Company s share options held by employees (including directors) and movements in such holdings during the two years ended 31 March 2018: ,600, ,600, % 6.96% Granted Cancelled during during Number Number the year the year of share Exercise of share ended ended options at price options at 31 March 31 March 31 March 2017 Date of grant Vesting period Exercisable period per share 1 April and 2018 注 Held by Directors (Note 1) (Note 2) (Note 3) 3 (Note 1) 1 (Note 2) 2 (Note 3) ,000,000 (4,000,000) 17,000, ,000, ,000, ,400,000 (800,000) 1,600, ,400,000 (4,800,000) 118,600,000 Held by Others (Note 1) 1 (Note 1) ,000, ,000, ,400,000 (4,800,000) 345,600,000 Weighted average exercise price HK$12.82 HK$12.64 HK$ Exercisable at the end of the year 2017/18 财务报告 141

245 For the year ended 31 March SHARE OPTION SCHEME AND SHARE- BASED PAYMENTS Notes: (1) The validity period of the options is five years from 16 April 2014 to 15 April And the options may be exercised on or after 16 April The exercise of the options will be subject to the conditions that (i) the audited profit after tax of the Group after deduction of non-controlling interests for the financial year ended 31 March 2017 or before shall not be less than HK$5.5 billion; (ii) if the above condition is not fulfilled, the options may be exercised if the audited profit after tax of the Group after deduction of non-controlling interests for the financial year ended 31 March 2018 shall not be less than HK$6 billion; and (iii) the options will lapse if the above two conditions are not satisfied. (2) The validity period of the options is from 25 June 2015 to 24 June And the options are exercisable upon satisfaction of either one of the conditions that (i) the Group s audited net profit after tax and deduction of non-controlling interests for a full financial year based on the consolidated audited financial statements of the Group amounts to HK$7.5 billion or above; or (ii) the total market capitalisation of the Group amounts to HK$150 billion or above, where the total market capitalisation shall be the product of the closing price of the shares of the Company as stated in the daily quotation sheets of the Stock Exchange at the end of any trading day and the total number of issued shares of the Company on that same day. The options will lapse if none of the above conditions is satisfied within the validity period of the options. Subsequent to the financial year ended 31 March 2018, the vesting condition of total market capitalisation was met. (3) The validity period of the options is from 25 June 2015 to 15 April And the options may be exercised on or after 16 April The exercise of the options will be subject to the satisfaction of either one of the conditions that (i) the Group s audited net profits after tax and deduction of non-controlling interests for the financial year ended 31 March 2017 based on the consolidated audited financial statements of the Group amounts to HK$5.5 billion or above; or (ii) if the above condition is not fulfilled, the options may be exercised if the Group s audited net profit after tax and deduction of non-controlling interests for the financial year ended 31 March 2018 based on the consolidated audited financial statements of the Group amounts to HK$6 billion or above. The options will lapse if none of the above conditions is satisfied within the validity period of the options. The options outstanding as at 31 March 2018 have a weighted average remaining contractual life of 2 years (2017: 3 years). CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT 36. (1) (i) 55 (ii) 60 (iii) (2) (i) 75 (ii) 1,500 (3) (i) 55 (ii)

246 For the year ended 31 March ACQUISITION OF ADDITIONAL INTEREST IN SUBSIDIARIES (A) Acquisition of additional interest in subsidiaries in 2018 The Group entered into certain sale and purchase agreements with the respective holders of the remaining equity interests holders of certain subsidiaries in the PRC for a total consideration of RMB19,551,000 (approximately HK$24,287,000). The difference between the consideration paid and the carrying amount of the additional interest acquired by the Group of HK$6,856,000 was credited to equity as capital reserve during the year ended 31 March (B) Acquisition of additional interest in subsidiaries in 2017 The Group entered into certain sale and purchase agreements with the respective holders of the remaining equity interests holders of certain subsidiaries in the PRC for a total consideration of RMB133,386,000 (approximately HK$151,575,000). The difference between the consideration paid and the carrying amount of the additional interest acquired by the Group of HK$127,400,000 was debited to equity as capital reserve during the year ended 31 March 附 (A) 附 19,551,000 24,287,000 6,856,000 (B) 附 133,386, ,575, ,400, /18 财务报告 143

247 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (i) In July 2017, the Group acquired 80% equity interest in ( ) at a total cash consideration of RMB9,600,000 (approximately HK$11,294,000). The acquisition was completed in July 2017, on that date the control in was passed to the Group. is engaged in the gas appliance business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (i) 9,600,000 11,294,000 80% Consideration transferred HK$ 000 Cash 11,294 Provisional fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 3,095 Inventories 193 Trade and other receivables 441 Bank balances and cash 10 Trade and other payables (500) 3,239 Non-controlling interests (648) Goodwill 8,703 11, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

248 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (i) (i) Consideration transferred The initial accounting for the above acquisition has been determined provisionally, awaiting the receipt of professional valuation in relation to the property, plant and equipment. The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$441,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 441,000 Goodwill arising on acquisition HK$ 000 Consideration transferred 11,294 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (2,591) Goodwill arising on acquisition 8,703 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its gas appliance business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. 2017/18 财务报告 145

249 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (i) (i) Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$648, ,000 Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 10 Cash consideration (11,294) (11,284) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$327,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$19,930, ,000 19,930, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

250 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (ii) In July 2017, the Group acquired 80% equity interest in ( ) at a total cash consideration of RMB6,400,000 (approximately HK$7,529,000). The acquisition was completed in July 2017, on that date the control in was passed to the Group. is engaged in the gas appliance business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (ii) 6,400,000 7,529,000 80% Consideration transferred HK$ 000 Cash 7,529 Provisional fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 1,917 Inventories 120 Trade and other receivables 50 Bank balances and cash 124 Trade and other payables (5) Taxation (87) 2,119 Non-controlling interests (424) Goodwill 5,834 7, /18 财务报告 147

251 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (ii) Consideration transferred The initial accounting for the above acquisition has been determined provisionally, awaiting the receipt of professional valuation in relation to the property, plant and equipment. (ii) The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$50,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 50,000 Goodwill arising on acquisition HK$ 000 Consideration transferred 7,529 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (1,695) Goodwill arising on acquisition 5,834 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its gas appliance business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. 148 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

252 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (ii) (ii) Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$424, ,000 Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 124 Cash consideration (7,529) (7,405) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$59,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$8,403, ,000 8,403, /18 财务报告 149

