-b体育登录入口

number of individuals

nil to rmb1,000,000

2.1 basis of preparation

the consolidated financial statements have been prepared in accordance with international financial reporting standards (“ifrss“) issued by the international accounting standards board (the “iasb“) and the disclosure requirements of the hong kong companies ordinance. they have been prepared on a historical cost basis, except for equity investments at fair value through other comprehensive income, financial assets and liabilities at fair value through profit or loss and debt instruments at fair value through other comprehensive income which have been measured at fair value.

these financial statements are presented in thousands of renminbi ("rmb") unless otherwise stated.

going concern

as at december 31, 2019, the group’s current liabilities exceeded its current assets by approximately rmb20,456 million (december 31, 2018 : rmb15,935 million). the directors of the company have considered the group’s available sources of funds as follows:

the group’s expected net cash inflows from operating activities in 2020;

unutilized banking facilities of approximately rmb118,084 million as at december 31, 2019, of which amounts totalling rmb108,360 million will be subject to renewal during the next 12 months. the directors of the company are confident that these banking facilities could be renewed upon expiration based on the group’s past experience and good credit standing; and

other available sources of financing from banks and other financial institutions given the group’s credit history.

the directors of the company believe that the group has adequate resources to continue operations for the foreseeable future of not less than 12 months from december 31, 2019. the directors of the company therefore are of the opinion that it is appropriate to adopt the going concern basis in preparing the consolidated financial statements.

consolidation

the consolidated financial statements comprise the financial statements of the company and all of its subsidiaries for the year ended december 31, 2019. control is achieved when the group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. specifically, the group controls an investee if and only if the group has:

power over the investee (i.e, existing rights that give it the current ability to direct the relevant activities of the investee);

exposure, or rights, to variable returns from its involvement with the investee; and

the ability to use its power over the investee to affect its returns.

generally, there is a presumption that a majority of voting rights result in control. to support this presumption and when the group has less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

the contractual arrangement with the other vote holders of the investee;

rights arising from other contractual arrangements; and

the group’s voting rights and potential voting rights.

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. consolidation of a subsidiary begins when the group obtains control over the subsidiary and ceases when the group loses control of the subsidiary. assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of financial position and consolidated statement of profit and loss and other comprehensive income from the date the group gains control until the date the group ceases to control the subsidiary.

profit or loss and each component of other comprehensive income ("oci") are attributed to the equity holders of the parent of the group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. when 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.

a change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. if the group loses control over a subsidiary, it:

derecognizes the assets (including goodwill) and liabilities of the subsidiary;

derecognizes the carrying amount of any non-controlling interests;

derecognizes the cumulative translation differences recorded in equity;

recognizes the fair value of the consideration received;

recognizes the fair value of any investment retained;

recognizes any surplus or deficit in profit or loss; and

reclassifies the parent’s share of components previously recognized in oci to profit or loss or retained earnings, as appropriate, as would be required if the group had directly disposed of the related assets or liabilities.

(a) merger accounting for business combinations under common control

the consolidated financial statements incorporate the financial statements of the combining entities or businesses in business combination under common control as if they had been combined from the date when the combining entities or businesses first came under the control of the ultimate holding company.

the net assets of the combining entities or businesses are consolidated using the carrying amount from the ultimate holding company’s perspective. no amount is recognized for goodwill or excess of the group‘s interest in the book value of the net assets over cost at the time of the common control combination, to the extent of the continuation of the ultimate holding company’s interest.

the consolidated statement of comprehensive income includes the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control, where this is a shorter period, regardless of the date of the common control combination.

the comparative financial data have been restated to reflect the business combinations under common control occurred during this year as disclosed in note 38.

transaction costs, including professional fees, registration fees, costs of furnishing information to shareholders, costs or losses incurred in combining operations of the previously separate businesses and other costs incurred in relation to the common control combination that is to be accounted for by using the merger accounting method are recognized as expenses in the period in which they are incurred.

(b) acquisition method of accounting for other business combinations and goodwill

the acquisition method of accounting is used to account for the acquisition of subsidiaries by the group, other than common control combinations. the consideration transferred is measured at the acquisition date fair value which is the sum of acquisition date fair value of assets transferred by the group, liabilities assumed by the group to the former owner of the acquiree and the equity interests issued by the group in exchange for control of the acquiree. the consideration transferred included the fair value of any assets and liabilities resulting from a contingent consideration arrangement. acquisition-related costs are expensed as incurred. identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date. all other components of non-controlling interests are measured at fair value.

for each business combination, the group elects whether to measure the non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportional share of net assets in the event of liquidation at fair value or at the proportional share of the acquiree's identifiable net assets.

when the group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. this includes the separation of embedded derivatives in host contracts of the acquiree.

if the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss.

goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognized for non-controlling interests and any fair value of the group's previously held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. if the sum of this consideration and other items is lower than the fair value of the net assets acquired, the difference is, after reassessment, recognized in profit or loss as a gain on bargain purchase.

after initial recognition, goodwill is measured at cost less any accumulated impairment losses. goodwill is tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. the group performs its annual impairment test of goodwill as at december 31. for the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the group are assigned to those units or groups of units.

impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash- generating units) to which the goodwill relates. where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. an impairment loss recognized for goodwill is not reversed in a subsequent period.

where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on the disposal. goodwill disposed of in these circumstances is measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.

a subsidiary is an entity, directly or indirectly, controlled by the company. control is achieved when the group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the group the current ability to direct the relevant activities of the investee).

when the company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a)

the contractual arrangement with the other vote holders of the investee;

(b)

rights arising from other contractual arrangements; and

(c)

the group’s voting rights and potential voting rights.

subsidiaries are fully consolidated from the date on which control is transferred to the group. they are de-consolidated from the date that control ceases.

inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. profits and losses resulting from inter-company transactions that are recognized in assets are also eliminated. amounts reported by subsidiaries have been adjusted where necessary in the consolidated financial statements to conform with the policies adopted by the group.

in the company’s statement of financial position, as permitted under ifrs 1, the investments in subsidiaries acquired prior to january 1, 2008, being the date of transition to ifrs, are stated at deemed cost as required under the previously adopted accounting standards. subsidiaries acquired after that date that are not classified as held for sale in accordance with ifrs 5 non-current assets held for sale and discontinued operations are stated at cost less provision for impairment losses. the results of subsidiaries are accounted for by the company on the basis of dividends received and receivable.

2.29 contract liabilities

a contract liability is recognized when a payment is received or a payment is due (whichever is earlier) from a custom before the group transfers the related goods or services. contract liabilities are recognized as revenue when the group performs under the contract (i.e., transfers control of the related goods or services to the customer) .

2.27 perpetual securities

perpetual securities are classified as equity if they are non-redeemable, or redeemable only at the issuer’s option, and any interest and distributions are discretionary. interest and distributions on perpetual securities classified as equity are recognized as distributions within equity.

the perpetual securities issued by the company are recognized as other equity instruments, and the perpetual securities issued by a subsidiary of the company are recognized as non-controlling interests.

p2y p-20y p2y p-10y p10y p-50y


	december 31,	december 31,
	2018	2019
within 1 year	13,598,039	12,145,985
between 1 and 2 years	140,665	229,221
between 2 and 3 years	47,654	30,713
over 3 years	222,906	178,836

	14,009,264	12,584,755


	december 31,	december 31,
	2018	2019
within 1 year	3,320,735	2,907,407
between 1 and 2 years	906,302	742,477
between 2 and 3 years	158,162	377,836
over 3 years	1,483,597	1,246,249
	5,868,796	5,273,969

less: provision for impairment	(659,261)	(714,857)

	5,209,535	4,559,112


	2017	2018	2019
fees	768	756	780
basic salaries, housing fund, other allowances and benefits in kind	1,370	1,849	4,665
pension cost	166	234	513

	2,304	2,839	5,958


	2017	2018	2019
cost of sales	241,261	265,108	294,766
general and administrative expenses	34,616	30,793	44,172

	275,877	295,901	338,938


		2019
interest on lease liabilities		487,249
depreciation charge of right-of-use assets		1,075,825
expense relating to short-term leases and other leases with remaining lease terms ended on or before december 31, 2019		63,626
expense relating to leases of low-value assets		1,800
total amount recognized in profit or loss		1,628,500

24. pledge of assets

the group has pledged various assets as collateral against certain secured borrowings as set out in note 18. as at december 31, 2018, a summary of these pledged assets was as follows:


	december 31,	december 31,
	2018	2019
property, plant and equipment (note 6)	4,168,239	4,946,338
land use rights (note 19)	328,116	—
right-of-use assets (note 19)	—	373,048
intangible assets (note 5)	772,597	757,269
notes receivable (note 13)	933,551	667,190
investments in associates (note 8)	535,610	538,787

	6,738,113	7,282,632

as at december 31, 2019, in addition to the loans and borrowings which were secured by the above assets, the current portion of long-term loans and borrowings amounting to rmb1,209 million (december 31, 2018: rmb1,354 million ), and the non-current portion of long-term loans and borrowings amounting to rmb10,265 million (december 31, 2018: rmb10,155 million ) were secured by the contractual right to charge users for electricity generated in the future.


	december 31,	december 31,
	2018	2019
equity investments designated at fair value through other comprehensive income
listed equity investments, at fair value
dongxing securities co., ltd.(東興證券)	6,441	8,853

	6,441	8,853

unlisted equity investments
sanmenxia dachang mining co., ltd. (三門峽達昌礦業有限公司)	20,926	20,905
inner mongolia ganqimaodu port development co., ltd. (內蒙古甘其毛都港務發展股份有限公司)	18,010	30,410
yinchuan economic and technological development zone investment holding co., ltd. (銀川經濟技術開發區投資控股有限公司)	19,306	20,000
china color international alumina development co., ltd. (中色國際氧化鋁開發有限公司)	9,000	6,614
luoyang jianyuan mining co., ltd. (洛陽建元礦業有限公司)	4,948	4,960
ningxia ningdian logistics transportation co., ltd. (寧夏寧電物流運輸有限公司)	1,194	1,640
chinalco innovative development investment company limited (“chinalco innovative”) (中鋁創投)	—	365,681
size industry investment fund (note)	1,650,000	1,653,251
fangchenggang chisha pier co., ltd. (防城港赤沙碼頭有限公司)	—	700
xingxian shengxing highway investment management co., ltd. (興縣盛興公路投資管理有限公司)	—	126,237

	1,723,384	2,230,398

	1,729,825	2,239,251


	december 31,	december 31,
	2018	2019
contracted, but not provided for	3,942,933	4,041,857


		2019
		lease liabilities
carrying amount at january 1,		11,010,323
new leases		82,370
contract modification		(178,575)
accretion of interest recognized during the year		487,250
payments		(3,032,106)

carrying amount at december 31,		8,369,262

analyzed into:
current portion		1,358,654
non-current portion		7,010,608


	december 31,	december 31,
	2018	2019
restricted cash	2,165,288	1,305,781

cash and cash equivalents	19,130,835	7,759,190

	21,296,123	9,064,971


	december 31,	december 31,
	2018	2019
rmb	18,026,265	7,858,867
usd	3,256,625	1,195,720
hkd	8,321	4,423
eur	371	1,943
aud	2,552	—
idr	1,989	4,018

	21,296,123	9,064,971


		date of disposal
cash consideration received		387
cash and bank balances disposed of		(123,530)

net outflows of cash and cash equivalents in respect of disposal of shandong engineering		(123,143)


	notes	2017	2018	2019
cash flows generated from operating activities
profit before income tax		3,049,175	2,264,514	2,113,801

adjustments for:
share of profits and losses of joint ventures	8(a)	(8,151)	199,452	(270,115)
share of profits and losses of associates	8(b)	165,249	(39,335)	(48,767)
depreciation of property, plant and equipment	6	6,554,842	7,499,322	7,094,716
depreciation of investment properties	7	14,105	22,229	26,559
depreciation of right-of-use assets	19	—	—	1,075,825
gain on disposal of other property, plant and equipment and land use rights, net	27	(76,739)	(101,098)	(242,960)
impairment losses on property, plant and equipment	6	16,200	46,484	259,354
impairment losses of intangible assets	5	8,134	—	1,448
amortization of intangible assets	5	275,877	295,901	338,938
amortization of land use rights	19	91,579	108,152	—
amortization of prepaid expenses included in other non-current assets		127,793	130,148	254,205
realized and unrealized losses/(gains) on futures, option and forward contracts	27	155,024	(141,459)	(50,820)
gain on previously held equity interest remeasured at acquisition-date fair value	27	(117,640)	(748,086)	—
gain on disposals and deemed disposals of subsidiaries	27	(325,022)	(3,517)	(261,187)
loss/(gains) on disposal of investments in associates	27	—	1,904	(159,514)
gain on disposal of business	27	—	—	(262,677)
gain on share of associates’ net assets	27	—	—	(295,288)
gain on disposal of and dividends from equity investments	27	(79,408)	(109,914)	(97,775)
receipt of government subsidies		(202,359)	(158,109)	(112,141)
interest income		(183,036)	—	—
finance costs	28	5,204,337	4,882,496	4,921,179
change in special reserve		58,743	6,605	(23,085)
others		(16,951)	75,381	(11,555)

		14,711,752	14,231,070	14,250,141
changes in working capital:
decrease/(increase) in inventories		(2,662,507)	1,194,454	929,027
increase in trade and notes receivables		(1,963,178)	(2,473,006)	(1,050,860)
decrease in other current assets		1,275,535	916,681	(360,639)
(increase)/decrease in restricted cash		(137,745)	530,284	859,507
(increase)/decrease in other non-current assets		(422,845)	425,739	547,287
(decrease)/increase in trade and notes payables		1,600,975	(5,559)	(1,385,081)
increase/(decrease) in other payables and accrued liabilities		1,672,658	(945,270)	(560,914)
increase in other non-current liabilities		81,878	105,386	(206,354)

cash generated from operations		14,156,523	13,979,779	13,022,114

prc corporate income taxes paid		(949,383)	(947,703)	(548,625)

net cash generated from operating activities		13,207,140	13,032,076	12,473,489

non-cash transactions of investing activities and financing activities
capital injection to an associate and joint ventures by non-cash assets		186,450	—	—
equity exchange arrangement		—	10,735,214	—
investment in a joint venture used gallium business		—	—	352,848
non-controlling shareholders forfeited sharing of profit or equity interest		—	—	149,322
endorsement of notes receivables accepted from the sale of goods or services for purchase of property, plant and equipment		372,816	2,384,046	1,504,162
acquisition of equity investments designated at fair value through other comprehensive income by exchanging equity in a subsidiary		—	—	350,911
acquisition of businesses at non-cash consideration		50,058	70,087	—
finance lease		44,342	113,601	—


	december 31,	december 31,
	2018	2019
associates	82,800	33,800
joint ventures	460,000	410,000

	542,800	443,800


		december 31,
		2018
within one year		541,541
in the second to fifth years, inclusive		1,880,058
after five years		10,567,925

		12,989,524

44. comparative amounts

certain comparative amounts have been restated as a result of the business combinations under common control as disclosed in note 38.

the comparative consolidated statements of cash flows for the years ended december 31, 2017 have been revised to reclassify the cash outflows for the purchase of non-controlling interests and business combination under common control from investing activities to financing activities in accordance with ias 7 statement of cash flows. this change did not impact the consolidated statement of financial position or consolidated statement of profit or loss and other comprehensive income for the prior periods.


	december 31,	december 31,
	2018	2019
net deferred tax assets	1,542,655	1,522,216

net deferred tax liabilities	1,812,805	1,712,739


		december 31,
		2018
operating leases:
in the mainland china, held on:
leases less than 10 years		768,153
leases between 10 and 50 years		2,753,882
leases over 50 years		784,830
		4,306,865



		2018
as at january 1,		3,604,201
additions		2,838
acquisition of subsidiaries		460,638
transfer from property, plant and equipment (note 6)		382,242
government grants		(34,174)
disposal of subsidiaries		(728)
amortization		(108,152)
as at december 31,		4,306,865

for the year ended december 31, 2018


					corporate
		primary			and other
	alumina	aluminum	energy		operating	inter-segment
	segment	segment	segment	trading	segments	elimination	total
type of goods or services
sales of goods	43,979,059	53,771,379	7,019,716	141,980,479	667,095	(67,632,024)	179,785,704
rendering of services	—	—	215,557	—	—	—	215,557
total revenue	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

geographical markets
mainland china	43,979,059	53,771,379	7,235,273	132,763,920	667,095	(67,632,024)	170,784,702
outside of mainland china	—	—	—	9,216,559	—	—	9,216,559
total revenue from contracts with customers	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

timing of revenue recognition
goods transferred at a point in time	43,979,059	53,771,379	7,019,716	141,980,479	667,095	(67,632,024)	179,785,704
services transferred over time	—	—	215,557	—	—	—	215,557
total revenue from contracts with customers	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

revenue from contracts with customers
external customers	14,586,564	41,313,516	7,036,936	116,610,176	454,069	—	180,001,261
intersegment sales	29,392,495	12,457,863	198,337	25,370,303	213,026	—	67,632,024
	43,979,059	53,771,379	7,235,273	141,980,479	667,095	-	247,633,285
intersegment adjustments and eliminations	(29,392,495)	(12,457,863)	(198,337)	(25,370,303)	(213,026)	—	(67,632,024)
total revenue	14,586,564	41,313,516	7,036,936	116,610,176	454,069	—	180,001,261

for the year ended december 31, 2019


					corporate
		primary			and other
	alumina	aluminum	energy		operating	inter-segment
	segment	segment	segment	trading	segments	elimination	total
type of goods or services
sales of goods	43,690,995	49,043,864	7,148,644	158,633,447	492,624	(69,440,031)	189,569,543
rendering of services	—	—	186,703	—	—	—	186,703
total revenue	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

geographical markets
mainland china	43,690,995	49,043,864	7,335,347	152,857,432	492,624	(69,440,031)	183,980,231
outside of mainland china	—	—	—	5,776,015	—	—	5,776,015
total revenue from contracts with customers	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

timing of revenue recognition
goods transferred at a point in time	43,690,995	49,043,864	7,148,644	158,633,447	492,624	(69,440,031)	189,569,543
services transferred over time	—	—	186,703	—	—	—	186,703
total revenue from contracts with customers	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

revenue from contracts with customers
external customers	14,117,594	37,349,482	7,099,211	130,864,398	325,561	—	189,756,246
intersegment sales	29,573,401	11,694,382	236,136	27,769,049	167,063	—	69,440,031
	43,690,995	49,043,864	7,335,347	158,633,447	492,624	—	259,196,277
intersegment adjustments and eliminations	(29,573,401)	(11,694,382)	(236,136)	(27,769,049)	(167,063)	—	(69,440,031)
total revenue	14,117,594	37,349,482	7,099,211	130,864,398	325,561	—	189,756,246


	2018	2019
revenue recognized that was included in contract liabilities at the beginning of the reporting period:
— sale of goods	1,277,125	1,543,164
— others	32,947	36,158

	1,310,072	1,579,322


	2017	2018	2019
salaries and bonus	4,205,361	4,636,972	4,939,758
housing fund	395,489	414,440	488,574
staff welfare and other expenses*	1,576,552	1,896,365	2,035,931
employment expense in relation to early retirement schemes (note 21)	767,632	447,660	210,428
employment expenses in relation to termination benefit	30,247	37,590	98,479

	6,975,281	7,433,027	7,773,170

* staff welfare and other expenses include staff welfare, staff union expenses, staff education expenses, unemployment insurance expenses, pension insurance expenses, etc.


	payable within	payable after
	five years	five year
extension options expected not to be exercised	—	—
termination options expected to be exercised	—	—


	december 31,	december 31,
	2018	2019
expiring in
2019	6,753,096	—
2020	711,878	690,646
2021	975,081	958,188
2022	1,211,002	1,211,002
2023	1,736,412	997,376
2024	—	2,353,070

	11,387,469	6,210,282

9. equity investments designated at fair value through other comprehensive income/available-for-sale financial investments


	december 31,	december 31,
	2018	2019
equity investments designated at fair value through other comprehensive income
listed equity investments, at fair value
dongxing securities co., ltd.(東興證券)	6,441	8,853

	6,441	8,853

unlisted equity investments
sanmenxia dachang mining co., ltd. (三門峽達昌礦業有限公司)	20,926	20,905
inner mongolia ganqimaodu port development co., ltd. (內蒙古甘其毛都港務發展股份有限公司)	18,010	30,410
yinchuan economic and technological development zone investment holding co., ltd. (銀川經濟技術開發區投資控股有限公司)	19,306	20,000
china color international alumina development co., ltd. (中色國際氧化鋁開發有限公司)	9,000	6,614
luoyang jianyuan mining co., ltd. (洛陽建元礦業有限公司)	4,948	4,960
ningxia ningdian logistics transportation co., ltd. (寧夏寧電物流運輸有限公司)	1,194	1,640
chinalco innovative development investment company limited (“chinalco innovative”) (中鋁創投)	—	365,681
size industry investment fund (note)	1,650,000	1,653,251
fangchenggang chisha pier co., ltd. (防城港赤沙碼頭有限公司)	—	700
xingxian shengxing highway investment management co., ltd. (興縣盛興公路投資管理有限公司)	—	126,237

	1,723,384	2,230,398

	1,729,825	2,239,251

the above equity investments were irrevocably designated at fair value through other comprehensive income as the group considers these investments to be strategic in nature.

note:

included in the unlisted investments is mainly the equity investment in size industry investment fund. in 2017, the company entered into a series of agreements with bank of communications international trust co., ltd. (“bocommtrust”) (交銀國際信託有限公司), bocommtrust asset management co., ltd.* (“bocommtrust asset”) ( 交銀國信資產管理有限公司), a subsidiary of bocommtrust, and chinalco jianxin investment fund management (beijing) company limited* (“chinalco jianxin”) (中鋁建信投資基金管理（北京）有限公司) to establish beijing chalco bocom size (“size industry investment fund“) (北京中鋁交銀四則產業投資基金管理合夥企業（有限合夥)). according to these agreements, bocommtrust acted as the prioritised limited partner and the company as the secondary limited partner of size industry investment fund, with the maximum amount of capital contribution of rmb6,700 million and rmb3,300 million, respectively. bocommtrust asset and chinalco jianxin are the general partner and the manager of size industry investment fund, respectively. the purpose of size industry investment fund is to invest in the company’s subsidiaries, associates or joint ventures in the form of debt financing.

as at december 31, 2019, size industry investment fund made four investments in three of the company’s associates and one of the company’s joint ventures amounting to rmb5,000 million in the form of debt. the company and bocommtrust contributed capital of rmb1,650 million and rmb3,350 million to size industry investment fund, respectively.

because the variable return of size industry investment fund depends on the selection of investment targets, the timing and size of the investment fund and the rate of return, which are all determined by bocommtrust under its full authority, the directors of the company are of the opinion that the company did not have control or joint control over, or significant influence over size industry investment fund. therefore, the company’s investment in size industry investment fund was accounted for as an equity investment designated at fair value through other comprehensive income.

* the english names represent the best effort made by management of the group in translating the chinese names of the companies as the companies do not have any official english names.


financial assets	december 31, 2018
	financial assets at fair value			equity
	through profit or			investments
	loss			designated at
	designated as			fair value
	such upon		financial	through other
	initial	held for	assets at	comprehensive
	recognition	trading	amortized cost	income	total
current

trade and notes receivables	—	—	8,104,017	—	8,104,017
financial assets at fair value through profit or loss	—	16,141	—	—	16,141
restricted cash and time deposits	—	—	2,165, 288		2,165, 288
cash and cash equivalents	—	—	19,130,835	—	19,130,835
financial assets included in other current assets	—	—	4,875,530	—	4,875,530

subtotal	—	16,141	34,275,670	—	34,291,811

non-current

equity investments designated at fair value through other comprehensive income	—	—	—	1,729,825	1,729,825
other non-current assets	—	—	204,718	—	204,718

subtotal	—	—	204,718	1,729,825	1,934,543

total	—	16,141	34,480,388	1,729,825	36,226,354


financial liabilities	december 31, 2018
	financial
	liabilities at fair
	value through
	profit or loss
	designated as
	such upon		financial
	initial	held for	liabilities at
	recognition	trading	amortized cost	total
current

financial liabilities at fair value through profit or loss	—	1,766	—	1,766
interest-bearing loans and borrowings	—	—	47,565,490	47,565,490
financial liabilities included in other payables and accrued liabilities (note 22)	—	—	9,286,462	9,286,462
trade and notes payables	—	—	14,009,264	14,009,264

subtotal	—	1,766	70,861,216	70,862,982

non-current

financial liabilities included in other non-current liabilities (note 21)	—	—	841,059	841,059
interest-bearing loans and borrowings	—	—	54,207,386	54,207,386

subtotal	—	—	55,048,445	55,048,445

total	—	1,766	125,909,661	125,911,427






financial assets	december 31, 2019
	financial assets at fair			equity	debt
	value through profit or			investments	instruments
	loss			designated at	at fair value
	designated as			fair value	through
	such upon		financial	through other	other
	initial	held for	assets at	comprehensive	comprehensive
	recognition	trading	amortized cost	income	income	total
current

trade receivables	—	—	4,559,112	—	—	4,559,112
notes receivable	—	—	—	—	2,834,011	2,834,011
financial assets at fair value through profit or loss*	—	3,503,175	—	—	—	3,503,175
restricted cash and time deposits	—	—	1,305,781	—	—	1,305,781
cash and cash equivalents	—	—	7,759,190	—	—	7,759,190
financial assets included in other current assets	—	—	5,723,924	—	—	5,723,924

subtotal	—	3,503,175	19,348,007	—	2,834,011	25,685,193

non-current

equity investments designated at fair value through other comprehensive income	—	—	—	2,239,251	—	2,239,251
other non-current assets	—	—	128,673	—	—	128,673

subtotal	—	—	128,673	2,239,251	—	2,367,924

total	—	3,503,175	19,476,680	2,239,251	2,834,011	28,053,117

* financial assets measured at fair value through profit or loss are mainly wealth management products, denominated in rmb, with expected rates of return depending on the interest rates and yield curves observable at commonly quoted intervals. the fair value approximates to the carrying amount of the financial assets measured at fair value through profit or loss.


financial liabilities	december 31, 2019
	financial liabilities at fair
	value through profit or
	loss
	designated as
	such upon		financial
	initial	held for	liabilities at
	recognition	trading	amortized cost	total
current

financial liabilities at fair value through profit or loss	—	805	—	805
interest-bearing loans and borrowings	—	—	42,286,604	42,286,604
financial liabilities included in other payables and accrued liabilities (note 22)	—	—	10,782,998	10,782,998
trade and notes payables	—	—	12,584,755	12,584,755

subtotal	—	805	65,654,357	65,655,162

non-current

financial liabilities included in other non-current liabilities (note 21)	—	—	1,153,487	1,153,487
interest-bearing loans and borrowings	—	—	59,243,563	59,243,563

subtotal	—	—	60,397,050	60,397,050

total	—	805	126,051,407	126,052,212


2018		ningxia energy
revenue		6,714,040
total expenses		6,555,933
profit for the year		158,107
total comprehensive income for the year		158,107

current assets		5,036,413
non-current assets		32,677,977
current liabilities		8,723,922
non-current liabilities		18,367,979

net cash flows from operating activities		2,755,612
net cash flows used in investing activities		(1,616,513)
net cash flows from financing activities		(991,998)
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		147,101


2019		ningxia energy
revenue		6,695,724
total expenses		6,314,098
profit for the year		381,626
total comprehensive income for the year		381,626

current assets		5,081,743
non-current assets		32,133,495
current liabilities		8,688,475
non-current liabilities		17,559,995

net cash flows from operating activities		3,274,683
net cash flows used in investing activities		(939,054)
net cash flows from financing activities		(2,611,597)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(275,968)


2018		guizhou huaren
revenue		4,282,882
total expenses		4,248,243
profit for the year		34,639
total comprehensive income for the year		34,639

current assets		1,169,453
non-current assets		3,038,875
current liabilities		1,381,541
non-current liabilities		1,458,995

net cash flows from operating activities		134,781
net cash flows used in investing activities		(510,243)
net cash flows from/financing activities		(115,222)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(490,684)


		guizhou
2019		huaren

revenue		5,982,665
total expenses		5,677,075
profit for the year		305,590
total comprehensive income for the year		305,590

current assets		1,034,442
non-current assets		2,650,822
current liabilities		1,164,346
non-current liabilities		1,006,360

net cash flows from operating activities		565,027
net cash flows used in investing activities		(91,319)
net cash flows from financing activities		(354,187)
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		119,521


2018		shanxi zhongrun
revenue		645,413
total expenses		644,596
profit for the year		817
total comprehensive income for the year		817

current assets		605,140
non-current assets		3,421,608
current liabilities		790,819
non-current liabilities		2,258,089

net cash flows from operating activities		(19,718)
net cash flows used in investing activities		(781,869)
net cash flows from/financing activities		(1,335,579)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(2,137,166)


2019		shanxi zhongrun
revenue		2,204,777
total expenses		2,081,652
profit for the year		123,125
total comprehensive income for the year		123,125

current assets		783,726
non-current assets		4,010,818
current liabilities		1,084,890
non-current liabilities		2,093,735

net cash flows from operating activities		234,014
net cash flows used in investing activities		(402,636)
net cash flows from financing activities		307,452
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		138,830

20. finance lease payables

these leases were classified as finance leases prior to ifrs 16 becoming effective on january 1, 2019.

at december 31, 2018, the total future minimum lease payments under finance leases and their present values were as follows:


	minimum lease	present value of minimum
	payments	lease payments
	december 31,	december 31,
	2018	2018
amounts payable:
within one year	2,518,653	2,328,358
in the second year	1,161,490	1,075,050
in the third to fifth years, inclusive	707,716	664,889
after five years	13,238	12,973

total minimum finance lease payments	4,401,097	4,081,270


future finance charges	(319,827)

total net finance lease payables (note 18)	4,081,270


portion classified as current liabilities (note 18)	(2,328,358)

non-current portion	1,752,912

during the year ended december 31, 2018, the group entered into various sale and leaseback agreements with pingan international financial leasing co., ltd. (平安國際融資租賃有限公司), tianjin far east hongxin finance leasing co., ltd. (“遠東宏信（天津）融資租賃有限公司”)，china aviation international leasing co., ltd. (“中航國際租賃有限公司”), zhaoyin leasing co., ltd.(“招銀租賃有限公司”) and chalco financial leasing co., ltd.*(“中鋁融資租賃有限公司”), which is a related party of the group, respectively, under which the group sold machineries and construction in progress and leased them back. the lease terms range from one to six years and the lease rentals are payable by installments which bear interest at prevailing lending rates.

* the english names represent the best effort made by the management of the group in translating the chinese name of the companies as they do not have any official english names.


	december 31,		december 31,
	2018		2019
total liabilities (excluding deferred tax liabilities, income tax payable and deferred government grants)	131,054,499		130,170,395
less: restricted cash, time deposits and cash and cash equivalents	(21,296,123)		(9,064,971)

net debt	109,758,376		121,105,424

total equity	67,669,619		70,725,060
add: net debt	109,758,376		121,105,424
less: non-controlling interests	(15,254,312)		(16,065,427)

total capital attributable to owners of the parent	162,173,683		175,765,057

gearing ratio	68	%	69	%


	december 31, 2018		december 31, 2019
		primary		primary
	alumina	aluminum	alumina	aluminum
qinghai branch	—	217,267	—	217,267
guangxi branch	189,419	—	189,419	—
lanzhou branch	—	1,924,259	—	1,924,259
pt. nusapati prima (“ptnp“)	15,739	—	15,998	—
shanxi huaxing	1,163,949	—	1,163,949	—

	1,369,107	2,141,526	1,369,366	2,141,526


	december 31,	december 31,
guarantors	2018	2019
long-term loans
yinyi fengdian, neimenggu, alashan (note (iv))	—	150,000
ningxia energy (note (i))	892,400	1,274,400
yinxing energy (note (i))	70,000	46,000
baotou aluminum limited company(包頭鋁業有限公司) and baotou communications investment group limited company(包頭交通投資集團有限公司) (note (ii))	1,600,000	1,250,000
the company and hangzhou jinjiang group limited company (“hangzhou jinjiang”, 杭州錦江集團有限公司) (note (iii))	246,000	10,000
hangzhou jinjiang (note (v))	—	123,500
qingzhen industrial investment co., ltd.*(“qingzhen investment”) (清鎮市工業投資有限公司) (note (v))	116,000	47,250
guizhou industrial investment group co., ltd.*(“guizhou investment”) (貴州產業投資（集團）有限責任公司) (note (v))	116,000	47,250
size industry investment fund (北京中鋁交銀四則產業投資基金管理合夥企業（有限合夥）) (note (v))	—	1,000,000

	3,040,400	3,948,400

short-term loans
china great wall aluminum co., ltd.*(“china great wall aluminum”)
(中國長城鋁業有限公司) (note(vi))	40,000	—
hangzhou jinjiang, qingzhen investment and guizhou investment (note(v))	200,000	—

	240,000	—

note:

(i)

the guarantor is a subsidiary of the company.

(ii)

the guarantors are a subsidiary of the company and a third party respectively.

(iii)

the guarantors are the company and a third party respectively.

(iv)

the guarantors are subsidiaries of the company.

(v)

the guarantor is a third party.

(vi)

the guarantor is a subsidiary of chinalco.


