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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2021
Related party transactions [abstract]  
Disclosure of related party transactions
 
40.
RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.
 
(a)
Related parties that control the Company or are controlled by the Company:
See note 10 for the principal subsidiaries.
None of the shareholders is the controlling entity of the Company.
 
(b)
Nature of the principal related parties that do not control/are not controlled by the Company:
 
(i)
Guangzhou Railway Group and its subsidiaries
 
Name of related parties   Relationship with the Company
Single largest shareholder and its subsidiaries
    
Guangzhou Railway Group   Single largest shareholder
Guangzhou Railway Group YangCheng Railway Enterprise Development Company   Subsidiary of the single largest shareholder
Guangdong Railway Company Limited.   Subsidiary of the single largest shareholder
GIDC   Subsidiary of the single largest shareholder
Guangzhou Railway Material Supply Company   Subsidiary of the single largest shareholder
Guangzhou Railway Station Service Centre   Subsidiary of the single largest shareholder
Guangzhou Yuetie Operational Development Company   Subsidiary of the single largest shareholder
Guangzhou Railway Rolling Stock Works Company Limited   Subsidiary of the single largest shareholder
Guangdong Tieqing International Travel Agency Company Limited   Subsidiary of the single largest shareholder
Xiashen Railway Guangdong Company Limited   Subsidiary of the single largest shareholder
Guangzhou Railway Real Estate Construction Engineering Co., Ltd.   Subsidiary of the single largest shareholder
Guangdong Yuetong Railway Logistics Company Limited   Subsidiary of the single largest shareholder
Sanmao Railway Company Xiaotangxi Freight Field Service Company   Subsidiary of the single largest shareholder
Guangzhou Railway Technology Development Co., Ltd.   Subsidiary of the single largest shareholder
Guangzhou Anmao Railway Consulting Construction Company Limited   Subsidiary of the single largest shareholder
Guangzhou Beiyang Information Technology Company Limited   Subsidiary of the single largest shareholder
Hunan Railway Lianchuang Technology Development Co., Ltd.   Subsidiary of the single largest shareholder
Guangzhou Northeast Freight Car Outer Winding Railway Co., Ltd.   Subsidiary of the single largest shareholder
Hunan Changtie Loading & Unloading Co., Ltd.   Subsidiary of the single largest shareholder
Guangzhou Ruiwei Econonmy Development Co., Ltd   Subsidiary of the single largest shareholder
Guangzhou Railway Technology Development Surveying Co., Ltd.   Subsidiary of the single largest shareholder
 
(b)
Nature of the principal related parties that do not control/are not controlled by the Company (continued):
 
(ii)
Associates of the Group:
 
Associates of the Group
     
Tiecheng    Associate of the Group
Shentu    Associate of the Group
 
(iii)
Relationship with CSRG and other railway companies
On March 14, 2013, pursuant to the Approval, the previous controlling entity of Guangzhou Railway Group, MOR, had been dismantled. The administrative function of MOR were transferred to the Ministry of Transport and the newly established National Railway Bureau, and its business functions were transferred to the CSRG. Accordingly, the equity interests of Guangzhou Railway Group which was wholly controlled by MOR previously were transferred to the CSRG (“Reform”). The Reform was completed since January 1, 2017 and the Company disclosed details of transactions undertaken with CSRG Group for the years of 2019, 2020 and 2021 for reference. Unless otherwise specified, the transactions with CSRG Group disclosed below have excluded transactions undertaken with Guangzhou Railway Group and its subsidiaries.
 
(c)
In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties:
 
(I)
Material transactions undertaken with Guangzhou Railway Group and its subsidiaries:
 
    2019     2020     2021  
    RMB’000     RMB’000     RMB’000  
Provision of services and sales of goods
                        
Transportation related services
                        
Provision of train transportation services to Guangzhou Railway Group and its subsidiaries (i)
     2,060,518       2,345,512       3,323,844  
Revenue collected by CSRG for railway network usage and related services provided to Guangzhou Railway Group and its subsidiaries (ii)
     1,563,191       1,332,346       1,325,614  
Revenue from railway operation service provided to Guangzhou Railway Group’s subsidiaries (iii)
     812,470       842,350       865,220  
   
 
 
    
 
 
    
 
 
  
      4,436,179       4,520,208       5,514,678  
   
 
 
    
 
 
    
 
 
  
Other services
                        
Sales of materials and supplies to Guangzhou Railway Group and its subsidiaries (iv)
     45,642       34,705       89,042  
   
 
 
    
 
 
    
 
 
  
Services received and purchase made
                        
Transportation related services
                        
Provision of train transportation services by Guangzhou Railway Group and its subsidiaries (i)(vi)
     774,291       753,288       796,142  
Cost settled by CSRG for railway network usage and related services provided by Guangzhou Railway Group and its subsidiaries (ii)
     2,194,467       1,985,768       2,896,222  
      2,968,758       2,739,056       3,692,364  
Other services
                        
Provision of repair and maintenance services by Guangzhou Railway Group and its subsidiaries (iv)
     441,719       297,809       311,080  
Purchase of materials and supplies from Guangzhou Railway Group and its subsidiaries (iv)
     623,433       722,487       770,683  
Provision of construction services by Guangzhou Railway Group and its subsidiaries (v)
     363,424       285,616       172,592  
   
 
 
    
 
 
    
 
 
  
      1,428,576       1,305,912       1,254,355  
   
 
 
    
 
 
    
 
 
  
 
(i)
The service charges are determined based on a pricing scheme set by the CSRG or based on negotiation between the contracting parties with reference to actual costs incurred.
 