253 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (iii) In September 2017, the Group acquired 70% equity interest in at a total cash consideration of RMB9,625,000 (approximately HK$11,324,000). The acquisition was completed in September 2017, on that date the control in was passed to the Group. is engaged in the LPG business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (iii) 9,625,000 11,324,000 70% LPG Consideration transferred HK$ 000 Cash 11,324 Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 3,247 Non-controlling interests (974) Goodwill 9,051 11, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

254 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (iii) Goodwill arising on acquisition (iii) HK$ 000 Consideration transferred 11,324 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (2,273) Goodwill arising on acquisition 9,051 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its LPG business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. LPG Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$974, ,000 Net cash outflow arising on acquisition HK$ 000 Cash consideration (11,324) 2017/18 财务报告 151

255 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (iii) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$27,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$11,389,000. (iii) 27,000 11,389,000 (iv) In September 2017, the Group acquired 75% equity interest in at a total cash consideration of RMB4,500,000 (approximately HK$5,294,000). The acquisition was completed in October 2017, on that date the control in was passed to the Group. is engaged in the LPG business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (iv) 4,500,000 5,294,000 75% LPG Consideration transferred HK$ 000 Cash 5,294 Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 1,765 Non-controlling interests (441) Goodwill 3,970 5, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

256 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (iv) Goodwill arising on acquisition (iv) HK$ 000 Consideration transferred 5,294 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (1,324) Goodwill arising on acquisition 3,970 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its LPG business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. LPG Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$441, , /18 财务报告 153

257 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (iv) (iv) Net cash outflow arising on acquisition HK$ 000 Cash consideration (5,294) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$152,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$1,394, ,000 1,394,000 (v) In October 2017, the Group acquired 100% equity interest in at a total cash consideration of RMB50,000,000 (approximately HK$58,824,000). The acquisition was completed in October 2017, on that date the control in was passed to the Group. is engaged in natural gas and gas pipeline construction business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (v) 50,000,000 58,824, % 154 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

258 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (v) (v) Consideration transferred HK$ 000 Cash 58,824 Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 22,289 Other intangible assets 36,780 Inventories 213 Trade and other receivables 3,538 Bank balances and cash 258 Trade and other payables (4,058) Deferred taxation (9,195) 49,825 Goodwill 8,999 58,824 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$3,538,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 3,538, /18 财务报告 155

259 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (v) (v) Goodwill arising on acquisition HK$ 000 Consideration transferred 58,824 Less: Fair value of identifiable net assets acquired (49,825) Goodwill arising on acquisition 8,999 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its natural gas and gas pipeline construction business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 258 Cash consideration (58,824) (58,566) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$237,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$1,543, ,000 1,543, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

260 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (vi) In April 2017, the Group acquired 100% equity interest in ( ) at a total cash consideration of RMB14,000,000 (approximately HK$16,471,000). The acquisition was completed in April 2017, on that date the control in was passed to the Group. is engaged in the natural gas and gas pipeline construction business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (vi) 14,000,000 16,471, % Consideration transferred HK$ 000 Cash 16, /18 财务报告 157

261 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (vi) (vi) Consideration transferred Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 5,256 Prepaid lease payments 6,060 Other intangible assets 8,180 Trade and other receivables 651 Bank balances and cash 639 Trade and other payables (2,270) Deferred taxation (2,045) 16,471 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$651,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 651, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

262 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (A) Acquisition of a business through purchase of subsidiaries in 附 (A) 附 务 (vi) Goodwill arising on acquisition (vi) HK$ 000 Consideration transferred 16,471 Less: Fair value of identifiable net assets acquired (16,471) Goodwill arising on acquisition Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 639 Deposit paid 11,364 Cash consideration (16,471) (4,468) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2018 was HK$638,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2018 amounted to HK$478, , , /18 财务报告 159

263 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (i) On 23 August 2016, a subsidiary of the Group entered into an acquisition agreement with an independent third party, pursuant to which the Group acquired 89.55% equity interest of ( ) at a consideration of RMB194,136,000 (approximately HK$223,145,000). The acquisition was completed on 1 January 2017, on that date the control in was passed to the Group. is principally engaged in natural gas and gas pipeline construction business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (i) 89.55% 194,136, ,145,000 Consideration transferred HK$ 000 Cash 223, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

264 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (i) (i) Consideration transferred Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 53,262 Other intangible assets 206,803 Inventories 15,908 Trade and other receivables 19,819 Bank balances and cash 30,587 Trade and other payables (23,564) Deferred taxation (54,462) 248,353 Non-controlling interests (25,953) Goodwill ,145 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$19,819,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 19,819, /18 财务报告 161

265 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (i) (i) Goodwill arising on acquisition HK$ 000 Consideration transferred 223,145 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (222,400) Goodwill arising on acquisition 745 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its natural gas and gas pipeline construction business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$25,953, ,953, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

266 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (i) (i) Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 30,587 Cash consideration (223,145) (192,558) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2017 was HK$5,426,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2017 amounted to HK$48,370,000. 5,426,000 48,370, /18 财务报告 163

267 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (ii) On 31 March 2016, a subsidiary of the Group entered into an acquisition agreement with an independent third party, pursuant to which the Group acquired 100% equity interest of ( ) at a consideration of RMB11,774,000 (approximately HK$13,533,000). The acquisition was completed on 1 July 2016, on that date the control in was passed to the Group. is principally engaged in natural gas and gas pipeline construction business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (ii) 100% 11,774,000 13,533,000 Consideration transferred HK$ 000 Cash 13, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

268 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (ii) (ii) Consideration transferred Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 67,441 Inventories 1,219 Trade and other receivables 11,589 Bank balances and cash 5,432 Trade and other payables (75,242) 10,439 Goodwill 3,094 13,533 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$11,589,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 11,589, /18 财务报告 165

269 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (ii) Goodwill arising on acquisition (ii) HK$ 000 Consideration transferred 13,533 Less: Fair value of identifiable net assets acquired (10,439) Goodwill arising on acquisition 3,094 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its natural gas and gas pipeline construction business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 5,432 Cash consideration (13,533) Deposit paid 4,598 (3,503) 166 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

270 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (ii) (ii) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2017 was HK$29,995,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2017 amounted to HK$98,042, ,995,000 98,042,000 (iii) In April 2015 and June 2016, subsidiaries of the Group entered into acquisition agreements with an independent third party and a non-wholly-owned subsidiary of SK E&S Co. Ltd., a substantial shareholder of the Company, pursuant to which the Group acquired an aggregate 100% equity interest of at a total consideration of RMB495,000,000 (approximately HK$585,515,000). Control in was obtained by the Group on 30 September is principally engaged in investment, construction and operation of natural gas related business. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (iii) SK E&S Co. Ltd. SK E&S Co. Ltd. 100% 495,000, ,515,000 Consideration transferred HK$ 000 Cash 585, /18 财务报告 167