	2017	2018	2019
current income tax expense	844,896	755,264	720,405
deferred tax (benefit)/expense	(201,190)	67,255	(94,685)

	643,706	822,519	625,720

effective equity

place of

registered

interest held

establishment

and paid-in

principal

ownership

voting

profit

name

and operation

capital

activities

interest

power

sharing

guangxi huayin aluminum co., ltd. * (“guangxi huayin”) (廣西華銀鋁業有限公司)

prc/
mainland china

2,441,987

manufacturing


	2018	2019
as at january 1	546,102	659,261
effect of adoption of ifrs 9	112,407	—
at beginning of year	658,509	659,261

impairment loss	64,544	236,238
written off	(33,469)	(97,554)
reversal	(20,466)	(83,095)
others	(9,857)	7

as at december 31	659,261	714,857


amendments to ifrs 9		prepayment features with negative compensation
ifrs 16		leases
amendments to ias 19		plan amendment, curtailment or settlement
amendments to ias 28		long-term interests in associates and joint ventures
amendments to ifrs 10 and ias 28 (2011)		sale or contribution of assets between an investors and its associate or joint venture
ifric interpretation 23		uncertainty over income tax treatments
annual improvements 2015-2017 cycle		amendments to ifrs 3, ifrs 11, ias 12 and ias 23



amendments to ifrs 3		definition of a business1
amendments to ifrs 9, ias 39 and ifrs 7		interest rate benchmark reform1
ifrs 17		insurance contracts2
amendments to ias 1 and ias 8		definition of material1

1 effective for annual periods beginning on or after january 1, 2020

2 effective for annual periods beginning on or after january 1, 2021


	2018	2019
as at january 1,	1,438,440	1,293,841
provision made during the year (note 29)	447,660	210,428
interest costs	62,801	18,260
payment during the year	(655,060)	(680,888)

as at december 31,	1,293,841	841,641

non-current	777,305	426,737
current (note 22)	516,536	414,904

	1,293,841	841,641


	december 31,	december 31,
	2018	2019
financial assets
— deposits paid to suppliers	317,946	501,918
— dividends receivable	47,167	82,796
— receivables from disposal of businesses and assets	134,789	90,399
— entrusted loans and loans receivable from third parties	1,645,205	1,544,070
— entrusted loans and loans receivable from related parties	1,297,892	1,309,095
— receivables from disposal of properties	1,881,513	1,948,434
— interest receivables	40,936	40,936
— recoverable reimbursement for freight charges	415,232	223,884
— receivable of governments grants	129,977	517,365
— other financial assets	787,396	1,185,466
	6,698,053	7,444,363

less: impairment allowance	(1,764,068)	(1,720,439)
	4,933,985	5,723,924

advances to employees	23,744	17,207
deductible input value added tax receivables	2,189,470	2,424,004
prepaid income tax	162,103	93,093
prepayments to related parties for purchases	586,312	229,324
prepayments to suppliers for purchases and others	964,158	634,548
others	169,881	117,678
	4,095,668	3,515,854

less: provision for impairment	(4,139)	(2,715)
	4,091,529	3,513,139

total other current assets	9,025,514	9,237,063

40. other equity instruments

on october 22, 2013, a subsidiary of the company, chalco hong kong investment company limited (“chalco hong kong investment”, or the “issuer“) issued usd350 million senior perpetual securities at an initial distribution rate of 6.625% (the “2013 senior perpetual securities“). the proceeds from the issuance of the 2013 senior perpetual securities after the issuance costs amounted to usd347 million (equivalent to rmb2,123 million). the proceeds were on-lent to the company and any of its subsidiaries for general corporate use. coupon payments at 6.625% per annum on the 2013 senior perpetual securities have been made semi-annually in arrears from october 29, 2013 and may be deferred at the discretion of the group. the 2013 senior perpetual securities have no fixed maturity dates and are callable only at the group’s option on or after october 29, 2018 at their principal amounts together with any accrued, unpaid or deferred coupon distribution payments. after october 29, 2018, the coupon distribution rate will be reset to a percentage per annum equal to the sum of (a) the initial spread of 5.312 percent, (b) the u.s. treasury rate, and (c) a margin of 5.00 percent per annum. while any coupon distribution payments are unpaid or deferred, the company and chalco hong kong as guarantors, and the issuer cannot declare or pay dividends or make distributions or similar discretionary payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank.

on october 31, 2018, the group redeemed the senior perpetual security, and paid $373 million in principal and interest, approximately rmb2,592 million.

on october 27, 2015, the company issued rmb2,000 million perpetual medium-term notes with an initial distribution rate at 5.50% (the “2015 perpetual medium-term notes”). the proceeds from the issuance of the 2015 perpetual medium-term notes were rmb2,000 million. the proceeds were used for the repayment of interest-bearing loans and borrowings. coupon payments at 5.50% per annum on the 2015 perpetual medium-term notes have been made annually in arrears from october 29, 2015 and may be deferred at the discretion of the company. the 2015 perpetual medium-term notes have no fixed maturity date and are callable only at the group’s option on october 29, 2020 or any coupon distribution date after october 29, 2020 at their principal amounts together with any accrued, unpaid or deferred coupon distribution payments. the coupon distribution rate will be reset to a percentage per annum equal to the sum of (a) the initial spread of 2.61 percent, (b) the china treasury rate, and (c) a margin of maximum 300 bps every five years after october 29, 2020. while any coupon distribution payments are unpaid or deferred, the company cannot declare or pay dividends to shareholders or decrease the share capital, or make material fixed asset investments.

on october 31, 2016, chalco hong kong investment issued usd500 million senior perpetual securities with an initial distribution rate at 4.25% (the “2016 senior perpetual securities”). the proceeds from the issuance of the 2016 senior perpetual securities after the issuance costs were usd498 million (equivalent to rmb3,374 million). the proceeds were on-lent to the company and any of its subsidiaries for general corporate use. coupon payments at 4.25% per annum on the 2016 senior perpetual securities have been made semi-annually on april 29 and october 29, in arrears from november 7, 2016 and may be deferred at the discretion of the group. the first coupon payment date was april 29, 2017. the 2016 senior perpetual securities have no fixed maturity date and are callable only at the group’s option on or after november 7, 2021 at their principal amounts together with any accrued, unpaid or deferred coupon distribution payments. after november 7, 2021, the coupon distribution rate will be reset to a percentage per annum equal to the sum of (a) the initial spread of 2.931 percent, (b) the u. s. treasury rate, and (c) a margin of 5.00 percent per annum. while any coupon distribution payments are unpaid or deferred, the group, the wholly-owned subsidiaries of chalco hong kong as guarantors, and the issuer cannot declare or pay dividends or make distributions or similar discretionary payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank.

on october 19, 2018, the company issued rmb2,000 million perpetual medium-term notes with an initial distribution rate at 5.10% (the “2018 perpetual medium-term notes“). the proceeds from the issuance of the 2018 perpetual medium-term notes were rmb2,000 million. the proceeds were used for the repayment of interest-bearing loans and borrowings. coupon payments of 5.10% per annum on the 2018 perpetual medium-term notes have been made annually in arrears from october 19, 2018 and may be deferred at the discretion of the company. the 2018 perpetual medium-term notes have no fixed maturity date and are callable only at the group’s option on october 23, 2021 or any coupon distribution date after october 23, 2021 at their principal amounts together with any accrued, unpaid or deferred coupon distribution payments. the coupon distribution rate will be reset to a percentage per annum equal to the sum of (a) the initial spread of 2.61 percent, (b) the china treasury rate, and (c) a margin of maximum 500 bps every five years after october 23, 2021. while any coupon distribution payments are unpaid or deferred, the company cannot declare or pay dividends to shareholders or decrease the share capital, or make material fixed asset investments.

on november 19, 2019, the company issued rmb1,500 million perpetual medium-term notes with an initial distribution rate at 4.20% (the “2019 perpetual medium-term notes”). the proceeds from the issuance of the 2019 perpetual medium-term notes were rmb1,499 million. the proceeds were used for the repayment of interest-bearing loans and borrowings. coupon payments of 4.20% per annum on the 2019 perpetual medium-term notes have been made annually in arrears from 19 november 2019 and may be deferred at the discretion of the company. the 2019 perpetual medium-term notes have no fixed maturity date and are callable only at the group’s option on november 20 2022 or any coupon distribution date after november 20 2022 at their principal amounts together with any accrued, unpaid or deferred coupon distribution payments. the coupon distribution rate will be reset to a percentage per annum equal to the sum of (a) the initial spread of 1.31 percent, (b) the china treasury rate, and (c) a margin of maximum 300 bps every five years after november 20 2022. while any coupon distribution payments are unpaid or deferred, the company cannot declare or pay dividends to shareholders or decrease the share capital, or make material fixed asset investments.

pursuant to the terms and conditions of the 2013 senior perpetual securities, the 2016 senior perpetual securities, the 2018 perpetual medium-term notes and the 2019 perpetual medium-term notes, the group has no contractual obligations to repay their principal or to pay any coupon distributions. thus, in the opinion of the directors of the company, they do not meet the definition of financial liabilities according to ias 32 financial instruments: presentation, and are classified as equity and subsequent distributions declared will be treated as distributions to equity owners.

27. other gains, net


	2017	2018	2019
gain on disposal of subsidiaries (note 39)	325,022	3,517	261,187
gain on disposal and dividends of equity investments designated at fair value through other comprehensive income (note (1))	79,408	109,914	97,775
realized (losses)/gains on futures, forward and option contracts, net (note (2))	(23,951)	40,492	60,671
unrealized (losses)/gains on futures, forward and option contracts, net (note (2))	(131,073)	100,967	(9,851)
gain on disposal of property, plant and equipment and land use rights, net (note (3))	76,739	272,098	259,684
gain on previously held equity interests remeasured at acquisition-date fair value	117,640	748,086	—
gain on share of associates’ net assets (note 8(b)), (note (4))	—	—	295,288
(loss)/gain on disposal of investment in a joint venture/an associate (note (5))	—	(1,904)	159,514
gain on disposal of business (note (6))	—	—	262,677
others	(124,383)	(351,266)	(139,676)

	319,402	921,904	1,247,269

notes:

(1)

in 2019, the dividends of other equity instrument investments were mainly rmb98 million from size industry investment fund (2017: rmb79 million, 2018: rmb109 million).

(2)

the group does not apply hedge accounting for these futures, forward and option contracts.

(3)

during the year, the transactions contributed to the gain on disposal of electrolytic aluminum capacity quota and property, plant and equipment mainly include the following:

(a)

pursuant to the agreement entered into between shanxi huasheng co., ltd. (“shanxi huasheng”) and yixin aluminum on may 28, 2019, the electrolytic aluminum capacity quota of 170,000 tonnes was transferred from shanxi huasheng to yixin aluminum. a gain of rmb800 million from disposal of the aluminum capacity quota was recorded by the group in the current period. the transfer constitutes a related party transaction which was disclosed in note 35 (a).

(b)

the fixed assets related to the electrolytic aluminum production line of guizhou branch have been disposed of, and the company recognized the disposal loss of rmb541 million from the difference between the transfer price and carrying amount of the assets.

(4)

as disclosed in note 8 (b), the group recognized a gain of rmb204 million and a gain of rmb91 million on barging purchase of associates yunnan aluminum and yixin aluminum, respectively.

(5)

in march 2019, ningxia energy transferred, through an auction transaction, its 50% equity interest in ningxia zhongning power co., ltd. to ningxia tianyuan manganese industry group co., ltd. a gain of rmb159 million from disposal of investment in a joint venture was recorded by the group in the current year.

(6)

the company used gallium metal business to increase its investment to an associate china rare earth co., ltd. (“china rare earth”), and recognized a gain of rmb263 million.


	2017	2018	2019
gain on disposal of subsidiaries (note 39)	325,022	3,517	261,187
gain on disposal and dividends of equity investments designated at fair value through other comprehensive income (note (1))	79,408	109,914	97,775
realized (losses)/gains on futures, forward and option contracts, net (note (2))	(23,951)	40,492	60,671
unrealized (losses)/gains on futures, forward and option contracts, net (note (2))	(131,073)	100,967	(9,851)
gain on disposal of property, plant and equipment and land use rights, net (note (3))	76,739	272,098	259,684
gain on previously held equity interests remeasured at acquisition-date fair value	117,640	748,086	—
gain on share of associates’ net assets (note 8(b)), (note (4))	—	—	295,288
(loss)/gain on disposal of investment in a joint venture/an associate (note (5))	—	(1,904)	159,514
gain on disposal of business (note (6))	—	—	262,677
others	(124,383)	(351,266)	(139,676)

	319,402	921,904	1,247,269

notes:

(1)

in 2019, the dividends of other equity instrument investments were mainly rmb98 million from size industry investment fund (2017: rmb79 million, 2018: rmb109 million).

(2)

the group does not apply hedge accounting for these futures, forward and option contracts.

(3)

during the year, the transactions contributed to the gain on disposal of electrolytic aluminum capacity quota and property, plant and equipment mainly include the following:

(a)

(b)

(4)

as disclosed in note 8 (b), the group recognized a gain of rmb204 million and a gain of rmb91 million on barging purchase of associates yunnan aluminum and yixin aluminum, respectively.

(5)

(6)

the company used gallium metal business to increase its investment to an associate china rare earth co., ltd. (“china rare earth”), and recognized a gain of rmb263 million.


	december 31,	december 31,
	2018	2019
financial assets
- other long-term receivables	204,718	128,673

prepayment for mining rights	808,736	813,822
long-term prepaid expenses	667,772	648,983
deferred losses for sale and leaseback transactions (note)	1,323,221	766,548
others	1,438,198	849,817
	4,237,927	3,079,170

	4,442,645	3,207,843

note: as disclosed in note 20, the group entered into several sale and leaseback agreements which constitute finance leases during the year. the deferred losses resulted from the sale are classified as other non-current assets and were amortized over the useful lives of the assets leased back.


	december 31,	december 31,
	2018	2019
financial liabilities
-long-term payables for mining rights	788,133	1,108,075
-other financial liabilities	52,926	45,412
	841,059	1,153,487

obligations in relation to early retirement schemes (note (i))	777,305	426,737
deferred government grants (note (ii))	314,045	245,916
deferred gain relating to sales and leaseback agreements	240,661	125,707
contract liabilities	132,844	125,758
provision for rehabilitation	121,033	131,248
others	11,217	10,721
	1,597,105	1,066,087

	2,438,164	2,219,574


	december 31,	december 31,
	2018	2019
financial liabilities
-payable for capital expenditures	5,694,632	6,832,365
-accrued interest	396,286	494,341
-payables withheld as guarantees and deposits	1,102,358	1,339,722
-dividends payable by subsidiaries to non-controlling shareholders	543,207	518,360
-consideration payable for investment projects	280,856	141,740
-current portion of payables for mining rights	210,325	372,824
-others	1,058,798	1,083,646
	9,286,462	10,782,998

taxes other than income taxes payable*	831,151	732,264
accrued payroll and bonus	220,851	21,902
staff welfare payables	391,824	258,448
current portion of obligations in relation to early retirement schemes (note 21)	516,536	414,904
contribution payable for pension insurance	30,145	20,386
output value-added tax on pending	252,691	210,283
others	37,492	999
	2,280,690	1,659,186

	11,567,152	12,442,184

* taxes other than income taxes payable mainly comprise accruals for value-added tax, resource tax, city construction tax and education surcharge.

the transaction prices allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at december 31, 2018 and december 31, 2019 are as follows:


	2018	2019
within one year	1,579,322	1,638,826
more than one year	132,844	125,758

	1,712,166	1,764,584


	december 31,	december 31,
	2018	2019
property, plant and equipment (note 6)	4,168,239	4,946,338
land use rights (note 19)	328,116	—
right-of-use assets (note 19)	—	373,048
intangible assets (note 5)	772,597	757,269
notes receivable (note 13)	933,551	667,190
investments in associates (note 8)	535,610	538,787

	6,738,113	7,282,632


	2017	2018	2019
purchase of inventories in relation to trading activities	98,282,748	85,443,397	104,928,962
raw materials and consumables used, and changes in work-in-progress and finished goods	34,550,042	43,197,855	35,573,467
power and utilities	17,274,948	17,650,214	16,755,424
depreciation of right-of-use assets	—	—	1,075,825
depreciation and amortization (other than depreciation of right-of-use assets)	7,064,747	8,055,753	7,714,418
employee benefit expenses (note 29)	6,975,281	7,433,027	7,773,170
repairs and maintenance	1,716,940	1,750,194	1,867,160
transportation expenses	1,768,604	1,893,659	950,716
logistic cost	1,894,061	2,794,733	2,469,531
taxes other than income tax expense (note (i))	858,344	936,546	904,088
rental expenses for land use rights and buildings	497,356	649,640	—
packaging expenses	267,547	261,626	277,785
research and development expenses	498,234	626,873	940,828
auditors’ remuneration expense (note (ii))	31,815	30,852	33,337

note:

(i)

taxes other than income tax expense mainly comprise surcharges, land use tax, property tax and stamp duties.

(ii)

during the year ended december 31, 2019, auditors’ remuneration included audit and non-audit services provided by ernst & young, including ernst & young, hong kong and ernst & young hua ming llp, amounting to rmb27.8 million (2017:rmb23.1 million, 2018: rmb26.7 million), and services provided by other auditors.


	minimum lease	present value of minimum
	payments	lease payments
	december 31,	december 31,
	2018	2018
amounts payable:
within one year	2,518,653	2,328,358
in the second year	1,161,490	1,075,050
in the third to fifth years, inclusive	707,716	664,889
after five years	13,238	12,973

total minimum finance lease payments	4,401,097	4,081,270


future finance charges	(319,827)

total net finance lease payables (note 18)	4,081,270


portion classified as current liabilities (note 18)	(2,328,358)

non-current portion	1,752,912


	2017		2018		2019
profit before income tax	3,049,175		2,264,514		2,113,801

tax expense calculated at the statutory tax rate of 25% (2017 and 2018: 25%)	762,294		566,129		528,450
tax effects of:
preferential income tax rates applicable to certain branches and subsidiaries	(287,081)		(268,665)		(464,880)
impact of change in income tax rate	98,150		23,425		4,594
tax losses with no deferred tax assets recognized	296,728		434,103		588,267
deductible temporary differences with no deferred tax assets recognized	308,657		384,072		41,695
utilization of previously unrecognized tax losses and deductible temporary differences	(212,309)		(52,962)		(17,952)
tax incentive in relation to deduction of certain expenses	(43,846)		(62,172)		(50,921)
non-taxable income	(126,101)		(254,337)		(173,686)
expenses not deductible for tax purposes	49,564		54,959		56,448
write-off of unrecoverable deferred tax assets previously recognized	49,808		183,195		187,433
profits and losses attributable to joint ventures and associates	—		40,029		(79,720)
recognition of deferred tax assets related to deductible temporary differences and tax losses previously not recognized	(274,726)		(233,940)		(3,868)
adjustments in respect of current tax of previous periods	22,568		8,683		9,860

income tax expense	643,706		822,519		625,720

effective tax rate	21	%	36	%	30	%

the remuneration of each director and supervisor of the company for the year ended december 31, 2017 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total

executive directors:
yu dehui	—	—	—	—	—
lu dongliang	—	—	—	—	—
jiang yinggang	—	822	—	83	905
	—	822	—	83	905

non-executive directors:
ao hong	—	—	—	—	—
liu caiming	—	—	—	—	—
wang jun	150	—	—	—	150
chen lijie	206	—	—	—	206
lie-a-cheong tai-chong, david	206	—	—	—	206
hu shihai	206	—	—	—	206
	768	—	—	—	768
supervisors:
liu xiangmin	—	—	—	—	—
wang jun	—	—	—	—	—
wu zuoming	—	548	—	83	631
	—	548	—	83	631

total	768	1,370	—	166	2,304

the remuneration of each director and supervisor of the company for the year ended december 31, 2018 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total
executive directors:
yu dehui (note (i))	—	—	—	—	—
lu dongliang (note (i))	—	—	—	—	—
jiang yinggang	—	762	—	90	852
zhu runzhou	—	438	—	54	492
	—	1,200	—	144	1,344

non-executive directors:
ao hong	—	—	—	—	—
liu caiming	—	—	—	—	—
wang jun	150	—	—	—	150
chen lijie	202	—	—	—	202
lie-a-cheong tai-chong, david	202	—	—	—	202
hu shihai	202	—	—	—	202
	756	—	—	—	756
supervisors:
liu xiangmin	—	—	—	—	—
wang jun	—	—	—	—	—
wu zuoming	—	649	—	90	739
	—	649	—	90	739

total	756	1,849	—	234	2,839

the remuneration of each director and supervisor of the company for the year ended december 31, 2019 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total
executive directors:
yu dehui (note (i))	—	—	—	—	—
lu dongliang (note (i))	—	—	—	—	—
he zhihui	—	885	—	73	958
zhu runzhou	—	833	—	88	921
jiang yinggang	—	889	—	88	977
	—	2,607	—	249	2,856

non-executive directors:
ao hong	—	—	—	—	—
wang jun (note (ii))	150	—	—	—	150
chen lijie	210	—	—	—	210
lie-a-cheong tai-chong, david	210	—	—	—	210
hu shihai	210	—	—	—	210
	780	—	—	—	780
supervisors:
ye guohua (note (iii))	—	—	—	—	—
ou xiaowu (note (iii))	—	—	—	—	—
shan shulan (note (iii))	—	—	—	—	—
guan xiaoguang (note (iii))	—	710	—	88	798
yue xuguang (note (iii))	—	770	—	88	858
wu zuoming	—	578	—	88	666
	—	2,058	—	264	2,322

total	780	4,665	—	513	5,958

note:

(i)

on february 21, 2019, mr. yu dehui resigned as the chairman and an executive director of the company, and mr. lu dongliang was elected as the chairman of the sixth session of the board of the company at the 39th meeting of the sixth session of the board.

(ii)

on february 20, 2019, the appointment of mr. wang jun as the chief financial officer and the secretary to the board (company secretary) of the company was approved at the 38th meeting of the sixth session of the board of the company.

(iii)

on june 25, 2019, mr. ye guohua was elected as the chairman of the seventh session of the supervisory committee of the company at the first meeting of the seventh session of the supervisory committee of the company.

on june 25, 2019, ms. shan shulan were elected as the shareholder representative supervisors of the seventh session of the supervisory committee of the company at the 2018 annual general meeting of the company.

on june 25, 2019, mr. guan xiaoguang was elected as an employee representative supervisor of the seventh session of the supervisory committee of the company at the employees’ representatives meeting of the company.

on december 10, 2019, mr. ou xiaowu, nominated by chinalco, the controlling shareholder of the company on october 24, 2019, was elected as a shareholder representative supervisor of the seventh session of the supervisory committee of the company at the 2019 third extraordinary general meeting of the company.

on december 10, 2019, mr. yue xuguang was elected as an employee representative supervisor of the seventh session of the supervisory committee of the company at the employees’ representatives meeting of the company.


	2017	2018	2019
basic salaries, housing fund, other allowances and benefits in kind	2,460	1,305	1,670
discretionary bonuses	—	—	—
pension costs	249	165	137

	2,709	1,470	1,807


	2017	2018	2019
revenue from contracts with customers (net of value-added tax)
sales of goods	180,706,361	179,785,704	189,569,543
rendering of services	163,732	215,557	186,703
revenue from other sources
rental income	152,543	240,153	317,915

	181,022,636	180,241,414	190,074,161


	2018		2019
percentage of equity interest held by non-controlling interests

ningxia energy	29.18	%	29.18	%
shanxi zhongrun	60.00	%	56.61	%
guizhou huaren	60.00	%	60.00	%

profit for the year allocated to non-controlling interests

ningxia energy	214,479		240,504
shanxi zhongrun	291,009		69,701
guizhou huaren	20,783		198,016

dividends distributed to non-controlling interests

ningxia energy	351,979		76,469
shanxi zhongrun	200,000		—
guizhou huaren	—		—

accumulated balances of non-controlling interests at the year ended

ningxia energy	4,757,014		4,978,089
shanxi zhongrun	782,176		996,686
guizhou huaren	820,675		1,028,426


	december 31,	december 31,
	2018	2019
trade payables	8,570,102	7,858,214
notes payable	5,439,162	4,726,541

	14,009,264	12,584,755


	december 31	december 31,
	2018	2019
trade receivables	5,868,796	5,273,969
less: provision for impairment	(659,261)	(714,857)
	5,209,535	4,559,112

notes receivable	2,894,482	2,834,011

	8,104,017	7,393,123


buildings		50 years
land use rights		40-70 years


buildings		2-20 years
machinery		2-10 years
land use rights		10-50 years

523253000 756000000 679517000 600000000 224000000 500000000 32720000 20250000 0 0 800000000 800000000 114604000 387000 360387000 360000000 240258000 12000000 -728000 -52668000 -52668000 780000 780000 780000 6519000 6519000 6519000 49347000000 -139436000 -122511000 -16925000 10835000 -133346000 112407000 38502000 1938915502 170000 5 5 1600000000 1100000000 500000000 1645205000 1544070000 55969188000 132202000 38340143000 14903798000 17629045000 952878000 2019288000 970069000 45901000 -4634619000 18083069000 5867557000 65742596000 146934000 39688029000 14903798000 26054567000 952878000 2019288000 335276000 6836000 -3332371000 18787833000 5867557000 67669202000 145938000 52414890000 14903798000 15254312000 11690292000 3988000000 214520000 6588000 -2816481000 18414678000 5867557000 433346000 5000000000 5000000000 350911000 316200000 480000000 400184000 2351479000 -40029000 79720000 23100000 26700000 27800000


buildings		8 - 45 years
machinery		3 - 30 years
transportation facilities		6 - 10 years
office and other equipment		3 - 10 years

91000000 204000000 4081270000 44342000 113601000 600036000 224000000 558924000 6698053000 6698053000 283844000 4113427000 844262000 1456520000 7444363000 7444363000 752731000 4910935000 151974000 1628723000 4933985000 4933985000 5723924000 5723924000 9286462000 10782998000 841059000 1153487000 319827000 0 325022000 325022000 325022000 232026000 38397000 54599000 3517000 3517000 3517000 7671000 -4154000 261187000 261187000 261187000 118000 255317000 3014000 2738000 -1904000 -1904000 159514000 159514000 -1904000 159514000 79408000 79408000 79408000 79000000 76616000 2792000 109914000 109914000 109914000 109000000 108914000 1000000 97775000 97775000 97775000 96775000 1000000 98000000 262677000 262677000 262677000 262677000 117640000 117640000 748086000 751263000 -3177000 295288000 295288000 295288000 91000000 204000000 295288000 0.68 0.69 -34174000 -107441000 -107441000 0 1000000 395489000 414440000 488574000 529966000 448991000 2891000 4166461000 454000 0 0 0 6720610000 148673000 720439000 5851498000 47167000 82796000 6721000000 p12m p20y p30y p3y p5y p2y p5y 82000000 12000000 167431000000 5 5 5 p1y p6y


	december 31	december 31,
	2018	2019
raw materials	8,362,697	6,825,650
work-in-progress	8,684,506	7,847,599
finished goods	3,280,641	4,501,633
spare parts	879,794	842,734
packaging materials and others	63,227	57,870
	21,270,865	20,075,486

less: provision for impairment of inventories	(811,197)	(560,066)

	20,459,668	19,515,420

-1448000 -1448000 -2413098000 -1503406000 64544000 236238000 130000 2927000 10735214000 -10735214000 10735214000 0 149322000 -1413289000 -980725000 -432564000 -980725000 -3765000 -218000 -3547000 -218000 149322000 -149322000 149322000 -96568000 -96568000 38189000 -38189000 38189000 8628545000 -87660000 -193345000 7263251000 1646299000 8212670000 -961000 622995000 474548000 7157695000 -41607000 1353000 1353000 416000 416000 -5218000 658000 -4888000 2837000 7811000 -8746000 -9857000 7000 -90644000 90644000 162120000 -162120000 -77511000 77511000 -77511000 -3696000 -3696000 -3696000 2051000 2051000 2051000 936000 936000 936000 -11166000 -11166000 -11166000 527385000 6090000 521295000 487249000 487249000 12719721000 1887824000 10831897000 1887824000 837621000 78271000 759350000 78271000 711114000 4144000 706970000 4144000 2040000 2040000 2040000 69885000 69885000 69885000 277771000 277771000 -23715000 -23715000 13185034000 13185034000 37965385000 37965385000 -2323105000 -2323105000 -6921860000 -6921860000 2200000 2200000 2200000 -525216000 -484068000 -41148000 63370000 63370000 -21773000 -21773000 4373033000 9857187000 225934000 143415000 141991000 117587000 65430000 24425000 41005000 4000000000 7519283000 1607905000 230961000 117586000 58973482000 -24431939000 -171481000 -517269000 -10693678000 -23159115000 67632024000 29392495000 213026000 198337000 12457863000 25370303000 -29392495000 -213026000 -198337000 -12457863000 -25370303000 69440031000 -29573401000 -167063000 -236136000 -11694382000 -27769049000 -29573401000 -167063000 -236136000 -11694382000 -27769049000 862214000 352848000 10742000 10425000 535610000 536000000 538787000 539000000 2441987000 2118874715 1988000000 1988000000 1988000000 1499104000 1499104000 1499104000 768000 768000 206000 206000 206000 768000 150000 768000 756000 756000 202000 202000 202000 756000 150000 756000 780000 780000 210000 210000 210000 780000 150000 780000 0 0 0 3604201000 4306865000 4306865000 4306865000 784830000 2753882000 768153000 -4306865000 328116000 20722000 31833000 20195000 109320000 348901000 -59819000 0.0370 0.0450 1608000000 131054499000 130170395000 1894061000 2794733000 2469531000 60316871000 1395970000 1595311000 1097003000 897820000 2725612000 1986418000 10094861000 10094861000 396727000 63941904000 1997097000 1998604000 1397319000 1982228000 1596192000 1098218000 999462000 898315000 2776981000 1992339000 16736755000 16736755000 42553000000 35029000000 788133000 1108075000 p5y 12929705000 6929053000 4081270000 4081270000 4081270000 12973000 1075050000 664889000 2328358000 4401097000 13238000 1161490000 707716000 2518653000 12989524000 12989524000 10567925000 1880058000 541541000 36024000 -490684000 -2137166000 -434000 123143000 50058000 70087000 350911000 186450000 10735214000 138586090000 137939763000 646327000 150466772000 147798239000 2668533000 46140740000 46140740000 3040400000 3040400000 16593587000 46121547000 19193000 12608727000 30491613000 18784797000 7377956000 3384400000 1600000000 246000000 892400000 70000000 116000000 16586390000 18777275000 7375557000 3382325000 7197000 7522000 2399000 2075000 116000000 38835887000 38835887000 3948400000 3948400000 9159028000 38818493000 17394000 13254721000 21632766000 18811397000 7525775000 3339687000 1250000000 10000000 1274400000 46000000 47250000 150000000 9151573000 18806428000 7523290000 3337202000 7455000 4969000 2485000 2485000 123500000 47250000 1000000000 314045000 245916000 1323221000 766548000 1752912000 777305000 777305000 426737000 426737000 808736000 813822000 372816000 2384046000 1504162000 2894482000 2834011000 934000000 933551000 667000000 667190000 3 1 1 2 4 2 1 1 1 1 7 5 9 5 3 7 1 4 1 15 12 14 3 1 3 2 2 8 3 314050688 1 1 1 2244164000 2002934000 2284994000 830615000 29701000 1424678000 2033443000 482195000 47743000 1503505000 4095668000 6639593000 1098455000 3744612000 1796526000 3515854000 7444363000 1632766000 4052681000 1758916000 4091529000 3513139000 2934000 312840000 3978000 200000 11095000 418000 353655000 215575000 18608000 411000 608000 102396000 2561000 2229000 0.05312 0.0261 0.02931 0.0261 0.0131 110000 129282 219249 0.0500 0.0300 0.0500 0.0500 0.0300 138670000 138670000 p5y p5y p5y 1058798000 1083646000 52926000 45412000 -124383000 -351266000 -139676000 59000000 111845000 111845000 1438198000 849817000 60336000 1597105000 1066087000 11217000 10721000 69640000 65901000 -239998000 10641000 186782000 66042000 1323000 51595000 38415000 345562000 37789000 52114000 1542000 2065000 686024000 -34536000 -33404000 2105913000 17128000 1930947000 148978000 8860000 1981405000 17056000 1810514000 80012000 73823000 37492000 999000 32947000 36158000 252691000 210283000



	december 31, 2018	december 31, 2019
cash and cash equivalents deposited with
a subsidiary of chinalco *	9,101,541	3,285,093

trade and notes receivables
chinalco and its subsidiaries	1,281,395	1,054,168
associates of chinalco	18,655	6,034
joint ventures	819,878	788,183
associates	6,615	25
	2,126,543	1,848,410

provision for impairment of receivables	(77,657)	(17,815)

	2,048,886	1,830,595

* on august 26, 2011, the company entered into an agreement with chinalco finance, pursuant to which, chinalco finance agreed to provide deposit services, credit services and other financial services to the group. on august 24, 2012, april 28, 2015 and october 26, 2017, the company renewed the financial service agreement with chinalco finance with a validation term of three years ending on october 26, 2020.


	december 31,	december 31,
	2018	2019
other current assets
chinalco and its subsidiaries	830,615	482,195
joint ventures	1,424,678	1,503,505
associates	29,701	47,743
	2,284,994	2,033,443

provision for impairment of other current assets	(40,830)	(30,509)

	2,244,164	2,002,934

other non-current assets
associates	111,845	111,845

interest-bearing loans and borrowings
subsidiaries of chinalco (including lease liabilities)	4,373,033	9,857,187

trade and notes payables
chinalco and its subsidiaries	404,278	334,840
joint ventures	631,570	527,744
associates	13,033	9,789
associates of chinalco	4,012	917

	1,052,893	873,290

	december 31,	december 31,
	2018	2019
other payables and accrued liabilities
chinalco and its subsidiaries	1,930,947	1,810,514
associates of chinalco	17,128	17,056
associates	148,978	80,012
joint ventures	8,860	73,823

	2,105,913	1,981,405

	december 31,	december 31,
	2018	2019
contract liabilities
chinalco and its subsidiaries	22,307	29,210
associates of chinalco	20	—
associates	12,451	223
joint ventures	94,367	56,010

	129,145	85,443

6000000 267547000 261626000 277785000 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 1413289000 3765000 2462250000 3915404000 3915404000 3915404000 6034000 867000 0.03 0.50 0.50 p5y p5y 0.15 0.15 0.15 162103000 162103000 93093000 93093000 586312000 229324000 7804083000 2323105000 6921860000 994263000 198000000 -700000 -101000 5631298000 6558000 23797000 3418000 5824000 124536000 83762879000 76899591000 76899591000 76899591000 40669197000 40669197000 5841765000 40669197000 1000036000 1204843000 1204843000 1204843000 2123000000 347000000 3374000000 498000000 1988000000 1499104000 215333000 30816000 367867000 52841000 1303221 578178 631750

25. profit before income tax

an analysis of profit before income tax is as follows:


	2017	2018	2019
purchase of inventories in relation to trading activities	98,282,748	85,443,397	104,928,962
raw materials and consumables used, and changes in work-in-progress and finished goods	34,550,042	43,197,855	35,573,467
power and utilities	17,274,948	17,650,214	16,755,424
depreciation of right-of-use assets	—	—	1,075,825
depreciation and amortization (other than depreciation of right-of-use assets)	7,064,747	8,055,753	7,714,418
employee benefit expenses (note 29)	6,975,281	7,433,027	7,773,170
repairs and maintenance	1,716,940	1,750,194	1,867,160
transportation expenses	1,768,604	1,893,659	950,716
logistic cost	1,894,061	2,794,733	2,469,531
taxes other than income tax expense (note (i))	858,344	936,546	904,088
rental expenses for land use rights and buildings	497,356	649,640	—
packaging expenses	267,547	261,626	277,785
research and development expenses	498,234	626,873	940,828
auditors’ remuneration expense (note (ii))	31,815	30,852	33,337

note:

(i)

taxes other than income tax expense mainly comprise surcharges, land use tax, property tax and stamp duties.

(ii)

99528506000 509595000 38700678000 12315564000 47844432000 158237000 0.3300 0.40 0.60 0.5 0.51 0.194852 0.33 4139000 2715000 40830000 30509000 3500000000 502744000 59215000 2838000 46000 -23951000 -23951000 3398000 43749000 1585000 -47730000 -24953000 40492000 40492000 -716000 -9248000 2855000 47601000 60671000 60671000 60671000 -155024000 141459000 50820000 202359000 158109000 112141000 129977000 517365000 1881513000 1948434000 134789000 90399000 4081270000 112000000 10678000000 -2011000000 415232000 223884000 800000000 500000000 1200000000 2245510000 1384398000 849940000 1000000000 4028859000 4052847000 4279601000 214858000 5071235000 1731111000 1030000000 964291000 5025800000 968300000 588182000 1000000000 1200000000 1641750000 1850000000 3204900000 p3y p3y p3y 2584682000 2584682000 2175133000 2175133000 2895910000 2417758000 1438440000 1293841000 1293841000 1293841000 841641000 841641000 767632000 447660000 447660000 210428000 210428000 62801000 18260000 -655060000 -680888000 -1848000000 1277125000 1543164000 1731000 26290000 -20466000 -83095000 373048000 26318000 100538864000 82192575000 106542875000 13187000000 3292000000 6680000000 23158952000 16561000000 4376000000 13517000000 34454943000 13329000000 356000000 10689000000 24374356000


	gross carrying	expected credit
as at 31, december 2018	amount	losses
stage 1 – 12 months expected credit loss	1,098,455	—
stage 2 – life time expected credit loss	3,744,612	88,974
stage 3 – life time expected credit loss with credit-impaired	1,796,526	1,675,094

	6,639,593	1,764,068


as at december 31, 2019	gross carrying amount	expected credit losses
stage 1 – 12 months expected credit loss	1,632,766	—
stage 2 – life time expected credit loss	4,052,681	82,061
stage 3 – life time expected credit loss with credit impaired	1,758,916	1,638,378
	7,444,363	1,720,439


		rmb'000
cash consideration		—
cash and bank balances acquired		673,587

net inflow of cash and cash equivalents included in cash flows from investing activities		673,587


		rmb’000
cash consideration		—
cash and bank balances acquired		255,152

net inflow of cash and cash equivalents included in cash flows from investing activities		255,152


		rmb’000
cash consideration		(2,665,205)
cash and bank balances acquired		81,344

net outflow of cash and cash equivalents included in cash flows from investing activities		(2,583,861)


		rmb’000
cash consideration		—
cash and bank balances acquired		2,173,062

net inflow of cash and cash equivalents included in cash flows from investing activities		2,173,062


		january 1, 2018
initial investment cost		480,000

share of loss accumulated under the equity method		(18,347)

book value of the investment in 40% equity of guizhou huaren on the acquisition date		461,653

fair value of the investment in 40% equity of guizhou huaren on the acquisition date (note)		529,966

gain on previously held equity interest remeasured at acquisition-date fair value		68,313


		august 31, 2017
initial investment cost		316,200

investment income recognized under the equity method		(494)

the book value of the investment in 51% equity of yinxing power on the merger date		315,706

the fair value of the investment in 51% equity of yinxing power on the merger date (note)		433,346

gain on previously held equity interest remeasured at acquisition-date fair value		117,640


		december 6, 2018
initial investment cost		2,351,479

share of loss accumulated under the equity method		(77,309)

share of changes in reserves under the equity method		11,166

cash dividends declared		(236,556)

book value of the investment in 50% equity of shanxi huaxing on the acquisition date		2,048,780

fair value of the investment in 50% equity of shanxi huaxing on the acquisition date (note)		2,665,205

gain on previously held equity interest remeasured at acquisition-date fair value		616,425

note: the fair value was determined by the valuation report issued by an independent qualified valuer.


		january 1, 2018
initial investment cost		400,184

share of loss accumulated under the equity method		(6,553)

book value of the investment in 40% equity of shanxi zhongrun on the acquisition date		393,631

fair value of the investment in 40% equity of shanxi zhongrun on the acquisition date (note)		448,991

gain on previously held equity interest remeasured at acquisition-date fair value		55,360

note: the fair value was determined by the valuation report issued by an independent qualified valuer.


	2018	2019
as at january 1	457,252	811,197
provision for impairment of inventories	2,413,098	1,503,406
disposal of subsidiary	—	(772)
reversal arising from increase in net realizable value	(165,510)	(340,134)
written off upon sales of inventories	(1,893,643)	(1,413,631)

as at december 31	811,197	560,066


		2019
within operating activities		65,426
within financing activities		3,032,106
		3,097,532


		rmb’000
revenue		4,282,882

profit for the period		34,639

net cash out flows		(490,684)


		rmb’000
revenue		578,117
profit for the period		96,756
net cash flows		36,024


		rmb’000
revenue		415,509
profit for the period		110,917
net cash out flows		(434)

the operating results and cash flows of shanxi zhongrun since the acquisition date to december 31, 2018 are as follows:


		rmb’000
revenue		645,214
profit for the period		817
net cash out flows		(2,137,166)

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0.36

0.3

0.087

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2.30 borrowing costs

borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalized as part of the cost of those assets. the capitalisation of such borrowing costs ceases when 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 capitalized. all other borrowing costs are expensed in the period in which they are incurred. borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.31 dividend distribution

dividend distribution to the company’s shareholders is recognized as a liability in the group’s and company’s financial statements in the period in which the dividends are approved by the company’s shareholders in a general meeting.

2.25 employee benefits

employee benefits mainly include salaries, bonuses, allowances and subsidies, pension insurance, social insurance and housing funds, labour union fees, employees’ education fees and other expenses related to the employees for their services. the group recognizes employee benefits as liabilities during the accounting period when employees rendered the services and allocates the related cost of assets and expenses based on different beneficiaries.

(a) bonus plans

the expected cost of bonus plans is recognized as a liability when the group has a present legal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligation can be made.