(c)
In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):
 
(I)
Material transactions undertaken with Guangzhou Railway Group and its subsidiaries (continued):
 
(ii)
Such revenues/charges are determined by the CSRG based on its standard charges applied on a nationwide basis.
(iii)
The service charges are levied based on contract prices determined based on a “cost plus a profit margin” and agreed between both contracting parties.
(iv)
The prices are determined based on mutual negotiation between the contracting parties with reference to actual costs incurred.
(v)
Based on construction amount determined under national railway engineering guidelines.
(vi)
The amount recognized in 2021 does not include the payment of short term leases related to the lease of passenger trains paid to Guangzhou Railway Group amounting to RMB400,473,000
(2019 and 2020: RMB247,714,000 and 
RMB292,603,000).
 
(II)
Material transactions with CSRG and other railway companies
When the passenger trains and freight trains operated by the Group pass through rail lines owned by other railway companies controlled by the CSRG, the Group need to pay those companies for the services rendered (track usage, locomotive traction and electric catenaries service, etc.), and vice versa. The charge rate of such services are instructed by the CSRG and are collected and settled by the CSRG according to its central recording and settlement systems (see details in note 2.22).
 
(c)
In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):
 
(II)
Material transactions with CSRG and other railway companies (continued):
 
In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with the CSRG Group:
 
     2019      2020      2021  
     RMB’000      RMB’000      RMB’000  
Provision of services and sales of goods
                           
Transportation related services
                           
Provision of train transportation services to CSRG Group (i)
      69,958        57,349        138,219  
Revenue collected by CSRG for services provided to CSRG Group (ii)
      2,479,015        2,105,206        2,275,132  
Revenue from railway operation service provided to CSRG Group (iii)
      2,392,333        2,214,460        2,232,346  
    
 
 
     
 
 
     
 
 
  
       4,941,306        4,377,015        4,645,697  
    
 
 
     
 
 
     
 
 
  
Other services
                           
Provision of repairing services for cargo trucks to CSRG Group (ii)
      370,990        436,955        470,143  
Sales of materials and supplies to CSRG Group (iv)
      8,330        —        —  
Provision of apartment leasing services to CSRG Group (iv)
      574        456        2,064  
Others
      —        887        607  
    
 
 
     
 
 
     
 
 
  
       379,894        438,298        472,814  
    
 
 
     
 
 
     
 
 
  
Services received and purchases made
                           
Transportation related services
                           
Provision of train transportation services by CSRG Group (i)(vi)
      37,408        18,872        58,121  
Cost settled by CSRG for services provided by CSRG Group (ii) (vi)
      2,107,765        1,506,541        1,769,170  
    
 
 
     
 
 
     
 
 
  
       2,145,173        1,525,413        1,827,291  
    
 
 
     
 
 
     
 
 
  
Other services
                           
Provision of repair and maintenance services by CSRG Group (iv)
      29,066        28,928        28,185  
Purchase of materials and supplies from CSRG Group (iv)
      23,968        12,362        3,203  
Provision of construction services by CSRG Group (v)
      23,636        2,662        —  
    
 
 
     
 
 
     
 
 
  
       76,670        43,952        31,388  
    
 
 
     
 
 
     
 
 
  
 
(i)
The service charges are determined based on a pricing scheme set by the CSRG or based on negotiation between the contracting parties with reference to actual costs incurred.
 
(c)
In addition to those disclosed elsewhere in the financial statements, during the year, the Group had the following material transactions undertaken with related parties (continued):
 
(II)
Material transactions with CSRG and other railway companies (continued):
 
(ii)
Such revenue/charges are determined by the CSRG based on its standard charges applied on a nationwide basis.
(iii)
The service charges are levied based on contract prices determined based on a “cost plus a profit margin” and explicitly agreed between both contracting parties.
(iv)
The prices are determined based on mutual negotiation between the contracting parties with reference to actual costs incurred.
(v)
Based on construction amounts determined under national railway engineering guidelines.
(vi)
The amount recognized in 2021 does not include the payment of short term leases related to the lease of passenger trains and freight trains to CSRG amounting to RMB 1,286,566,000
(2019 and 2020: RMB436,323,000 and 
RMB554,003,000)
 
(III)
Revenues collected and settled through the CSRG:
 