271 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iii) (iii) Consideration transferred Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 643,118 Other intangible assets 323,292 Prepaid lease payment 8,811 Deposit for acquisition of property, plant and equipment 13,929 Investments in associates 2,247 Inventories 23,972 Trade and other receivables 91,035 Bank balances and cash 149,331 Trade and other payables (463,189) Taxation (5,812) Bank and other borrowings (241,294) Deferred taxation (80,823) Non-controlling interests of the subsidiaries of (60,153) 404,464 Goodwill 181, ,515 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$91,035,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 91,035, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

272 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iii) Goodwill arising on acquisition (iii) HK$ 000 Consideration transferred 585,515 Less: Fair value of identifiable net assets acquired (404,464) Goodwill arising on acquisition 181,051 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its sales of natural gas and gas pipeline construction business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 149,331 Cash consideration paid (585,515) Deposit paid 9,485 (426,699) 2017/18 财务报告 169

273 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iii) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2017 was HK$108,579,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2017 amounted to HK$612,827,000. (iii) 108,579, ,827,000 (iv) On 23 June 2016, a subsidiary of the Group entered into an acquisition agreement with Beijing Gas Group Limited which is a subsidiary of Beijing Enterprises Holdings Limited ( Beijing Enterprise ), a substantial shareholder of the Company, pursuant to which the Group acquired 51% equity interest of at a cash consideration of RMB234,558,000 (approximately HK$266,543,000). Control in was obtained by the Group on 31 December is principally engaged in the distribution of city gas and natural gas for vehicle use and the construction of long-distance natural gas pipelines. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (iv) 51% 234,558, ,543,000 Consideration transferred HK$ 000 Cash 266, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

274 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iv) (iv) Consideration transferred Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 289,230 Intangible assets 242,935 Prepaid lease payments 38,976 Available-for-sale investments 110,485 Inventories 134,689 Trade and other receivables 56,991 Bank balances and cash 33,713 Trade and other payables (363,752) Deferred taxation (63,276) 479,991 Non-controlling interests (235,195) Goodwill 21, ,543 The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$56,991,000 at the date of acquisition. The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. 56,991, /18 财务报告 171

275 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iv) Goodwill arising on acquisition (iv) HK$ 000 Consideration transferred 266,543 Less: Fair value of identifiable net assets acquired, net of non-controlling interests (244,796) Goodwill arising on acquisition 21,747 The goodwill arising on the acquisition of was attributed to the anticipated profitability of its distribution of city gas and natural gas and the construction of longdistance natural gas pipelines business. None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Non-controlling interests The non-controlling interests in recognised at the date of the acquisition was measured by reference to the respective proportionate shares of recognised amounts of net assets of relevant subsidiary and amounted to HK$235,195, ,195, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

276 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (iv) (iv) Net cash inflow arising on acquisition HK$ 000 Bank balances and cash acquired 33,713 Cash consideration paid (266,543) (232,830) Impact of acquisition on the results of the Group Included in the profit for the year ended 31 March 2017 was HK$21,563,000 attributable to the acquisition of. Revenue of included in the Group s revenue for the year ended 31 March 2017 amounted to HK$116,836, ,563, ,836,000 (v) On 28 June 2016, a subsidiary of the Group entered into an acquisition agreement with Beijing Gas Group (BVI) Co., Ltd which is a subsidiary of Beijing Enterprises, a substantial shareholder of the Company. The Group acquired 100% equity interest of Beijing Gas at a consideration of HK$1,270,031,000 by the issuance of 110,823,011 ordinary shares of the Company (closing price of HK$11.46 per share at the completion date). Control in Beijing Gas was obtained by the Group on 31 March Beijing Gas is principally engaged in the distribution of city gas, natural gas for vehicle use and construction of longdistance natural gas pipelines in the PRC. The directors of the Company considered that the acquisition will bring about a further synergy effect of the existing business of the Group. (v) (BVI) 110,823, % 1,270,031, /18 财务报告 173

277 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (v) (v) Consideration transferred HK$ 000 Share issued at fair value 1,270,031 Fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Property, plant and equipment 767,433 Deposits for acquisition of property, plant and equipment 2,557 Prepaid lease payments 13,055 Intangible assets 47,240 Investments in associates 564,725 Inventories 49,570 Trade and other receivables 147,766 Bank balances and cash 222,435 Trade and other payables (325,153) Bank and other borrowings (336,818) Taxation (502) Deferred tax liabilities (21,386) Non-controlling interest of the subsidiaries of Beijing Gas (27,699) 1,103,223 Goodwill 166,808 1,270, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

278 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (v) (v) Consideration transferred The fair value as well as the gross contractual amounts of the trade and other receivables acquired amounted to HK$147,766,000 at the date of acquisition. 147,766,000 The best estimate at acquisition date of the contractual cash flows not expected to be collected was nil. In addition to the 51% equity interests in acquired as mentioned in note 38(B) (iv), the Group further acquired 48% equity interests in through the above acquisition at a consideration equivalent to the carrying amount of the additional interest acquired. 38(B)(iv) 51% 48% Goodwill arising on acquisition HK$ 000 Consideration transferred 1,270,031 Less: Fair value of identifiable net assets acquired (1,103,223) Goodwill arising on acquisition 166,808 The goodwill arising on the acquisition of Beijing Gas was attributed to the anticipated profitability of its distribution of city gas, natural gas and construction of longdistance natural gas pipelines business. 2017/18 财务报告 175

279 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (B) Acquisition of a business through purchase of subsidiaries in 附 (B) 附 务 (v) (v) Goodwill arising on acquisition None of the goodwill arising on this acquisition was expected to be deductible for tax purposes. Net cash inflow arising on acquisition HK$ 000 Bank balances and cash acquired 222,435 Impact of acquisition on the results of the Group No profit and revenue for the year ended 31 March 2017 was attributable to the acquisition of Beijing Gas. (C) Acquisition of assets through purchase of a subsidiary in 2018 (C) 附 (i) In 2017, the Group acquired 100% equity interest in Continental Hong Kong Group Limited ( Continental HK ) which holds 25% equity interest in at a total consideration of HK$750,000,000. The acquisition was completed with significant influence exercised in in April Continental HK is an investment holding entity, while is engaged in the natural gas business. (i) 750,000, % 25% 176 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