(b) retirement benefit obligations

the group primarily pays contributions on a monthly basis to participate in a pension plan organized by the relevant municipal and provincial governments in the prc. in 2019, the group made monthly contributions at the rate of 17% (2018: 20%) of the qualified employees’ salaries. the municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired employees payable under these plans. the group has no legal or constructive obligations for further contributions if the fund does not hold sufficient assets to pay all employees the benefit relating to their current and past services.

the group provides other social insurance and housing funds to the qualified employees in the prc based on certain percentages of their salaries. these percentages are not to exceed the upper limits of the percentages prescribed by the ministry of human resources and social security of the prc. these benefits are paid to social security organisations and the amounts are expensed as incurred. the group has no legal or constructive obligations for further contributions if the fund does not hold sufficient assets to pay all employees the benefit relating to their current and past services.

(d) termination benefit obligations and early retirement benefit obligations

termination and early retirement benefit obligations are payable when employment is terminated by the group before the normal retirement date, or whenever an employee accepts voluntary redundancy and/or early retirement in exchange for these benefits. the group recognizes termination and early retirement benefit obligations when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy and/or early retirement. the specific terms vary among the terminated and early retired employees depending on various factors including position, length of service and district of the employees concerned. benefits falling due for more than 12 months after the end of the reporting period are discounted to their present values.

2.7 fair value measurement

the group measures its derivative financial instruments and equity investments at fair value at the end of each reporting period.

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. the fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability.

the principal or the most advantageous market must be accessible by the group. the fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

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.

the group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

all assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

level 1 — based on quoted (unadjusted) prices in active markets for identical assets or liabilities

level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly

level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

for assets and liabilities that are recognized in the financial statements on a recurring basis, the group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

2.17 investments and other financial assets

ifrs 9 financial instruments replaced ias 39 financial instruments: recognition and measurement for annual periods beginning on or after january 1, 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement, impairment and hedge accounting. the group has recognized the transition adjustments against the applicable opening balances in equity at january 1, 2018. therefore, the comparative information was not restated and continues to be reported under ias 39.

initial recognition and measurement

financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.

the classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the group’s business model for managing them. with the exception of trade receivables that do not contain a significant financing component or for which the group has applied the practical expedient of not adjusting the effect of a significant financing component, the group initially measures a financial asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. trade receivables that do not contain a significant financing component or for which the group has applied the practical expedient are measured at the transaction price determined under ifrs 15 in accordance with the policies set out for “revenue recognition” below.

in order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“sppi”) on the principal amount outstanding. financial assets with cash flows that are not sppi are classified and measured at fair value through profit or loss, irrespective of the business model.

the group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. the business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.

all regular way purchases and sales of financial assets are recognized on the trade date, that is, the date that the group commits to purchase or sell the asset. regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

subsequent measurement

the subsequent measurement of financial assets depends on their classification as follows:

financial assets at amortized cost (debt instruments)

financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

financial assets at fair value through other comprehensive income (debt instruments)

for debt investments at fair value through other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in profit or loss and computed in the same manner as for financial assets measured at amortized cost. the remaining fair value changes are recognized in other comprehensive income. upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled to profit or loss.

financial assets designated at fair value through other comprehensive income (equity investments)

upon initial recognition, the group can elect to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income when they meet the definition of equity under ias 32 financial instruments: presentation and are not held for trading. the classification is determined on an instrument-by-instrument basis.

gains and losses on these financial assets are never recycled to profit or loss. dividends are recognized as other income in profit or loss when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the group and the amount of the dividend can be measured reliably, except when the group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in other comprehensive income. equity investments designated at fair value through other comprehensive income are not subject to impairment assessment.

financial assets at fair value through profit or loss

financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in profit or loss.

this category includes derivative instruments, wealth management products and equity investments which the group had not irrevocably elected to classify at fair value through other comprehensive income. dividends on equity investments classified as financial assets at fair value through profit or loss are also recognized as other gains in profit or loss when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the group and the amount of the dividend can be measured reliably.

a derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

a derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. the financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through profit or loss.

derecognition of financial assets

a financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the group’s consolidated statement of financial position) when:

the rights to receive cash flows from the asset have expired; or

the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the group has transferred substantially all the risks and rewards of the asset, or (b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

when the group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. when it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the group continues to recognize the transferred asset to the extent of the group’s continuing involvement. in that case, the group also recognizes an associated liability. the transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the group has retained.

continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the group could be required to repay.

impairment of financial assets

the group recognizes an allowance for expected credit losses (“ecls”) for all debt instruments not held at fair value through profit or loss. ecls are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the group expects to receive, discounted at an approximation of the original effective interest rate. the ecl at december 31, 2019 was estimated based on a range of forecast economic conditions as at that date. since early january 2020, the coronavirus outbreak has spread across mainland china and beyond, causing disruption to business and economic activity. the impact on gdp and other key indicators have been considered when determining the severity and likelihood of downside economic scenarios that are used to estimate ecl under ifrs 9 in 2020.

general approach

ecls are recognized in two stages. for credit exposures for which there has not been a significant increase in credit risk since initial recognition, ecls are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ecl). for those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ecl).

at each reporting date, the group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. when making the assessment, the group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.

the group considers a financial asset to be in default when internal or external information indicates that the group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the group. a financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

debt investments at fair value through other comprehensive income and financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ecls except for trade receivables and contract assets which apply the simplified approach as detailed below.

stage 1 - financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ecls

stage 2 - financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ecls

stage 3 - financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ecls

simplified approach

for trade receivables and contract assets that do not contain a significant financing component or when the group applies the practical expedient of not adjusting the effect of a significant financing component, the group applies the simplified approach in calculating ecls. under the simplified approach, the group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ecls at each reporting date. the group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

for trade receivables and contract assets that contain a significant financial component and lease receivables, the group chooses as its accounting policy to adopt the simplified approach in calculating ecls with policies as described above.

2.18 financial liabilities

initial recognition and measurement

financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

all financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

the group’s financial liabilities include trade and other payables, derivative financial instruments and interest-bearing bank and other borrowings.

subsequent measurement

the subsequent measurement of financial liabilities depends on their classification as follows:

financial liabilities at fair value through profit or loss

financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. this category also includes derivative financial instruments entered into by the group that are not designated as hedging instruments in hedge relationships as defined by ifrs 9. separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. gains or losses on liabilities held for trading are recognized in profit or loss. the net fair value gain or loss recognized in profit or loss does not include any interest charged on these financial liabilities.

financial liabilities at amortized cost (loans and borrowings)

after initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate amortization process.

amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. the effective interest rate amortization is included in finance costs in profit or loss.

financial guarantee contracts

financial guarantee contracts issued by the group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. a financial guarantee contract is recognized initially as a liability at its fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. subsequent to initial recognition, the group measures the financial guarantee contracts at the higher of: (i) the ecl allowance determined in accordance with the policy as set out in “impairment of financial assets”; and (ii) the amount initially recognized less, when appropriate, the cumulative amount of income recognized.

derecognition of financial liabilities

a financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires. when an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in profit or loss.

2.9 foreign currency translation

functional and presentation currency

items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). the consolidated financial statements are presented in rmb, which is the company’s functional currency and the group’s presentation currency.

transactions and balances

foreign currency transactions recorded by the entities in the group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period. differences arising on settlement or translation of monetary items are recognized in profit or loss.

non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. the gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item.

in determining the exchange rate on initial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of initial transaction is the date on which the group initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. if there are multiple payments or receipts in advance, the group determines the transaction date for each payment or receipt of the advance consideration.

group companies

the results and financial positions of all the group entities (none of which has the currency of a hyper-inflationary economy) that has a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)

assets and liabilities in each statement of financial position presented are translated at the closing rates at the end of the reporting period;

(ii)

income and expenses in each statement of profit and loss and other comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rates at the dates of the transactions); and

(iii)

all resulting exchange differences are recognized in other comprehensive income. upon disposal of a foreign operation, the other comprehensive income related to the foreign operation is reclassified to profit or loss.

goodwill and fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. exchange differences arising are recognized in other comprehensive income.

2.24 government grants

in 2018, the management of the group performed an analysis on the nature of the group's government grants. after reassessing the gross vs. net presentation policy, management considered that presenting government grants in the net method can provide reliable and more relevant information about the effects of transactions to the users of the financial statements. as such, the company proposed a voluntary change in the accounting policy.

up to the year of 2017, the group recognized and measured government grants according to the gross method: asset-related government grants are recognized when the government document designates that the government grants are used for constructing or forming long-term assets. asset-related government grants are recognized as deferred income and are amortized evenly in profit or loss over the useful lives of the related assets. income-related government grants that are used to compensate subsequent related expenses or losses of the group are recognized as deferred income and recorded in profit or loss when the related expenses or losses are incurred. when the grants are used to compensate expenses or losses that were already incurred, they are directly recognized in profit or loss for the current period.

after the voluntary change in the accounting policy, the group recognized government grants according to the net method. for asset related government grants, had the asset already existed upon receiving the government grant, the group directly deducted the grant amount from the book value of the assets related to the government grant instead of recording the government grants as deferred income. for government grants related to income and expenses already incurred by the group, which are specific to compensate certain cost and expenses, the group would directly offset the grant amount against the related cost or expense.

government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. when the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed.

asset-related government grants are recognized when the government document designates that the government grants are used for constructing or forming long-term assets. if the government document is inexplicit, the group should make a judgement based on the basic conditions to obtain the government grants, and recognizes them as asset-related government grants if the conditions are to construct or to form long-term assets. otherwise, the government grants should be income-related.

for asset-related government grants that is related to long lived assets that already exist at the time of recognising the government grant, the grant is deducted in calculating the carrying amount of the asset. the grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense. if the asset is not yet purchased or constructed at the time of recognising the government grant, the grant is recognized as deferred income and will be deducted from the cost of the asset once the asset is recognized.

income-related government grants that are specific to compensate expenses or costs that have already incurred, they are directly recognized in profit or loss for the current period as deduction of the related expenses or costs. if the income-related government grants are specific to compensate future expenses or costs of the group, they are recognized as deferred income and will be released to profit or loss when the related expenses or costs are incurred.

2.8 impairment of non-financial assets

where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, deferred tax assets, non-current assets classified as held for sales and goodwill or intangible assets with indefinite useful life), the asset's recoverable amount is estimated. an asset's recoverable amount is the higher of the asset's or cash-generating unit's value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

an impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. 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. an impairment loss is charged to profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset.

an assessment is made at the end of each reporting period as to whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. if such an indication exists, the recoverable amount is estimated. a previously recognized impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortization) had no impairment loss been recognized for the asset in prior years. a reversal of such an impairment loss is credited to profit or loss in the period in which it arises.

2.26 income tax

income tax comprises current and deferred tax. income tax relating to items recognized outside profit or loss is recognized outside profit or loss, either in other comprehensive income or directly in equity.

current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the group operates.

deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

deferred tax liabilities are recognized for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be utilized, except:

when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

in respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

the carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

deferred tax assets and deferred tax liabilities are offset if and only if the group has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

2.13 intangible assets (other than goodwill)

intangible assets acquired separately are measured on initial recognition at cost. the cost of intangible assets acquired in a business combination is the fair value at the date of acquisition. the useful lives of intangible assets are assessed to be either finite or indefinite. intangible assets with finite lives are subsequently amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. the amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

(a) mining rights and mineral exploration rights

the group’s mineral exploration rights and mining rights relate to coal, bauxite and other mines.

(i) recognition

except for mineral exploration rights and mining rights acquired in a business combination, mineral exploration rights and mining rights are initially recorded at cost which includes the acquisition consideration, qualifying exploration and other direct costs. the mineral exploration rights are stated at cost less any impairment, and the mining rights are stated at cost less any amortization and impairment.

(ii) reclassification

mineral exploration rights are converted to mining rights when technical feasibility and commercial viability of extracting a mineral resource are demonstrable, and are subject to amortization when commercial production has commenced.

the group assesses the stage of each mine under construction to determine when a mine moves into the production stage. the criteria used to assess the start date are determined based on the unique nature of each mine construction project. the group considers various relevant criteria, such as completion of a reasonable period of testing of the mine and equipment, ability to produce in saleable form (within specifications) and ability to sustain ongoing production to assess when a mine is substantially complete and ready for its intended use.

(iii) amortization

amortization of bauxite and other mining rights (except for coal mining rights) is provided on a straight-line basis according to the shorter of the expiration date of the mining certificate and the mineable period of natural resources. estimated mineable periods of the majority of the mining rights range from 3 to 30 years.

coal mining rights are amortized on a unit-of-production basis over the economically recoverable reserves evaluated based on the reserves estimated in accordance with the standards in the solid mineral resource/reserve classification of the prc (gb/t17766‑1999) of the mine concerned.

(iv) impairment

an impairment review is performed when there are indicators that the carrying amount of the mineral exploration rights and mining rights may exceed their recoverable amounts. to the extent that this occurs, the excess is fully provided as an impairment loss.

(b) computer software

acquired computer software licences are capitalized on the basis of the costs incurred to acquire and bring to use specific software. these costs are amortized over their estimated useful lives, which do not exceed 10 years. costs associated with maintaining computer software programmes are recognized as an expense as incurred.

electrolytic aluminum production quota are initially recorded at cost and subsequently states at cost less any amortization and impairment. amortization is provided on a straight-line basis according to expected production period.

(d) other intangible assets

other intangible assets mainly include profit-sharing rights of maochang mine, which are initially recorded at costs incurred to acquire the specific right. amortization is calculated on the straight-line basis over its estimated useful life. the estimated useful live of profit-sharing rights of maochang mine is 22.5 years.

for intangible assets with finite useful life, the estimated useful lives and amortization method are reviewed annually at the end of each reporting period and adjusted when necessary.

2.4 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.

a joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

the group’s investments in associates and joint ventures are stated in the consolidated statement of financial position at the group’s share of net assets under the equity method of accounting, less any impairment losses. adjustments are made to bring into line any dissimilar accounting policies that may exist. the group’s share of the post-acquisition results and other comprehensive income of associates and joint ventures is included in the consolidated statement of profit or loss and other comprehensive income. in addition, when there has been a change recognized directly in the equity of the associate or joint venture, the group recognizes its share of any changes, when applicable, in the consolidated statement of changes in equity. unrealized gains and losses resulting from transactions between the group and its associates or joint ventures are eliminated to the extent of the group’s investments in the associates or joint ventures, except where unrealized losses provide evidence of an impairment of the assets transferred. goodwill arising from the acquisition of associates or joint ventures is included as part of the group’s investments in associates or joint ventures.

after application of the equity method, the group determine whether it is necessary to recognize an impairment loss on its investment in its associate and joint venture in the profit or loss. at each reporting date, the group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. if there is such evidence, the group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, then recognizes the loss in the profit or loss.

if an investment in an associate becomes an investment in a joint venture or vice versa, the retained interest is not remeasured. instead, the investment continues to be accounted for under the equity method. in all other cases, upon loss of significant influence over the associate or joint control over the joint venture, the group measures and recognizes any retained investment at its fair value. any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.

when an investment in an associate or a joint venture is classified as held for sale, it is accounted for in accordance with ifrs 5 non-current assets held for sale and discontinued operations.

2.11 investment properties

investment properties are interests in land and buildings (including the leasehold property held as a right-of-use asset (2018: leasehold property under an operating lease) which would otherwise meet the definition of an investment property) held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. such properties are measured initially at cost, including transaction costs. after initial recognition, the group uses the cost methods to measure all of its investment properties.

depreciation is calculated on the straight-line basis to write off the cost to investment property's residual value over its estimated useful life. the estimated useful lives are as follows:


buildings		50 years
land use rights		40-70 years

the carrying amounts of investment properties measured using the cost method are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable.

any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of the retirement or disposal.

2.15 leases (applicable from january 1, 2019)

the group assesses at contract inception whether a contract is, or contains, a lease. a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

group as a lessee

the group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. the group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

(a)right-of-use assets

right-of-use assets are recognized at the commencement date of the lease (that is the date the underlying asset is available for use). right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. the cost of right-of-us assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payment made at or before the commencement date less any lease incentives received. right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:


buildings		2-20 years
machinery		2-10 years
land use rights		10-50 years

if ownership of the leased asset transfers to the group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

(b)lease liabilities

lease liabilities are recognized at the commencement date of the lease at the present value of lease payments to be made over the lease term. the lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. the lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the group and payments of penalties for termination of a lease, if the lease term reflects the group exercising the option to terminate. the variable lease payments that do not depend on an index or a rate are recognized as an expense in the period in which the event or condition that triggers the payment occurs.

in calculating the present value of lease payments, the group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. after the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. in addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying asset.

the group’s lease liabilities are included in interest-bearing bank and other borrowings.

(c)short-term leases and leases of low-value assets

the group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (that is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). it also applies the recognition exemption for leases of low-value assets to leases of office equipment that are considered to be of low value (i.e. below rmb30,000).

lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.

group as a lessor

when the group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease.

leases in which the group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. when a contract contains lease and non-lease components, the group allocates the consideration in the contract to each component on a relative stand-alone selling price basis. rental income is accounted for on a straight-line basis over the lease terms and is included in revenue in profit or loss due to its operating nature. initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. contingent rents are recognized as revenue in the period in which they are earned.

leases that transfer substantially all the risks and rewards incidental to ownership of an underlying assets to the lessee, are accounted for as finance leases. at the commencement date, the cost of the leased asset is capitalized at the present value of the minimum lease payments and related payments (including the initial direct costs), and presented as a receivable at an amount equal to the net investment in the lease. the finance costs of such leases are charged to profit or loss so as to provide a constant periodic rate of charge over the lease terms.

2.16 leases (applicable before january 1, 2019)

leases that transfer substantially all the rewards and risks of ownership of assets to the group, other than legal title, are accounted for as finance leases. at the inception of a finance lease, the cost of the leased asset is capitalized at the present value of the minimum lease payments and recorded together with the obligation, excluding the interest element, to reflect the purchase and financing. assets held under capitalized finance leases, including prepaid land lease payments under finance leases, are included in property, plant and equipment, and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. the finance costs of such leases are charged to profit or loss so as to provide a constant periodic rate of charge over the lease terms.

assets acquired through hire purchase contracts of a financing nature are accounted for as finance leases, but are depreciated over their estimated useful lives.

leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. where the group is the lessor, assets leased by the group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to profit or loss on the straight-line basis over the lease terms. where the group is the lessee, rentals payable under operating leases net of any incentives received from the lessor are charged to profit or loss on the straight-line basis over the lease terms.

prepaid land lease payments under operating leases are initially stated at cost and subsequently recognized on the straight-line basis over the lease terms.

2.21 inventories

inventories comprise raw materials, work-in-progress, finished goods, spare parts and packaging materials and others, and are stated at the lower of cost and net realizable amount. cost is determined using the weighted average method. work-in-progress and finished goods comprise materials, direct labour and an appropriate proportion of all production overhead expenditure (based on the normal operating capacity). borrowing costs are excluded.

provision for impairment of inventories is usually determined by the excess of cost over the net realizable amount and recorded in profit or loss. net realizable amounts are determined based on the estimated selling price less estimated conversion costs, selling expenses and related taxes in the ordinary course of business. the provision for or the reversal of provision for impairment of inventories is recognized within "cost of sales" in profit or loss.

2.12 non-current assets and disposal groups held for sale

non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sales transaction rather than through continuing use. for this to be the case, the asset or disposal group must be available for immediate sale in its present condition subject only to terms that are usual and customary for the sale of such assets or disposal groups and its sale must be highly probable. all assets and liabilities of a subsidiary classified as a disposal group are reclassified as held for sale regardless of whether the group retains a non-controlling interest in its former subsidiary after the sale.

non-current assets and disposal groups (other than financial assets) classified as held for sale are measured at the lower of their carrying amounts and fair values less costs to sell. property, plant and equipment and intangible assets classified as held for sale are not depreciated or amortized.

2.19 offsetting financial instruments

financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

2.10 property, plant and equipment

property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any impairment losses. when an item of property, plant and equipment is classified as held for sale or when it is part of a disposal group classified as held for sale, it is not depreciated and is accounted for in accordance with ifrs 5. the cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. in situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalized in the carrying amount of the asset as a replacement. where significant parts of property, plant and equipment are required to be replaced at intervals, the group recognizes such parts as individual assets with specific useful lives and depreciates them accordingly.

depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. the principal annual rates used for this purpose are as follows:


buildings		8 - 45 years
machinery		3 - 30 years
transportation facilities		6 - 10 years
office and other equipment		3 - 10 years

where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

an item of property, plant and equipment including any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. any gain or loss on disposal or retirement recognized in profit or loss in the year the asset is derecognized is the difference between the net sales proceeds and the carrying amount of the relevant asset.

construction in progress (“cip”) represents buildings under construction, which is stated at cost less any impairment losses, and is not depreciated. cost comprises the direct costs of construction and capitalized borrowing costs on related borrowed funds during the period of construction. cip is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

2.23 provisions

a provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

when the effect of discounting is material, the amount recognized for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. the increase in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.

2.28 revenue recognition

revenue from contracts with customers

the group adopted ifrs 15 from january 1, 2018 using the modified retrospective method of adoption. the group applied ifrs 15 to contracts that are initiated after the effective date and contracts that had remaining obligations as of the effective date. in respect of the prior periods, the group retained prior period's figures as reported under the previous standards, recognising the cumulative effect of applying ifrs 15 as an adjustment to the opening balance of equity as at january 1, 2018. the group concluded that the transitional adjustment to be made on january 1, 2018 to accumulated losses upon initial adoption of ifrs 15 is nil. it is because the group recognizes revenue upon the transfer of significant risks and rewards, which coincides with the fulfilment of performance obligations. additionally, the group's contracts with customers generally has only one performance obligation.

revenue from contracts with customers is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the group expects to be entitled in exchange for those goods or services.

when the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the group will be entitled in exchange for transferring the goods or services to the customer. the variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

when the contract contains a financing component which provides the customer with a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the group and the customer at contract inception. when the contract contains a financing component which provides the group a significant financial benefit for more than one year, revenue recognized under the contract includes the interest expense accreted on the contract liability under the effective interest method. for a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in ifrs 15.

(a)

sale of industrial products

revenue from the sale of industrial products (including sales of scrap and other materials) is recognized at the point in time when control of the asset is transferred to the customer, generally on delivery of the industrial products.

(b)

rendering of services

revenue from services is recognized over time, using an input method to measure progress towards complete satisfaction of the service, because the customer simultaneously receives and consumes the benefits provided by the group. revenue is recognized on a straight-line basis because the entity's inputs are expended evenly throughout the performance period.

revenue from other sources

(a)

rental income

rental income is recognized on a time proportion basis over the lease terms. variable lease payments that do not depend on an index or a rate are recognized as income in the accounting period in which they are incurred.

(b)

other income

interest income is recognized on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

dividend income is recognized when the shareholders' right to receive payment has been established, it is probable that the economic benefits associated with the dividend will flow to the group and the amount of the dividend can be measured reliably.

2.14 research and development costs

research and development expenditures are classified as research expenditures and development expenditures according to the nature of the expenditures and whether there is significant uncertainty of development activities transforming to assets.

research expenditures are recognized in profit or loss for the current period. development expenditures are recognized as assets when all of the following criteria are met:

(i)

it is technically feasible to complete the asset so that it will be available for use or sale;

(ii)

management intends to complete the asset and intends and has ability to use or sell it;

(iii)

it can be demonstrated that the asset will generate probable future economic benefits;

(iv)

there are adequate technical, financial and other resources to complete the development of the asset and management has the ability to use or sell the asset; and

(v)

the expenditure attributable to the asset during its development phase can be reliably measured.

development expenditures that do not meet the criteria above are recorded in profit or loss for the current period as incurred. development expenditures that have been recorded in profit or loss in previous periods will be not recognized as assets in subsequent periods. the group has not had any development expenditure capitalized.

2.5 segment reporting

operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. the chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the presidents of the company that make strategic decisions.

2.6 related parties

a party is considered to be related to the group if:

(a) the party is a person or a close member of that person’s family and that person:

(i)

has control or joint control over the group;

(ii)

has a significant influence over the group; or

(iii)

is a member of the key management personnel of the group or of a parent of the group;

(b) the party is an entity where any of the following conditions applies:

(iv)

the entity and the group are members of the same group;

(v)

one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);

(vi)

the entity and the group are joint ventures of the same third party;

(vii)

one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(viii)

the entity is a post-employment benefit plan for the benefit of employees of either the group or an entity related to the group; (if the group is itself a plan) and the sponsoring employers of the post-employment benefit plan;

(ix)

a person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and

(x)

the entity, or any member of a group of which it is a part, provides key management personnel services to the group or to the parent of the group.

(xi)

the entity, or any member of a group of which it is a part, provides key management personnel services to the group or to the parent of the group.

2.22 cash and cash equivalents

for the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the group’s cash management.

for the purpose of the consolidated statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use.

0.1262

0.1016

0.02


		increase/(decrease)
		rmb'000
assets
increase in right-of-use assets		17,976,851
decrease in property, plant and equipment		(6,720,610)
decrease in land use rights		(4,306,865)
decrease in other non-current assets		(20,323)

increase in total assets		6,929,053

liabilities
increase in interest-bearing loans and borrowings		11,010,323
decrease in finance lease payables		(4,081,270)

increase in total liabilities		6,929,053

decrease in retained earnings		—
decrease in non-controlling interests		—

2.3 issued but not yet effective international financial reporting standards

the group has not applied the following new and revised ifrss that have been issued but are not yet effective, in these financial statements.



amendments to ifrs 3		definition of a business1
amendments to ifrs 9, ias 39 and ifrs 7		interest rate benchmark reform1
ifrs 17		insurance contracts2
amendments to ias 1 and ias 8		definition of material1

1 effective for annual periods beginning on or after january 1, 2020

2 effective for annual periods beginning on or after january 1, 2021

further information about those ifrss that are expected to be applicable to the group is described below.

amendments to ias 1 and ias 8 provide a new definition of material. the new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. the amendments clarify that materiality will depend on the nature or magnitude of information. a misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. the group expects to adopt the amendments prospectively from january 1, 2020. the amendments are not expected to have any significant impact on the group’s financial statements.

amendments to ifrs 3 clarify and provide additional guidance on the definition of a business. the amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. a business can exist without including all of the inputs and processes needed to create outputs. the amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. instead, the focus is on whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create outputs. the amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. the group expects to adopt the amendments prospectively from january 1, 2020. since the amendments apply prospectively to transactions or other events that occur on or after the date of first application, the group will not be affected by these amendments on the date of transition.

amendments to ifrs 9, ias 39 and ifrs 7 address the effects of interbank offered rate reform on financial reporting. the amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark. in addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. the amendments are effective for annual periods beginning on or after january 1, 2020. early application is permitted. the amendments are not expected to have any significant impact on the group’s financial statements.

50 years

p22y6m

p6y

p10y

p40y

p8y

p45y

p10y

p3y

p30y

p3y

p30y

p3y

p10y

p70y

3. significant accounting estimates and judgements

the preparation of the group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. uncertainty about these judgements, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affected in future periods.

judgements

in the process of applying the group’s accounting policies and preparing the group’s consolidated financial statements, management has made the following judgements, apart from those involving estimates, which have a significant effect on the amounts recognized in the consolidated financial statements.

(a)

significant influence over an entity in which the group holds less than 20% of voting rights

as disclosed in note 8, the group owned a 10.04% equity interest in yunnan aluminium co., ltd.* ("yunnan aluminum") (雲南鋁業股份有限公司). the group considers that it has significant influence over yunnan aluminum even though it owns less than 20% of the voting rights, on the grounds that the group is the second largest shareholders of yunnan aluminum and one out of the eleven directors of the board of directors of yunnan aluminum exercises director's rights on behalf of the group.

at december 31, 2019, the group owned a 6.68% equity interest in chalco mineral resources co., ltd.* ("chalco resources”) (中鋁礦產資源有限公司). the group considers that it has significant influence over chalco resources even though it owns less than 20% of the voting rights, on the grounds that the group can appoint one out of the five directors of the board of directors of chalco resources.

at december 31, 2019, the group owned 14.71% of the voting right of chinalco capital holdings co., ltd.* ("chinalco capital“) (中鋁資本控股有限公司). the group considers that it has significant influence over chinalco capital since it can appoint one out of three directors of the board of directors of chinalco capital.

at december 31, 2019, the group owned a 16% equity interest in baise new aluminum power co., ltd. * (“new aluminum power ”) (百色新鋁電力有限公司). the group considers that the group has significant influence over new aluminum power even though it owns less than 20% of the voting rights, on the grounds that the group can appoint one out of the nine directors of the board of directors of new aluminum power.

at december 31, 2019, the group owned a 14.29% equity interest in inner mongolia geliugou co., ltd.* ("inner mongolia qiliugou") (內蒙古圪柳溝能源有限公司). the group considers that it has significant influence over inner mongolia qiliugou even though it owns less than 20% of the voting rights, on the grounds that the group can appoint one out of the seven directors of the board of directors of inner mongolia qiliugou.

(b) consolidation of entities in which the group holds less than a majority of voting rights

at december 31, 2019, the group owned a 40.23% equity interest in ningxia yinxing energy co., ltd. * ("yinxing energy") (寧夏銀星能源股份有限公司). since the remaining 59.77% of the equity shares in yinxing energy are held by a large number of individual shareholders, in opinion of the directors of the company, the group has control over yinxing energy, and yinxing energy continues to be included in the consolidation scope.

at december 31, 2019, the company owned a 40% equity interest in guizhou huaren new materials co., ltd.* ("guizhou huaren")(貴州華仁新材料有限公司). in accordance with the acting-in-concert agreement signed between the company and hangzhou jinjiang group co., ltd.* ("hangzhou jinjiang")(杭州錦江集團有限公司), hangzhou jinjiang would exercise the shareholders’ and board of directors’ votes in concert with the group. therefore, the directors of the company believe that the company has control over guizhou huaren and consolidated guizhou huaren’s financial statements from the date the group obtained control.

at december 31, 2019, the company owned 43.39% of the shares of shanxi china aluminum china resources co., ltd.* ("shanxi zhongrun")(山西中鋁華潤有限公司). in accordance with the acting-in-concert agreement signed between the company and china resources coal industry group co., ltd. ("china resources coal industry"), china resources coal industry would exercise the shareholders’ and board of directors’ votes in concert with the group. therefore, the directors of the company believe that the company has control over shanxi zhongrun and consolidated shanxi zhongrun’s financial statements from the date the group obtained control.

as disclosed in note 9, in 2017, the company initiated the establishment of beijing chalco bocom size industry investment fund management partnership (limited partnership) * (“size industry investment fund”) (北京中鋁交銀四則產業投資基金管理合夥企業(有限合夥)). pursuant to the investment agreements, the directors of the company are of the opinion that as a limited partner, the company neither had control over or joint control over nor significant influence over size industry investment fund. therefore, the company’s investment in size industry investment fund was accounted for as equity investment designated at fair value through other comprehensive income.

* the english name represents the best effort made by management of the group in translating its chinese name as it does not have any official english names.

estimates and assumptions

the key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. the group’s assumptions and estimates are based on parameters available when the consolidated financial statements were prepared. existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the group. such changes are reflected in the assumptions when they occur.

(a)

property, plant and equipment and intangible assets – recoverable amount (excluding goodwill)

in accordance with the group’s accounting policy, each asset or cash-generating unit is evaluated in every reporting period to determine whether there are any indications of impairment. if any such indication exists, an estimate of the net recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. the recoverable amount of an asset or cash-generating unit of assets is measured at the higher of fair value less costs of disposal and value in use.

value in use is generally determined as the present value of the estimated future cash flows of those expected to arise from the continued use of the asset in its present form and its eventual disposal. present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in the asset. future cash flow estimates are based on significant estimates and judgments involved in the projections of the future prices of aluminum and alumina, expected production and sales volumes, production costs, operating expenses, and discount rates applied to these forecasted future cash flows. these estimates and judgments may be affected by unexpected changes in the future market or economic conditions; hence, there is a possibility that changes in circumstances will alter these projections, which may impact on the recoverable amounts of the assets. in such circumstances, some or all of the carrying value of the assets may be impaired and the impairment would be charged against profit or loss.

(b)

property, plant and equipment and intangible assets (excluding goodwill) – estimated useful lives and residual values

the group’s management determines the estimated useful lives and residual values (if applicable) and consequently the related depreciation/amortization charges for its property, plant and equipment and intangible assets (excluding goodwill). these estimates are based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions, or based on value-in-use calculations or market valuations according to the estimated periods that the group intends to derive future economic benefits from the use of intangible assets. management will increase the depreciation/ amortization charge where useful lives are less than previously estimated, and it will write off or write down technically obsolete or non-strategic assets that have been abandoned or sold.

actual economic lives may differ from estimated useful lives and actual residual values may differ from estimated residual values. periodic review could result in change in depreciable lives and residual values and therefore change in depreciation/amortization expense in future periods.

(c)

goodwill - recoverable amount

in accordance with the group's accounting policy, goodwill is allocated to the group's cash generating units ("cgu") as it represents the lowest level within the group at which the goodwill is monitored for internal management purposes and is tested for impairment annually or more frequently if events or changes in circumstance indicated that the carrying amount may be impaired, by comparing the recoverable amount of the cgu and the carrying amount of the cgu. the recoverable amount is the higher of value in use and the fair value less costs of disposal. the recoverable amount of the underlying cgus involved estimates and judgments, including future prices of aluminum and alumina, expected production and sales volumes, production costs, operating expenses, terminal growth rates used to estimate future cash flows and discount rates applied to these forecasted future cash flows of the underlying cgus. these estimates and judgments may be affected by unexpected changes in future market or economic conditions.

(d)

provision for expected credit losses on trade receivables

the group uses a provision matrix to calculate ecls for trade receivables. the provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by product type, customer type, and coverage by letters of credit and other forms of credit insurance).

the provision matrix is initially based on the group’s historical observed default rates. the group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. for instance, if forecast economic conditions (i.e., gross domestic products) are expected to deteriorate over the next year which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. at each reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

the assessment of the correlation among historical observed default rates, forecast economic conditions and ecls is a significant estimate. the amount of ecls is sensitive to changes in circumstances and forecast economic conditions. the group’s historical credit loss experience and forecast of economic conditions may also not be representative of the customer’s actual default in the future. the information about the ecls on the group’s trade receivables is disclosed in note 13 to the financial statements.

(e)

estimated impairment of inventories

in accordance with the group’s accounting policy, the group’s management tests whether inventories suffered any impairment based on estimates of the net realizable amount of the inventories. for different types of inventories, it requires the estimation on selling prices, costs of conversion, selling expenses and the related tax expense to calculate the net realizable amount of inventories. for inventories held for executed sales contracts, management estimates the net realizable amount based on the contracted price. for raw materials and work-in-progress, management has established a model in estimating the net realizable amount at which the inventories can be realized in the normal course of business after considering the group’s manufacturing cycles, production capacity and forecasts, estimated future conversion costs and selling prices. management also takes into account the price or cost fluctuations and other related matters occurring after the end of the reporting period which reflect conditions that existed at the end of the reporting period.

it is reasonably possible that if there is a significant change in circumstances, including the group’s business and the external environment, outcomes within the next financial year would be significantly affected.

(f)

coal reserve estimates and units-of-production amortization for coal mining rights

external qualified valuation professionals evaluate “economically recoverable reserves“ based on the reserves estimated by external qualified exploration engineers in accordance with the prc standards. the estimates of coal reserves are inherently imprecise and represent only the approximate amounts of the coal reserves because of the subjective judgements involved in developing such information. economically recoverable reserve estimates are evaluated on a regular basis and have taken into account recent production and technical information about each mine.

(g)

income tax

the group estimates its income tax provision and deferred taxation in accordance with the prevailing tax rules and regulations, taking into account any special approvals obtained from the relevant tax authorities and any preferential tax treatment to which it is entitled in each location or jurisdiction in which the group operates. there are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. the group recognizes liabilities for anticipated tax audit issues based on the estimates of whether additional taxes will be due. where the final tax outcome of these matters is different from the amounts that were initially recorded, the differences will impact on the income tax and deferred tax provisions in the period in which the determination is made.

deferred tax assets are recognized for unused tax losses and deductible temporary differences, such as the provision for impairment of receivables, inventories and property, plant and equipment and accruals of expenses not yet deductible for tax purposes, to the extent that it is probable that taxable profits will be available against which the losses deductible temporary difference can be utilized. significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon forecast of future taxable profits which was complex and judgmental and was based on significant assumptions, including future tax rates, the possible utilization of loss carry forwards and future taxable profits that are affected by unexpected changes in the tax law framework and future market or economic conditions.

an entity shall recognize a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except to the extent that both of the following conditions are satisfied:

the parent, investor or joint venturer is able to control the timing of the reversal of the temporary difference; and

it is probable that the temporary difference will not reverse in the foreseeable future.

the group considers that it has recorded adequate current tax provision and deferred taxes based on the prevailing tax rules and regulations and its current best estimates and assumptions. in the event that future tax rules and regulations or related circumstances change, adjustments to current and deferred taxation may be necessary which would impact on the group’s results or financial position.

(h)

investments in joint ventures and associates – recoverable amount

in accordance with the group’s accounting policy, each investment in a joint venture and an associate is evaluated in every reporting period to determine whether there are any indicators of impairment. if any such indicators exist, an estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. the recoverable amount of the investment in a joint venture and an associate is measured at the higher of fair value less costs of disposal and value in use.

value in use is also generally determined as the present value of the estimated future cash flows of those expected to arise from the continued use of the asset in its present form and its eventual disposal. present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in the asset. future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors) and operating costs. this policy requires management to make these estimates and assumptions which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact on the recoverable amounts of the investments. in such circumstances, some or all of the carrying value of the investments may be impaired and the impairment would be charged against profit or loss.