     2019      2020      2021  
     RMB’000      RMB’000      RMB’000  
- Passenger transportation
      7,475,003        3,769,231        6,054,100  
- Freight transportation
      1,740,907        1,456,605        1,701,842  
- Other transportation related services
      74,870        24,048        8,488  
    
 
 
     
 
 
     
 
 
  
       9,290,780        5,249,884        7,764,430  
    
 
 
     
 
 
     
 
 
  
 
(IV)
Lease – as lessee:
In 2021, the depreciation expense of the
right-of-use
assets was RMB16,246,000 (
2019 and 2020
: RMB 13,378,000), the interest expense of lease liabilities was RMB67,605,000 (
2019 and 2020: RMB57,670,000 and 
RMB 57,629,000), and the actual payment to Guangzhou Railway Group was RMB61,887,000 (
2019 and 2020: RMB59,620,000 and 
RMB60,750,000).
The payment of short-term leases related to related parties are shown in notes 40(c)(I)(vi) and 40(c)(Il)(vi).
 
(d)
Key management compensation
In 2021, the compensation paid or payable to key management for employee services was RMB4,151,000 (2019 and 2020: RMB4,073,000 and RMB3,696,000).
 
(e)
As at December 31, 2021 and 2020, the Group had the following material balances maintained with related parties:
 
(II)
Material balances with Guangzhou Railway Group and its subsidiaries:
 
 
  
2020
 
  
2021
 
 
  
RMB’000
 
  
RMB’000
 
Trade receivables
      1,853,846        2,881,069  
- Guangzhou Railway Group (i)
      208,024        600,042  
- Subsidiaries of Guangzhou Railway Group (i)
      1,645,822        2,281,027  
- Associates
      —        —  
Less: Provision for impairment
      (24,099 )       (16,028 ) 
    
 
 
     
 
 
  
       1,829,747        2,865,041  
    
 
 
     
 
 
  
Prepayments and other receivables
      59,580        83,808  
- Guangzhou Railway Group
      431        1,944  
- Subsidiaries of Guangzhou Railway Group
      59,070        81,790  
- Associates
      79        74  
Less: Provision for impairment
      (51 )       (62 ) 
    
 
 
     
 
 
  
       59,529        83,746  
    
 
 
     
 
 
  
Prepayments for fixed assets and
construction-in-progress
      —        7,270  
- Subsidiaries of Guangzhou Railway Group (ii)
      —        7,270  
- 
Associates
      —        —  
Trade and bill payables
      1,243,372        1,882,872  
- Guangzhou Railway Group (i)
      67,889        71,414  
- Subsidiaries of Guangzhou Railway Group (ii)
      1,145,025        1,730,317  
- Associates
      30,458        81,141  
Payables for fixed assets and
construction-in-progress
      876,031        1,038,742  
- Guangzhou Railway Group
      111,799        334,313  
- Subsidiaries of Guangzhou Railway Group
      342,123        326,023  
- Associates
      422,109        378,406  
Contract liabilities
      436        4,346  
- Subsidiaries of Guangzhou Railway Group
      297        3,940  
- Associates
      139        406  
Accruals and other payables
      443,754        495,930  
- Guangzhou Railway Group
      4,379        8,600  
- Subsidiaries of Guangzhou Railway Group (iii)
      426,821        468,064  
- Associates (iv)
      12,554        19,266  
 
(i)
The trade balances due from/to Guangzhou Railway Group, subsidiaries of Guangzhou Railway Group mainly represent service fees and charges payable and receivable balances arising from the provision of passenger transportation and cargo forwarding businesses jointly with these related parties within the PRC.
 
 
(e)
As at December 31, 2021 and 2020, the Group had the following material balances maintained with related parties (continued):
 
(I)
Material balances with Guangzhou Railway Group and its subsidiaries (continued):
 
(ii)
The trade payables due to subsidiaries of Guangzhou Railway Group mainly represent payables arising from unsettled fees for purchase of materials and provision of other services according to various service agreements entered into between the Group and the related parties.
(iii)
The other payables due to subsidiaries of Guangzhou Railway Group mainly represent the performance deposits received for construction projects and deposits received from ticketing agencies.
(iv)
The other payables due to associates mainly represent the performance deposits received for construction projects operated by associates.
As at December 31, 2021 and 2020, all the balances maintained with related parties were unsecured,
non-interest
bearing and were repayable on demand.
 
(II)
Material balances with CSRG Group:
 
     2020      2021  
     RMB’000      RMB’000  
Due from CSRG Group
                  
- Trade receivables
      1,101,951        783,707  
- Other receivables
      183,021        87,251  
    
 
 
     
 
 
  
Due to CSRG Group
                  
- Trade payables and payables for fixed assets and
construction-in-progress
      71,082        114,481  
- Other payables
      4,564        91,737  
    
 
 
     
 
 
  
As at December 31, 2021 and 2020, all the balances maintained with CSRG Group were unsecured,
non-interest
bearing and were repayable on demand.