280 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (C) Acquisition of assets through purchase of a subsidiary in 附 (C) 附 (i) (i) Consideration transferred HK$ 000 Unsettled consideration (Note) 200,000 Cash consideration 550, ,000 Provisional fair value of assets acquired and liabilities assumed at the date of acquisition recognised by the Group: HK$ 000 Investment in an associate 1,037,622 Trade and other receivables 9,539 Bank balances and cash 17 Other payables (Note) (296,112) Amount due to an associate (112) Taxation (954) 750,000 Note: Included in the other payables balance is an amount of HK$249,985,000 which represents an amount due by Continental HK to former shareholders of. Pursuant to the sale and purchase agreement for this acquisition, the vendor agreed to settle any amount payable to former shareholders of in excess of HK$249,985,000, if required, The Group will settle the remaining consideration of HK$200,000,000 when the above payable balance is duly settled. The unsettled consideration is included in trade and other payables (see note 30). 249,985, ,985, ,000, The initial accounting for the above acquisition has been determined provisionally, awaiting the receipt of professional valuation in relation to the investment in an associate. 2017/18 财务报告 177

281 For the year ended 31 March ACQUISITION OF SUBSIDIARIES (C) Acquisition of assets through purchase of a subsidiary in 附 (C) 附 (i) (i) Net cash outflow arising on acquisition HK$ 000 Bank balances and cash acquired 17 Cash consideration (550,000) Deposit paid previously 200,000 (349,983) If the above acquisitions of businesses during the year ended 31 March 2018 had been completed on 1 April 2017, total group revenue and profit for the year would have been HK$52,895,611,000 and HK$6,671,035,000 respectively. The pro forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of the operations of the Group that actually would have been achieved had above acquisition been completed on 1 April 2017, nor is it intended to be projection of future results. If the above acquisitions of businesses during the year ended 31 March 2017 had been completed on 1 April 2016, total group revenue and profit for the year would have been HK$33,997,795,000 and HK$5,057,221,000 respectively. The pro forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of the operations of the Group that actually would have been achieved had above acquisition been completed on 1 April 2016, nor is it intended to be projection of future results. 52,895,611,000 6,671,035,000 33,997,795,000 5,057,221, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

282 For the year ended 31 March CAPITAL RISK MANAGEMENT The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimization of the debt and equity balance. The Group s overall strategy remains unchanged throughout the year. The capital structure of the Group consists of debts, which include the amounts due to associates and joint ventures and bank and other borrowings disclosed in notes 20, 24 and 31 respectively, and equity attributable to owners of the Company, comprising issued share capital disclosed in note 32, reserves and accumulated profits as disclosed in the consolidated statement of changes in equity. The management reviews the capital structure by considering the cost of capital and the risks associated with each class of capital. Based on recommendations of the management, the Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debt or the redemption of existing debt. 40. FINANCIAL INSTRUMENTS Categories of financial instruments HK$ 000 HK$ 000 Financial assets Available-for-sale investments 409, ,304 Held-for-trading investments 48,077 27,402 Loans and receivables (including cash and cash equivalents) 14,973,586 9,102,191 Financial liabilities Amortised cost 43,295,330 31,776,061 Derivative financial instrument 2, /18 财务报告 179

283 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies The Group s major financial instruments include available-for-sale investments, held-for-trading investments, amounts due from associates and joint ventures, trade and other receivables, trade and other payables, amounts due to associates and joint ventures, amounts due to non-controlling interests of subsidiaries, derivative financial instrument, bank and other borrowings, pledged bank deposits and bank balances. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Market risks Currency risk The Group collects most of its revenue in RMB and most of the expenditures as well as capital expenditures are also denominated in RMB. However, the Group has certain bank balances, amount due to a non-controlling interest of a subsidiary and bank and other borrowings that are not denominated in functional currency of the respective group entities. The appreciation or devaluation of RMB against foreign currencies may have positive or negative impact on the results of operations of the Group. During the current year, the Group entered into a cross currency interest rate swaps contract (see note 34) to mitigate against the USD foreign currency risk arising from its USD denominated bank borrowings as detailed in note 财务 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

284 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Currency risk As at end of the reporting period, the carrying amounts of the Group s monetary assets and liabilities that are denominated in foreign currency are as follows: 40. 财务 Assets Liabilities HK$ 000 HK$ 000 HK$ 000 HK$ 000 USD 396, ,183 1,783, ,486 HK$ 567,563 75,857 2,908, ,651 JPY 595, ,511 EURO 19,869 18,175 Sensitivity analysis The following table details the Group s sensitivity to a 5% (2017: 5%) increase and decrease in RMB against respective foreign currencies. 5% (2017: 5%) is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currencies denominated monetary items and adjusts their translation at the end of the reporting period for a 5% (2017: 5%) change in foreign currencies rates. A positive number below indicates an increase in post-tax profit where RMB strengthen 5% (2017: 5%) against the USD, JPY and EURO or where RMB weakening 5% (2017: 5%) against HK$. For a 5% (2017: 5%) weakening of RMB against the USD, JPY and EURO or strengthening against the HK$, there would be an equal and opposite impact on the result for the year and the balance below would be negative. 5% 5% 5%5% 5% 5% 5% 5% 5% 5% 5% 5% 2017/18 财务报告 181

285 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Currency risk Sensitivity analysis 40. 财务 Increase in post-tax profit for the year HK$ 000 HK$ 000 USD impact 52,090 24,461 HK$ impact 87,790 30,218 JPY impact 22,322 20,420 EURO impact ,947 75,781 In management s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year. Interest rate risk The Group manages its interest rate exposure based on interest rate level as well as potential impact on the Group s financial position arising from volatility. The Group is exposed to fair value interest rate risk in relation to amounts due from associates, and fixed-rate bank and other borrowings issued by the Group (see notes 24 and 31 for details of these balances respectively) CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