(i)

leases – estimating the incremental borrowing rate

the group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an incremental borrowing rate (“ibr”) to measure lease liabilities. the ibr is the rate of interest that the group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. the ibr therefore reflects what the group “would have to pay”, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when it needs to be adjusted to reflect the terms and conditions of the lease. the group estimates the ibr using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).

22. other payables and accrued liabilities


	december 31,	december 31,
	2018	2019
financial liabilities
-payable for capital expenditures	5,694,632	6,832,365
-accrued interest	396,286	494,341
-payables withheld as guarantees and deposits	1,102,358	1,339,722
-dividends payable by subsidiaries to non-controlling shareholders	543,207	518,360
-consideration payable for investment projects	280,856	141,740
-current portion of payables for mining rights	210,325	372,824
-others	1,058,798	1,083,646
	9,286,462	10,782,998

taxes other than income taxes payable*	831,151	732,264
accrued payroll and bonus	220,851	21,902
staff welfare payables	391,824	258,448
current portion of obligations in relation to early retirement schemes (note 21)	516,536	414,904
contribution payable for pension insurance	30,145	20,386
output value-added tax on pending	252,691	210,283
others	37,492	999
	2,280,690	1,659,186

	11,567,152	12,442,184

* taxes other than income taxes payable mainly comprise accruals for value-added tax, resource tax, city construction tax and education surcharge.

as at december 31, 2019, except for other payables and accrued liabilities of the group amounting to rmb825 million and rmb0.25 million, which were denominated in usd and hkd, respectively (december 31, 2018: rmb240 million and rmb0.27 million which were denominated in usd and hkd respectively), all payables and accrued liabilities were denominated in rmb.


	2017	2018	2019
fees	768	756	780
basic salaries, housing fund, other allowances and benefits in kind	3,830	3,953	6,945
pension costs	415	482	715

	5,013	5,191	8,440

45. approval of the financial statements

the financial statements were approved and authorized for issue by the board of directors on april 22, 2020.

18. interest-bearing loans and borrowings


	december 31,	december 31,
	2018	2019
long-term loans and borrowings

finance lease payables (note 20)	4,081,270	—

lease liabilities (note 19)	—	8,369,262

bank and other loans (note (a))
— secured (note (f))	12,608,727	13,254,721
— guaranteed (note (e))	3,040,400	3,948,400
— unsecured	30,491,613	21,632,766

	46,140,740	38,835,887

medium-term notes and bonds and long-term bonds and private placement notes (note (b))
— unsecured	10,094,861	16,736,755

total long-term loans and borrowings	60,316,871	63,941,904

current portion of lease liabilities (note 19)	—	(1,358,654)

current portion of finance lease payables (note 20)	(2,328,358)	—

current portion of medium-term bonds and long-term bonds	(396,727)	—

current portion of long-term bank and other loans	(3,384,400)	(3,339,687)

non-current portion of long-term loans and borrowings	54,207,386	59,243,563


	december 31,	december 31,
	2018	2019
short-term loans and borrowings
bank and other loans (note (c))
— secured (note (f))	1,220,680	465,000
— guaranteed (note (e))	240,000	—
— unsecured*	37,887,420	20,773,166

	39,348,100	21,238,166

short-term bonds, unsecured (note (d))	500,000	9,331,488
gold leasing arrangements (note (g))	1,607,905	7,018,609
current portion of lease liabilities (note 19)	—	1,358,654
current portion of finance lease payables (note 20)	2,328,358	—
current portion of medium-term notes	396,727	—
current portion of long-term bank and other loans	3,384,400	3,339,687

total short-term borrowings and current portion of long-term loans and borrowings	47,565,490	42,286,604

as at december 31, 2019, except for loans and borrowings of the group amounting to rmb17 million (december 31, 2018: rmb19 million) and rmb4,006 million (december 31, 2018: rmb3,984 million), which were denominated in jpy and usd, respectively, all loans and borrowings were denominated in rmb.

as at december 31, 2019, included in the group’s interest-bearing loans and borrowings are amounts due to subsidiaries of chinalco (including lease liabilities) rmb9,867 million (december 31, 2018: rmb4,373 million), respectively, as set out in note 35(b). there were no interest-bearing loans and borrowings obtained from joint ventures and associates (december 31, 2018: nil).

* as at december 31, 2019, shandong huayu alloy materials co., ltd. (“shandong huayu”), a subsidiary of the group, has overdue short-term loans of rmb649 million. since overdued on its bank debts, shandong huayu actively communicated with relevant bank creditors, participated in relevant litigation process in accordance with law, and coordinated the repayments of its debts with its own assets, and sought the understanding and support of relevant bank creditors. as of the date of approval of the report, shandong huayu’s default on debts did not lead to a renegotiation of debt terms.

note:

(a) long-term bank and other loans

(i)

the maturity of long-term bank and other loans is set out below：


	loans from banks and other				total of long-term bank and
	financial institutions		other loans		other loans
	december 31,	december 31,	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019	2018	2019
within 1 year	3,382,325	3,337,202	2,075	2,485	3,384,400	3,339,687
between 1 and 2 years	7,375,557	7,523,290	2,399	2,485	7,377,956	7,525,775
between 2 and 5 years	16,586,390	9,151,573	7,197	7,455	16,593,587	9,159,028
over 5 years	18,777,275	18,806,428	7,522	4,969	18,784,797	18,811,397

	46,121,547	38,818,493	19,193	17,394	46,140,740	38,835,887

(ii)

other loans were provided by local bureaus of the ministry of finance to the group. the weighted average annual interest rate of long-term bank and other loans for the year ended december 31, 2019 was 5.20% (2018: 4.78%).

(b) medium-term notes and bonds and long-term bonds and private placement notes

outstanding medium-term bonds & private placement notes of the group as at december 31, 2019 are summarized as follows:


		effective		december 31,	december 31,
	face value /maturity	interest rate		2018	2019
2018 medium-term notes	2,000,000/2021	5.84	%	1,986,418	1,992,339
2019 medium-term bonds	2,000,000/2024	4.31	%	—	1,982,228
2016 private placement notes	3,215,000/2019	5.12	%	396,727	—
2018 medium-term bonds	1,100,000/2021	4.66	%	1,097,003	1,098,218
2018 medium-term bonds	900,000/2023	5.06	%	897,820	898,315
2018 medium-term bonds	1,400,000/2021	4.30	%	1,395,970	1,397,319
2018 medium-term bonds	1,600,000/2023	4.57	%	1,595,311	1,596,192
2019 medium-term bonds	2,000,000/2022	3.84	%	—	1,998,604
2019 medium-term bonds	1,000,000/2022	3.50	%	—	1,997,097
2019 medium-term bonds	900,000/2023	4.99	%	—	999,462
2018 hong kong medium-term bonds	2,785,840/2021	5.25	%	2,725,612	2,776,981
				10,094,861	16,736,755

medium-term notes and bonds and private placement notes were issued for capital expenditure and operating cash flows purposes, as well as for the purpose of re-financing of bank loans.

other loans were entrusted loans provided by state-owned companies to the group.

the weighted average annual interest rate of short-term bank and other loans for the year ended december 31, 2019 was 4.29% (2018: 4.52%).

(d) short-term bonds

outstanding short-term bonds as at december 31, 2019 are summarized as follows:


		effective		december 31,	december 31,
	face value /maturity	interest rate		2018	2019
2018 ningxia short-term bonds	500,000/2019	5.00	%	500,000	—
2019 ningxia short-term bonds	300,000/2020	3.97	%	—	300,000
2019 short-term bonds	1,000,000/2020	2.45	%	—	1,008,161
2019 short-term bonds	2,000,000/2020	2.63	%	—	2,013,127
2019 short-term bonds	3,000,000/2020	2.00	%	—	3,008,384
2019 short-term bonds	3,000,000/2020	2.30	%	—	3,001,816

				500,000	9,331,488

all the above short-term bonds were issued for working capital needs.

(e) guaranteed interest-bearing loans and borrowings

details of the interest-bearing loans and borrowings in which the group received guarantees are set out as follows:


	december 31,	december 31,
guarantors	2018	2019
long-term loans
yinyi fengdian, neimenggu, alashan (note (iv))	—	150,000
ningxia energy (note (i))	892,400	1,274,400
yinxing energy (note (i))	70,000	46,000
baotou aluminum limited company(包頭鋁業有限公司) and baotou communications investment group limited company(包頭交通投資集團有限公司) (note (ii))	1,600,000	1,250,000
the company and hangzhou jinjiang group limited company (“hangzhou jinjiang”, 杭州錦江集團有限公司) (note (iii))	246,000	10,000
hangzhou jinjiang (note (v))	—	123,500
qingzhen industrial investment co., ltd.*(“qingzhen investment”) (清鎮市工業投資有限公司) (note (v))	116,000	47,250
guizhou industrial investment group co., ltd.*(“guizhou investment”) (貴州產業投資（集團）有限責任公司) (note (v))	116,000	47,250
size industry investment fund (北京中鋁交銀四則產業投資基金管理合夥企業（有限合夥）) (note (v))	—	1,000,000

	3,040,400	3,948,400

short-term loans
china great wall aluminum co., ltd.*(“china great wall aluminum”)
(中國長城鋁業有限公司) (note(vi))	40,000	—
hangzhou jinjiang, qingzhen investment and guizhou investment (note(v))	200,000	—

	240,000	—

note:

(i)

the guarantor is a subsidiary of the company.

(ii)

the guarantors are a subsidiary of the company and a third party respectively.

(iii)

the guarantors are the company and a third party respectively.

(iv)

the guarantors are subsidiaries of the company.

(v)

the guarantor is a third party.

(vi)

the guarantor is a subsidiary of chinalco.

* the english names represent the best effort by management of the group in translating the chinese names of the companies as they do not have any official english names.

(f) secured interest-bearing loans and borrowings

the assets pledged for bank and other borrowings were set out in note 24 to the financial statements.

(g) gold leasing arrangements

in 2018 and 2019, the company entered into several gold leasing master framework agreements, individual gold leasing agreements and general hedging agreements with bank of communications and agriculture bank of china (collectively, "the banks"). according to the gold leasing master framework agreements and gold leasing agreements, the company leased standard gold with fineness of au 99.99 for 6 to 12 months from the banks, with annual interest rates ranging from 3.70% to 4.50%. concurrently, the company entrusted the banks to sell all leased gold and received cash of rmb6,922 million from the sale, and repaid gold leasing principal amounting to rmb1,608 million. upon the expiry of the gold leasing agreements, the company shall purchase the standard gold (with same quality and value according to the general hedging agreements entered into simultaneously with the leasing agreements ) to return to the banks.

the directors of the company are of the view that the company is free from the assumption of risk of gold price fluctuations due to the fixed repurchase price under the general hedging agreements, and therefore, this arrangement should be accounted for as short-term loans with fixed interest rates (ranging from 3.70% to 4.50)% (2018: ranging from 4.10% to 4.50%), net of the banks' charges.

38. business combination

(a) acquisition of 100% equity interest in qingdao light metal

on december 28, 2017, chalco shandong, a subsidiary of the company, entered into an equity transfer agreement with chinalco, pursuant to which chalco shandong acquired 100% equity interest of qingdao light metal from chinalco. the consideration for the acquisition was rmb162 million which was determined based on the appraisal value of the 100% equity interest in qingdao light metal. the company has paid all consideration as of december 31, 2017. the transaction date was december 29, 2017 which was the date that the group obtained control of qingdao light metal. before and after the acquisition, both qingdao light metal and the company were controlled by chinalco, and the control was not temporary. thus, the acquisition of 100% equity interest in qingdao light metal is considered to be a business combination under common control.

the carrying amounts of the assets and liabilities of qingdao light metal as at the transaction date and the comparative financial figures were as follows:


	december 31,	december 29,
	2016	2017
assets
investment properties	10,742	10,425
property, plant and equipment	290,579	278,309
land use rights	20,722	20,195
inventories	29,446	49,489
other current assets	2,934	3,978
trade and notes receivables	29,748	98,957
cash and cash equivalents	5,688	10,924

liabilities
trade and notes payables	64,900	97,681
other payables and accrued expenses	10,641	66,042
interest-bearing loans and borrowings	167,000	167,000

net assets	147,318	141,554
other equity instruments	138,670	138,670
	8,648	2,884


difference recognized in equity		158,848

total purchase consideration		161,732

(b) acquisition of shanxi aluminum sewage treatment plant

on december 28, 2017, shanxi new material, a subsidiary of the company, entered into an assets transfer agreement with chalco shanxi aluminum, a subsidiary of chinalco, pursuant to which, shanxi new material acquired shanxi aluminum sewage treatment plant at a total consideration of rmb50 million. the consideration was determined based on the appraisal report issued by an independent qualified valuer. in the opinion of directors of the company, the sewage treatment plant constitutes a business. before and after the acquisition, both entities were controlled by chinalco, and the control was not temporary. thus, the acquisition is considered to be a business combination under common control. the acquisition date was december 28, 2017, which is determined by the date of transfer of the assets.

the carrying amount of the assets and liabilities of shanxi aluminum sewage treatment plant as at the transaction date and the comparative financial figures were as follows:


	december 31,	december 28,
	2016	2017
assets
property, plant and equipment	52,001	48,995

liabilities
other payables and accrued expenses	—	—

net assets	52,001	48,995
difference recognized in equity	—	1,063

total purchase consideration		50,058

the acquisition of shanxi aluminum sewage treatment plant has no impact on the group’s cash and cash equivalents.

in april 2015, ningxia energy and zhejiang power group co., ltd.* (“zhejiang power”) (浙江省能源集團有限公司) jointly established ningxia yinxing power co., ltd.* (“yinxing power”) (寧夏銀星發電有限責任公司). the registered capital of yinxing power is rmb800 million, of which ningxia energy and zhejiang power contributed 51% and 49%, respectively. ningxia energy can appoint four out of the seven directors of the board of directors. according to the articles of association of yinxing power, the resolutions pertaining to significant relevant activities at both the shareholders’ and board of directors meetings require more than two-thirds of the votes for passing. accordingly, the directors of the company considered that ningxia energy and zhejiang power have joint control over yinxing power, which was accounted for as a joint venture.

in august 2017, to minimize coal procurement costs and to secure long-term coal supply to yinxing power, ningxia energy and zhejiang power entered into an acting-in-concert agreement which was effective on august 31, 2017. according to the acting-in-concert agreement, zhejiang power will exercise the shareholders vote in concert with the group. accordingly, the directors of the company consider that ningxia energy have control over yinxing power and consolidated yinxing power as a subsidiary since august 31, 2017.

the fair value of identifiable assets and liabilities of yinxing power at the acquisition date are as follows:


		august 31, 2017
		fair value
assets
property, plant and equipment		3,594,970
land use rights		31,833
intangible assets		188
other current assets		312,840
inventories		35,349
trade and notes receivables		162,093
cash and cash equivalents		255,152

liabilities
deferred tax liabilities		(40,706)
interest-bearing loans and borrowings		(2,514,800)
other payables and accrued expenses		(186,782)
trade and notes payables		(800,438)

net assets		849,699

non-controlling interests		416,353

net assets acquired		433,346

goodwill		—

satisfied by cash		—

details of the 51% equity interest held by the group before the acquisition of yinxing power and the profit from the investment are as follows:


		august 31, 2017
initial investment cost		316,200

investment income recognized under the equity method		(494)

the book value of the investment in 51% equity of yinxing power on the merger date		315,706

the fair value of the investment in 51% equity of yinxing power on the merger date (note)		433,346

gain on previously held equity interest remeasured at acquisition-date fair value		117,640

note: the fair value was determined by the valuation report issued by an independent qualified valuer.

an analysis of the cash flows in respect of the acquisition of yinxing power is as follows:


		rmb’000
cash consideration		—
cash and bank balances acquired		255,152

net inflow of cash and cash equivalents included in cash flows from investing activities		255,152

the operating results and cash flows of yinxing power since the merger date to the end of the year are as follows:


		rmb’000
revenue		578,117
profit for the period		96,756
net cash flows		36,024

* the english names represent the best effort by management of the group in translating the chinese names of the companies as they do not have any official english names.

(d) acquisition of guizhou huaren

in may 2017, the company, together with hangzhou jinjiang, guizhou investment and qingzhen investment jointly established guizhou huaren. the registered capital of guizhou huaren is rmb1,200 million, of which the company holds 40% of equity interest in guizhou huaren, hangzhou jinjiang holds 30%, while each of the other two shareholders holds 15% equity interest, respectively. according to the article of association of guizhou huaren, the directors of the company considered that the company had significant influence over guizhou huaren, which was accounted for as an associate.

in december 2017, the company and hangzhou jinjiang entered into an acting-in-concert agreement which became effective on january 1, 2018. according to the acting-in-concert agreement, hangzhou jinjiang agreed to exercise the board members’ and shareholder’s vote in concert with the company. accordingly, the directors of the company considered that the company obtains control over guizhou huaren and has consolidated guizhou huaren’s financial position and performance into the group’s consolidated financial statements since january 1, 2018.

the fair value of identifiable assets and liabilities of guizhou huaren at the acquisition date are as follows:


		january 1, 2018
		fair value
assets
property, plant and equipment		2,194,095
intangible assets		137
land use rights		109,320
other current assets		353,655
inventories		220,718
trade and notes receivables		250
restricted cash		324,030
cash and cash equivalents		673,587
liabilities
deferred tax liabilities		(58,299)
interest-bearing loans and borrowings		(1,680,000)
contract liabilities		(2,562)
other payables and accrued expenses		(345,562)
trade and notes payables		(464,454)

net assets		1,324,915

non-controlling interests		794,949

share of net assets acquired		529,966

goodwill		—

satisfied by:
cash		—
fair value of previously held equity interest		529,966
		529,966

details of the 40% equity interest held by the company before the acquisition of guizhou huaren and the profit from the investment are as follows:


		january 1, 2018
initial investment cost		480,000

share of loss accumulated under the equity method		(18,347)

book value of the investment in 40% equity of guizhou huaren on the acquisition date		461,653

fair value of the investment in 40% equity of guizhou huaren on the acquisition date (note)		529,966

gain on previously held equity interest remeasured at acquisition-date fair value		68,313

note: the fair value was determined by the valuation report issued by an independent qualified valuer.

an analysis of the cash flows in respect of the acquisition of guizhou huaren is as follows:


		rmb'000
cash consideration		—
cash and bank balances acquired		673,587

net inflow of cash and cash equivalents included in cash flows from investing activities		673,587

the operating results and cash flows of guizhou huaren since the acquisition date to december 31, 2018 are as follows:


		rmb’000
revenue		4,282,882

profit for the period		34,639

net cash out flows		(490,684)

(e) acquisition of shanxi zhongrun

in february 2017, the company entered into a capital injection and enlargement agreement on shanxi zhongrun with huarun (coal) group co., ltd.* (“huarun (coal) group”) (華潤（煤業）集團有限公司), shanxi xishan coal and electricity power co., ltd.* (“xishan coal electricity”) (山西西山煤電股份有限公司) and jin energy power group co., ltd.* (“jin energy power”) (晉能電力集團有限公司). after the capital contribution, the registered capital of shanxi zhongrun is rmb500 million, of which the company holds 40% of equity interest in shanxi zhongrun while each of the other three shareholders holds a 20% equity interest, respectively. the company can appoint two out of the five directors of the board of directors. according to the article of association of shanxi zhongrun and the agreement, the directors of the company considered that the company had significant influence over shanxi zhongrun, which was accounted for as an associate.

in december 2017, the company and huarun (coal) group entered into an acting-in-concert agreement which was effective on january 1, 2018. according to the acting-in-concert agreement, huarun (coal) group agreed to exercise the board members’ and shareholder’s vote in concert with the company. accordingly, the directors of the company considered that the company obtains control over shanxi zhongrun and has consolidated shanxi zhongrun’s financial position and performance into the group’s consolidated financial statements since january 1, 2018.

the fair value of identifiable assets and liabilities of shanxi zhongrun at the acquisition date are as follows:


		january 1, 2018
		fair value
assets
property, plant and equipment		2,292,483
intangible assets		749
other current assets		215,575
inventories		15,473
trade and notes receivables		4,135
cash and cash equivalents		2,173,062

liabilities
deferred tax liabilities		(41,581)
interest-bearing loans and borrowings		(3,485,852)
other payables and accrued expenses		(37,789)
trade and notes payables		(13,778)

net assets		1,122,477

non-controlling interests		673,486

share of net assets acquired		448,991

goodwill		—

satisfied by:
cash		—
fair value of previously held equity interest		448,991

		448,991

details of the 40% equity interest held by the company before the acquisition of shanxi zhongrun and the profit from the investment are as follows:


		january 1, 2018
initial investment cost		400,184

share of loss accumulated under the equity method		(6,553)

book value of the investment in 40% equity of shanxi zhongrun on the acquisition date		393,631

fair value of the investment in 40% equity of shanxi zhongrun on the acquisition date (note)		448,991

gain on previously held equity interest remeasured at acquisition-date fair value		55,360

note: the fair value was determined by the valuation report issued by an independent qualified valuer.

an analysis of the cash flows in respect of the acquisition of shanxi zhongrun is as follows:


		rmb’000
cash consideration		—
cash and bank balances acquired		2,173,062

net inflow of cash and cash equivalents included in cash flows from investing activities		2,173,062

the operating results and cash flows of shanxi zhongrun since the acquisition date to december 31, 2018 are as follows:


		rmb’000
revenue		645,214
profit for the period		817
net cash out flows		(2,137,166)

* the english names represent the best effort made by management of the group in translating their chinese names as the companies do not have any official english names.

(f) acquisition of shanxi huaxing

on december 31, 2017, the company, chalco hong kong and baotou communication investment held 10%, 40% and 50% of the shares of shanxi huaxing, respectively. according to the articles of association of shanxi huaxing, the group can exercise joint control over shanxi huaxing and therefore, which was accounted for as a joint venture accordingly.

in december 2018, the company entered into an equity transfer agreement with baotou communication investment. according to the agreement, the company acquired 50% of shanxi huaxing’s equity with a consideration at rmb2,665 million in cash. upon completion of the transaction, the group held a total of 100% of shanxi huaxing’s shares. the directors of the company considered that the company obtains control over shanxi huaxing and has consolidated shanxi huaxing’s financial position and performance into the group’s consolidated financial statements since the acquisition date of december 6, 2018.

the fair value of identifiable assets and liabilities of shanxi huaxing at the acquisition date are as follows:


		december 6, 2018
		fair value
assets
property, plant and equipment		7,327,807
intangible assets		728,067
land use right		348,901
deferred tax assets		8,094
other non-current assets		60,336
other current assets		102,396
inventories		865,418
trade and notes receivables		44,706
restricted cash		203,350
cash and cash equivalents		81,344


liabilities
deferred tax liabilities		(722,349)
interest-bearing loans and borrowings		(1,743,036)
other non-current liabilities		(239,998)
contract liabilities		(617,827)
other payables and accrued expenses		(686,024)
trade and notes payables		(1,594,724)

net assets		4,166,461

non-controlling interests		—

share of net assets acquired		4,166,461

goodwill		1,163,949

satisfied by:
cash		2,665,205
fair value of previously held equity interest		2,665,205

		5,330,410

details of the 50% equity interest held by the group before the acquisition of shanxi huaxing and the profit from the investment are as follows:


		december 6, 2018
initial investment cost		2,351,479

share of loss accumulated under the equity method		(77,309)

share of changes in reserves under the equity method		11,166

cash dividends declared		(236,556)

book value of the investment in 50% equity of shanxi huaxing on the acquisition date		2,048,780

fair value of the investment in 50% equity of shanxi huaxing on the acquisition date (note)		2,665,205

gain on previously held equity interest remeasured at acquisition-date fair value		616,425

note: the fair value was determined by the valuation report issued by an independent qualified valuer.

an analysis of the cash flows in respect of the acquisition of shanxi huaxing is as follows:


		rmb’000
cash consideration		(2,665,205)
cash and bank balances acquired		81,344

net outflow of cash and cash equivalents included in cash flows from investing activities		(2,583,861)

the operating results and cash flows of shanxi huaxing since the acquisition date to december 31, 2018 are as follows:


		rmb’000
revenue		415,509
profit for the period		110,917
net cash out flows		(434)

* the english names represent the best effort made by management of the group in translating their chinese names as the companies do not have any official english names.

(g) acquisition of shandong aluminum carbon plant

on august 31, 2018, chalco shandong, a subsidiary of the company, entered into an asset transfer agreement with shandong aluminum plant, pursuant to which, chalco shandong acquired shandong aluminum carbon plant from shandong aluminum at a total consideration of rmb146 million. the consideration was determined based on the appraisal report issued by an independent qualified valuer. chalco shandong has paid all consideration as of december 31, 2018. in the opinion of the directors of the company, shandong aluminum carbon plant constitutes a business. before and after the acquisition, chalco shandong and shandong aluminum were controlled by chinalco, and the control was not temporary. as such, the acquisition is considered to be a business combination under common control. the acquisition date was august 31, 2018, which is determined by the date of transfer of the assets.

the carrying amounts of the assets and liabilities of shandong aluminum carbon plant as at the transaction date and the comparative financial figures were as follows:


	december 31,	august 31,
	2017	2018
assets
property, plant and equipment	24,393	23,845
inventories	51,104	46,150
other current assets	418	411
trade and notes receivables	23,052	44,522
cash and cash equivalents	34,354	—

liabilities
trade and notes payables	(12,235)	(24,011)
contract liabilities	—	(1,432)
other payables and accrued expenses	(38,415)	(1,542)

net assets	82,671	87,943

difference recognized in equity		58,319

total purchase consideration		146,262

(h) acquisition of pingguo aluminum carbon plant

on august 30, 2018, guangxi branch of the company entered into an asset transfer agreement with pingguo aluminum, pursuant to which, guangxi branch of the company acquired pingguo aluminum carbon plant from pingguo aluminum at a total consideration of rmb92 million. the consideration was determined based on the appraisal report issued by an independent qualified valuer. guangxi branch of the company has paid all consideration as of december 31, 2018. in the opinion of the directors of the company, the pingguo aluminum carbon plant constitutes a business. before and after the acquisition, guangxi branch and pingguo aluminum were controlled by chinalco, and the control was not temporary. as such, the acquisition is considered to be a business combination under common control. the acquisition date was august 30, 2018, which is determined by the date of transfer of the assets.

the carrying amounts of the assets and liabilities of pingguo aluminum carbon plant as at the transaction date and the comparative financial figures were as follows:


	december 31,	august 30,
	2017	2018
assets
property, plant and equipment	35,201	127,315
trade and notes receivables	12,143	—
inventories	90,581	71,264

liabilities
trade and notes payables	(69,521)	(117,749)

net assets	68,404	80,830
difference recognized in equity		11,218

total purchase consideration		92,048

(i) acquisition of chibi great wall carbon

on august 30, 2018, chalco mining, a subsidiary of the company, entered into an equity transfer agreement with china great wall aluminum and henan great wall zhongxin, pursuant to which, chalco mining acquired 57.69% and 19.96% equity interest in red chibi great wall from china great wall aluminum and henan great wall zhongxin, respectively. the consideration for the acquisition was rmb202 million, which was determined based on the appraisal value of the 77.65% equity interest in chibi great wall carbon. as at december 31, 2018, chalco mining has paid the consideration in receivables amounting to rmb70 million and cash amounting to rmb132 million, respectively. the transaction date was august 30, 2018, which was the date that the group obtained control of chibi great wall carbon. before and after the acquisition, both chibi great wall carbon and chalco mining were controlled by chinalco, and the control was not temporary. thus, the acquisition of the 77.65% equity interest in chibi great wall carbon is considered to be a business combination under common control.

the carrying amounts of the assets and liabilities of red cliff carbon as at the transaction date and the comparative financial figures were as follows:


	december 31,	august 30,
	2017	2018
assets
property, plant and equipment	271,604	379,618
land use rights	26,124	25,731
deferred tax assets	3,325	3,325
inventories	59,035	65,440
other current assets	11,095	18,608
trade and notes receivables	32,880	53,392
restricted cash	15,700	—
cash and cash equivalents	50,545	16,258

liabilities
interest-bearing loans and borrowings	(228,500)	(233,000)
contract liabilities	—	(1,816)
trade and notes payables	(46,702)	(56,970)
other payables and accrued expenses	(51,595)	(52,114)
income tax payable	(2,927)	—
other non-current liabilities	(69,640)	(65,901)

net assets	70,944	152,571
non-controlling interests	(15,856)	(34,100)
difference recognized in equity		83,497

total purchase consideration		201,968

(j) acquisition of longhua logistics

on august 30, 2018, china aluminum logistics group corporation co., ltd. (“china aluminum logistics group”) (“中鋁物流集團有限公司”), a subsidiary of the company, entered into an equity transfer agreement with northeast light alloy co., ltd., pursuant to which, chalco aluminum logistics acquired a 51% equity interest in east light logistics from northeast light alloy co., ltd. the consideration for the acquisition was rmb3 million, which was determined based on the appraisal value of the 51% equity interest in east light logistics and china aluminum logistics group has paid all consideration as of december 31, 2018. the transaction date was august 30, 2018, which was the date that the group obtained control of east light logistics. before and after the acquisition, both east light logistics and china aluminum logistics group were controlled by chinalco, and the control was not temporary. as such, the acquisition of the 51% equity interest in east light logistics is considered to be a business combination under common control.

the carrying amount of the assets and liabilities of east light logistics as at the transaction date and the comparative financial figures were as follows:


	december 31,	september 17,
	2017	2018
assets
property, plant and equipment	2,901	3,839
inventories	127	2,207
other current assets	200	608
trade and notes receivables	6,704	6,828
cash and cash equivalents	281	403

liabilities
trade and notes payables	(2,062)	(4,647)
contract liabilities	—	(1,504)
income tax payable	(130)	—
other payables and accrued expenses	(1,323)	(2,065)

net assets	6,698	5,669

non-controlling interests	(3,281)	(2,778)

net assets acquired		2,891

difference recognized in equity		413

total purchase consideration		3,304

(k) acquisition of suzhou zhongcai

on april 29, 2019, chinalco shanghai company limited ("chinalco shanghai") ("中鋁上海有限公司"), a subsidiary of the company, entered into an equity transfer agreement with zhongse technology co., ltd.* ("zhongse technology") ("中色科技股份有限公司") and suzhou research institute of non-ferrous metals co., ltd.* ("suzhou research institute") ("蘇州有色金屬研究院有限公司"), pursuant to which, chinalco shanghai acquired 70% and 30% equity interests in suzhou zhongse metal materials technology co., ltd.* ("suzhou zhongcai") ("蘇州中色金屬材料科技有限公司") from zhongse technology and suzhou research institute, respectively. the consideration for the acquisition was rmb237 thousand, which was determined based on the appraisal value of the 100% equity interest in suzhou zhongcai. chinalco shanghai has paid the consideration in full as of june 30, 2019. the acquisition date was june 1, 2019, which was the date that the group obtained control of suzhou zhongcai. before and after the acquisition, both suzhou zhongcai and chinalco shanghai were controlled by chinalco, and the control was not temporary. thus, the acquisition of the 100% equity interest in suzhou zhongcai is considered to be a business combination under common control, other than significant influence or joint control.

the carrying amounts of the assets and liabilities of suzhou zhongcai as at the acquisition date and the comparative financial figures were as follows:


	december 31,	june 1,
	2018	2019

assets
property, plant and equipment	55,747	55,746
land use rights	26,574	—
right-of-use assets	—	26,318
other current assets	2,561	2,229
deferred tax assets	86	143
trade and notes receivables	3,485	2,758
cash and cash equivalents	183	136

liabilities
deferred tax liabilities	111	—
interest-bearing loans and borrowings	51,908	51,908
other payables and accrued expenses	34,536	33,404
trade and notes payables	1,664	1,564

net assets	417	454

non-controlling interests	—	—

net assets acquired		454

difference recognized in equity		(217)

total purchase consideration		237

* the english names represent the best effort made by the management of the group in translating their chinese names as the companies do not have any official english names.

15. cash and cash equivalents and restricted cash


	december 31,	december 31,
	2018	2019
restricted cash	2,165,288	1,305,781

cash and cash equivalents	19,130,835	7,759,190

	21,296,123	9,064,971

restricted cash mainly represented deposits held for use in issued notes payable and letters of credit.

as at december 31, 2019, bank balances and cash on hand of the group were denominated in the following currencies:


	december 31,	december 31,
	2018	2019
rmb	18,026,265	7,858,867
usd	3,256,625	1,195,720
hkd	8,321	4,423
eur	371	1,943
aud	2,552	—
idr	1,989	4,018

	21,296,123	9,064,971

cash at banks earns interest at floating rates based on daily bank deposit rates. the bank balances, time deposits and restricted cash are deposited with creditworthy banks with no recent history of default.

34. notes to the consolidated statement of cash flows

(a) reconciliation of profit before taxation to cash generated from operations


	notes	2017	2018	2019
cash flows generated from operating activities
profit before income tax		3,049,175	2,264,514	2,113,801

adjustments for:
share of profits and losses of joint ventures	8(a)	(8,151)	199,452	(270,115)
share of profits and losses of associates	8(b)	165,249	(39,335)	(48,767)
depreciation of property, plant and equipment	6	6,554,842	7,499,322	7,094,716
depreciation of investment properties	7	14,105	22,229	26,559
depreciation of right-of-use assets	19	—	—	1,075,825
gain on disposal of other property, plant and equipment and land use rights, net	27	(76,739)	(101,098)	(242,960)
impairment losses on property, plant and equipment	6	16,200	46,484	259,354
impairment losses of intangible assets	5	8,134	—	1,448
amortization of intangible assets	5	275,877	295,901	338,938
amortization of land use rights	19	91,579	108,152	—
amortization of prepaid expenses included in other non-current assets		127,793	130,148	254,205
realized and unrealized losses/(gains) on futures, option and forward contracts	27	155,024	(141,459)	(50,820)
gain on previously held equity interest remeasured at acquisition-date fair value	27	(117,640)	(748,086)	—
gain on disposals and deemed disposals of subsidiaries	27	(325,022)	(3,517)	(261,187)
loss/(gains) on disposal of investments in associates	27	—	1,904	(159,514)
gain on disposal of business	27	—	—	(262,677)
gain on share of associates’ net assets	27	—	—	(295,288)
gain on disposal of and dividends from equity investments	27	(79,408)	(109,914)	(97,775)
receipt of government subsidies		(202,359)	(158,109)	(112,141)
interest income		(183,036)	—	—
finance costs	28	5,204,337	4,882,496	4,921,179
change in special reserve		58,743	6,605	(23,085)
others		(16,951)	75,381	(11,555)

		14,711,752	14,231,070	14,250,141
changes in working capital:
decrease/(increase) in inventories		(2,662,507)	1,194,454	929,027
increase in trade and notes receivables		(1,963,178)	(2,473,006)	(1,050,860)
decrease in other current assets		1,275,535	916,681	(360,639)
(increase)/decrease in restricted cash		(137,745)	530,284	859,507
(increase)/decrease in other non-current assets		(422,845)	425,739	547,287
(decrease)/increase in trade and notes payables		1,600,975	(5,559)	(1,385,081)
increase/(decrease) in other payables and accrued liabilities		1,672,658	(945,270)	(560,914)
increase in other non-current liabilities		81,878	105,386	(206,354)

cash generated from operations		14,156,523	13,979,779	13,022,114

prc corporate income taxes paid		(949,383)	(947,703)	(548,625)

net cash generated from operating activities		13,207,140	13,032,076	12,473,489

non-cash transactions of investing activities and financing activities
capital injection to an associate and joint ventures by non-cash assets		186,450	—	—
equity exchange arrangement		—	10,735,214	—
investment in a joint venture used gallium business		—	—	352,848
non-controlling shareholders forfeited sharing of profit or equity interest		—	—	149,322
endorsement of notes receivables accepted from the sale of goods or services for purchase of property, plant and equipment		372,816	2,384,046	1,504,162
acquisition of equity investments designated at fair value through other comprehensive income by exchanging equity in a subsidiary		—	—	350,911
acquisition of businesses at non-cash consideration		50,058	70,087	—
finance lease		44,342	113,601	—

(b) reconciliation of liabilities arising from financing activities

the table below details changes in the group’s liabilities from financing activities, including both cash and non-cash changes. liabilities arising from financing activities are liabilities 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.


			financial
			liabilities	financial
			included in	liabilities
	financial		other current	included in
	liabilities at fair		payables and	other non-	interest bearing
	value through	trade and	accrued	current	loans and
	profit or loss	notes payables	expenses	liabilities	borrowings	total
as at january 1, 2018	89,426	12,360,441	11,363,236	769,061	103,270,773	127,852,937

net cash generated from operating activities	—	(3,996)	(624,504)	—	—	(628,500)

net cash flows from/(used in) investing activities	(87,660)	1,646,299	(193,345)	—	7,263,251	8,628,545
payment of upfront interest of gold leasing arrangement	—	—	—	—	2,323,105	2,323,105
proceeds from issuance of short-term bonds and medium-term notes, net of issuance costs	—	—	—	—	13,185,034	13,185,034
repayments of medium-term notes and short-term bonds	—	—	—	—	(21,815,000)	(21,815,000)
repayments of gold leasing arrangement	—	—	—	—	(7,519,283)	(7,519,283)
drawdown of short-term and long-term bank and other loans	—	—	—	—	76,899,591	76,899,591
repayments of short-term and long-term bank and other loans	—	—	(1,000,000)	—	(69,560,667)	(70,560,667)
proceeds from finance lease, net of deposit and transaction costs	—	—	—	—	1,204,843	1,204,843
capital elements of finance lease rental payment	—	—	—	—	(3,915,404)	(3,915,404)
dividends paid by subsidiaries to non-controlling shareholders	—	—	277,771	—	—	277,771
amortization of unrecognized finance expenses and interest expense	—	—	—	6,090	521,295	527,385
interest paid	—	—	(460,147)	(24,736)	(85,578)	(570,461)
reclassification	—	—	(90,644)	90,644	—	—
net cash (used in)/ generated from financing activities	—	—	(1,273,020)	71,998	(8,762,064)	(9,963,086)
net foreign exchange differences	—	6,520	14,095	—	916	21,531
as at december 31, 2018	1,766	14,009,264	9,286,462	841,059	101,772,876	125,911,427


			financial
			liabilities	financial
			included in	liabilities
	financial		other current	included in
	liabilities at fair		payables and	other non-	interest bearing
	value through	trade and	accrued	current	loans and
	profit or loss	notes payables	expenses	liabilities	borrowings	total
as at january 1, 2019	1,766	14,009,264	9,286,462	841,059	101,772,876	125,911,427

net cash generated from operating activities	—	(1,385,080)	470,478	—	—	(914,602)

net cash flows from/(used in) investing activities	(961)	(41,607)	622,995	474,548	7,157,695	8,212,670
proceeds from gold leasing arrangement	—	—	—	—	6,921,860	6,921,860
proceeds from issuance of short-term bonds and medium-term notes, net of issuance costs	—	—	—	—	37,965,385	37,965,385
repayments of senior perpetual securities	—	—	—	—	(352,648)	(352,648)
repayments of medium-term notes and short-term bonds	—	—	—	—	(22,400,000)	(22,400,000)
repayments of gold leasing arrangement	—	—	—	—	(1,607,905)	(1,607,905)
drawdown of short-term and long-term bank and other loans	—	—	—	—	40,669,197	40,669,197
repayments of short-term and long-term bank and other loans	—	—	—	—	(66,105,388)	(66,105,388)
principal portion of lease payment	—	—	—	—	(3,032,106)	(3,032,106)
dividends paid by subsidiaries to non-controlling shareholders	—	—	(23,715)	—	—	(23,715)
amortization of unrecognized finance expenses and interest expense	—	—	—	—	487,249	487,249
interest paid	—	—	235,310	—	22,631	257,941
reclassification	—	—	162,120	(162,120)	—	—
net cash (used in)/ generated from financing activities	—	—	373,715	(162,120)	(7,431,725)	(7,220,130)
net foreign exchange differences	—	2,178	10,408		31,321	43,907
as at december 31, 2019	805	12,584,755	10,764,058	1,153,487	101,530,167	126,033,272


		2019
within operating activities		65,426
within financing activities		3,032,106
		3,097,532

2.2 changes in accounting policies and disclosures

the group has adopted the following new and revised ifrss for the first time for the current year’s financial statements.


amendments to ifrs 9		prepayment features with negative compensation
ifrs 16		leases
amendments to ias 19		plan amendment, curtailment or settlement
amendments to ias 28		long-term interests in associates and joint ventures
amendments to ifrs 10 and ias 28 (2011)		sale or contribution of assets between an investors and its associate or joint venture
ifric interpretation 23		uncertainty over income tax treatments
annual improvements 2015-2017 cycle		amendments to ifrs 3, ifrs 11, ias 12 and ias 23

except for the amendments to ifrs 9 and ifrs 19 and annual improvements to ifrs 2015-2017 cycle, which are not relevant to the preparation of the group’s financial statements, the nature and the impact of the new and revised ifrss are described below:

(a) ifrs 16 leases

ifrs 16 replaces ias 17 leases, ifric 4 determining whether an arrangement contains a lease, sic 15 operating leases-incentives and sic 27 evaluating the substance of transactions involving the legal form of a lease. the standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model to recognize and measure right-of-use assets and lease liabilities, except for certain recognition exemptions. lessor accounting under ifrs 16 is substantially unchanged from ias 17. lessors continue to classify leases as either operating or finance leases using similar principles as in ias 17. therefore, ifrs 16 did not have any financial impact on leases where the group is the lessor.

the group has adopted ifrs 16 using the modified retrospective method of adoption with the date of initial application of january 1, 2019. under this method, the standard has been applied retrospectively with the cumulative effect of initial adoption recognized as an adjustment to the opening balance of retained earnings at january 1, 2019, and the comparative information for 2018 was not restated and continues to be reported under ias 17 and related interpretations.

new definition of a lease

under ifrs 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. control is conveyed where the customer has both the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. the group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying ias 17 and ifric 4 at the date of initial application. contracts that were not identified as leases under ias 17 and ifric 4 were not reassessed. therefore, the definition of a lease under ifrs 16 has been applied only to contracts entered into or changed on or after january 1, 2019.

as a lessee- leases previously classified as operating leases

nature of the effect of adoption of ifrs 16

the group has lease contracts for various items of property, machinery, vehicles and other equipment. as a lessee, the group previously classified leases as either finance leases or operating leases based on the assessment of whether the lease transferred substantially all the rewards and risks of ownership of assets to the group. under ifrs 16, the group applies a single approach to recognize and measure right-of-use assets and lease liabilities for all leases, except for two elective exemptions for leases of low-value assets (elected on a lease-by-lease basis) and leases with a lease term of 12 months or less (“short-term leases”) (elected by class of underlying asset). instead of recognising rental expenses under operating leases on a straight-line basis over the lease term commencing from january 1, 2019, the group recognizes depreciation (and impairment, if any) of the right-of-use assets and interest accrued on the outstanding lease liabilities (as finance costs).

impacts on transition

lease liabilities at january 1, 2019 were recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at january 1, 2019 and included in interest-bearing loans and borrowings. the right-of-use assets were measured at the amount of the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease recognized in the consolidated statement of financial position immediately before january 1, 2019.

all these assets were assessed for any impairment based on ias 36 on that date. the group elected to present the right-of-use assets separately in the statement of financial position. this includes the lease assets recognized previously under finance leases of rmb6,721 million that were reclassified from property, plant and equipment, land use right of rmb4,307 million that were disclosed separately in the statement of financial position, and prepaid rental of rmb20 million that were included in other non-current assets.

the group has used the following elective practical expedients when applying ifrs16 at january 1, 2019:

· applied the short-term leases exemptions to leases with a lease term that ends within 12 months from the date of initial application

· applying a single discount rate to a portfolio of leases with reasonably similar characteristics when measuring the lease liabilities at january 1, 2019

· using hindsight in determining the lease term where the contract contains options to extend or terminate the lease

· and excluding initial direct costs from the measurement of the right-of-use assets at the date of initial application

the group did not change the initial carrying amounts of recognized assets and liabilities at the date of initial application for leases previously classified as finance leases. accordingly, the carrying amounts of the right-of- use assets and the lease liabilities at january 1, 2019 were the carrying amounts of the recognized assets and liabilities (i.e., finance lease payables) measured under ias 17.

the impact arising from the adoption of ifrs16 at january 1, 2019 is as follows:


		increase/(decrease)
		rmb'000
assets
increase in right-of-use assets		17,976,851
decrease in property, plant and equipment		(6,720,610)
decrease in land use rights		(4,306,865)
decrease in other non-current assets		(20,323)

increase in total assets		6,929,053

liabilities
increase in interest-bearing loans and borrowings		11,010,323
decrease in finance lease payables		(4,081,270)

increase in total liabilities		6,929,053

decrease in retained earnings		—
decrease in non-controlling interests		—

the lease liabilities as at january 1, 2019 reconciled to the operating lease commitments as at december 31, 2018 is as follows:


	increase/(decrease)
	rmb'000
operating lease commitments as at december 31, 2018	12,989,524
less: commitments relating to short-term leases, low-value assets leases and those leases with a remaining lease term ending on or before december 31, 2019	59,819
undiscounted operating lease commitments as at january 1, 2019 under ifrs 16	12,929,705

weighted average incremental borrowing rate as at january 1, 2019	4.97	%

discounted operating lease commitments as at january 1, 2019 under ifrs 16	6,929,053
add: recognized finance leases as at december 31, 2018	4,081,270

lease liabilities as at january 1, 2019	11,010,323

(b) amendments to ias 28

amendments to ias 28 clarify that the scope exclusion of ifrs 9 only includes interests in an associate or joint venture to which the equity method is applied and does not include long-term interests that in substance form part of the net investment in the associate or joint venture, to which the equity method has not been applied. therefore, an entity applies ifrs 9, rather than ias 28, including the impairment requirements under ifrs 9, in accounting for such long-term interests. ias 28 is then applied to the net investment, which includes the long-term interests, only in the context of recognising losses of an associate or joint venture and impairment of the net investment in the associate or joint venture. the group assessed its business model for its long-term interests in associates and joint ventures upon adoption of the amendments on january 1, 2019 and concluded that the long-term interests in associates and joint ventures continue to be measured at amortized cost in accordance with ifrs 9. accordingly, the amendments did not have any impact on financial position or performance of the group.

(c)ifric 23

ifric 23 addresses the accounting for income taxes (current and deferred) when tax treatments involve uncertainty that affects the application of ias 12 (often referred to as “uncertain tax positions”). the interpretation does not apply to taxes or levies outside the scope of ias 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. the interpretation specifically addresses (i) whether an entity considers uncertain tax treatments separately; (ii) the assumptions an entity makes about the examination of tax treatments by taxation authorities; (iii) how an entity determines taxable profits or tax losses, tax bases, unused tax losses, unused tax credits and tax rates; and (iv) how an entity considers changes in facts and circumstances. upon adoption of the interpretation, the group assessed whether it has any uncertain tax positions arising from transactions during the year. based on the group’s assessment, the directors are of opinion that the eventual outcome of the uncertainty position shall not have a material adverse financial effect.

(d)amendments to ifrs 10 and ias 28

amendments to ifrs 10 and ias 28 (2011) address an inconsistency between the requirements in ifrs 10 and in ias 28 (2011) in dealing with the sale or contribution of assets between an investor and its associate or joint venture. the amendments require a full recognition of a gain or loss when the sale or contribution of assets between an investor and its associate or joint venture constitutes a business. for a transaction involving assets that do not constitute a business, a gain or loss resulting from the transaction is recognized in the investor’s profit or loss only to the extent of the unrelated investor’s interest in that associate or joint venture. the amendments are to be applied prospectively. the group adopted the amendments on january 1, 2019, and assessed the sale or contribution of assets transaction with its associate or joint venture. the amendments did not have any significant impact on the group’s financial statements.

42. commitments

(a) capital commitments on property, plant and equipment


	december 31,	december 31,
	2018	2019
contracted, but not provided for	3,942,933	4,041,857

(b) operating lease commitments as at 31, december 2018

the future aggregate minimum lease payments as at december 31, 2018 pursuant to non-cancellable lease agreements entered into by the group are summarized as follows:


		december 31,
		2018
within one year		541,541
in the second to fifth years, inclusive		1,880,058
after five years		10,567,925

		12,989,524

as at december 31, 2019, the commitments to make capital contributions to the group’s joint ventures and associates were as follows:


	december 31,	december 31,
	2018	2019
associates	82,800	33,800
joint ventures	460,000	410,000

	542,800	443,800

41. contingent liabilities

the group was sued in the second quarter of 2019 against the project construction, financing arrangement and others, collectively aggregating to rmb591 million, which mainly arose from contract variation orders without merits and disagreed by the group. as an administrative process, the local courts held to freeze the group’s bank accounts or other equivalent assets amounting to rmb214 million. as at december 31, 2019 and as at the date of approval of these financial statements, the local courts have already frozen several bank accounts of the group aggregating to rmb61 million and a real estate of the group of a net book value amounting to rmb46 million. currently the lawsuits are in progress and the outcomes are unknown. the directors, based on the advice from the group’s legal counsels, believe that the group has valid defence against all the allegations and accordingly, have not provided for any claim arising from the litigations, other than the related legal and other costs.

as at december 31, 2018


	gross carrying	expected credit	expected credit
	amount	losses	loss rate (%)
alumina and primary aluminum
within 1 year	401,691	3,696	0.92
between 1 and 2 years	55,766	6,179	11.08
between 2 and 3 years	16,546	14,893	90.01
over 3 years	379,213	359,759	94.87
	853,216	384,527	/
trading
within 1 year	473,153	662	0.14
between 1 and 2 years	4,146	70	1.68
between 2 and 3 years	74	3	3.80
over 3 years	19,422	3,787	19.50
	496,795	4,522	/
energy
within 1 year	88,462	3,388	3.83
between 1 and 2 years	3,217	685	21.28
between 2 and 3 years	15,417	3,688	23.92
over 3 years	12,710	6,216	48.91
	119,806	13,977	/
corporate and other operating segments
within 1 year	108,627	6,539	6.02
between 1 and 2 years	10,974	7,767	70.78
between 2 and 3 years	4,026	3,823	94.96
over 3 years	25,800	25,142	97.45
	149,427	43,271	/

	1,619,244	446,297

individually assessed trade receivables	4,249,552	212,964

	5,868,796	659,261

as at december 31, 2019


	gross carrying	expected credit	expected credit
	amount	losses	loss rate (%)
alumina and primary aluminum
within 1 year	207,602	1,910	0.92
between 1 and 2 years	47,883	5,305	11.08
between 2 and 3 years	20,712	18,643	90.01
over 3 years	205,395	194,858	94.87
	481,592	220,716	/
trading
within 1 year	113,596	159	0.14
between 1 and 2 years	—	—	1.69
between 2 and 3 years	1,001	41	4.05
over 3 years	79,793	15,560	19.50
	194,390	15,760	/
energy
within 1 year	348,399	13,343	3.83
between 1 and 2 years	11,722	2,496	21.29
between 2 and 3 years	9,073	2,170	23.92
over 3 years	7,269	3,555	48.91
	376,463	21,564	/
corporate and other operating segments
within 1 year	51,774	3,117	6.02
between 1 and 2 years	18,129	12,831	70.78
between 2 and 3 years	5,399	5,127	94.96
over 3 years	6,176	6,019	97.45
	81,478	27,094	/

	1,133,923	285,134

individually assessed trade receivables	4,140,046	429,723

	5,273,969	714,857

10. deferred tax

deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred taxes relate to the same tax authority.

the movements in deferred tax assets and liabilities during the year ended december 31, 2019 without taking into consideration the offsetting of balances within the same tax jurisdiction are as follows:

movements in deferred tax assets:


				unrealized
	provision	accrued		profit at
	for impairment	expenses	tax losses	consolidation	others	total
as at january 1, 2018	525,439	264,209	539,899	166,043	168,647	1,664,237

acquisition of subsidiaries	360	—	—	—	7,734	8,094
(charged)/credited to profit or loss	(139,956)	(21,839)	76,338	3,833	5,989	(75,635)

as at december 31, 2018	385,843	242,370	616,237	169,876	182,370	1,596,696

as at january 1, 2019	385,843	242,370	616,237	169,876	182,370	1,596,696
credited/(charged) to profit or loss	59,218	(33,214)	(40,047)	(521)	(2,956)	(17,520)

as at december 31, 2019	445,061	209,156	576,190	169,355	179,414	1,579,176

movements in deferred tax liabilities:


				fair value
		fair value		adjustments arising
	interest	changes of	depreciation	from acquisition of
	capitalisation	financial assets	and amortization	subsidiaries	total
as at january 1, 2018	52,934	5,972	7,659	988,848	1,055,413
exchange realignment	—	—	—	1,353	1,353
credited to other comprehensive income	—	(3,769)	—	—	(3,769)
acquisition of subsidiaries	—	—	—	822,229	822,229
(credited)/charged to profit or loss	(9,102)	3,403	24,830	(27,511)	(8,380)

as at december 31, 2018	43,832	5,606	32,489	1,784,919	1,866,846

as at january 1, 2019	43,832	5,606	32,489	1,784,919	1,866,846
exchange realignment	—	—	—	416	416
credited to other comprehensive income	—	14,642	—	—	14,642
credited to profit or loss	(5,825)	(12,517)	(8,616)	(85,247)	(112,205)

as at december 31, 2019	38,007	7,731	23,873	1,700,088	1,769,699

the temporary differences associated with investments in the group’s associates and joint ventures, for which a deferred tax liability has not been recognized in the periods presented, aggregate to rmb827 million (2018: rmb438 million), considering dividends from investments in associates and joint ventures are exempted from the prc income tax and the group has no plan to dispose any of these investees in the foreseeable future.

for presentation purposes, certain deferred tax assets and liabilities have been offset in the consolidated statement of financial position. the following is an analysis of the deferred tax balances of the group for financial reporting purposes:


	december 31,	december 31,
	2018	2019
net deferred tax assets	1,542,655	1,522,216

net deferred tax liabilities	1,812,805	1,712,739

as at december 31, 2019, the group has not recognized deferred tax assets of rmb1,467 million (december 31, 2018: rmb2,634 million) in respect of accumulated tax losses amounting to rmb6,210 million (december 31, 2018: rmb11,387 million) arising in mainland china and deferred tax assets of rmb2,287 million (december 31, 2018: rmb1,660 million) in respect of deductible temporary differences amounting to rmb9,160 million (december 31, 2018: rmb7,992 million) as it was considered not probable that those assets would be realized. the above tax losses will expire in one to five years if not utilized.

as at december 31, 2019, the expiry profile of these unprovided tax losses was analyzed as follows:


	december 31,	december 31,
	2018	2019
expiring in
2019	6,753,096	—
2020	711,878	690,646
2021	975,081	958,188
2022	1,211,002	1,211,002
2023	1,736,412	997,376
2024	—	2,353,070

	11,387,469	6,210,282


	2017	2018	2019
cost of sales	6,387,773	7,291,380	6,926,580
general and administrative expenses	160,143	201,337	161,547
selling and distribution expenses	6,926	6,605	6,589

	6,554,842	7,499,322	7,094,716


	december 31,	december 31,
	2018	2019
long-term loans and borrowings

finance lease payables (note 20)	4,081,270	—

lease liabilities (note 19)	—	8,369,262

bank and other loans (note (a))
— secured (note (f))	12,608,727	13,254,721
— guaranteed (note (e))	3,040,400	3,948,400
— unsecured	30,491,613	21,632,766

	46,140,740	38,835,887

medium-term notes and bonds and long-term bonds and private placement notes (note (b))
— unsecured	10,094,861	16,736,755

total long-term loans and borrowings	60,316,871	63,941,904

current portion of lease liabilities (note 19)	—	(1,358,654)

current portion of finance lease payables (note 20)	(2,328,358)	—

current portion of medium-term bonds and long-term bonds	(396,727)	—

current portion of long-term bank and other loans	(3,384,400)	(3,339,687)

non-current portion of long-term loans and borrowings	54,207,386	59,243,563


	december 31,	december 31,
	2018	2019
short-term loans and borrowings
bank and other loans (note (c))
— secured (note (f))	1,220,680	465,000
— guaranteed (note (e))	240,000	—
— unsecured*	37,887,420	20,773,166

	39,348,100	21,238,166

short-term bonds, unsecured (note (d))	500,000	9,331,488
gold leasing arrangements (note (g))	1,607,905	7,018,609
current portion of lease liabilities (note 19)	—	1,358,654
current portion of finance lease payables (note 20)	2,328,358	—
current portion of medium-term notes	396,727	—
current portion of long-term bank and other loans	3,384,400	3,339,687

total short-term borrowings and current portion of long-term loans and borrowings	47,565,490	42,286,604


		effective		december 31,	december 31,
	face value /maturity	interest rate		2018	2019
2018 medium-term notes	2,000,000/2021	5.84	%	1,986,418	1,992,339
2019 medium-term bonds	2,000,000/2024	4.31	%	—	1,982,228
2016 private placement notes	3,215,000/2019	5.12	%	396,727	—
2018 medium-term bonds	1,100,000/2021	4.66	%	1,097,003	1,098,218
2018 medium-term bonds	900,000/2023	5.06	%	897,820	898,315
2018 medium-term bonds	1,400,000/2021	4.30	%	1,395,970	1,397,319
2018 medium-term bonds	1,600,000/2023	4.57	%	1,595,311	1,596,192
2019 medium-term bonds	2,000,000/2022	3.84	%	—	1,998,604
2019 medium-term bonds	1,000,000/2022	3.50	%	—	1,997,097
2019 medium-term bonds	900,000/2023	4.99	%	—	999,462
2018 hong kong medium-term bonds	2,785,840/2021	5.25	%	2,725,612	2,776,981
				10,094,861	16,736,755


		effective		december 31,	december 31,
	face value /maturity	interest rate		2018	2019
2018 ningxia short-term bonds	500,000/2019	5.00	%	500,000	—
2019 ningxia short-term bonds	300,000/2020	3.97	%	—	300,000
2019 short-term bonds	1,000,000/2020	2.45	%	—	1,008,161
2019 short-term bonds	2,000,000/2020	2.63	%	—	2,013,127
2019 short-term bonds	3,000,000/2020	2.00	%	—	3,008,384
2019 short-term bonds	3,000,000/2020	2.30	%	—	3,001,816

				500,000	9,331,488


	december 31,	december 29,
	2016	2017
assets
investment properties	10,742	10,425
property, plant and equipment	290,579	278,309
land use rights	20,722	20,195
inventories	29,446	49,489
other current assets	2,934	3,978
trade and notes receivables	29,748	98,957
cash and cash equivalents	5,688	10,924

liabilities
trade and notes payables	64,900	97,681
other payables and accrued expenses	10,641	66,042
interest-bearing loans and borrowings	167,000	167,000

net assets	147,318	141,554
other equity instruments	138,670	138,670
	8,648	2,884


difference recognized in equity		158,848

total purchase consideration		161,732


	december 31,	september 17,
	2017	2018
assets
property, plant and equipment	2,901	3,839
inventories	127	2,207
other current assets	200	608
trade and notes receivables	6,704	6,828
cash and cash equivalents	281	403

liabilities
trade and notes payables	(2,062)	(4,647)
contract liabilities	—	(1,504)
income tax payable	(130)	—
other payables and accrued expenses	(1,323)	(2,065)

net assets	6,698	5,669

non-controlling interests	(3,281)	(2,778)

net assets acquired		2,891

difference recognized in equity		413

total purchase consideration		3,304


		january 1, 2018
		fair value
assets
property, plant and equipment		2,194,095
intangible assets		137
land use rights		109,320
other current assets		353,655
inventories		220,718
trade and notes receivables		250
restricted cash		324,030
cash and cash equivalents		673,587
liabilities
deferred tax liabilities		(58,299)
interest-bearing loans and borrowings		(1,680,000)
contract liabilities		(2,562)
other payables and accrued expenses		(345,562)
trade and notes payables		(464,454)

net assets		1,324,915

non-controlling interests		794,949

share of net assets acquired		529,966

goodwill		—

satisfied by:
cash		—
fair value of previously held equity interest		529,966
		529,966


		august 31, 2017
		fair value
assets
property, plant and equipment		3,594,970
land use rights		31,833
intangible assets		188
other current assets		312,840
inventories		35,349
trade and notes receivables		162,093
cash and cash equivalents		255,152

liabilities
deferred tax liabilities		(40,706)
interest-bearing loans and borrowings		(2,514,800)
other payables and accrued expenses		(186,782)
trade and notes payables		(800,438)

net assets		849,699

non-controlling interests		416,353

net assets acquired		433,346

goodwill		—

satisfied by cash		—


	december 31,	august 30,
	2017	2018
assets
property, plant and equipment	35,201	127,315
trade and notes receivables	12,143	—
inventories	90,581	71,264

liabilities
trade and notes payables	(69,521)	(117,749)

net assets	68,404	80,830
difference recognized in equity		11,218

total purchase consideration		92,048


	december 31,	august 30,
	2017	2018
assets
property, plant and equipment	271,604	379,618
land use rights	26,124	25,731
deferred tax assets	3,325	3,325
inventories	59,035	65,440
other current assets	11,095	18,608
trade and notes receivables	32,880	53,392
restricted cash	15,700	—
cash and cash equivalents	50,545	16,258

liabilities
interest-bearing loans and borrowings	(228,500)	(233,000)
contract liabilities	—	(1,816)
trade and notes payables	(46,702)	(56,970)
other payables and accrued expenses	(51,595)	(52,114)
income tax payable	(2,927)	—
other non-current liabilities	(69,640)	(65,901)

net assets	70,944	152,571
non-controlling interests	(15,856)	(34,100)
difference recognized in equity		83,497

total purchase consideration		201,968


	december 31,	december 28,
	2016	2017
assets
property, plant and equipment	52,001	48,995

liabilities
other payables and accrued expenses	—	—

net assets	52,001	48,995
difference recognized in equity	—	1,063

total purchase consideration		50,058


	december 31,	august 31,
	2017	2018
assets
property, plant and equipment	24,393	23,845
inventories	51,104	46,150
other current assets	418	411
trade and notes receivables	23,052	44,522
cash and cash equivalents	34,354	—

liabilities
trade and notes payables	(12,235)	(24,011)
contract liabilities	—	(1,432)
other payables and accrued expenses	(38,415)	(1,542)

net assets	82,671	87,943

difference recognized in equity		58,319

total purchase consideration		146,262


		december 6, 2018
		fair value
assets
property, plant and equipment		7,327,807
intangible assets		728,067
land use right		348,901
deferred tax assets		8,094
other non-current assets		60,336
other current assets		102,396
inventories		865,418
trade and notes receivables		44,706
restricted cash		203,350
cash and cash equivalents		81,344


liabilities
deferred tax liabilities		(722,349)
interest-bearing loans and borrowings		(1,743,036)
other non-current liabilities		(239,998)
contract liabilities		(617,827)
other payables and accrued expenses		(686,024)
trade and notes payables		(1,594,724)

net assets		4,166,461

non-controlling interests		—

share of net assets acquired		4,166,461

goodwill		1,163,949

satisfied by:
cash		2,665,205
fair value of previously held equity interest		2,665,205

		5,330,410


		january 1, 2018
		fair value
assets
property, plant and equipment		2,292,483
intangible assets		749
other current assets		215,575
inventories		15,473
trade and notes receivables		4,135
cash and cash equivalents		2,173,062

liabilities
deferred tax liabilities		(41,581)
interest-bearing loans and borrowings		(3,485,852)
other payables and accrued expenses		(37,789)
trade and notes payables		(13,778)

net assets		1,122,477

non-controlling interests		673,486

share of net assets acquired		448,991

goodwill		—

satisfied by:
cash		—
fair value of previously held equity interest		448,991

		448,991


	buildings	land use rights	total
year ended december 31, 2018
opening net carrying amount	254,061	1,078,309	1,332,370
transfer from property, plant and equipment (note 6)	11,039	—	11,039
transfer to property, plant and equipment (note 6)	(21,773)	—	(21,773)
disposal	—	(143,401)	(143,401)
depreciation	(7,353)	(14,876)	(22,229)
closing net carrying amount	235,974	920,032	1,156,006

as at december 31, 2018
cost	251,626	939,015	1,190,641
accumulated depreciation	(15,652)	(18,983)	(34,635)

net carrying amount	235,974	920,032	1,156,006


	buildings	land use rights	total
year ended december 31, 2019
opening net carrying amount	235,974	920,032	1,156,006
additions	44,063	—	44,063
transfer from property, plant and equipment (note 6)	179,564	—	179,564
transfer from right-of-use assets (note 19)	—	239,765	239,765
disposal	(36,949)	(52,537)	(89,486)
depreciation	(8,484)	(18,075)	(26,559)
impairment	—	(87)	(87)
closing net carrying amount	414,168	1,089,098	1,503,266

as at december 31, 2019
cost	508,705	1,159,343	1,668,048
accumulated depreciation and impairment	(94,537)	(70,245)	(164,782)

net carrying amount	414,168	1,089,098	1,503,266


				office
			transportation	and other	construction
	buildings	machinery	facilities	equipment	in progress	total
year ended december 31, 2018
opening net carrying amount	32,288,223	52,784,696	541,908	129,630	9,987,437	95,731,894
reclassifications and internal transfers	3,204,611	3,600,371	75,277	5,149	(6,885,408)	—
government grants	(468)	(113,481)	—	—	—	(113,949)
transfer to intangible assets (note 5)	—	—	—	—	(525,216)	(525,216)
transfer to prepaid land lease payments (note 19)	—	—	—	—	(382,242)	(382,242)
transfer to investment properties (note 7)	(11,039)	—	—	—	—	(11,039)
transfer from investment properties (note 7)	21,773	—	—	—	—	21,773
additions	230,243	1,998,717	31,668	48,912	8,016,079	10,325,619
acquisition of subsidiaries	4,633,728	4,026,062	17,443	5,937	3,149,060	11,832,230
disposal of subsidiaries	—	(472)	(101)	(53)	(8,893)	(9,519)
disposals	(251,212)	(2,505,158)	(39,827)	(3,347)	(275,391)	(3,074,935)
depreciation	(1,266,607)	(6,087,890)	(116,807)	(28,018)	—	(7,499,322)
impairment losses	—	(7,061)	—	—	(39,423)	(46,484)
currency translation differences	99	146	34	27	—	306

closing net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116

as at december 31, 2018
cost	56,620,994	103,608,492	2,538,835	603,665	13,187,424	176,559,410
accumulated depreciation and impairment	(17,771,643)	(49,912,562)	(2,029,240)	(445,428)	(151,421)	(70,310,294)

net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116


				office
			transportation	and other	construction
	buildings	machinery	facilities	equipment	in progress	total
year ended december 31, 2019
opening net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116
impact on initial application of ifrs 16 (note 2.2)	(148,673)	(5,851,498)	—	—	(720,439)	(6,720,610)
opening net book amount at january 1, 2019	38,700,678	47,844,432	509,595	158,237	12,315,564	99,528,506
currency translation differences	89	103	17	46	—	255
reclassifications and internal transfers	3,869,147	5,125,998	(29,181)	207,546	(9,173,510)	—
transfer to intangible assets (note 5)	—	—	—	—	(63,370)	(63,370)
transfer to right-of-use assets	(107,368)	(495)	—	—	—	(107,863)
transfer to investment properties (note 7)	(179,564)	—	—	—	—	(179,564)
additions	576,035	635,678	44,122	13,506	9,351,883	10,621,224
transfer from right-of-use assets (note 19) *	—	1,674,260	—	—	—	1,674,260
government grants	(7,211)	(69,012)	—	—	—	(76,223)
disposals	(79,280)	(378,816)	(19,672)	(938)	(70,201)	(548,907)
disposal of subsidiaries	(85,851)	(73,432)	(3,270)	(239)	—	(162,792)
depreciation	(1,849,121)	(5,121,646)	(100,547)	(23,402)	—	(7,094,716)
impairment loss	(105,347)	(153,394)	(14)	(185)	(414)	(259,354)

closing net carrying amount	40,732,207	49,483,676	401,050	354,571	12,359,952	103,331,456

as at december 31, 2019
cost	60,153,059	101,624,509	2,238,818	829,575	12,511,787	177,357,748
accumulated depreciation and impairment	(19,420,852)	(52,140,833)	(1,837,768)	(475,004)	(151,835)	(74,026,292)

net carrying amount	40,732,207	49,483,676	401,050	354,571	12,359,952	103,331,456

33. dividends

according to the articles of association of the company, the company considers that the maximum limit of profit appropriation to its shareholders is the lowest of:

(i)

the sum of the net profit and the opening retained earnings for the current period in accordance with ifrss;

(ii)

the sum of the net profit and the opening retained earnings for the current period in accordance with the prc accounting standards for business enterprises; and

(iii)

the amount limited by the company law of the prc.

according to the resolution of the board of directors dated march 26, 2020, the directors did not propose any final dividend for the year ended december 31, 2019, which is to be approved by the shareholders.


	2017	2018	2019
profit attributable to ordinary equity holders of the parent (rmb)	1,413,221	707,460	850,999
other equity instruments’ distribution reserved (rmb)	(110,000)	(129,282)	(219,249)
	1,303,221	578,178	631,750
weighted average number of ordinary shares in issue	14,903,798,236	14,903,798,236	14,903,798,236
effect of equity exchange arrangement	—	1,938,915,502	—
issuance of share capital* (note 16)	—	—	2,118,874,715
	14,903,798,236	16,842,713,738	17,022,672,951

basic and diluted earnings per share (rmb)	0.087	0.034	0.037

* the group had no potentially dilutive ordinary shares in issue during the years ended december 31, 2019, 2018 and 2017.

29. employee benefit expenses

an analysis of employee benefit expenses is as follows:


	2017	2018	2019
salaries and bonus	4,205,361	4,636,972	4,939,758
housing fund	395,489	414,440	488,574
staff welfare and other expenses*	1,576,552	1,896,365	2,035,931
employment expense in relation to early retirement schemes (note 21)	767,632	447,660	210,428
employment expenses in relation to termination benefit	30,247	37,590	98,479

	6,975,281	7,433,027	7,773,170

* staff welfare and other expenses include staff welfare, staff union expenses, staff education expenses, unemployment insurance expenses, pension insurance expenses, etc.

employee benefit expenses include remuneration payables to directors, supervisors and senior management as set out in note 30.

4. revenue and segment information

(a) revenue

revenue recognized during the years is as follows:


	2017	2018	2019
revenue from contracts with customers (net of value-added tax)
sales of goods	180,706,361	179,785,704	189,569,543
rendering of services	163,732	215,557	186,703
revenue from other sources
rental income	152,543	240,153	317,915

	181,022,636	180,241,414	190,074,161

revenue from the rendering of services includes revenue from the supply of heat and water and the provision of machinery processing, transportation, packaging and other services.

(i) disaggregated revenue information

for the year ended december 31, 2018


					corporate
		primary			and other
	alumina	aluminum	energy		operating	inter-segment
	segment	segment	segment	trading	segments	elimination	total
type of goods or services
sales of goods	43,979,059	53,771,379	7,019,716	141,980,479	667,095	(67,632,024)	179,785,704
rendering of services	—	—	215,557	—	—	—	215,557
total revenue	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

geographical markets
mainland china	43,979,059	53,771,379	7,235,273	132,763,920	667,095	(67,632,024)	170,784,702
outside of mainland china	—	—	—	9,216,559	—	—	9,216,559
total revenue from contracts with customers	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

timing of revenue recognition
goods transferred at a point in time	43,979,059	53,771,379	7,019,716	141,980,479	667,095	(67,632,024)	179,785,704
services transferred over time	—	—	215,557	—	—	—	215,557
total revenue from contracts with customers	43,979,059	53,771,379	7,235,273	141,980,479	667,095	(67,632,024)	180,001,261

revenue from contracts with customers
external customers	14,586,564	41,313,516	7,036,936	116,610,176	454,069	—	180,001,261
intersegment sales	29,392,495	12,457,863	198,337	25,370,303	213,026	—	67,632,024
	43,979,059	53,771,379	7,235,273	141,980,479	667,095	-	247,633,285
intersegment adjustments and eliminations	(29,392,495)	(12,457,863)	(198,337)	(25,370,303)	(213,026)	—	(67,632,024)
total revenue	14,586,564	41,313,516	7,036,936	116,610,176	454,069	—	180,001,261

for the year ended december 31, 2019


					corporate
		primary			and other
	alumina	aluminum	energy		operating	inter-segment
	segment	segment	segment	trading	segments	elimination	total
type of goods or services
sales of goods	43,690,995	49,043,864	7,148,644	158,633,447	492,624	(69,440,031)	189,569,543
rendering of services	—	—	186,703	—	—	—	186,703
total revenue	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

geographical markets
mainland china	43,690,995	49,043,864	7,335,347	152,857,432	492,624	(69,440,031)	183,980,231
outside of mainland china	—	—	—	5,776,015	—	—	5,776,015
total revenue from contracts with customers	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

timing of revenue recognition
goods transferred at a point in time	43,690,995	49,043,864	7,148,644	158,633,447	492,624	(69,440,031)	189,569,543
services transferred over time	—	—	186,703	—	—	—	186,703
total revenue from contracts with customers	43,690,995	49,043,864	7,335,347	158,633,447	492,624	(69,440,031)	189,756,246

revenue from contracts with customers
external customers	14,117,594	37,349,482	7,099,211	130,864,398	325,561	—	189,756,246
intersegment sales	29,573,401	11,694,382	236,136	27,769,049	167,063	—	69,440,031
	43,690,995	49,043,864	7,335,347	158,633,447	492,624	—	259,196,277
intersegment adjustments and eliminations	(29,573,401)	(11,694,382)	(236,136)	(27,769,049)	(167,063)	—	(69,440,031)
total revenue	14,117,594	37,349,482	7,099,211	130,864,398	325,561	—	189,756,246

the following table shows the amounts of revenue recognized in the current reporting period that were included in the contract liabilities at the beginning of the reporting period:


	2018	2019
revenue recognized that was included in contract liabilities at the beginning of the reporting period:
— sale of goods	1,277,125	1,543,164
— others	32,947	36,158

	1,310,072	1,579,322

(ii) performance obligations

information about the group’s performance obligations is summarized below:

revenue from sales of products (including sales of and other materials)

the performance obligation is satisfied upon delivery of the industrial products and payment is generally due within 30 to 90 days from delivery, except for new customers, where payment in advance is normally required.

sale of goods were made in a short period of time and the performance obligation was mostly satisficed in one year or less at the end of each year.

rendering of services

the performance obligation is satisfied over time as services are rendered and payment is generally due upon completion of the relevant services.

the transaction prices allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at december 31, 2018 and december 31, 2019 are as follows:


	2018	2019
within one year	1,579,322	1,638,826
more than one year	132,844	125,758

	1,712,166	1,764,584

the remaining performance obligations expected to be recognized in more than one year relate to rendering of services that are to be satisfied within 1–10 years. all the other remaining performance obligations are satisfied in one year or less at the end of each year.