286 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Interest rate risk The Group is also exposed to cash flow interest rate risk in relation to variable-rate bank balances and floating-rate bank and other borrowings (see notes 29 and 31 for details of bank balances and these borrowings respectively). It is the Group s policy to keep its borrowings at floating rate of interests so as to minimise the fair value interest rate risk. Sensitivity analysis The sensitivity analysis has been determined based on the exposure to interest rate risk for both floating-rate bank and other borrowings, together with the interest capitalised to construction in progress at the end of the reporting period. Floating-rate bank balances have not been included in the sensitivity analysis as the management considers that the interest rate would not fluctuate significantly in the near future and therefore the financial impact to the group is not significant. A change of 100 basis points (2017: 100 basis points) was applied to the yield curves and interest rate on both floating-rate bank and other borrowings, together with the interest capitalised to construction in progress. The applied change is used when reporting interest rate risk internally to key management personnel and represents management s assessment of the reasonably possible change in interest rates. If the interest rate of variable rate bank and other borrowings, had been 100 basis points (2017: 100 basis points) higher/lower and all other variables were held constant, after taking into account the interest capitalised to construction in progress, the Group s post-tax profit for the year, after taking amount of interest capitalised to construction in progress, would decrease/increase by HK$161,006,000 (2017: HK$130,440,000). 40. 财务 ,006, ,440, /18 财务报告 183

287 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Equity price risk The Group s certain available-for-sale investments and held-for-trading investments are measured at fair value at the end of the reporting period. Therefore, the Group is exposed to equity price risk. The management manages this exposure by maintaining a portfolio of investments with different risk profiles. Sensitivity analysis The sensitivity analysis below has been determined based on the exposure to equity price risks of listed equity instrument at the reporting date. A 10% (2017: 10%) change is used when reporting equity price risk internally to key management personnel and represents management s assessment of the reasonably possible change in equity price. 40. 财务 10% 10% For the year ended 31 March 2018, if the market bid prices of the listed investments had been 10% (2017: 10%) higher/lower and all other variables were held constant, the Group s post-tax profit for the year would increase/decrease by HK$4,014,000 (2017: HK$2,288,000) and the Group s investment revaluation reserve will increase/decrease by HK$12,337,000 (2017: HK$14,293,000) respectively. This is mainly attributable to the changes in fair values of the listed held-for-trading investments and available-for-sale investments respectively. 10% 10% 4,014,000 2,288,000 12,337,000 14,293, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

288 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Credit risk As at 31 March 2018, the Group s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties or debtors provided by the Group is arising from the carrying amount of the respective financial assets classified as loans and receivables as stated in the consolidated statement of financial position. In order to minimise the credit risk, the management of the Group has delegated a team 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 recoverable amount of each individual trade debt at each half-reporting end date and end of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group s credit risk is significantly reduced. The credit risk on liquid funds is limited because the counterparties are reputable banks in the PRC and banks with high credit-ratings assigned by international credit-rating agencies. At the end of the reporting period, the Group does not have any significant concentration of credit risk on trade receivables, with exposure spread over a number of sub-contractors, commercial and household customers. 40. 财务 2017/18 财务报告 185

289 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Credit risk The policy of allowances for doubtful debts of the Group is based on the evaluation of collectability and aging analysis of accounts and on management s estimate. In determining whether impairment is required, the Group takes into consideration of aging status and likelihood of collection. Specific allowance is only made for receivables that are unlikely to be collected and is recognised on the difference between the estimated future cash flows expected to receive discounted using the original effective interest rate and the carrying value. If the financial conditions of customers of the Group were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required. 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. In addition to issuance of new shares, the Group also relies on bank and other borrowings as a significant source of liquidity. The Group has net current liabilities of HK$2,224,273,000 (2017: HK$7,216,492,000) as at 31 March The consolidated financial statements have been prepared on a going concern basis because the directors believe that the Group has sufficient funds to finance its current working capital requirements taking account of the cash flows from operations and assuming the continuing ability to utilise the available long-term bank loans facilities. As at 31 March 2018, the Group had available unutilised long-term bank loans facilities of HK$72,304,689,000 (2017: HK$62,955,853,000). Details of the Group s bank and other borrowings as at 31 March 2018 are set out in note 财务 2,224,273,000 7,216,492,000 72,304,689,000 62,955,853, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

290 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Liquidity risk The following tables detail the Group s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal gross cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curve at the end of the reporting period. Liquidity tables 40. 财务 Carrying Weighted amount average Payable Between Between Total at the end contractual on Less than 1 to 3 months Between Over undiscounted of reporting interest rate demand 1 month 3 months to 1 year 1 to 5 years 5 years cash flows period 合 报 % HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 % At 31 March 2018 Non-derivative financial liabilities Trade and bill payables 2,179,734 1,072,484 3,141,068 1,076,689 7,469,975 7,469,975 Other payables and accrued charges 2,291, , ,140 3,063,791 3,063,791 Amounts due to non-controlling interests of subsidiaries 300, , ,577 Bank and other borrowings fixed rate ,303,812 7,003, ,889 13,811,162 12,778,824 floating rate ,691 7,169,412 12,441,076 1,606,653 21,254,832 19,593,597 Amounts due to joint ventures 88,441 88,441 88,441 Amounts due to associates ,143 4,471,451 1,644,109 16,852,432 20,521,226 2,110,542 45,988,903 43,295, /18 财务报告 187

291 For the year ended 31 March FINANCIAL INSTRUMENTS Financial risk management objectives and policies Market risks Liquidity tables 40. 财务 Carrying Weighted amount average Payable Between Between Total at the end contractual on Less than 1 to 3 months Between Over undiscounted of reporting interest rate demand 1 month 3 months to 1 year 1 to 5 years 5 years cash flows period 合 报 % HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 % At 31 March 2017 Non-derivative financial liabilities Trade and bill payables 2,317, , , ,122 5,006,239 5,006,239 Other payables and accrued charges 1,478, , ,628 1,976,483 1,976,483 Amounts due to non-controlling interests of subsidiaries 276, , ,572 Bank and other borrowings fixed rate ,211,817 6,876, ,962 8,567,247 7,738,621 floating rate , ,912 9,158,172 8,493, ,995 19,725,679 15,879,814 Amounts due to joint ventures Amounts due to associates 797, , , , , ,939 1,174,904 4,503,363 1,582,092 11,478,312 16,342,924 1,368,957 36,450,552 31,776,061 The amounts included above for variable rate bank borrowings are subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period. 188 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

292 For the year ended 31 March FINANCIAL INSTRUMENTS Fair value measurements of financial instruments This note provides information about how the Group determines fair values of various financial assets. 40. (i) Fair value of the Group s financial assets that are measured at fair value on a recurring basis The Group s financial assets at FVTPL are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined. (i) Fair value Fair value Financial assets hierarchy Held-for-trading investments Listed equity securities in Hong Kong HK$48,077,000 48,077,000 Listed equity securities in Hong Kong HK$27,402,000 27,402,000 Level 1 Available-for-sale investments Listed equity securities in Hong Kong HK$123,371, ,371,000 Listed equity securities in Hong Kong HK$142,934, ,934,000 Level 1 Derivative Financial Instrument Cross currency interest rate swap Hong Kong HK$2,338,000 2,338,000 Cross currency interest rate swap Hong Kong HK$936, ,000 Level 2 There were no transfer between instruments in Level 1 and 2 in both years. 2017/18 财务报告 189