(b) segment information

the presidents of the company have been identified as the chief operating decision-makers. they are responsible for the review of internal reports in order to allocate resources to operating segments and assess their performance of these operating segments.

the presidents monitor the business from a product perspective comprising alumina, primary aluminum and energy products which are identified as separate reportable operating segments. in addition, the group’s trading business is identified as a separate reportable operating segment. the group’s operating segments also include corporate and other operating activities.

the presidents assess the performance of operating segments based on profit or loss before income tax in related periods. unless otherwise stated below, the manner of assessment used by the presidents is consistent with that applied in these financial statements. management has determined the operating segments based on the reports reviewed by the presidents that are used to make strategic decisions.

the group’s five reportable operating segments are summarized as follows:

the alumina segment, which consists of the mining and purchase of bauxite and other raw materials, the refining of bauxite into alumina, and the sale of alumina both internally to the group’s aluminum enterprises and trading enterprises and externally to customers outside the group. this segment also includes the production and sale of chemical alumina and metal gallium.

the primary aluminum segment, which consists of the procurement of alumina and other raw materials, supplemental materials and electricity power, and the smelting of alumina to produce primary aluminum which is sold to internal trading enterprises and external customers, including chinalco and its subsidiaries. this segment also includes the production and sale of carbon products and aluminum alloy and other aluminum products.

the energy segment, which consists of the research and development, production and operation of energy products, mainly includes coal mining, electricity generation by thermal power, wind power and solar power, and the new energy-related equipment manufacturing business. sales of coals are mainly made to the group’s internal and external coal consuming customers; electricity is sold to regional power grid corporations.

the trading segment, which consists of the trading of alumina, primary aluminum, aluminum fabrication products, other non-ferrous metal products, coal products, raw materials and supplemental materials and logistics and transport services to internal manufacturing plants and external customers in the prc. the products are sourced from fellow subsidiaries of the group, international and domestic suppliers of the group. sales of products manufactured by the group’s manufacturing business are included in the total revenue of the trading segment and are eliminated with the segment revenue of the respective segments which supply the products to the trading segment.

corporate and other operating segments, which mainly include corporate management, research and development activities and others.

prepaid current income tax and deferred tax assets are excluded from segment assets, and income tax payable and deferred tax liabilities are excluded from segment liabilities. all sales among the operating segments were conducted on terms mutually agreed among group companies, and have been eliminated on consolidation.


	year ended december 31, 2017
					corporate
					and other	inter-
		primary			operating	segment
	alumina	aluminium	energy	trading	segments	eliminations	total
total revenue	38,997,261	47,245,646	6,250,966	146,856,931	645,314	(58,973,482)	181,022,636
inter-segment revenue	(24,431,939)	(10,693,678)	(517,269)	(23,159,115)	(171,481)	58,973,482	—

sales of self-produced products (note (i))				23,158,952

sales of products sourced from external suppliers				100,538,864

revenue from external customers	14,565,322	36,551,968	5,733,697	123,697,816	473,833	—	181,022,636

segment profit/(loss) before income tax	3,290,945	826,632	(171,310)	733,896	(1,728,563)	97,575	3,049,175

income tax expense							(643,706)

profit for the year							2,405,469

other items
finance income	233,016	83,996	44,015	192,327	153,336	—	706,690
finance costs	(708,655)	(1,212,249)	(1,000,767)	(467,088)	(1,814,663)	—	(5,203,422)
share of profits and losses of joint ventures	82,619	—	(383,263)	1,885	306,910	—	8,151
share of profits and losses of associates	—	(16,887)	(181,667)	9,463	23,842	—	(165,249)
amortization of land use rights	(42,768)	(25,120)	(15)	(6,376)	(17,300)	—	(91,579)
depreciation and amortization (excluding the amortization of land use rights)	(2,781,350)	(2,516,058)	(1,510,218)	(79,342)	(86,200)	—	(6,973,168)
gain on disposal of property, plant and equipment and land use right	47,243	40,106	(12,826)	1,673	543	—	76,739
realized gain/(loss) on futures, forward and option contracts, net	3,398	(47,730)	1,585	(24,953)	43,749	—	(23,951)
impairment of property, plant and equipment	(568)	—	(15,632)	—	—	—	(16,200)
unrealized loss on futures, forward and option contracts, net	—	(17,033)	—	(92,719)	(21,321)	—	(131,073)
gain on deemed disposal and disposal of subsidiaries	—	—	38,397	54,599	232,026	—	325,022
changes for impairment of inventories	79,063	64,734	4,488	722	5,287	—	154,294
(provision for)/reversal of impairment of receivables, net of bad debts recovered	(17,453)	269	(25,119)	(18,396)	—	—	(60,699)
gain on disposal and dividends of available for sale	—	2,792	—	—	76,616	—	79,408
gain on previously held equity interest remeasured at an acquisition-date fair value	—	—	117,640	—	—	—	117,640
investments in associates	90,875	296,357	2,170,178	184,149	4,193,471	—	6,935,030
investments in joint ventures	2,809,758	—	878,196	28,865	2,290,805	—	6,007,624

additions during the period:
intangible assets	—	197	284,509	372	89	—	285,167
land use rights	—	—	27,956	25,199	6,060	—	59,215
property, plant and equipment (note (ii))	2,642,350	5,533,168	1,268,051	64,005	256,093	—	9,763,667

note:

(i)

the sales of self-produced products include sales of self-produced alumina amounting to rmb13,187 million, sales of self-produced primary aluminium amounting rmb6,680, and sales of self-produced other products amounting to rmb3,292 million.

(ii)

the additions to property, plant and equipment under sale and leaseback contracts are not included.


	year ended december 31, 2018
					corporate
					and other	inter-
		primary			operating	segment
	alumina	aluminum	energy	trading	segments	eliminations	total
total revenue	44,150,937	53,802,172	7,235,273	142,017,821	667,235	(67,632,024)	180,241,414
inter-segment revenue	(29,392,495)	(12,457,863)	(198,337)	(25,370,303)	(213,026)	67,632,024	—

sales of self-produced products (note (i))				34,454,943

sales of products sourced from external suppliers				82,192,575

revenue from external customers	14,758,442	41,344,309	7,036,936	116,647,518	454,209	—	180,241,414

segment profit/(loss) before income tax	3,496,381	(929,298)	26,020	740,454	(1,267,146)	198,103	2,264,514

income tax expense							(822,519)

profit for the year							1,441,995

other items
finance income	100,125	54,458	15,744	136,515	185,392	—	492,234
finance costs	(399,344)	(1,131,622)	(1,047,285)	(366,807)	(1,937,438)	—	(4,882,496)
share of profits and losses of joint ventures	37,377	8	(225,377)	9,010	(20,470)	—	(199,452)
share of profits and losses of associates	(1,141)	17,102	(52,368)	19,375	56,367	—	39,335
amortization of land use rights	(39,027)	(41,175)	(9,335)	(18,615)	—	—	(108,152)
depreciation and amortization (excluding the amortization of land use rights)	(2,846,051)	(2,954,801)	(1,962,081)	(101,705)	(82,963)	—	(7,947,601)
gain/(loss) on disposal of property, plant and equipment and land use right	53,116	15,211	24,780	20,036	(12,045)	—	101,098
realized (loss)/gain on futures, forward and option contracts, net	(716)	—	2,855	47,601	(9,248)	—	40,492
other income	57,777	38,220	29,858	6,718	2,794	—	135,367
impairment of property, plant and equipment	—	—	(7,450)	(39,034)	—	—	(46,484)
unrealized gain on futures, forward and option contracts, net	—	—	—	100,967	—	—	100,967
gain/(loss) on disposal of subsidiaries	7,671	—	—	—	(4,154)	—	3,517
changes for impairment of inventories	(54,463)	(273,796)	(7,884)	(17,802)	—	—	(353,945)
reversal of/(provision for) impairment of receivables, net of bad debts recovered	19,320	(9,406)	(23,327)	(84,922)	(9,621)	—	(107,956)
dividends of equity investments at fair value through other comprehensive income	—	—	1,000	—	108,914	—	109,914
loss on disposal of associates	—	—	(1,904)	—	—	—	(1,904)
(loss)/gain on previously held equity interest remeasured at an acquisition-date fair value	—	—	(3,177)	—	751,263	—	748,086
investments in associates	89,734	558,759	2,064,425	131,691	3,518,853	—	6,363,462
investments in joint ventures	989,840	—	435,867	77,211	1,890,431	—	3,393,349

additions during the period:
intangible assets	99,089	753	2,754	514	194	—	103,304
land use rights	2,786	—	—	52	—	—	2,838
property, plant and equipment (note (ii))	2,564,003	4,602,580	1,610,442	101,360	143,839	—	9,022,224

note:

(i)

the sales of self-produced products include sales of self-produced alumina amounting to rmb16,561 million, sales of self-produced primary aluminium amounting rmb13,517 million, and sales of self-produced other products amounting to rmb4,376 million.

(ii)

the additions to property, plant and equipment under sale and leaseback contracts (note 20) are not included.


	year ended december 31, 2019
					corporate
					and other
		primary			operating	inter-segment
	alumina	aluminum	energy	trading	segments	eliminations	total
total revenue	43,899,982	49,089,019	7,345,971	158,686,280	492,940	(69,440,031)	190,074,161
inter-segment revenue	(29,573,401)	(11,694,382)	(236,136)	(27,769,049)	(167,063)	69,440,031	—

sales of self-produced products (note (i))				24,374,356

sales of products sourced from external suppliers				106,542,875

revenue from external customers	14,326,581	37,394,637	7,109,835	130,917,231	325,877	—	190,074,161

segment profit/(loss) before income tax	844,848	687,246	403,479	952,848	(987,704)	213,084	2,113,801

income tax expense							(625,720)

profit for the year							1,488,081

other items
finance income	61,644	53,252	35,093	105,622	5,540	—	261,151
finance costs	(651,238)	(1,328,730)	(1,064,769)	(223,928)	(1,652,514)	—	(4,921,179)
share of profits and losses of joint ventures	86,245	—	(22,272)	3,767	202,375	—	270,115
share of profits and losses of associates	(6,319)	11,621	(32,660)	36,579	39,546	—	48,767
amortization of right-of-use assets	(495,693)	(338,975)	(146,139)	(45,541)	(49,477)	—	(1,075,825)
depreciation and amortization (excluding the amortization of right-of-use assets)	(2,830,152)	(3,235,356)	(1,488,077)	(79,366)	(81,467)	—	(7,714,418)
(loss)/gain on disposal of property, plant and equipment, and land use rights	(587,503)	830,205	(1,010)	7,216	(5,948)	—	242,960
gain on disposal of business	262,677	—	—	—	—	—	262,677
realized loss on futures, forward and option contracts, net	—	—	—	60,671	—	—	60,671
other income	21,252	716	47,666	6,241	2,757	—	78,632
impairment losses on property, plant and equipment and other non-current assets	(8,743)	(247,112)	(3,499)	—	—	—	(259,354)
unrealized loss on futures, forward and option contracts,net	—	—	—	(9,851)	—	—	(9,851)
gain on share of associates’ net assets	—	—	—	—	295,288	—	295,288
gain on disposal of a subsidiary	118	—	3,014	2,738	255,317	—	261,187
gain on disposal of associates	—	—	159,514	—	—	—	159,514
changes for impairment of inventories	69,740	166,331	(19,076)	34,136	—	—	251,131
reversal of/ (provision for) impairment of receivables, net of bad debts recovered	6,837	1,088	(53,227)	(121,154)	(3,295)	—	(169,751)
dividends of equity investments at fair value through other comprehensive income	—	—	1,000	—	96,775	—	97,775
investments in associates	83,424	574,385	2,021,964	362,757	6,469,871	—	9,512,401
investments in joint ventures	1,076,085	—	298,991	79,199	1,931,307	—	3,385,582

additions during the period:
intangible assets	209,365	949,013	(5,062)	1,869	201	—	1,155,386
right-of- use assets	1,080,285	131,797	8,411	27,365	—	—	1,247,858
property, plant and equipment (note (ii))	6,486,248	2,381,644	1,454,659	132,841	165,832	—	10,621,224

note:

(i)

the sales of self-produced products include sales of self-produced alumina amounting to rmb13,329 million, sales of self-produced primary aluminium amounting rmb10,689 million, and sales of self-produced other products amounting to rmb356 million.

(ii)

the additions to property, plant and equipment under sale and leaseback contracts are not included.


					corporate
					and other
		primary			operating
	alumina	aluminum	energy	trading	segments	total
as at december 31, 2018


segment assets	82,677,250	57,712,842	39,458,086	20,217,906	33,577,526	233,643,610
reconciliation:
elimination of inter-segment receivables						(34,228,334)
other eliminations						(155,283)
corporate and other unallocated assets:
deferred tax assets						1,542,655
prepaid income tax						162,103

total assets						200,964,751

segment liabilities	38,817,030	34,492,538	27,265,031	14,530,230	50,492,049	165,596,878
reconciliation:
elimination of inter-segment payables						(34,228,334)
corporate and other unallocated liabilities:
deferred tax liabilities						1,812,805
income tax payable						113,783

total liabilities						133,295,132


					corporate
					and other
		primary			operating
	alumina	aluminum	energy	trading	segments	total
as at december 31, 2019

segment assets	90,584,165	63,155,573	38,886,172	17,360,278	49,658,116	259,644,304
reconciliation:
elimination of inter-segment receivables						(58,081,964)
other eliminations						(106,985)
corporate and other unallocated assets:
deferred tax assets						1,522,216
prepaid income tax						93,093

total assets						203,070,664

segment liabilities	47,247,335	38,588,473	26,582,436	9,308,667	66,771,364	188,498,275
reconciliation:
elimination of inter-segment payables						(58,081,964)
corporate and other unallocated liabilities:
deferred tax liabilities						1,712,739
income tax payable						216,554

total liabilities						132,345,604

the group mainly operates in mainland china. operating segment information by geographical location as follows:


	2017	2018	2019
segment revenue from external customers
— mainland china	171,956,305	171,024,855	184,298,146
— outside mainland china	9,066,331	9,216,559	5,776,015
	181,022,636	180,241,414	190,074,161


	2018	2019
non-current assets (excluding financial assets and deferred tax assets)
— mainland china	137,939,763	147,798,239
— outside mainland china	646,327	2,668,533
	138,586,090	150,466,772

for the year ended december 31, 2019, revenues of approximately rmb40,567 million (2017: rmb39,759 million, 2018: rmb32,852 million) were derived from entities directly or indirectly owned or controlled by the prc government including chinalco. these revenues are mainly attributable to the alumina, primary aluminium, energy and trading segments. there were no other individual customers from which the group has derived revenue of 10% or more of the group’s revenue during the years ended december 31, 2017, 2018 and 2019.

43. events after the reporting period

(a)

on january 13, 2020, the group completed an issuance of short-term bonds with a total face value of rmb1.5 billion at par value of rmb100.00 per unit which will mature in april 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.10%.

(b)

on january 15, 2020, the group completed an issuance of short-term bonds with a total face value of rmb2 billion at par value of rmb100.00 per unit which will mature in april 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.20%.

(c)

on february 13, 2020, the group completed an issuance of short-term bonds with a total face value of rmb1 billion at par value of rmb100.00 per unit which will mature in may 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.10%.

(d)

on february 20, 2020, the group completed an issuance of short-term bonds with a total face value of rmb1 billion at par value of rmb100.00 per unit which will mature in november 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.50%.

(e)

on february 21, 2020, the group completed an issuance of short-term bonds with a total face value of rmb1 billion at par value of rmb100.00 per unit which will mature in may 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.20%.

(f)

on march 5, 2020, the group completed an issuance of corporate bonds with a total face value of rmb0.5 billion at par value of rmb100.00 per unit which will mature in march 2025 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 3.30%.

(g)

on march 13, 2020, the group completed an issuance of short-term bonds with a total face value of rmb1.8 billion at par value of rmb100.00 per unit which will mature in september 2020 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.20%.

(h)

on march 20, 2020, the group completed an issuance of corporate bonds with a total face value of rmb1 billion at par value of rmb100.00 per unit which will mature in march 2023 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 3.05%.

(i)

on march 26, 2020, the group completed an issuance of medium-term notes with a total face value of rmb0.9 billion at par value of rmb100.00 per unit which will mature in march 2023 for working capital needs and repayment of bank borrowings. the fixed annual coupon interest rate of these bonds is 2.93%.

(j)

the outbreak of the novel coronavirus (covid-19)in the prc since january 2020,the prevention and control of covid-19 has continued. the group has taken all possible effective measures to limit and keep the impact in control. the group will follow and strengthen its support to the government’s requirements on covid-19 prevention and control work.covid-19 has significant impacts on production, consumption and investment. it is expected that the aluminum industry will face greater challenges as well as greater opportunities. the group will continue to pay close attention to and evaluate the developments of covid-19 and market changes, and actively respond to the possible impact on the group’s financial situation and operating results. because of the significant uncertainties surrounding the covid-19 outbreak, the extent of the business disruption and the related financial impact cannot be reasonably estimated at this time.


	carrying amounts		fair values
	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019
financial assets
other non-current assets (note 11)	204,718	128,673	182,132	111,935

	204,718	128,673	182,132	111,935


	carrying amounts		fair values
	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019
financial liabilities
financial liabilities included in other non-current liabilities (note 21)	841,059	1,153,487	816,529	1,146,893
long-term interest-bearing loans and borrowings, excluding lease liability (note 18)	54,207,386	52,232,955	53,207,052	50,952,676

	55,048,445	53,386,442	54,023,581	52,099,569

assets measured at fair value


as at december 31, 2018	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial assets at fair value through profit or loss:
futures contracts	16,141	—	—	16,141
equity investments designated at fair value through other comprehensive income:
listed equity investments	6,441	—	—	6,441
other unlisted investment	—	—	1,723,384	1,723,384

	22,582	—	1,723,384	1,745,966


as at december 31, 2019	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial assets at fair value through profit or loss:
futures contracts	3,175	—	—	3,175
financial product	—	3,500,000	—	3,500,000
debt instruments at fair value through other comprehensive income - notes receivable	—	2,834,011	—	2,834,011
equity investments designated at fair value through other comprehensive income:
listed equity investments	8,853	—	—	8,853
other unlisted investment	—	—	2,230,398	2,230,398

	12,028	6,334,011	2,230,398	8,576,437

liabilities measured at fair value


as at december 31, 2018	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at fair value through profit or loss:
futures contracts	1,766	—	—	1,766

	1,766	—	—	1,766


as at december 31, 2019	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at fair value through profit or loss:
futures contracts	805	—	—	805
	805	—	—	805

assets for which fair values are disclosed


as at december 31, 2018	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
loans and receivables:
financial assets included in other non-current assets	—	182,132	—	182,132


as at december 31, 2019	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
loans and receivables:
financial assets included in other non-current assets	—	111,935	—	111,935

liabilities for which fair values are disclosed


as at december 31, 2018	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at amortized cost:
financial liabilities included in other non-current liabilities	—	816,529	—	816,529
long-term interest-bearing loans and borrowings	—	53,207,052	—	53,207,052

	—	54,023,581	—	54,023,581


as at december 31, 2019	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at amortized cost:
financial liabilities included in other non-current liabilities	—	1,146,893	—	1,146,893
long-term interest-bearing loans and borrowings	—	50,952,676	—	50,952,676

	—	52,099,569	—	52,099,569


	2017	2018	2019
finance income - interest income	(706,690)	(492,234)	(261,151)

interest expense	5,175,154	5,202,639	4,665,329
less: interest expense capitalized in property, plant and equipment (note 6)	(344,452)	(517,589)	(289,499)
interest expense, net of capitalized interest	4,830,702	4,685,050	4,375,830
interest on lease liabilities	—	—	487,249
amortization of unrecognized finance expenses	241,099	205,335	60,415
exchange (gain)/loss, net	131,621	(7,889)	(2,315)
finance costs	5,203,422	4,882,496	4,921,179

capitalization rate during the year (note 6)	4.41% to 8.00%	4.54% to 7.00%	4.00% to 6.96%

28. finance income/finance costs

an analysis of finance income/finance costs is as follows:


	2017	2018	2019
finance income - interest income	(706,690)	(492,234)	(261,151)

interest expense	5,175,154	5,202,639	4,665,329
less: interest expense capitalized in property, plant and equipment (note 6)	(344,452)	(517,589)	(289,499)
interest expense, net of capitalized interest	4,830,702	4,685,050	4,375,830
interest on lease liabilities	—	—	487,249
amortization of unrecognized finance expenses	241,099	205,335	60,415
exchange (gain)/loss, net	131,621	(7,889)	(2,315)
finance costs	5,203,422	4,882,496	4,921,179

capitalization rate during the year (note 6)	4.41% to 8.00%	4.54% to 7.00%	4.00% to 6.96%

2.20 derivative financial instruments

initial recognition and subsequent measurement

the group uses derivative financial instruments, such as futures and option contracts, to reduce its exposure to fluctuation in the price of primary aluminium and other products, to hedge its foreign currency risk and interest rate risk, respectively. such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

any gains or losses arising from changes in fair value of derivatives are taken directly to profit or loss.


	december 31,	december 31,
	2018	2019
within 1 year	1,456,520	1,628,723
between 1 and 2 years	283,844	752,731
between 2 and 3 years	844,262	151,974
over 3 years	4,113,427	4,910,935
	6,698,053	7,444,363
less: provision for impairment	(1,764,068)	(1,720,439)

	4,933,985	5,723,924

36. financial and capital risk management

36.1 financial risk management

the group’s activities expose it to a variety of financial risks, including market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk. the group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the group’s financial performance.

risk management is carried out by the treasury management department (the “group treasury“) under policies approved by the board of directors of the company. the group treasury identifies, evaluates and hedges financial risks through close co-operation with the group’s operating units.

(a) market risk

(i) foreign currency risk

foreign currency risk primarily arises from certain significant foreign currency deposits, trade and notes receivables, trade and notes payables, advances paid to suppliers, and short-term and long-term loans denominated in united states dollars (“usd”), australian dollars (“aud”), euro (“eur”), japanese yen (“jpy”), and hong kong dollars (“hkd”). related exposures are disclosed in notes 13, 14, 15, 18, 22, 23 and 40 to the financial statements, respectively. the group treasury closely monitors the international foreign currency market on the change of exchange rates and takes these into consideration when investing in foreign currency deposits and borrowing loans. as at december 31, 2019, the group only had significant exposure to usd.

as at december 31, 2019, if rmb had strengthened/weakened by 5% against usd with all other variables held constant, the profit for the year would have been approximately rmb95 million higher/lower (2018: rmb10 million lower/higher), mainly as a result of foreign exchange gains and losses arising from the translation of usd-denominated borrowings, other payables and medium-term notes. profit was more sensitive to the fluctuation in the rmb/usd exchange rates in 2019 than in 2018, mainly due to the increase in the usd denominated other payables and medium-term notes.

as the assets and liabilities denominated in other foreign currencies other than usd were relatively minimal to the total assets and liabilities of the group, the directors of the company are of the opinion that the group was not exposed to any significant foreign currency risk arising from these foreign currency denominated assets and liabilities as at december 31, 2019 and 2018.

(ii) interest rate risk

as at december 31, 2019, as the group had no significant interest-bearing assets except for bank deposits (note 15) and entrusted loans (note 14), the group’s income and operating cash flows are substantially independent of changes in market interest rates.

most of the bank deposits are maintained in savings and time deposit accounts in the prc. the interest rates are regulated by the people’s bank of china and the group treasury closely monitors the fluctuation on such rates periodically. the interest rates of entrusted loans are fixed. as the interest rates applied to the entrusted loans were fixed, the directors of the company are of the opinion that the group was not exposed to any significant interest rate risk for its financial assets held as at december 31, 2019 and 2018.

the interest rate risk for the group’s financial liabilities primarily arises from interest-bearing loans. loans borrowed at floating interest rates expose the group to cash flow interest rate risk. the group enters into debt obligations to support general corporate purposes including capital expenditures and working capital needs. the group treasury closely monitors market interest rates and maintains a balance between variable rate and fixed rate borrowings in order to reduce the exposures to the interest rate risk described above.

as at december 31, 2019, if interest rates had been 100 basis points (december 31, 2018: 100 basis points) higher/lower for bank and other loans borrowed at floating interest rates with all other variables held constant, net profit for the year would have been rmb451 million lower/higher (2018: rmb641 million), respectively, mainly as a result of the higher/lower interest expense on floating rate borrowings.

the interest rate risk of the group mainly arises from medium-term notes and short-term bonds issued at fixed rates. as the fluctuation of comparable interest rates of corporate bonds with similar terms was relatively low, the directors of the company are of the opinion that the group was not exposed to any significant fair value interest rate risk for its fixed interest rate borrowings held as at december 31, 2019 and 2018.

(iii) commodity price risk

the group uses futures and option contracts to reduce its exposure to fluctuations in the price of primary aluminum and other products. the group uses the futures contract for hedging other than speculation. with reference to the hedging of primary aluminum, production company hedges the output of primary aluminum and trading company hedges the quantities of buyout and self-supporting.

the group uses mainly futures contracts and option contracts traded on the shanghai futures exchange and london metal exchange (“lme”) to hedge against fluctuations in primary aluminum prices. as at december 31, 2019, the fair values of the outstanding futures contracts amounting to rmb3 million (december 31, 2018: rmb16 million) and rmb1 million (december 31, 2018: rmb2 million) were recognized in financial assets and financial liabilities at fair value through profit or loss, respectively. as at december 31, 2019, the company did not hold any option contracts (december 31, 2018: the company did not hold any option contracts).

as at december 31, 2019, if the commodity futures prices had increased/decreased by 3% (december 31, 2018: 3%) and all other variables held constant, the profit for the year would have changed by the amounts shown below:

	2018	2019
primary aluminum	decrease/increase rmb14 million	decrease/increase rmb40 million
copper	increase/decrease rmb0.9 million	increase/decrease rmb0.9 million
zinc	decrease/increase rmb1.0 million	decrease/increase rmb5.1 million
coal	decrease/increase rmb2.7 million	decrease/increase rmb0.2 million

(b) credit risk

credit risk arises from balances with banks and financial institutions, trade and notes receivables, other current and non-current receivables as well as credit exposures of customers, including outstanding receivables and committed transactions.

the group maintains substantially all of its bank balances and cash and short-term investments in several major state-owned banks in the prc. with strong support from the prc government to these state-owned banks, the directors of the company are of the opinion that there is no significant credit risk on such assets being exposed to losses.

the group applies the simplified approach to most of its trade receivables to provide for expected credit losses prescribed by ifrs 9, which permits the use of the lifetime expected loss provision for trade receivables. the group has made individual assessment for trade receivables from clients with top rating and those receivables with pledged assets separately and impairment provisions are made.

to measure the expected credit losses of trade receivables excluding individually assessed and impaired receivables, trade receivables have been grouped based on shared credit risk characteristics and the days past due. the expected credit loss model also incorporates forward-looking information.

the group has performed historical analysis and identified the key economic variables impacting credit risk and expected credit losses. it considers available reasonable and supportive forwarding-looking information. especially the following indicators are incorporated:

internal credit rating

external credit rating

actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations

actual or expected significant changes in the operating results of individual clients

significant changes in the expected performance and behaviour of the clients

the group measures expected credit loss rates on the basis of a loss rate approach by segmenting its portfolio into appropriate groupings based on shared credit risk characteristics. at the end of each year, the group updates its historical loss information with forward-looking information. as the historical credit loss rates were comparatively stable and no significant changes were expected to the forward-looking information after the consideration of reasonable and supportable forecasts of comparatively stable customer relationship and customers’ credit ratings, the expected credit loss rates remained consistent during 2019.

maximum exposure and year-end staging as at december 31, 2018 and 2019

the table below shows the credit quality and the maximum exposure to credit risk based on the group's credit policy, which is mainly based on past due information unless other information is available without undue cost or effort, and year-end staging classification as at december 31, 2018 and 2019. the amounts presented are carrying amounts for financial assets and the exposure to credit risk for the financial guarantee contracts.


year ended december 31, 2018	stage 1	stage 2	stage 3	simplified	total

trade receivables*	—	—	—	5,209,535	5,209,535
financial assets in other current assets	1,098,455	3,655,638	121,432	—	4,875,525
restricted cash	2,165,288	—	—	—	2,165,288
notes receivable	2,894,482	—	—	—	2,894,482
cash and cash equivalents	19,130,835	—	—	—	19,130,835
financial assets in other non-current assets	204,718	—	—	—	204,718
financial guarantees -not yet past due	12,450	—	—	—	12,450

total	25,506,228	3,655,638	121,432	5,209,535	34,492,833



year ended december 31, 2019	stage 1	stage 2	stage 3	simplified	total
trade receivables*	—	—	—	4,559,112	4,559,112
financial assets in other current assets	1,632,766	3,970,620	120,538	—	5,723,924
restricted cash	1,305,781	—	—	—	1,305,781
notes receivable	2,834,011	—	—	—	2,834,011
cash and cash equivalents	7,759,190	—	—	—	7,759,190
financial assets in other non-current assets	128,673	—	—	—	128,673
financial guarantees-not yet past due	5,772	—	—	—	5,772
total	13,666,193	3,970,620	120,538	4,559,112	22,316,463

* for trade receivables to which the group applies the simplified approach for impairment, information based on the provision matrix is disclosed in notes 13 to the consolidated financial statements.

the carrying amounts of short-term investments and these receivables included in notes 9, 11, 13, and 14 represent the group’s maximum exposure to credit risk in relation to its financial assets. the group also provided financial guarantees to certain subsidiaries and a joint venture. the guarantees to the joint venture mentioned in note 35 represented the group’s maximum exposure to credit risk in relation to its guarantees to the joint venture.

for the year ended december 31, 2019, revenues of approximately rmb40,567 million (2017: rmb39,759 million, 2018: rmb32,852 million) were derived from entities directly or indirectly owned or controlled by the prc government including chinalco. there were no other individual customers from whom the group has derived revenue of more than 10% of the group’s revenue during the years ended december 31, 2017, 2018 and 2019. thus, the directors of the company are of the opinion that the group was not exposed to any significant concentration of credit risk as at december 31, 2019 and 2018.

cash flow forecast is performed in the operating entities of the group and aggregated by the group treasury. the group treasury monitors rolling forecasts of the group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. this forecast takes into consideration of the group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements, for example, currency restrictions.

as at december 31,2019, the group had total banking facilities of approximately rmb167,431 million of which the amounts totalling rmb49,347 million have been utilized as at december 31, 2019. banking facilities of approximately rmb108,360 million will be subject to renewal during the next 12 months. the directors of the company are confident that such banking facilities can be renewed upon expiration based on their past experience and good credit standing.

in addition, as at december 31, 2019, the group had no credit facilities through its futures agent at the lme (december 31, 2018: usd12 million (equivalent to rmb82 million), of which usd1 million (equivalent to rmb7 million) has been utilized. the futures agent has the right to adjust the related credit facilities.)

management also monitors rolling forecasts of the group’s liquidity reserve on the basis of the expected cash flows.

the table below analyzes the maturity profile of the group’s financial liabilities as at the end of the reporting period. the amounts disclosed in the table are the contractual undiscounted cash flows.


	within 1 year	1 to 2 years	2 to 5 years	over 5 years	total
as at december 31, 2018
finance lease payables, including current portion	2,518,653	1,161,490	707,716	13,238	4,401,097
long-term bank and other loans, including current portion	3,384,400	7,377,956	16,593,587	18,784,797	46,140,740
medium-term notes and bonds, including current portion	400,000	—	9,785,840	—	10,185,840
short-term bonds	500,000	—	—	—	500,000
gold leasing arrangement	1,607,905	—	—	—	1,607,905
short-term bank and other loans	39,348,100	—	—	—	39,348,100
interest payables for borrowings	4,848,968	2,602,751	4,197,364	898,786	12,547,869
financial liabilities at fair value through profit or loss	1,766	—	—	—	1,766
financial liabilities included in other payables and accrued liabilities, excluding accrued interest	8,890,176	—	—	—	8,890,176
financial liabilities included in other non-current liabilities (note)	—	108,896	333,354	420,258	862,508
trade and notes payables	14,009,264	—	—	—	14,009,264

	75,509,232	11,251,093	31,617,861	20,117,079	138,495,265


	within 1 year	1 to 2 years	2 to 5 years	over 5 years	total
as at december 31, 2019
lease liabilities, including current portion	1,729,933	1,106,701	1,333,762	10,377,143	14,547,539
long-term bank and other loans, including current portion	3,339,687	7,525,775	9,159,028	18,811,397	38,835,887
medium-term notes and bonds, including current portion	—	7,285,840	9,500,000	—	16,785,840
short-term bonds	9,300,000	—	—	—	9,300,000
gold leasing arrangement	6,921,860	—	—	—	6,921,860
short-term bank and other loans	21,238,166	—	—	—	21,238,166
interest payables for loans and borrowings	4,955,925	2,289,092	4,220,111	978,041	12,443,169
financial liabilities at fair value through profit or loss	805	—	—	—	805
financial liabilities included in other payables and accrued liabilities, excluding accrued interest	10,288,657	—	—	—	10,288,657
financial liabilities included in other non-current liabilities (note)	—	176,232	182,006	857,647	1,215,885
trade and notes payables	12,584,755	—	—	—	12,584,755

	70,359,788	18,383,640	24,394,907	31,024,228	144,162,563

note: as disclosed in note 21, as at december 31, 2019, the carrying value of financial liabilities included in other non-current liabilities was rmb1,153 million (december 31, 2018: rmb841 million).

36.2 financial instruments

(a)

financial instruments by category

the carrying amounts of each of the categories of financial instruments of the group as at the end of the reporting period are as follows:


financial assets	december 31, 2018
	financial assets at fair value			equity
	through profit or			investments
	loss			designated at
	designated as			fair value
	such upon		financial	through other
	initial	held for	assets at	comprehensive
	recognition	trading	amortized cost	income	total
current

trade and notes receivables	—	—	8,104,017	—	8,104,017
financial assets at fair value through profit or loss	—	16,141	—	—	16,141
restricted cash and time deposits	—	—	2,165, 288		2,165, 288
cash and cash equivalents	—	—	19,130,835	—	19,130,835
financial assets included in other current assets	—	—	4,875,530	—	4,875,530

subtotal	—	16,141	34,275,670	—	34,291,811

non-current

equity investments designated at fair value through other comprehensive income	—	—	—	1,729,825	1,729,825
other non-current assets	—	—	204,718	—	204,718

subtotal	—	—	204,718	1,729,825	1,934,543

total	—	16,141	34,480,388	1,729,825	36,226,354


financial liabilities	december 31, 2018
	financial
	liabilities at fair
	value through
	profit or loss
	designated as
	such upon		financial
	initial	held for	liabilities at
	recognition	trading	amortized cost	total
current

financial liabilities at fair value through profit or loss	—	1,766	—	1,766
interest-bearing loans and borrowings	—	—	47,565,490	47,565,490
financial liabilities included in other payables and accrued liabilities (note 22)	—	—	9,286,462	9,286,462
trade and notes payables	—	—	14,009,264	14,009,264

subtotal	—	1,766	70,861,216	70,862,982

non-current

financial liabilities included in other non-current liabilities (note 21)	—	—	841,059	841,059
interest-bearing loans and borrowings	—	—	54,207,386	54,207,386

subtotal	—	—	55,048,445	55,048,445

total	—	1,766	125,909,661	125,911,427






financial assets	december 31, 2019
	financial assets at fair			equity	debt
	value through profit or			investments	instruments
	loss			designated at	at fair value
	designated as			fair value	through
	such upon		financial	through other	other
	initial	held for	assets at	comprehensive	comprehensive
	recognition	trading	amortized cost	income	income	total
current

trade receivables	—	—	4,559,112	—	—	4,559,112
notes receivable	—	—	—	—	2,834,011	2,834,011
financial assets at fair value through profit or loss*	—	3,503,175	—	—	—	3,503,175
restricted cash and time deposits	—	—	1,305,781	—	—	1,305,781
cash and cash equivalents	—	—	7,759,190	—	—	7,759,190
financial assets included in other current assets	—	—	5,723,924	—	—	5,723,924

subtotal	—	3,503,175	19,348,007	—	2,834,011	25,685,193

non-current

equity investments designated at fair value through other comprehensive income	—	—	—	2,239,251	—	2,239,251
other non-current assets	—	—	128,673	—	—	128,673

subtotal	—	—	128,673	2,239,251	—	2,367,924

total	—	3,503,175	19,476,680	2,239,251	2,834,011	28,053,117


financial liabilities	december 31, 2019
	financial liabilities at fair
	value through profit or
	loss
	designated as
	such upon		financial
	initial	held for	liabilities at
	recognition	trading	amortized cost	total
current

financial liabilities at fair value through profit or loss	—	805	—	805
interest-bearing loans and borrowings	—	—	42,286,604	42,286,604
financial liabilities included in other payables and accrued liabilities (note 22)	—	—	10,782,998	10,782,998
trade and notes payables	—	—	12,584,755	12,584,755

subtotal	—	805	65,654,357	65,655,162

non-current

financial liabilities included in other non-current liabilities (note 21)	—	—	1,153,487	1,153,487
interest-bearing loans and borrowings	—	—	59,243,563	59,243,563

subtotal	—	—	60,397,050	60,397,050

total	—	805	126,051,407	126,052,212

(b)

fair value and fair value hierarchy

fair value

the carrying amounts and fair values of the group’s financial instruments, other than those with carrying amounts that reasonably approximate to fair values and those carried at fair value, are as follows:


	carrying amounts		fair values
	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019
financial assets
other non-current assets (note 11)	204,718	128,673	182,132	111,935

	204,718	128,673	182,132	111,935


	carrying amounts		fair values
	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019
financial liabilities
financial liabilities included in other non-current liabilities (note 21)	841,059	1,153,487	816,529	1,146,893
long-term interest-bearing loans and borrowings, excluding lease liability (note 18)	54,207,386	52,232,955	53,207,052	50,952,676

	55,048,445	53,386,442	54,023,581	52,099,569

management has assessed that the fair values of cash and cash equivalents, restricted cash and time deposits, trade and notes receivables, financial assets included in other current assets, entrusted loans, trade and notes payables, financial liabilities included in other payables and accrued liabilities, short-term and the current portion of interest-bearing loans and borrowings, interest payable and the current portion of long-term payables approximate to their carrying amounts largely due to the short term maturities of these instruments.

the fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

the fair values of the financial assets included in other non-current assets and financial liabilities included in other non-current liabilities and long-term interest-bearing loans and borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments on with similar terms, credit risk and remaining maturities.

the group’s own non-performance risk for financial liabilities included in other non-current liabilities and long-term interest-bearing loans and borrowings as at december 31, 2019 was assessed to be insignificant.

fair value hierarchy

the following tables illustrate the fair value measurement hierarchy of the group’s financial instruments:

assets measured at fair value


as at december 31, 2018	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial assets at fair value through profit or loss:
futures contracts	16,141	—	—	16,141
equity investments designated at fair value through other comprehensive income:
listed equity investments	6,441	—	—	6,441
other unlisted investment	—	—	1,723,384	1,723,384

	22,582	—	1,723,384	1,745,966


as at december 31, 2019	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial assets at fair value through profit or loss:
futures contracts	3,175	—	—	3,175
financial product	—	3,500,000	—	3,500,000
debt instruments at fair value through other comprehensive income - notes receivable	—	2,834,011	—	2,834,011
equity investments designated at fair value through other comprehensive income:
listed equity investments	8,853	—	—	8,853
other unlisted investment	—	—	2,230,398	2,230,398

	12,028	6,334,011	2,230,398	8,576,437

liabilities measured at fair value


as at december 31, 2018	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at fair value through profit or loss:
futures contracts	1,766	—	—	1,766

	1,766	—	—	1,766


as at december 31, 2019	fair value measurement using
		significant	significant
	quoted prices in	observable	unobservable
	active markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at fair value through profit or loss:
futures contracts	805	—	—	805
	805	—	—	805

assets for which fair values are disclosed


as at december 31, 2018	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
loans and receivables:
financial assets included in other non-current assets	—	182,132	—	182,132


as at december 31, 2019	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
loans and receivables:
financial assets included in other non-current assets	—	111,935	—	111,935

liabilities for which fair values are disclosed


as at december 31, 2018	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at amortized cost:
financial liabilities included in other non-current liabilities	—	816,529	—	816,529
long-term interest-bearing loans and borrowings	—	53,207,052	—	53,207,052

	—	54,023,581	—	54,023,581


as at december 31, 2019	fair value measurement using
	quoted
	prices in	significant	significant
	active	observable	unobservable
	markets	inputs	inputs
	(level 1)	(level 2)	(level 3)	total
financial liabilities at amortized cost:
financial liabilities included in other non-current liabilities	—	1,146,893	—	1,146,893
long-term interest-bearing loans and borrowings	—	50,952,676	—	50,952,676

	—	52,099,569	—	52,099,569

during the year ended december 31, 2019, the group had no transfers of fair value measurements between level 1 and level 2 and no transfers into or out of level 3 for both financial assets and financial liabilities (2018: nil).

below is a summary of significant unobservable inputs to the valuation of financial instruments as at december 31, 2019 and 2018:


		significant
	valuation technique	unobservable input	range
equity investments in size industry investment fund

december 31, 2019	net assets method	net assets	5,000,000
december 31, 2018	net assets method	net assets	5,000,000
chinalco innovative
december 31, 2019	net assets method	net assets	350,911

36.3 capital risk management

the group’s capital management objectives are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

in order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debts.

consistent with other entities in the industry, the group monitors capital on the basis of its gearing ratio. this ratio is calculated as net debt divided by total capital. net debt is calculated as total liabilities (excluding deferred tax liabilities, income tax payable and deferred government grants) less restricted cash, time deposits and cash and cash equivalents. total capital is calculated as equity, as shown in the consolidated statement of financial position, plus net debt less non-controlling interests.

the gearing ratio as at december 31, 2018 and 2019 is as follows:


	december 31,		december 31,
	2018		2019
total liabilities (excluding deferred tax liabilities, income tax payable and deferred government grants)	131,054,499		130,170,395
less: restricted cash, time deposits and cash and cash equivalents	(21,296,123)		(9,064,971)

net debt	109,758,376		121,105,424

total equity	67,669,619		70,725,060
add: net debt	109,758,376		121,105,424
less: non-controlling interests	(15,254,312)		(16,065,427)

total capital attributable to owners of the parent	162,173,683		175,765,057

gearing ratio	68	%	69	%

1. general information

aluminum corporation of china limited (the "company") (中國鋁業股份有限公司) and its subsidiaries (together the "group") are principally engaged in the manufacture and distribution of alumina, primary aluminum and energy products. the group is also engaged in the development of bauxite-related resources, the production, fabrication and distribution of bauxite, carbon and relevant non-ferrous metal products and the trading and logistics and transport services of non-ferrous metal products and coal products.

the company is a joint stock company which is domiciled and was established on september 10, 2001 in the people’s republic of china (the "prc") with limited liability. the address of its registered office is no. 62 north xizhimen street, haidian district, beijing, the prc.

the company’s shares have been listed on the main board of the hong kong stock exchange and the new york stock exchange since 2001. the company also listed its a shares on the shanghai stock exchange in 2007.

in the opinion of the directors, the ultimate holding company and the parent of the company is aluminum corporation of china (“chinalco“) (中國鋁業集团有限公司), a company incorporated and domiciled in the prc and wholly owned by the state-owned assets supervision and administration commission of the state council.

information about subsidiaries

particulars of the company’s principal subsidiaries are as follows:


				percentage of equity
	place of			attributable to
	registration and	registered		the company
name	business	capital	principal activities	direct		indirect
shanxi huaxing aluminum co. ltd. (“shanxi huaxing”) (山西華興鋁業有限公司)	prc/mainland china	1,850,000	manufacture and distribution of alumina	60.00	%	40.00	%
baotou aluminum co., ltd. (“baotou aluminum“) (包頭鋁業有限公司)	prc/mainland china	2,245,510	manufacture and distribution of primary aluminum, aluminum alloy and related fabricated products and carbon products	100.00	%	—
china aluminum international trading co., ltd. (“chalco trading”) (中鋁國際貿易有限公司)	prc/mainland china	1,731,111	import and export activities	100.00	%	—

chalco shanxi new material co., ltd. (“shanxi new material”) (中鋁山西新材料有限公司)	prc/mainland china	4,279,601	manufacture and distribution of alumina, primary aluminum and anode carbon products and electricity generation and supply	85.98	%	—
china aluminum international trading group co., ltd. (“chalco trading group”) (中鋁國際貿易集團有限公司)	prc/mainland china	1,030,000	import and export activities	100.00	%	—
zunyi aluminum co., ltd. (遵義鋁業股份有限公司)	prc/mainland china	3,204,900	manufacture and distribution of primary aluminum and alumina	67.45	%	—
chalco hong kong ltd. (“chalco hong kong”) (中國鋁業香港有限公司)	hong kong	hkd849,940 in thousand	overseas investments and alumina import and export activities	100.00	%	—
chalco mining co., ltd. (“chalco mining“) (中鋁礦業有限公司)	prc/mainland china	4,028,859	manufacture, acquisition and distribution of bauxite mines, limestone ore, manufacturing and distribution of alumina	100.00	%	—
chalco energy co., ltd. (中鋁能源有限公司)	prc/mainland china	1,384,398	thermoelectric supply and investment management	100.00	%	—
china aluminum ningxia energy group co., ltd. (“ningxia energy“) (中鋁寧夏能源集團)	prc/mainland china	5,025,800	thermal power, wind power and solar power generation, coal mining, and power-related equipment manufacturing	70.82	%	—
guizhou huajin aluminum co., ltd. (“guizhou huajin“) (貴州華錦鋁業有限公司)	prc/mainland china	1,000,000	manufacture and distribution of alumina	60.00	%	—


				percentage of equity
	place of			attributable to
	registration and	registered		the company
name	business	capital	principal activities	direct		indirect
chalco zhengzhou research institute of non-ferrous metal co., ltd. (中國鋁業鄭州有色金屬研究院有限公司)	prc/mainland china	214,858	research and development services	100.00	%	—
chalco shandong co., ltd. ("chalco shandong“) (中鋁山東有限公司)	prc/mainland china	4,052,847	manufacture and distribution of alumina	100.00	%	—
chalco zhongzhou aluminum co., ltd. ("zhongzhou aluminum“) (中鋁中州鋁業有限公司)	prc/mainland china	5,071,235	manufacture and distribution of alumina	100.00	%	—
china aluminum logistics group corporation co., ltd. (中鋁物流集團有限公司)	prc/mainland china	964,291	logistic transportation	100.00	%	—
chinalco shanxi jiaokou xinghua technology ltd. (“xinghua technology“) (中鋁集團山西交口興華科技股份有限公司)	prc/mainland china	588,182	manufacture and distribution of primary aluminum	33.00	%	33.00	%
chinalco shanghai company limited (“chinalco shanghai“) (中鋁(上海)有限公司)	prc/mainland china	968,300	trading and engineering project management	100.00	%	—
shanxi china huarun co., ltd. (“shanxi huarun”) (山西中鋁華潤有限公司)	prc/mainland china	1,641,750	manufacture and distribution of primary aluminum	43.39	%	—
guizhou huaren new material co., ltd. (“guizhou huaren”) (貴州華仁新材料有限公司)	prc/mainland china	1,200,000	manufacture and distribution of primary aluminum	40.00	%	—
chalco materials co. ltd. (中鋁物資有限公司)	prc/mainland china	1,000,000	import and export activities	100.00	%	—

the above table lists the subsidiaries of the company which, in the opinion of the directors, principally affected the results of the year or formed a substantial part of the net assets of the group. to give details of the other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

* the english names represent the best effort made by management of the group in translating the subsidiaries' chinese name as they do not have any official english names.


	2017	2018	2019
segment revenue from external customers
— mainland china	171,956,305	171,024,855	184,298,146
— outside mainland china	9,066,331	9,216,559	5,776,015
	181,022,636	180,241,414	190,074,161


	2018	2019
non-current assets (excluding financial assets and deferred tax assets)
— mainland china	137,939,763	147,798,239
— outside mainland china	646,327	2,668,533
	138,586,090	150,466,772

31. income tax expense


	2017	2018	2019
current income tax expense	844,896	755,264	720,405
deferred tax (benefit)/expense	(201,190)	67,255	(94,685)

	643,706	822,519	625,720

in general, the group’s prc entities are subject to prc corporate income tax at the standard rate of 25% (2017: 25%, 2018: 25%) on their respective estimated assessable profits for the year. certain branches and subsidiaries of the company located in the western regions of the prc are granted tax concessions including a preferential tax rate of 15% (2017: 15%, 2018: 15%).

a reconciliation of the tax expense applicable to profit before tax at the statutory rates for the countries in which the company and the majority of its subsidiaries are domiciled to the tax expense at the effective tax rates, and a reconciliation of the applicable rates to the effective tax rates are as follows:


	2017		2018		2019
profit before income tax	3,049,175		2,264,514		2,113,801

tax expense calculated at the statutory tax rate of 25% (2017 and 2018: 25%)	762,294		566,129		528,450
tax effects of:
preferential income tax rates applicable to certain branches and subsidiaries	(287,081)		(268,665)		(464,880)
impact of change in income tax rate	98,150		23,425		4,594
tax losses with no deferred tax assets recognized	296,728		434,103		588,267
deductible temporary differences with no deferred tax assets recognized	308,657		384,072		41,695
utilization of previously unrecognized tax losses and deductible temporary differences	(212,309)		(52,962)		(17,952)
tax incentive in relation to deduction of certain expenses	(43,846)		(62,172)		(50,921)
non-taxable income	(126,101)		(254,337)		(173,686)
expenses not deductible for tax purposes	49,564		54,959		56,448
write-off of unrecoverable deferred tax assets previously recognized	49,808		183,195		187,433
profits and losses attributable to joint ventures and associates	—		40,029		(79,720)
recognition of deferred tax assets related to deductible temporary differences and tax losses previously not recognized	(274,726)		(233,940)		(3,868)
adjustments in respect of current tax of previous periods	22,568		8,683		9,860

income tax expense	643,706		822,519		625,720

effective tax rate	21	%	36	%	30	%

share of income tax expense of associates and joint ventures of rmb79 million (2017: rmb86 million, 2018: rmb106 million) and rmb54 million (2017: rmb11 million, 2018: rmb 48 million) is included in “share of profits and losses of associates” and “share of profits and losses of joint ventures“, respectively.

30. directors’ and supervisors’ remuneration

(a) directors’ and supervisors’ remuneration

directors’ and supervisors’ remuneration for the year, disclosed pursuant to the listing rules, section 383(1)(a), (b), (c) and (f) of the hong kong companies ordinance and part 2 of the companies regulation (disclosure of information about benefits of directors), is as follows:


	2017	2018	2019
fees	768	756	780
basic salaries, housing fund, other allowances and benefits in kind	1,370	1,849	4,665
pension cost	166	234	513

	2,304	2,839	5,958

the remuneration of each director and supervisor of the company for the year ended december 31, 2017 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total

executive directors:
yu dehui	—	—	—	—	—
lu dongliang	—	—	—	—	—
jiang yinggang	—	822	—	83	905
	—	822	—	83	905

non-executive directors:
ao hong	—	—	—	—	—
liu caiming	—	—	—	—	—
wang jun	150	—	—	—	150
chen lijie	206	—	—	—	206
lie-a-cheong tai-chong, david	206	—	—	—	206
hu shihai	206	—	—	—	206
	768	—	—	—	768
supervisors:
liu xiangmin	—	—	—	—	—
wang jun	—	—	—	—	—
wu zuoming	—	548	—	83	631
	—	548	—	83	631

total	768	1,370	—	166	2,304

the remuneration of each director and supervisor of the company for the year ended december 31, 2018 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total
executive directors:
yu dehui (note (i))	—	—	—	—	—
lu dongliang (note (i))	—	—	—	—	—
jiang yinggang	—	762	—	90	852
zhu runzhou	—	438	—	54	492
	—	1,200	—	144	1,344

non-executive directors:
ao hong	—	—	—	—	—
liu caiming	—	—	—	—	—
wang jun	150	—	—	—	150
chen lijie	202	—	—	—	202
lie-a-cheong tai-chong, david	202	—	—	—	202
hu shihai	202	—	—	—	202
	756	—	—	—	756
supervisors:
liu xiangmin	—	—	—	—	—
wang jun	—	—	—	—	—
wu zuoming	—	649	—	90	739
	—	649	—	90	739

total	756	1,849	—	234	2,839

the remuneration of each director and supervisor of the company for the year ended december 31, 2019 is set out below:


			discretionary
names of directors and supervisors	fees	salaries	bonuses	pension costs	total
executive directors:
yu dehui (note (i))	—	—	—	—	—
lu dongliang (note (i))	—	—	—	—	—
he zhihui	—	885	—	73	958
zhu runzhou	—	833	—	88	921
jiang yinggang	—	889	—	88	977
	—	2,607	—	249	2,856

non-executive directors:
ao hong	—	—	—	—	—
wang jun (note (ii))	150	—	—	—	150
chen lijie	210	—	—	—	210
lie-a-cheong tai-chong, david	210	—	—	—	210
hu shihai	210	—	—	—	210
	780	—	—	—	780
supervisors:
ye guohua (note (iii))	—	—	—	—	—
ou xiaowu (note (iii))	—	—	—	—	—
shan shulan (note (iii))	—	—	—	—	—
guan xiaoguang (note (iii))	—	710	—	88	798
yue xuguang (note (iii))	—	770	—	88	858
wu zuoming	—	578	—	88	666
	—	2,058	—	264	2,322

total	780	4,665	—	513	5,958

note:

(i)

(ii)

(iii)

the remuneration of the directors and supervisors of the company fell within the following band:

during the year, no options were granted to the directors or the supervisors of the company (2017: nil, 2018: nil).

during the year, no emoluments were paid to the directors or the supervisors of the company (among which included the five highest paid employees) as an inducement to join or upon joining the company or as compensation for loss of office (2017: nil, 2018: nil).

no directors or supervisors of the company waived any remuneration during the years 2017, 2018 and 2019.

(b) five highest paid individuals

during the year ended december 31, 2019, the five highest paid employees of the group include two directors and one supervisor (2017: one director and one supervisor, 2018: one director and one supervisor) whose remuneration is reflected in the analysis presented above. the remuneration payable to the remaining three individuals during 2019 (2017: three , 2018: three) is as follows:


	2017	2018	2019
basic salaries, housing fund, other allowances and benefits in kind	2,460	1,305	1,670
discretionary bonuses	—	—	—
pension costs	249	165	137

	2,709	1,470	1,807

the number of the remaining two highest paid individuals during 2019 (2017: three, 2018: two) whose remuneration fell within the following band is as follows:

5. intangible assets


				computer
				software,
				electrolytic
				aluminium
		mining	mineral	production
		rights and	exploration	quota and
	goodwill	others	rights	others	total
year ended december 31, 2018
opening net carrying amount	2,345,930	7,066,428	1,111,586	113,689	10,637,633
additions	—	98,995	—	4,309	103,304
acquisition of subsidiaries	1,163,949	728,066	—	1,285	1,893,300
reclassification	—	7,072	(7,072)	—	—
disposals	—	—	—	(168)	(168)
amortization	—	(265,108)	—	(30,793)	(295,901)
transfer from property, plant and equipment (note 6)	—	41,148	—	484,068	525,216
currency translation differences	754	5,782	9,445	—	15,981

closing net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365
as at december 31, 2018
cost	3,510,633	9,430,183	1,113,959	888,975	14,943,750
accumulated amortization and impairment	—	(1,747,800)	—	(316,585)	(2,064,385)

net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365


				computer
				software,
				electrolytic
				aluminium
		mining	mineral	production
		rights and	exploration	quota and
	goodwill	others	rights	others	total
year ended december 31, 2019
opening net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365
additions	—	467,640	—	687,746	1,155,386
reclassification	—	115,871	(115,871)	—	—
disposals	—	—	—	(9)	(9)
amortization	—	(294,766)	—	(44,172)	(338,938)
transfer from property, plant and equipment (note 6)	—	—	—	63,370	63,370
currency translation differences	259	1,783	3,244	—	5,286

closing net carrying amount	3,510,892	7,972,911	1,001,332	1,279,325	13,764,460
as at december 31, 2019
cost	3,510,892	10,016,634	1,001,332	1,640,081	16,168,939
accumulated amortization and impairment	—	(2,043,723)	—	(360,756)	(2,404,479)

net carrying amount	3,510,892	7,972,911	1,001,332	1,279,325	13,764,460

for the year ended december 31, 2019, the amortization expenses of intangible assets recognized in profit or loss were analyzed as follows:


	2017	2018	2019
cost of sales	241,261	265,108	294,766
general and administrative expenses	34,616	30,793	44,172

	275,877	295,901	338,938

as at december 31, 2019, the group has pledged intangible assets with a net carrying value amounting to rmb757 million (december 31, 2018: rmb773 million) for bank and other borrowings as set out in note 24 to the financial statements.

as at december 31, 2019, the group was in the process of applying for the certificates of mining rights with a carrying value amounting to rmb39 million (december 31, 2018: rmb21 million). there have been no litigations, claims or assessments against the group for compensation with respect to the use of these rights to date. as at december 31, 2019, the carrying value of these rights only represented approximately 0.02% of the total asset value of the group (december 31, 2018: approximately 0.01%). management considers that it is probable that the group can obtain the relevant ownership certificates from the appropriate authorities. the directors of the company are of the opinion that the group legally owns and has the rights to use the above mining rights, and that there is no material adverse impact on the overall financial position of the group.

impairment testing of goodwill

the lowest level within the group at which goodwill is monitored for internal management purposes is the operating segment level. therefore, goodwill is allocated to the group’s cash-generating units (“cgus”) and groups of cgus according to operating segments. a summary of goodwill allocated to each segment is presented below:


	december 31, 2018		december 31, 2019
		primary		primary
	alumina	aluminum	alumina	aluminum
qinghai branch	—	217,267	—	217,267
guangxi branch	189,419	—	189,419	—
lanzhou branch	—	1,924,259	—	1,924,259
pt. nusapati prima (“ptnp“)	15,739	—	15,998	—
shanxi huaxing	1,163,949	—	1,163,949	—

	1,369,107	2,141,526	1,369,366	2,141,526

the recoverable amount of a cgu is determined based on value-in-use calculations. these calculation of viu use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. cash flows beyond the 5‑year period are extrapolated using the estimated growth rate of 2% (2018: 2%) not exceeding the long-term average growth rate for the businesses in which the cgu operates. other key assumptions applied in the impairment testing include future prices of aluminum and alumina, expected production and sales volumes, production costs and operating expenses. management determined these key assumptions based on past performance and their expectations on market development. furthermore, the group adopts a pre-tax rate of 12.62% (2018: 12.62%) that reflects specific risks related to cgus and groups of cgus as the discount rate. the assumptions above are used in analyzing the recoverable amounts of cgus and groups of cgus within operating segments. these estimates and judgments may be affected by unexpected changes in the future market or economic conditions.

the directors of the company are of the view that, based on their assessment, there was no impairment of goodwill as at december 31, 2019 and december 31, 2018.

8. investments in joint ventures and associates

(a) investments in joint ventures

movements in investments in joint ventures are as follows:


	2018	2019
as at january 1	6,007,624	3,393,349
capital injections	90,000	50,000
a joint venture changed into a subsidiary	(2,048,780)	—
disposal*	—	(114,604)
share of profits and losses for the year	(199,452)	270,115
share of changes in reserves	(2,837)	8,746
cash dividends declared	(236,253)	(222,024)
impairment	(216,953)	—

as at december 31	3,393,349	3,385,582

* in march 2019, a subsidiary of the group ningxia energy transferred, through an auction transaction, its 50% equity interest in ningxia zhongning power co., ltd.

as at december 31, 2019, all joint ventures of the group were unlisted.

as at december 31, 2019, particulars of the group's material joint venture is as follows:

effective equity

place of

registered

interest held

establishment

and paid-in

principal

ownership

voting

profit

name

and operation

capital

activities

interest

power

sharing

guangxi huayin aluminum co., ltd. * (“guangxi huayin”) (廣西華銀鋁業有限公司)

prc/
mainland china

2,441,987

manufacturing

guangxi huayin, which is considered a material joint venture of the group, is accounted for using the equity method.

* the english names represent the best effort by management of the group in translating the chinese names of the companies as they do not have any official english names.

the following table illustrates the summarized financial information in respect of guangxi huayin :


	2018		2019
cash and cash equivalents	232,022		261,447
other current assets	1,233,669		1,222,290
current assets	1,465,691		1,483,737

non-current assets	5,473,480		5,249,101

financial liabilities	840,000		1,106,593
other current liabilities	961,283		960,077
current liabilities	1,801,283		2,066,670

non-current liabilities	814,691		414,299

net assets	4,323,197		4,251,869
non-controlling interests	—		—

reconciliation to the group’s interest in the joint venture:
proportion of the group’s ownership	33	%	33	%
group’s share of net assets of the joint venture	1,426,655		1,403,117
carrying amount of the investment	1,426,655		1,403,117


	2017	2018	2019

revenue	5,547,895	5,173,801	5,226,893
gross profit	1,844,116	979,991	1,303,254
interest income	31,754	6,365	9,781
depreciation and amortization	524,090	509,556	525,109
interest expenses	132,273	77,438	63,351
profit before income tax	1,507,883	504,875	621,315
income tax	214,264	78,827	79,300

other comprehensive income	—	—	—

total comprehensive income for the year	1,293,619	426,048	542,015

share of the joint ventures’ profits and losses for the year	426,894	140,693	178,865
dividend received	40,260	132,000	198,000

the following table illustrates the aggregate financial information of the group’s joint ventures that are not individually material:


	2018	2019
share of the joint ventures’ profits and losses for the year	(340,145)	91,250
share of the joint ventures’ total comprehensive income	(340,145)	91,250

aggregate carrying amount of the group’s investments in joint ventures	1,858,386	1,870,538

there were no material contingent liabilities relating to the group’s interests in the joint ventures and the joint ventures themselves.

(b) investments in associates

movements in investments in associates are as follows:


	2018	2019
as at january 1	6,935,030	6,363,462
investment to yunnan aluminium (note (1), note (27) )	—	1,491,736
investment to heqing yixin aluminum industry co., ltd. (鶴慶溢鑫鋁業有限公司) (“yixin aluminum”) (note (2), note (27) )	—	941,160
capital injections, other than to yunnan aluminium and yixin aluminum	315,300	729,368
subsidiaries changed into associates	—	16,283
associates changed into subsidiaries	(862,214)	—
capital reduction	(32,720)	(20,250)
share of profits and losses for the year	39,335	48,767
cash dividends declared	(36,157)	(50,314)
share of changes in reserves	4,888	(7,811)

as at december 31	6,363,462	9,512,401

note (1): investment to yunnan aluminium

on december 19, 2019, the company and yunnan aluminum entered into a share subscription agreements ("subscription agreements"), pursuant to which the company subscribed for 314,050,688 shares of yunnan aluminum at a price of rmb4.10 per share with the total subscription amount of rmb1,288 million. upon completion of the subscription, the company obtained 10.04% equity interests in yunnan aluminum.

the group considers that it has significant influence over yunnan aluminum even though it owns less than 20% of the voting rights, on the grounds that after the investment, the group is the second largest shareholder of yunnan aluminum and one out of the eleven directors of the board of directors of yunnan aluminum exercises director's rights on behalf of the group.

as at the date of this announcement, chinalco is the controlling shareholder of the company, and yunnan aluminum is a subsidiary of chinalco. therefore, yunnan aluminum is a connected person of the company under the hong kong listing rules. as such, the transaction contemplated under the shares subscription agreement constitutes a connected transaction under chapter 14a of the hong kong listing rules. the investment constitutes a related party transaction which was disclosed in note 35 (a).

the investment to yunnan aluminum, which is a listed company, is conducive for resolving business competitions between the company and yunnan aluminum and is in line with the development strategies and in the whole interests of the company.

the excess of the fair value of identifiable net assets as at the acquisition date over the consideration transferred approximates to rmb204 million, which was mainly arising from the fair value adjustments for certain intangible assets according to a professional valuer’s report, was recognized in other gains for the year ended december 31, 2019.

note (2): investment to yixin aluminum

on december 10, 2019, the company entered into the capital contribution agreement with shareholders of yixin aluminum, including yunnan aluminum, wenshan aluminum co., ltd. (“wenshan aluminum”) and three individual shareholders, pursuant to which the company agreed to make a capital contribution of rmb850 million in cash to yixin aluminum. upon completion of the capital contribution, the company holds approximately 38.90% equity investments of yixin aluminum.

chinalco is the controlling shareholder of the company, and yunnan aluminum, wenshan aluminum and yixin aluminum are subsidiaries of chinalco. therefore, yunnan aluminum, wenshan aluminum and yixin aluminum are connected persons of the company under the hong kong listing rules. as such, the transaction contemplated under the capital contribution agreement constitutes a connected transaction under chapter 14a of the hong kong listing rules. the investment constitutes a related party transaction which was disclosed in note 35 (a).

the investment to yixin aluminum is to facilitate the company in participating in the green development layout on the integration of water, electricity and aluminum in yunnan province and obtaining competitive assets for its principal business.

the excess of the fair value of identifiable net assets as at the acquisition date over the consideration transferred approximated to rmb91 million, which was mainly arising from the fair value adjustments for constructions according to a professional valuer’s report, was recognized in other gains for the year ended december 31, 2019.

as at december 31, 2019, all associates , except for yunnan aluminium, of the group were unlisted.

as at december 31, 2019, no associate was individually material to the group.

the following table illustrates the aggregate financial information of the group’s associates that are not individually material:


	2018	2019
share of the associates’ profits and losses	39,335	48,767
share of the associates’ total comprehensive income	39,335	48,767

aggregate carrying amount of the group’s investments in the associates	6,363,462	9,512,401

as at december 31, 2019, there were no proportionate interests of the group in the associates' capital commitments (december 31, 2018: nil).

as at december 31, 2019, the group had pledged investments in associates amounting to rmb539 million (december 31, 2018: investments in associates amounting to rmb536 million) as set out in note 24 to the financial statements.

there were no material contingent liabilities relating to the group’s interests in the associates and the associates themselves.

particulars of the company’s principal subsidiaries are as follows:


				percentage of equity
	place of			attributable to
	registration and	registered		the company
name	business	capital	principal activities	direct		indirect
shanxi huaxing aluminum co. ltd. (“shanxi huaxing”) (山西華興鋁業有限公司)	prc/mainland china	1,850,000	manufacture and distribution of alumina	60.00	%	40.00	%
baotou aluminum co., ltd. (“baotou aluminum“) (包頭鋁業有限公司)	prc/mainland china	2,245,510	manufacture and distribution of primary aluminum, aluminum alloy and related fabricated products and carbon products	100.00	%	—
china aluminum international trading co., ltd. (“chalco trading”) (中鋁國際貿易有限公司)	prc/mainland china	1,731,111	import and export activities	100.00	%	—

chalco shanxi new material co., ltd. (“shanxi new material”) (中鋁山西新材料有限公司)	prc/mainland china	4,279,601	manufacture and distribution of alumina, primary aluminum and anode carbon products and electricity generation and supply	85.98	%	—
china aluminum international trading group co., ltd. (“chalco trading group”) (中鋁國際貿易集團有限公司)	prc/mainland china	1,030,000	import and export activities	100.00	%	—
zunyi aluminum co., ltd. (遵義鋁業股份有限公司)	prc/mainland china	3,204,900	manufacture and distribution of primary aluminum and alumina	67.45	%	—
chalco hong kong ltd. (“chalco hong kong”) (中國鋁業香港有限公司)	hong kong	hkd849,940 in thousand	overseas investments and alumina import and export activities	100.00	%	—
chalco mining co., ltd. (“chalco mining“) (中鋁礦業有限公司)	prc/mainland china	4,028,859	manufacture, acquisition and distribution of bauxite mines, limestone ore, manufacturing and distribution of alumina	100.00	%	—
chalco energy co., ltd. (中鋁能源有限公司)	prc/mainland china	1,384,398	thermoelectric supply and investment management	100.00	%	—
china aluminum ningxia energy group co., ltd. (“ningxia energy“) (中鋁寧夏能源集團)	prc/mainland china	5,025,800	thermal power, wind power and solar power generation, coal mining, and power-related equipment manufacturing	70.82	%	—
guizhou huajin aluminum co., ltd. (“guizhou huajin“) (貴州華錦鋁業有限公司)	prc/mainland china	1,000,000	manufacture and distribution of alumina	60.00	%	—


				percentage of equity
	place of			attributable to
	registration and	registered		the company
name	business	capital	principal activities	direct		indirect
chalco zhengzhou research institute of non-ferrous metal co., ltd. (中國鋁業鄭州有色金屬研究院有限公司)	prc/mainland china	214,858	research and development services	100.00	%	—
chalco shandong co., ltd. ("chalco shandong“) (中鋁山東有限公司)	prc/mainland china	4,052,847	manufacture and distribution of alumina	100.00	%	—
chalco zhongzhou aluminum co., ltd. ("zhongzhou aluminum“) (中鋁中州鋁業有限公司)	prc/mainland china	5,071,235	manufacture and distribution of alumina	100.00	%	—
china aluminum logistics group corporation co., ltd. (中鋁物流集團有限公司)	prc/mainland china	964,291	logistic transportation	100.00	%	—
chinalco shanxi jiaokou xinghua technology ltd. (“xinghua technology“) (中鋁集團山西交口興華科技股份有限公司)	prc/mainland china	588,182	manufacture and distribution of primary aluminum	33.00	%	33.00	%
chinalco shanghai company limited (“chinalco shanghai“) (中鋁(上海)有限公司)	prc/mainland china	968,300	trading and engineering project management	100.00	%	—
shanxi china huarun co., ltd. (“shanxi huarun”) (山西中鋁華潤有限公司)	prc/mainland china	1,641,750	manufacture and distribution of primary aluminum	43.39	%	—
guizhou huaren new material co., ltd. (“guizhou huaren”) (貴州華仁新材料有限公司)	prc/mainland china	1,200,000	manufacture and distribution of primary aluminum	40.00	%	—
chalco materials co. ltd. (中鋁物資有限公司)	prc/mainland china	1,000,000	import and export activities	100.00	%	—

12. inventories


	december 31	december 31,
	2018	2019
raw materials	8,362,697	6,825,650
work-in-progress	8,684,506	7,847,599
finished goods	3,280,641	4,501,633
spare parts	879,794	842,734
packaging materials and others	63,227	57,870
	21,270,865	20,075,486

less: provision for impairment of inventories	(811,197)	(560,066)

	20,459,668	19,515,420

movements in the provision for impairment of inventories are as follows:


	2018	2019
as at january 1	457,252	811,197
provision for impairment of inventories	2,413,098	1,503,406
disposal of subsidiary	—	(772)
reversal arising from increase in net realizable value	(165,510)	(340,134)
written off upon sales of inventories	(1,893,643)	(1,413,631)

as at december 31	811,197	560,066

as at december 31, 2019 and december 31, 2018, the group had not pledged inventories for bank and other borrowings.

7. investment properties


	buildings	land use rights	total
year ended december 31, 2018
opening net carrying amount	254,061	1,078,309	1,332,370
transfer from property, plant and equipment (note 6)	11,039	—	11,039
transfer to property, plant and equipment (note 6)	(21,773)	—	(21,773)
disposal	—	(143,401)	(143,401)
depreciation	(7,353)	(14,876)	(22,229)
closing net carrying amount	235,974	920,032	1,156,006

as at december 31, 2018
cost	251,626	939,015	1,190,641
accumulated depreciation	(15,652)	(18,983)	(34,635)

net carrying amount	235,974	920,032	1,156,006


	buildings	land use rights	total
year ended december 31, 2019
opening net carrying amount	235,974	920,032	1,156,006
additions	44,063	—	44,063
transfer from property, plant and equipment (note 6)	179,564	—	179,564
transfer from right-of-use assets (note 19)	—	239,765	239,765
disposal	(36,949)	(52,537)	(89,486)
depreciation	(8,484)	(18,075)	(26,559)
impairment	—	(87)	(87)
closing net carrying amount	414,168	1,089,098	1,503,266

as at december 31, 2019
cost	508,705	1,159,343	1,668,048
accumulated depreciation and impairment	(94,537)	(70,245)	(164,782)

net carrying amount	414,168	1,089,098	1,503,266

the group’s investment properties consist of land use rights held for capital appreciation and buildings leased to third parties under operating leases.

as at december 31, 2019, the group was in the process of applying for the ownership certificates of investment properties with a net carrying value of rmb255 million (december 31, 2018: rmb68 million). there have been no litigations, claims or assessments against the group for compensation with respect to the use of these rights to date. as at december 31, 2019, the carrying value of these investment properties only represented approximately 0.13% of the total asset value of the group (december 31, 2018: 0.03%). management considers that it is probable that the group can obtain the relevant ownership certificates from the appropriate authorities. the directors of the company are of the opinion that the group legally owns and has the rights to use the above investment properties, and that there is no material adverse impact on the overall financial position of the group.

as at december 31, 2019, the fair value of the buildings was approximately rmb1,071 million (december 31, 2018: rmb781 million), which was estimated based on the market price of comparable buildings in the nearby area. the directors of the company estimated that the fair value of the land use right is likely to be rmb1,269 million (december 31, 2018: rmb1,287 million), which was determined based on the transaction prices for similar lands nearby.


	2018	2019
as at january 1	6,935,030	6,363,462
investment to yunnan aluminium (note (1), note (27) )	—	1,491,736
investment to heqing yixin aluminum industry co., ltd. (鶴慶溢鑫鋁業有限公司) (“yixin aluminum”) (note (2), note (27) )	—	941,160
capital injections, other than to yunnan aluminium and yixin aluminum	315,300	729,368
subsidiaries changed into associates	—	16,283
associates changed into subsidiaries	(862,214)	—
capital reduction	(32,720)	(20,250)
share of profits and losses for the year	39,335	48,767
cash dividends declared	(36,157)	(50,314)
share of changes in reserves	4,888	(7,811)

as at december 31	6,363,462	9,512,401


	2018	2019
as at january 1	6,007,624	3,393,349
capital injections	90,000	50,000
a joint venture changed into a subsidiary	(2,048,780)	—
disposal*	—	(114,604)
share of profits and losses for the year	(199,452)	270,115
share of changes in reserves	(2,837)	8,746
cash dividends declared	(236,253)	(222,024)
impairment	(216,953)	—

as at december 31	3,393,349	3,385,582

19. lease

the group as a lessee

the group has lease contracts for various items of plant and machinery, motor vehicles and other equipment used in its operations. lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 20 to 30 years, and no ongoing payments will be made under the terms of these land leases. leases of plant and machinery generally have lease terms between 3 and 5 years, while motor vehicles generally have lease terms between 2 and 5 years. other equipment generally has lease terms of 12 months or less and/or is individually of low value. generally, the group is restricted from assigning and subleasing the leased assets outside the group. there are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

(a) land use rights (before january 1, 2019)


		december 31,
		2018
operating leases:
in the mainland china, held on:
leases less than 10 years		768,153
leases between 10 and 50 years		2,753,882
leases over 50 years		784,830
		4,306,865



		2018
as at january 1,		3,604,201
additions		2,838
acquisition of subsidiaries		460,638
transfer from property, plant and equipment (note 6)		382,242
government grants		(34,174)
disposal of subsidiaries		(728)
amortization		(108,152)
as at december 31,		4,306,865

as at december 31, 2018, the group has pledged land use rights at a net carrying value amounting to rmb328 million for bank and other borrowings as set out in note 24 to the financial statements.