293 For the year ended 31 March FINANCIAL INSTRUMENTS Fair value measurements of financial instruments 40. (ii) Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis The fair value of other financial assets and financial liabilities, except for corporate bonds, is determined in accordance with generally accepted pricing models based on discounted cash flow analysis. (ii) The directors of the Company consider that the carrying amounts of other financial assets and financial liabilities carried at amortised cost approximate their respective fair values. 41. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES The table below details changes in the Group s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group s consolidated statement of cash flows as cash flows from financing activities CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

294 For the year ended 31 March RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES 41. Amounts Borrowings due to non- (including Amounts controlling Consideration loan interest due to joint interest of Payables payables) ventures subsidiaries 合 附 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (Notes 30 and 31) At 1 April ,964 23,727, , ,572 25,349,722 Financing cash flows (321,966) 6,460,348 (794,653) 19,324 5,363,053 Foreign exchange translation 53,448 1,244,713 4,681 1,302,842 Interest expenses 1,119,264 1,119,264 Consideration payables 200, ,000 At 31 March ,446 32,551, ,577 33,334, /18 财务报告 191

295 For the year ended 31 March COMMITMENTS Operating lease arrangements The Group as lessee At the end of the reporting period, the Group had commitments for future minimum lease payments under non-cancellable operating leases in respect of rented premises and equipment which fall due as follows: HK$ 000 HK$ 000 Within one year 135,215 56,735 In the second to fifth year inclusive 105,149 74,688 After five years 62,456 79, , ,316 Operating lease payments represent rentals payable by the Group in respect of rented premises and equipment. Leases for rented premises and equipment are negotiated for an average term of one to six years with fixed rental. 192 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

296 For the year ended 31 March COMMITMENTS Operating lease arrangements The Group as lessor At the end of the reporting period, the Group had contracted with tenants for the following future minimum lease payments under non-cancellable operating leases in respect of rented premises which fall due as follows: HK$ 000 HK$ 000 Within one year 13,473 22,320 In the second to fifth year inclusive 4,226 27,975 After five years ,332 18,115 63,627 Leases are negotiated for an average term of one to ten years with fixed rentals. Capital commitments As at 31 March 2018, the Group has capital commitments in respect of the acquisition for property, plant and equipment and construction materials for property, plant and equipment contracted for but not provided in the consolidated financial statements amounting to HK$134,766,000 (2017: HK$121,324,000) and HK$54,934,000 (2017: HK$81,825,000) respectively. In October 2016, the Group cooperated with CIIF to establish the Fund and the capital commitment of the Group regarding the Fund is set out in note ,766, ,324,000 54,934,000 81,825, /18 财务报告 193

297 For the year ended 31 March PLEDGE OF ASSETS The Group pledged certain non-current and current assets and equity interests over certain subsidiaries to banks or financial institutions to secure loan facilities granted to the Group. Carrying amount of the non-current and current assets pledged to banks or financial institutions to secure loan facilities granted to the Group is as follows: HK$ 000 HK$ 000 Long-term loan facilities Investment properties 72,200 Property, plant and equipment 31,267 Other deposits 68,323 Short-term loan facilities Pledged bank deposits 290, , , ,143 At the end of the reporting period, the Company s equity interests in certain subsidiaries were pledged to a bank for credit facilities granted to the Group. 194 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

298 For the year ended 31 March RETIREMENT BENEFITS SCHEMES The Group has joined a MPF Scheme for all employees in Hong Kong. The MPF Scheme is registered with the Mandatory Provident Fund Scheme Authority under the Mandatory Provident Fund Schemes Ordinance. The assets of the MPF Scheme are held separately from those of the Group in funds under the control of an independent trustee. Under the rule of the MPF Scheme, the employer and its employees are each required to make contributions to the scheme at rate specified in the rules. The only obligation of the Group with respect of the MPF Scheme is to make the required contributions under the scheme. No forfeited contribution is available to reduce the contribution payable in the future years at 31 March 2018 and Employees of the Group s subsidiaries in the PRC are covered by the retirement and pension schemes defined by local practice and regulations. The subsidiaries are required to contribute a specific percentage of their payroll costs to the retirement and pension schemes. The only obligation of the Group in respect to the retirement benefits scheme is to make the specified contribution. The calculation of contributions for PRC eligible staff is based on certain percentage of the applicable payroll costs. The contribution to the MPF Scheme is calculated based on the rules set out in the MPF Ordinance which is 5% on the basic salary of the relevant employee subject to a specific ceiling % 2017/18 财务报告 195

299 For the year ended 31 March RELATED PARTY TRANSACTIONS Apart from the amounts due from (to) related parties and transactions as disclosed in notes 20, 24, 27 and 30 respectively, the Group entered into the following transactions with major related parties that are not members of the Group: (i) During the year ended 31 March 2018, the Group purchased gas for total amount of HK$30,005,000 (2017: HK$27,045,000) from a joint venture. (i) 30,005,000 27,045,000 (ii) During the year ended 31 March 2018, the Group sold consumables and spare parts for a total amount of HK$1,392,418,000 (2017: HK$136,475,000) to joint ventures. (ii) 1,392,418, ,475,000 (iii) During the year ended 31 March 2018, the Group received other contracted construction revenue for total amount of HK$2,375,950,000 (2017: HK$42,389,000) from joint ventures. (iii) 2,375,950,000 42,389,000 (iv) During the year ended 31 March 2018, the Group purchased consumables and spare parts for total amount of HK$616,171,000 (2017: HK$309,445,000) from associates. (iv) 616,171, ,445,000 (v) During the year ended 31 March 2018, the Group purchased gas appliances for total amount of HK$1,302,663,000 (2017: HK$234,029,000) from an associate. (v) 1,302,663, ,029,000 (vi) During the year ended 31 March 2018, the Group received interest income for total amount of HK$480,000 (2017: HK$1,120,000) from a joint venture. (vi) 480,000 1,120,000 (vii) During the year ended 31 March 2018, the Group received management fee income for total amount of HK$12,324,000 from joint ventures. (vii) 12,324, CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

300 For the year ended 31 March RELATED PARTY TRANSACTIONS The remuneration of key management of the Group was as follows: HK$ 000 HK$ 000 Short-term benefits 50,093 42,138 Post employment benefits Share-based payments 236, ,285 42,192 The remuneration of key management is determined by the remuneration committee having regard to the performance of individuals and market trends. 2017/18 财务报告 197

301 For the year ended 31 March contingent LIABILITIES On 30 March 2017, the Company received a form of claim filed by a former director of the Company in the Labour Tribunal of Hong Kong claiming approximately HK$140 million (being the alleged loss of salary in the sum of HK$21.6 million (annual salary of HK$7.2 million) for the three financial years ended 31 March 2014 and the aggregate bonus in the sum of approximately HK$118.4 million for the four financial years ended 31 March 2014) and other unliquidated damages and interest from the Company for the alleged wrongful dismissal by the Company of a former director of the Company as a director and an employee of the Company on 29 March By the mutual consent of the parties to the claim, the claim has been transferred to the Court of First Instance of the High Court In addition, the above former director and other share option holders initiated legal proceedings against the Company with regard to their respective purported exercise of share options. In respect of the aforementioned legal proceedings, the Company has sought advice from its legal advisors and has been advised that there is a sound basis for defending the above claims, no provision of contingent liabilities (2017: nil) was provided as at 31 March For details of the legal proceedings, please refer to the announcement of the Company dated 2 June 2017 on the website of the Stock Exchange (please note that the above former director has since withdrawn his claims against the Company in respect of HCA751/2017 referred to in the said announcement). HCA751/ CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

302 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES Particulars of the principal subsidiaries are as follows: 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Wholly-foreign owned enterprises ( WFOE ) WFOE Registered US$187,800, ,800, # 100 # Investment holding and treasury PRC WFOE Registered US$250,000,000 WFOE 250,000, # 100 # Investment holding and treasury PRC Sino-foreign equity joint venture Registered RMB20,000,000 20,000, ## 60 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB44,000,000 44,000, ## 80 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB100,000, ,000, ## 90 ## Sales of natural gas and gas pipeline construction 2017/18 财务报告 199

303 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB70,000,000 70,000, ## 70 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB72,000,000 72,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB118,950, ,950, ## 100 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB16,002,000 16,002, ## 100 ## Sales of natural gas and gas pipeline construction PRC WFOE Registered US$3,060,000 WFOE 3,060, ## 100 ## Sales of natural gas and gas pipeline 200 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

304 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Sino-foreign equity joint venture Registered US$40,000,000 40,000, ## 75 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB265,725, ,725, ## 64 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB38,000,000 38,000, ## 64 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB20,000,000 20,000, ## 64 ## Design, construction and maintenance of city pipeline projects PRC Sino-foreign equity joint venture Registered RMB200,000, ,000, ## 100 ## Sales of natural gas and gas pipeline construction 2017/18 财务报告 201

305 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Sino-foreign equity joint venture Registered RMB42,000,000 42,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC WFOE Registered RMB50,000,000 WFOE 50,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB133,330, ,330, ## 70 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB20,000,000 20,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Sino-foreign equity joint venture Registered RMB183,800, ,800, ## 80 ## Sales of natural gas and gas pipeline construction 202 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

306 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB20,000,000 20,000, ## 80 ## Design, construction and maintenance of city pipeline projects PRC Limited liability company Registered RMB1,130,000,000 1,130,000, ## 100 ## Investment in petrochemical facilities of storage and transportation, fundamental facilities of pier, sales of raw chemical materials and construction materials PRC Limited liability company Registered RMB300,000, ,000, ## 100 ## Producing and storing LPG and chemical products LPG 2017/18 财务报告 203

307 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered USD60,000,000 60,000, ## ## Manufacturing of highly purified LPG, highly purified propane and butane LPG PRC Limited liability company Registered RMB400,000, ,000, ## 100 ## Sales of LPG LPG Fortune Gas Investment Holdings Limited Hong Kong Incorporated Ordinary HK$702,730, ,730, ## 100 ## Investment holding, sales of natural gas and CBM business CBM PRC Limited liability company Registered RMB50,000,000 50,000, ## 80 ## Sales of natural gas and gas pipeline construction PRC WFOE Registered RMB30,000,000 WFOE 30,000, # 100 # Investment holding 204 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

308 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Sino-foreign equity joint venture Registered RMB64,000,000 64,000, ## 100 ## Sales of natural gas and gas pipeline construction Hong Kong Incorporated Ordinary USD59,027,780 59,027, ## 70 ## Exploration and production of coal bed methane PRC Limited liability company Registered RMB100,000, ,000, ## 100 ## Design, construction and maintenance of city pipeline projects PRC Limited liability company Registered RMB50,000,000 50,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB16,000,000 16,000, ## 75 ## Design, construction and maintenance of city pipeline projects 2017/18 财务报告 205

309 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB150,000, ,000, ## 99 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB40,000,000 40,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB300,000, ,000, ## 100 ## Design, construction and maintenance of city pipeline projects ) PRC Limited liability company Registered US$59,600,000 59,600, ## 100 ## Gas station construction, management and consultancy services PRC Limited liability company Registered US$10,000,000 10,000, ## 100 ## Production of natural gas 206 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

310 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB397,050, ,050, ## 85 ## Design, construction and maintenance of city pipeline projects PRC Limited liability company Registered RMB100,000, ,000, ## 100 ## Development, consultancy services and investment in clean energy ) PRC Limited liability company Registered RMB100,000, ,000, ## 100 ## Provision of management services to group companies PRC Limited liability company Registered RMB133,000, ,000, ## 65 ## Sales of natural gas and gas pipeline construction Panva Gas Holdings BVI Incorporated Limited Ordinary US$1,111 1, ## 100 ## Investment holding and sales of LPG LPG 2017/18 财务报告 207

311 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % China Natural Gas Investments Limited BVI Incorporated Registered 100 # 100 # Investment holding USD Panriver Investments Company Limited BVI Limited liability company Registered HK$200,000, ,000, ## 100 ## Investment holding Energy Link Investments Limited Hong Kong Limited liability company Ordinary HK$800,000, ,000, # 100 # Investment holding China Gas Energy Utilization Holdings Limited Hong Kong Limited liability company Ordinary HK$ # 100 # Investment holding Zhongran Energy Network Development Limited Hong Kong Limited liability company Ordinary HK$ # 100 # Investment holding 208 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

312 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB10,000,000 10,000, ## 100 ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB390,310, ,310, ## 100 ## Development, production and sales of gas appliances Beijing Gas BVI Incorporated Ordinary US$ ## 100 ## Investment holding PRC Limited liability company Registered RMB300,000, ,000, ## 99 ## Distribution of city gas and natural gas for vehicle use and the construction of long distance natural gas pipeline PRC Limited liability company Registered RMB118,000, ,000,000 97% ## 97% ## Sales of natural gas and gas pipeline construction 2017/18 财务报告 209

313 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB60,000,000 60,000, % ## 100% ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB80,000,000 80,000, % ## 100% ## Development and consultancy services in gas pipeline construction PRC Limited liability company Registered RMB80,000,000 80,000, % ## 100% ## Sales of natural gas and gas pipeline construction PRC Limited liability company Registered RMB107,500, ,500,000 55% ## 55% ## Development, consultancy services and investment in clean energy PRC Limited liability company Registered RMB50,000,000 50,000, % ## 100% ## Sales of natural gas and gas pipeline construction 210 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

314 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % PRC Limited liability company Registered RMB500,000, ,000, % ## 100% ## Development, consultancy services and investment in clean energy PRC Limited liability company Registered RMB10,000,000 10,000, % ## 100% ## Investment holdings PRC Limited liability company Registered RMB100,000, ,000, % ## 100% ## Provision of management services, and consultancy services Zhongran Energy Limited HK Limited liability company Ordinary HK$ % # 100% # Investment holdings Sky Access Limited BVI Incorporated Ordinary US$ Fresh Goal Limited BVI Incorporated Ordinary US$ % # 100% # Investment holdings 100% # 100% # Investment holdings 2017/18 财务报告 211

315 For the year ended 31 March PARTICULAR OF PRINCIPAL SUBSIDIARIES 47. 附 Proportion of Place of nominal value of incorporation Form of Paid up issued issued share capital/ or registration/ business share capital/ registered capital Name of subsidiary operations structure registered capital held by the Company Principal activities 附 注 注 务 注 注 务 % % China Gas Capital Management Limited BVI Incorporated Ordinary US$ % # 100% # Investment holdings # The proportion of nominal value of issued share capital/ registered capital/registered capital directly held by the Company. ## The proportion of nominal value of issued share capital/ registered capital/registered capital indirectly held by the Company. # ## The above table lists the principal subsidiaries of the Company which, in the opinion of the directors, principally affected the results or assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length. None of the subsidiaries had any debt securities outstanding at the end of the both years. 212 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

316 For the year ended 31 March STATEMENT OF FINANCIAL POSITION OF THE COMPANY Information about the statement of the financial position of the Company at the end of the reporting period is as follows: 48. 财务 表 HK$ 000 HK$ 000 Non-current assets Interests in subsidiaries 7,860,279 7,064,688 Investments in associates 1,408,560 1,410,350 Investments in joint ventures 598, ,974 Available-for-sale investments 2,900 2,900 Amounts due from subsidiaries 17,177,311 12,249,298 27,048,024 21,326,210 Current assets Other receivables and prepayment 2, ,842 Bank balances and cash 885, , , ,414 Current liabilities Other payables and accruals 124,972 60,622 Amounts due to subsidiaries 8,624,364 4,235,982 Bank borrowings due within one year 2,702,145 1,758,886 11,451,481 6,055,490 Net current liabilities (10,563,584) (5,617,076) 16,484,440 15,709,134 Equity Share capital 49,685 49,685 Reserves 10,424,899 8,711,119 Total equity 10,474,584 8,760,804 Non-current liability Bank borrowings due after one year 6,009,856 6,948,330 16,484,440 15,709, /18 财务报告 213

317 For the year ended 31 March STATEMENT OF FINANCIAL POSITION OF THE COMPANY Movement in the Company s reserves: 48. 财务 表 Employee share-based Capital Share compensation Translation Contributed redemption Accumulated premium reserve reserve surplus reserve profits Total 报 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (note) At 1 April ,074,281 (205,364) 65,475 1,107 1,478,129 8,413,628 Profit and total comprehensive income for the year 783, ,267 Exchange difference arising from translation (262,815) (262,815) Repurchase of shares (538,068) 527 (527) (538,068) Issuance of new shares upon acquisitions of subsidiaries 1,268,923 1,268,923 Dividends paid (953,816) (953,816) At 31 March 2017 Profit and total comprehensive income for the year Recognition of equity-settled share-based payments Exchange difference arising from translation 7,805,136 (468,179) 65,475 1,634 1,307,053 8,711,119 2,241,379 2,241, , , , ,266 Dividends paid (1,391,185) (1,391,185) At 31 March ,805, ,320 (248,913) 65,475 1,634 2,157,247 10,424,899 Note: The contributed surplus of the Company represents the difference between the underlying net assets of the subsidiaries acquired by the Company as a result of the group reorganisation prior to the listing of the Company s shares in 1995 and the nominal amount of the Company s share capital issued as consideration for the acquisition. 214 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

318 Financial Summary 财务摘要 For the year ended 31 March HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Results Revenue 52,831,958 31,993,323 29,496,869 31,666,111 26,007,997 Profit for the year attributable to owners of the Company 6,095,153 4,147,732 2,273,121 3,371,053 2,575,506 At 31 March HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (restated) Assets and liabilities Total assets 82,058,007 60,221,785 53,532,891 50,624,436 45,264,629 Total liabilities (49,327,907) (36,275,206) (32,568,771) (29,188,936) (27,107,617) 32,730,100 23,946,579 20,964,120 21,435,500 18,157,012 Equity attributable to owners of the Company 28,455,996 20,550,233 17,852,562 18,396,317 15,783,489 Non-controlling interests 4,274,104 3,396,346 3,111,558 3,039,183 2,373,523 32,730,100 23,946,579 20,964,120 21,435,500 18,157, /18 财务报告 215

319 Particulars of Major Properties 主要物业资料 Location Type Group s interest (%) Lease term (%) Leasehold land and buildings In Hong Kong: 16/F., Capital Centre No. 151 Gloucester Road Wan Chai Hong Kong Office premises 100 Long lease In the People s Republic of China: 5022 B Commercial 100 Medium term lease A Commercial 100 Medium term lease 6 Office premises 100 Medium term lease Investment properties 资物业 No Kai Tak Road Kowloon City Kowloon Hong Kong Vacant land 100 Medium term lease 216 CHINA GAS HOLDINGS LIMITED 2017/18 FINANCIAL REPORT

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321 CHINA GAS HOLDINGS LIMITED * 香港湾仔告士打道 151 号资本中心 16 楼 1601 室