(b) right-of-use assets

the carrying amounts of the group’s right-of-use assets and the movements during the year are as follows:


	buildings	machinery	land use rights	total
as at january 1, 2019	396,499	6,129,771	11,450,581	17,976,851
additions	21,203	11,606	1,215,049	1,247,858
transfer to investment properties (note 7)	—	—	(239,765)	(239,765)
transfer to property, plant and equipment (note 6)	—	(1,674,260)	—	(1,674,260)
government grants	—	(107,441)	—	(107,441)
contract modification	(45,507)	—	(137,358)	(182,865)
disposal of subsidiaries	—	—	(52,668)	(52,668)
depreciation	(84,940)	(601,891)	(388,994)	(1,075,825)
impairment losses	—	—	(1,448)	(1,448)
as at december 31, 2019	287,255	3,757,785	11,845,397	15,890,437

as at december 31, 2019, the group was in the process of applying for the certificates of land use rights with a carrying amount of rmb74 million (december 31, 2018: rmb687 million). there has been no litigations, claims or assessments against the group for compensation with respect to the use of land parcels to date. as at december 31, 2019, the carrying value of these land parcels only represented approximately 0.04% of the total asset value of the group (december 31, 2018: 0.34%). management considers that it is probable that the group can obtain the relevant ownership certificates from the appropriate authorities. the directors of the company are of the opinion that the group legally owns and has the right to use the above land, and that there is no material adverse impact on the overall financial position of the group.

as at december 31, 2019, the group has pledged land use rights at a net carrying value amounting to rmb373 million for bank and other borrowings as set out in note 24 to the financial statements.

the carrying amount of lease liabilities (included under interest-bearing bank and other borrowings) and the movements during the year are as follows:


		2019
		lease liabilities
carrying amount at january 1,		11,010,323
new leases		82,370
contract modification		(178,575)
accretion of interest recognized during the year		487,250
payments		(3,032,106)

carrying amount at december 31,		8,369,262

analyzed into:
current portion		1,358,654
non-current portion		7,010,608

(d) the amounts recognized in profit or loss in relation to leases are as follows:


		2019
interest on lease liabilities		487,249
depreciation charge of right-of-use assets		1,075,825
expense relating to short-term leases and other leases with remaining lease terms ended on or before december 31, 2019		63,626
expense relating to leases of low-value assets		1,800
total amount recognized in profit or loss		1,628,500

(e) extension and termination options

the group has several lease contracts that include extension and termination options. these options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the group’s business needs. management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease terms:


	payable within	payable after
	five years	five year
extension options expected not to be exercised	—	—
termination options expected to be exercised	—	—

(f) the total cash outflow for leases and future cash outflows relating to leases that have not yet commenced are disclosed in notes 34(c) and 42, respectively, to the financial statements

the group as a lessor

rental income recognized by the group during the year was rmb318 million (2017: rmb153 million, 2018: rmb240 million), details of which are included in note 4 to the financial statements. in the opinions of the directors, the undiscounted lease payments receivable by the group in future periods under non-cancellable operating leases is not material.


year ended december 31, 2018	stage 1	stage 2	stage 3	simplified	total

trade receivables*	—	—	—	5,209,535	5,209,535
financial assets in other current assets	1,098,455	3,655,638	121,432	—	4,875,525
restricted cash	2,165,288	—	—	—	2,165,288
notes receivable	2,894,482	—	—	—	2,894,482
cash and cash equivalents	19,130,835	—	—	—	19,130,835
financial assets in other non-current assets	204,718	—	—	—	204,718
financial guarantees -not yet past due	12,450	—	—	—	12,450

total	25,506,228	3,655,638	121,432	5,209,535	34,492,833



year ended december 31, 2019	stage 1	stage 2	stage 3	simplified	total
trade receivables*	—	—	—	4,559,112	4,559,112
financial assets in other current assets	1,632,766	3,970,620	120,538	—	5,723,924
restricted cash	1,305,781	—	—	—	1,305,781
notes receivable	2,834,011	—	—	—	2,834,011
cash and cash equivalents	7,759,190	—	—	—	7,759,190
financial assets in other non-current assets	128,673	—	—	—	128,673
financial guarantees-not yet past due	5,772	—	—	—	5,772
total	13,666,193	3,970,620	120,538	4,559,112	22,316,463


	within 1 year	1 to 2 years	2 to 5 years	over 5 years	total
as at december 31, 2018
finance lease payables, including current portion	2,518,653	1,161,490	707,716	13,238	4,401,097
long-term bank and other loans, including current portion	3,384,400	7,377,956	16,593,587	18,784,797	46,140,740
medium-term notes and bonds, including current portion	400,000	—	9,785,840	—	10,185,840
short-term bonds	500,000	—	—	—	500,000
gold leasing arrangement	1,607,905	—	—	—	1,607,905
short-term bank and other loans	39,348,100	—	—	—	39,348,100
interest payables for borrowings	4,848,968	2,602,751	4,197,364	898,786	12,547,869
financial liabilities at fair value through profit or loss	1,766	—	—	—	1,766
financial liabilities included in other payables and accrued liabilities, excluding accrued interest	8,890,176	—	—	—	8,890,176
financial liabilities included in other non-current liabilities (note)	—	108,896	333,354	420,258	862,508
trade and notes payables	14,009,264	—	—	—	14,009,264

	75,509,232	11,251,093	31,617,861	20,117,079	138,495,265


	within 1 year	1 to 2 years	2 to 5 years	over 5 years	total
as at december 31, 2019
lease liabilities, including current portion	1,729,933	1,106,701	1,333,762	10,377,143	14,547,539
long-term bank and other loans, including current portion	3,339,687	7,525,775	9,159,028	18,811,397	38,835,887
medium-term notes and bonds, including current portion	—	7,285,840	9,500,000	—	16,785,840
short-term bonds	9,300,000	—	—	—	9,300,000
gold leasing arrangement	6,921,860	—	—	—	6,921,860
short-term bank and other loans	21,238,166	—	—	—	21,238,166
interest payables for loans and borrowings	4,955,925	2,289,092	4,220,111	978,041	12,443,169
financial liabilities at fair value through profit or loss	805	—	—	—	805
financial liabilities included in other payables and accrued liabilities, excluding accrued interest	10,288,657	—	—	—	10,288,657
financial liabilities included in other non-current liabilities (note)	—	176,232	182,006	857,647	1,215,885
trade and notes payables	12,584,755	—	—	—	12,584,755

	70,359,788	18,383,640	24,394,907	31,024,228	144,162,563

note: as disclosed in note 21, as at december 31, 2019, the carrying value of financial liabilities included in other non-current liabilities was rmb1,153 million (december 31, 2018: rmb841 million).

39. disposal of businesses

(a)

disposal of shandong engineering

on october 31, 2017, the company and chalieco entered into an equity transfer agreement, pursuant to which the company agreed to sell and chalieco agreed to acquire 60% equity interest in shandong engineering at a consideration of rmb360 million. the consideration was determined based on the appraised value of the 60% equity interest in shandong engineering. full consideration has been received by the group in november 2017.

the directors of the company are of the opinion that the group lost control over shandong engineering and accounted for it as an associate accordingly. as of the date of disposal, the carrying amount of shandong engineering was rmb350 million, and the group recognized gain of disposal of subsidiary of rmb153 million for 60% equity interests disposed of. the group re-measured the remaining 40% equity interest of shandong engineering to a fair value of rmb240 million and recognized the fair value gain of rmb102 million accordingly. in addition, unrealized profit arisen from construction services provided by shandong engineering previously eliminated upon consolidation amounting to rmb59 million was reversed and recognized in other gains.

the details of the net assets disposed of are as follows:


		date of disposal
net assets disposed of:
property, plant and equipment		109,103
intangible assets		428
deferred tax assets		3,106
inventories		167,499
trade receivables and notes receivable		1,067,636
other current assets		23,136
cash and cash equivalents		123,530
other non-current liabilities		(4,637)
other payables and accrued liabilities		(282,232)
trade and notes payables		(727,622)
interest-bearing loans and borrowings		(130,000)
net assets		349,947

non-controlling interests		3,961
total net assets		345,986



gain on disposal of shandong engineering		254,659
the fair value of the remaining equity interest in shandong engineering		240,258

consideration		360,387

satisfied by:
cash		387
notes receivable		360,000

an analysis of the cash flow of cash and cash equivalents in respect of the disposal of shandong engineering is as follows:


		date of disposal
cash consideration received		387
cash and bank balances disposed of		(123,530)

net outflows of cash and cash equivalents in respect of disposal of shandong engineering		(123,143)

(b)

deemed disposal of shanxi zhongrun

the company previously had a 50% equity interest in shanxi china huarun co., ltd.* (“shanxi zhongrun”) (山西中鋁華潤有限公司). according to the then acting-in-concert agreement entered into by the company and the other shareholders of shanxi zhongrun, huarun (coal) group co., ltd. * (“huarun (coal) group”) (華潤(煤業)集團有限公司), huarun (coal) group agreed to confer its voting rights in the shareholders’ meeting of shanxi zhongrun to the company. accordingly, the directors of the company considered that the company had control over shanxi zhongrun and included shanxi zhongrun in the consolidation scope.

on february 15, 2017, the company entered into a capital injection and enlargement agreement on shanxi zhongrun with huarun (coal) group, shanxi xishan coal and electricity power co., ltd.* (“xishan coal electricity”) (西山煤電), and jin energy power group co., ltd.* (“jin energy power”) (晉能電力). pursuant to the agreement, the company, xishan coal electricity and jin energy power had each subscribed rmb100 million, respectively. after the capital contribution, the company’s equity interest in shanxi zhongrun decreased to 40% while each of the other three shareholders hold a 20% equity interest, respectively, and the acting-in-concert agreement between the company and huarun (coal) group also ceased to be effective since then. the directors of the company are of the opinion that the group lost control over shanxi zhongrun and accounted for it as an associate accordingly. as of the date of deemed disposal, the company re-measured the 40% equity of shanxi zhongrun to a fair value of rmb100 million and recognized the fair value gain of rmb4 million accordingly.

(c)

disposal of zibo trading

in november 2017, chalco trading, a subsidiary of the company, agreed to transfer 50% equity interest in zibo international trading co. ltd. * (”zibo trading”) (“淄博國貿”) to a third party. the directors of the company are of the opinion that the group lost control over zibo trading and accounted for it as a joint venture accordingly. as of the date of disposal, the group recognized loss of disposal of subsidiary of rmb2 million for 50% equity interest disposed of. the group re-measured the 50% equity of zibo trading to a fair value of rmb12 million and recognized the fair value loss of rmb2 million accordingly.

(d)

bankruptcy liquidation of longmen aluminum

in september 2017, shanxi hejin people’s court accepted the liquidation petition filed by the group’s subsidiary, shanxi longmen aluminum co., ltd. (“longmen aluminum”) (山西龍門鋁業有限公司). upon the liquidation, administrators took control over longmen aluminum, the directors of the company considered the company lost control over longmen aluminum and therefore, ceased to consolidate longmen aluminum since then. the group recognized a loss of rmb26 million for lost control over longmen aluminum.

(e)

bankruptcy liquidation of beijing yike

in september 2017, beijing shijingshan people’s court accepted the liquidation petition filed by the group’s subsidiary, beijing yike. upon the liquidation, administrators took control over beijing yike, and therefore, the directors of the company considered the group lost control over beijing yike and deconsolidated beijing yike since then. the group recognized a gain of rmb38 million upon the deconsolidation of beijing yike.

(f) disposal of zhengzhou chalco longyu mining co., ltd.

in august 2018, chalco trading, a subsidiary of the company, agreed to transfer a 51% equity interest in zhengzhou chalco longyu mining co., ltd.* (“longyu mining”) (“鄭州中鋁龍宇礦業有限公司”) to a third party. as of the date of disposal, the group recognized a gain of disposal of subsidiary of rmb8 million.

(g) bankruptcy liquidation of shanxi huatai carbon co., ltd.

in march 2018, shanxi jiexiu people’s court accepted the liquidation petition filed by the group’s subsidiary, shanxi huatai carbon co., ltd.* (“山西華泰碳素有限責任公司”). upon the liquidation, administrators took control over shanxi huatai carbon co., ltd., and the directors of the company considered that the company lost control over shanxi huatai carbon co., ltd. and therefore, ceased to consolidate shanxi huatai carbon co., ltd. since then. the group recognized a loss of rmb2 million for lost control over shanxi huatai carbon co., ltd.

(h) bankruptcy liquidation of hedong carbon co., ltd.

in june 2018, shanxi hejin people’s court accepted the liquidation petition filed by the group’s subsidiary, hedong carbon co., ltd.* (“河東碳素”). upon the liquidation, administrators took control over hedong carbon co., ltd., and the directors of the company considered that the company lost control over hedong carbon co., ltd. and therefore, ceased to consolidate hedong carbon co., ltd. since then. the group recognized a loss of rmb2 million for lost control over hedong carbon co., ltd.

(i) disposal of 100% equity of china aluminum nanhai alloy

in january 2019, the company entered into a capital contribution agreement with chinalco and its subsidiary chinalco innovative, pursuant to which the company shall make a capital contribution to chinalco innovative in form of its 100% equity interests in china aluminum nanhai alloy co., ltd. (“china aluminum nanhai alloy”). after the transaction, the company holds 19.4852% in chinalco innovative. as of the date of deemed disposal, the company re-measured the equity of china aluminum nanhai alloy to a fair value of rmb350 million and recognized the fair value gain of rmb258 million accordingly.

(j) disposal of 40% equity interest of inner mongolia fengrong and disposal of 60% equity interest of ningxia fenghao

on february 20, 2019, chalco energy co., ltd., a wholly-owned subsidiary of the company, entered into equity transfer agreements with chinalco environment protection co., ltd. on the partial disposal of 40% equity interests in inner mongolia fengrong co., ltd. and 60% equity interests in ningxia fenghao co., ltd., respectively. a gain of rmb3,014 thousands from partial disposal of the two subsidiaries was recorded by the group in the current period.

(k) deregistration of shanghai kailin

chalco trade, a subsidiary of the company, held 100% equity interest of shanghai chalco kailin aluminum co., ltd. * (上海中鋁凱林鋁業有限公司) (“shanghai kailin”). in july 2019, shanghai kailin was deregistered, from which the company recorded a gain of rmb160 thousands.

(l) disposal of ruzhou jinhua

zhongzhou aluminum, a subsidiary of the company, held a 51% equity interest in ruzhou chinalco jinhua mining co., ltd. * (汝州中鋁金華礦業有限公司) (“ ruzhou jinhua “). in july 2019, zhongzhou aluminum disposed all of its equity interests of ruzhou jinhua, and a gain of rmb113 thousands from the disposal was included in other gains during the year ended december 31, 2019.

* the english names represent the best effort made by management of the group translating the chinese names of the companies as the companies do not have any official english names.


		date of disposal
net assets disposed of:
property, plant and equipment		109,103
intangible assets		428
deferred tax assets		3,106
inventories		167,499
trade receivables and notes receivable		1,067,636
other current assets		23,136
cash and cash equivalents		123,530
other non-current liabilities		(4,637)
other payables and accrued liabilities		(282,232)
trade and notes payables		(727,622)
interest-bearing loans and borrowings		(130,000)
net assets		349,947

non-controlling interests		3,961
total net assets		345,986



gain on disposal of shandong engineering		254,659
the fair value of the remaining equity interest in shandong engineering		240,258

consideration		360,387

satisfied by:
cash		387
notes receivable		360,000


	year ended december 31, 2017
					corporate
					and other	inter-
		primary			operating	segment
	alumina	aluminium	energy	trading	segments	eliminations	total
total revenue	38,997,261	47,245,646	6,250,966	146,856,931	645,314	(58,973,482)	181,022,636
inter-segment revenue	(24,431,939)	(10,693,678)	(517,269)	(23,159,115)	(171,481)	58,973,482	—

sales of self-produced products (note (i))				23,158,952

sales of products sourced from external suppliers				100,538,864

revenue from external customers	14,565,322	36,551,968	5,733,697	123,697,816	473,833	—	181,022,636

segment profit/(loss) before income tax	3,290,945	826,632	(171,310)	733,896	(1,728,563)	97,575	3,049,175

income tax expense							(643,706)

profit for the year							2,405,469

other items
finance income	233,016	83,996	44,015	192,327	153,336	—	706,690
finance costs	(708,655)	(1,212,249)	(1,000,767)	(467,088)	(1,814,663)	—	(5,203,422)
share of profits and losses of joint ventures	82,619	—	(383,263)	1,885	306,910	—	8,151
share of profits and losses of associates	—	(16,887)	(181,667)	9,463	23,842	—	(165,249)
amortization of land use rights	(42,768)	(25,120)	(15)	(6,376)	(17,300)	—	(91,579)
depreciation and amortization (excluding the amortization of land use rights)	(2,781,350)	(2,516,058)	(1,510,218)	(79,342)	(86,200)	—	(6,973,168)
gain on disposal of property, plant and equipment and land use right	47,243	40,106	(12,826)	1,673	543	—	76,739
realized gain/(loss) on futures, forward and option contracts, net	3,398	(47,730)	1,585	(24,953)	43,749	—	(23,951)
impairment of property, plant and equipment	(568)	—	(15,632)	—	—	—	(16,200)
unrealized loss on futures, forward and option contracts, net	—	(17,033)	—	(92,719)	(21,321)	—	(131,073)
gain on deemed disposal and disposal of subsidiaries	—	—	38,397	54,599	232,026	—	325,022
changes for impairment of inventories	79,063	64,734	4,488	722	5,287	—	154,294
(provision for)/reversal of impairment of receivables, net of bad debts recovered	(17,453)	269	(25,119)	(18,396)	—	—	(60,699)
gain on disposal and dividends of available for sale	—	2,792	—	—	76,616	—	79,408
gain on previously held equity interest remeasured at an acquisition-date fair value	—	—	117,640	—	—	—	117,640
investments in associates	90,875	296,357	2,170,178	184,149	4,193,471	—	6,935,030
investments in joint ventures	2,809,758	—	878,196	28,865	2,290,805	—	6,007,624

additions during the period:
intangible assets	—	197	284,509	372	89	—	285,167
land use rights	—	—	27,956	25,199	6,060	—	59,215
property, plant and equipment (note (ii))	2,642,350	5,533,168	1,268,051	64,005	256,093	—	9,763,667

note:

(i)

(ii)

the additions to property, plant and equipment under sale and leaseback contracts are not included.


	year ended december 31, 2018
					corporate
					and other	inter-
		primary			operating	segment
	alumina	aluminum	energy	trading	segments	eliminations	total
total revenue	44,150,937	53,802,172	7,235,273	142,017,821	667,235	(67,632,024)	180,241,414
inter-segment revenue	(29,392,495)	(12,457,863)	(198,337)	(25,370,303)	(213,026)	67,632,024	—

sales of self-produced products (note (i))				34,454,943

sales of products sourced from external suppliers				82,192,575

revenue from external customers	14,758,442	41,344,309	7,036,936	116,647,518	454,209	—	180,241,414

segment profit/(loss) before income tax	3,496,381	(929,298)	26,020	740,454	(1,267,146)	198,103	2,264,514

income tax expense							(822,519)

profit for the year							1,441,995

other items
finance income	100,125	54,458	15,744	136,515	185,392	—	492,234
finance costs	(399,344)	(1,131,622)	(1,047,285)	(366,807)	(1,937,438)	—	(4,882,496)
share of profits and losses of joint ventures	37,377	8	(225,377)	9,010	(20,470)	—	(199,452)
share of profits and losses of associates	(1,141)	17,102	(52,368)	19,375	56,367	—	39,335
amortization of land use rights	(39,027)	(41,175)	(9,335)	(18,615)	—	—	(108,152)
depreciation and amortization (excluding the amortization of land use rights)	(2,846,051)	(2,954,801)	(1,962,081)	(101,705)	(82,963)	—	(7,947,601)
gain/(loss) on disposal of property, plant and equipment and land use right	53,116	15,211	24,780	20,036	(12,045)	—	101,098
realized (loss)/gain on futures, forward and option contracts, net	(716)	—	2,855	47,601	(9,248)	—	40,492
other income	57,777	38,220	29,858	6,718	2,794	—	135,367
impairment of property, plant and equipment	—	—	(7,450)	(39,034)	—	—	(46,484)
unrealized gain on futures, forward and option contracts, net	—	—	—	100,967	—	—	100,967
gain/(loss) on disposal of subsidiaries	7,671	—	—	—	(4,154)	—	3,517
changes for impairment of inventories	(54,463)	(273,796)	(7,884)	(17,802)	—	—	(353,945)
reversal of/(provision for) impairment of receivables, net of bad debts recovered	19,320	(9,406)	(23,327)	(84,922)	(9,621)	—	(107,956)
dividends of equity investments at fair value through other comprehensive income	—	—	1,000	—	108,914	—	109,914
loss on disposal of associates	—	—	(1,904)	—	—	—	(1,904)
(loss)/gain on previously held equity interest remeasured at an acquisition-date fair value	—	—	(3,177)	—	751,263	—	748,086
investments in associates	89,734	558,759	2,064,425	131,691	3,518,853	—	6,363,462
investments in joint ventures	989,840	—	435,867	77,211	1,890,431	—	3,393,349

additions during the period:
intangible assets	99,089	753	2,754	514	194	—	103,304
land use rights	2,786	—	—	52	—	—	2,838
property, plant and equipment (note (ii))	2,564,003	4,602,580	1,610,442	101,360	143,839	—	9,022,224

note:

(i)

(ii)

the additions to property, plant and equipment under sale and leaseback contracts (note 20) are not included.


	year ended december 31, 2019
					corporate
					and other
		primary			operating	inter-segment
	alumina	aluminum	energy	trading	segments	eliminations	total
total revenue	43,899,982	49,089,019	7,345,971	158,686,280	492,940	(69,440,031)	190,074,161
inter-segment revenue	(29,573,401)	(11,694,382)	(236,136)	(27,769,049)	(167,063)	69,440,031	—

sales of self-produced products (note (i))				24,374,356

sales of products sourced from external suppliers				106,542,875

revenue from external customers	14,326,581	37,394,637	7,109,835	130,917,231	325,877	—	190,074,161

segment profit/(loss) before income tax	844,848	687,246	403,479	952,848	(987,704)	213,084	2,113,801

income tax expense							(625,720)

profit for the year							1,488,081

other items
finance income	61,644	53,252	35,093	105,622	5,540	—	261,151
finance costs	(651,238)	(1,328,730)	(1,064,769)	(223,928)	(1,652,514)	—	(4,921,179)
share of profits and losses of joint ventures	86,245	—	(22,272)	3,767	202,375	—	270,115
share of profits and losses of associates	(6,319)	11,621	(32,660)	36,579	39,546	—	48,767
amortization of right-of-use assets	(495,693)	(338,975)	(146,139)	(45,541)	(49,477)	—	(1,075,825)
depreciation and amortization (excluding the amortization of right-of-use assets)	(2,830,152)	(3,235,356)	(1,488,077)	(79,366)	(81,467)	—	(7,714,418)
(loss)/gain on disposal of property, plant and equipment, and land use rights	(587,503)	830,205	(1,010)	7,216	(5,948)	—	242,960
gain on disposal of business	262,677	—	—	—	—	—	262,677
realized loss on futures, forward and option contracts, net	—	—	—	60,671	—	—	60,671
other income	21,252	716	47,666	6,241	2,757	—	78,632
impairment losses on property, plant and equipment and other non-current assets	(8,743)	(247,112)	(3,499)	—	—	—	(259,354)
unrealized loss on futures, forward and option contracts,net	—	—	—	(9,851)	—	—	(9,851)
gain on share of associates’ net assets	—	—	—	—	295,288	—	295,288
gain on disposal of a subsidiary	118	—	3,014	2,738	255,317	—	261,187
gain on disposal of associates	—	—	159,514	—	—	—	159,514
changes for impairment of inventories	69,740	166,331	(19,076)	34,136	—	—	251,131
reversal of/ (provision for) impairment of receivables, net of bad debts recovered	6,837	1,088	(53,227)	(121,154)	(3,295)	—	(169,751)
dividends of equity investments at fair value through other comprehensive income	—	—	1,000	—	96,775	—	97,775
investments in associates	83,424	574,385	2,021,964	362,757	6,469,871	—	9,512,401
investments in joint ventures	1,076,085	—	298,991	79,199	1,931,307	—	3,385,582

additions during the period:
intangible assets	209,365	949,013	(5,062)	1,869	201	—	1,155,386
right-of- use assets	1,080,285	131,797	8,411	27,365	—	—	1,247,858
property, plant and equipment (note (ii))	6,486,248	2,381,644	1,454,659	132,841	165,832	—	10,621,224

note:

(i)

(ii)

the additions to property, plant and equipment under sale and leaseback contracts are not included.


					corporate
					and other
		primary			operating
	alumina	aluminum	energy	trading	segments	total
as at december 31, 2018


segment assets	82,677,250	57,712,842	39,458,086	20,217,906	33,577,526	233,643,610
reconciliation:
elimination of inter-segment receivables						(34,228,334)
other eliminations						(155,283)
corporate and other unallocated assets:
deferred tax assets						1,542,655
prepaid income tax						162,103

total assets						200,964,751

segment liabilities	38,817,030	34,492,538	27,265,031	14,530,230	50,492,049	165,596,878
reconciliation:
elimination of inter-segment payables						(34,228,334)
corporate and other unallocated liabilities:
deferred tax liabilities						1,812,805
income tax payable						113,783

total liabilities						133,295,132


					corporate
					and other
		primary			operating
	alumina	aluminum	energy	trading	segments	total
as at december 31, 2019

segment assets	90,584,165	63,155,573	38,886,172	17,360,278	49,658,116	259,644,304
reconciliation:
elimination of inter-segment receivables						(58,081,964)
other eliminations						(106,985)
corporate and other unallocated assets:
deferred tax assets						1,522,216
prepaid income tax						93,093

total assets						203,070,664

segment liabilities	47,247,335	38,588,473	26,582,436	9,308,667	66,771,364	188,498,275
reconciliation:
elimination of inter-segment payables						(58,081,964)
corporate and other unallocated liabilities:
deferred tax liabilities						1,712,739
income tax payable						216,554

total liabilities						132,345,604

14. other current assets


	december 31,	december 31,
	2018	2019
financial assets
— deposits paid to suppliers	317,946	501,918
— dividends receivable	47,167	82,796
— receivables from disposal of businesses and assets	134,789	90,399
— entrusted loans and loans receivable from third parties	1,645,205	1,544,070
— entrusted loans and loans receivable from related parties	1,297,892	1,309,095
— receivables from disposal of properties	1,881,513	1,948,434
— interest receivables	40,936	40,936
— recoverable reimbursement for freight charges	415,232	223,884
— receivable of governments grants	129,977	517,365
— other financial assets	787,396	1,185,466
	6,698,053	7,444,363

less: impairment allowance	(1,764,068)	(1,720,439)
	4,933,985	5,723,924

advances to employees	23,744	17,207
deductible input value added tax receivables	2,189,470	2,424,004
prepaid income tax	162,103	93,093
prepayments to related parties for purchases	586,312	229,324
prepayments to suppliers for purchases and others	964,158	634,548
others	169,881	117,678
	4,095,668	3,515,854

less: provision for impairment	(4,139)	(2,715)
	4,091,529	3,513,139

total other current assets	9,025,514	9,237,063

as at december 31, 2019, except for amounts included in other receivables amounting to rmb37 million, which were denominated in usd (december 31, 2018: other receivables amounting to rmb48 million denominated in usd), remaining amounts in other current assets were denominated in rmb0.12 million (december 31, 2018: remaining denominated in rmb) .

as at december 31, 2019, except for entrusted loans and loans receivable (december 31, 2018: except for entrusted loans and loans receivable) which were interest-bearing assets, all amounts in other current assets were non-interest-bearing (december 31, 2018: all non-interest-bearing).

as at december 31, 2019, the ageing analysis of financial assets included in other current assets was as follows:


	december 31,	december 31,
	2018	2019
within 1 year	1,456,520	1,628,723
between 1 and 2 years	283,844	752,731
between 2 and 3 years	844,262	151,974
over 3 years	4,113,427	4,910,935
	6,698,053	7,444,363
less: provision for impairment	(1,764,068)	(1,720,439)

	4,933,985	5,723,924

movements in the provision for impairment of other current assets are as follows:


	2018	2019
as at january 1	1,677,277	1,768,207
effect of adoption of ifrs 9	38,502	—
at beginning of year	1,715,779	1,768,207

impairment loss	65,494	42,898
write off	(6,117)	(62,319)
reversal	(1,731)	(26,290)
others	(5,218)	658

as at december 31	1,768,207	1,723,154

impairment under ifrs 9 for the year ended december 31, 2018 and 2019

financial assets included in other current assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ecls.


	gross carrying	expected credit
as at 31, december 2018	amount	losses
stage 1 – 12 months expected credit loss	1,098,455	—
stage 2 – life time expected credit loss	3,744,612	88,974
stage 3 – life time expected credit loss with credit-impaired	1,796,526	1,675,094

	6,639,593	1,764,068


as at december 31, 2019	gross carrying amount	expected credit losses
stage 1 – 12 months expected credit loss	1,632,766	—
stage 2 – life time expected credit loss	4,052,681	82,061
stage 3 – life time expected credit loss with credit impaired	1,758,916	1,638,378
	7,444,363	1,720,439

11. other non-current assets


	december 31,	december 31,
	2018	2019
financial assets
- other long-term receivables	204,718	128,673

prepayment for mining rights	808,736	813,822
long-term prepaid expenses	667,772	648,983
deferred losses for sale and leaseback transactions (note)	1,323,221	766,548
others	1,438,198	849,817
	4,237,927	3,079,170

	4,442,645	3,207,843

as at december 31, 2019 and december 31, 2018, all amounts were denominated in rmb.

as at december 31, 2019 and december 31, 2018, all amounts in other non-current assets were non-interest-bearing.

21. other non-current liabilities


	december 31,	december 31,
	2018	2019
financial liabilities
-long-term payables for mining rights	788,133	1,108,075
-other financial liabilities	52,926	45,412
	841,059	1,153,487

obligations in relation to early retirement schemes (note (i))	777,305	426,737
deferred government grants (note (ii))	314,045	245,916
deferred gain relating to sales and leaseback agreements	240,661	125,707
contract liabilities	132,844	125,758
provision for rehabilitation	121,033	131,248
others	11,217	10,721
	1,597,105	1,066,087

	2,438,164	2,219,574

note:

(i) obligations in relation to early retirement schemes

from 2014, certain subsidiaries and branches implemented certain early retirement benefit schemes which allow qualified employees to early retire on a voluntary basis. the group undertakes the obligations to pay the early retirement employees’ living expenses for no more than five years in the future on a monthly basis according to the early retirement benefit schemes, together with social insurance and housing fund pursuant to the regulation of the local social security office. living expenses, social insurance and the housing fund are together referred to as "the payments". the payments are forecasted to increase by 3% per annum with reference to the inflation rate and adjusted based on the average death rate in china. the payments are discounted by the treasury bond rate of december 31, 2019. as at december 31, 2019, the current portion of the payments within one year was reclassified to “other payables and accrued liabilities”.

as at december 31, 2019, obligations in relation to retirement benefits under the group’s early retirement schemes are as follows:


	2018	2019
as at january 1,	1,438,440	1,293,841
provision made during the year (note 29)	447,660	210,428
interest costs	62,801	18,260
payment during the year	(655,060)	(680,888)

as at december 31,	1,293,841	841,641

non-current	777,305	426,737
current (note 22)	516,536	414,904

	1,293,841	841,641

(ii)for asset related government grant, had the asset already exist upon receiving the government grant, the group directly deducts the grant amount against the book value of assets related to government grant instead of record the government grants as deferred income. for government grant related to income and expenses or losses already incurred by the group, the government grant amounts are directly deducted the related costs, expenses or non-operating losses. other types of government grant in the group are still included in deferred government grant and other income.

26. other income

for the year ended december 31,2019, government grants amounting to rmb79 million (2017: rmb90 million, 2018: rmb135 million) were recognized as income for the year to facilitate the group’s development. there are no unfulfilled conditions or contingencies attached to the grants.


	2018	2019
as at january 1	1,677,277	1,768,207
effect of adoption of ifrs 9	38,502	—
at beginning of year	1,715,779	1,768,207

impairment loss	65,494	42,898
write off	(6,117)	(62,319)
reversal	(1,731)	(26,290)
others	(5,218)	658

as at december 31	1,768,207	1,723,154

6. property, plant and equipment


				office
			transportation	and other	construction
	buildings	machinery	facilities	equipment	in progress	total
year ended december 31, 2018
opening net carrying amount	32,288,223	52,784,696	541,908	129,630	9,987,437	95,731,894
reclassifications and internal transfers	3,204,611	3,600,371	75,277	5,149	(6,885,408)	—
government grants	(468)	(113,481)	—	—	—	(113,949)
transfer to intangible assets (note 5)	—	—	—	—	(525,216)	(525,216)
transfer to prepaid land lease payments (note 19)	—	—	—	—	(382,242)	(382,242)
transfer to investment properties (note 7)	(11,039)	—	—	—	—	(11,039)
transfer from investment properties (note 7)	21,773	—	—	—	—	21,773
additions	230,243	1,998,717	31,668	48,912	8,016,079	10,325,619
acquisition of subsidiaries	4,633,728	4,026,062	17,443	5,937	3,149,060	11,832,230
disposal of subsidiaries	—	(472)	(101)	(53)	(8,893)	(9,519)
disposals	(251,212)	(2,505,158)	(39,827)	(3,347)	(275,391)	(3,074,935)
depreciation	(1,266,607)	(6,087,890)	(116,807)	(28,018)	—	(7,499,322)
impairment losses	—	(7,061)	—	—	(39,423)	(46,484)
currency translation differences	99	146	34	27	—	306

closing net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116

as at december 31, 2018
cost	56,620,994	103,608,492	2,538,835	603,665	13,187,424	176,559,410
accumulated depreciation and impairment	(17,771,643)	(49,912,562)	(2,029,240)	(445,428)	(151,421)	(70,310,294)

net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116


				office
			transportation	and other	construction
	buildings	machinery	facilities	equipment	in progress	total
year ended december 31, 2019
opening net carrying amount	38,849,351	53,695,930	509,595	158,237	13,036,003	106,249,116
impact on initial application of ifrs 16 (note 2.2)	(148,673)	(5,851,498)	—	—	(720,439)	(6,720,610)
opening net book amount at january 1, 2019	38,700,678	47,844,432	509,595	158,237	12,315,564	99,528,506
currency translation differences	89	103	17	46	—	255
reclassifications and internal transfers	3,869,147	5,125,998	(29,181)	207,546	(9,173,510)	—
transfer to intangible assets (note 5)	—	—	—	—	(63,370)	(63,370)
transfer to right-of-use assets	(107,368)	(495)	—	—	—	(107,863)
transfer to investment properties (note 7)	(179,564)	—	—	—	—	(179,564)
additions	576,035	635,678	44,122	13,506	9,351,883	10,621,224
transfer from right-of-use assets (note 19) *	—	1,674,260	—	—	—	1,674,260
government grants	(7,211)	(69,012)	—	—	—	(76,223)
disposals	(79,280)	(378,816)	(19,672)	(938)	(70,201)	(548,907)
disposal of subsidiaries	(85,851)	(73,432)	(3,270)	(239)	—	(162,792)
depreciation	(1,849,121)	(5,121,646)	(100,547)	(23,402)	—	(7,094,716)
impairment loss	(105,347)	(153,394)	(14)	(185)	(414)	(259,354)

closing net carrying amount	40,732,207	49,483,676	401,050	354,571	12,359,952	103,331,456

as at december 31, 2019
cost	60,153,059	101,624,509	2,238,818	829,575	12,511,787	177,357,748
accumulated depreciation and impairment	(19,420,852)	(52,140,833)	(1,837,768)	(475,004)	(151,835)	(74,026,292)

net carrying amount	40,732,207	49,483,676	401,050	354,571	12,359,952	103,331,456

* this includes the right-of-use assets recognized previously under sale and leaseback contracts of rmb1,674 million that were reclassified from property, plant and equipment, upon initial adoption of ifrs 16. after the expiration of those contracts, they were measured as property, plant and equipment.

for the years ended december 31, 2017, 2018 and 2019, depreciation expenses recognized in profit or loss are analyzed as follows:


	2017	2018	2019
cost of sales	6,387,773	7,291,380	6,926,580
general and administrative expenses	160,143	201,337	161,547
selling and distribution expenses	6,926	6,605	6,589

	6,554,842	7,499,322	7,094,716

as at december 31, 2019, the group was in the process of applying for the ownership certificates of buildings with a net carrying value of rmb7,315 million (december 31, 2018: rmb5,639 million). there have been no litigations, claims or assessments against the group for compensation with respect to the use of these buildings as at the date of approval of these financial statements.

as at december 31, 2019, the carrying value of these buildings only represented approximately 3.60% of the group’s total asset value (december 31, 2018: 2.81%). management considers that it is probable that the group can obtain the relevant ownership certificates from the appropriate authorities. the directors of the company are of the opinion that the group legally owns and has the rights to use the above buildings, and that there is no material adverse impact on the overall financial position of the group.

for the year ended december 31, 2019, interest expenses of rmb289 million (2017: rmb344 million, 2018: rmb518 million) (note 28) arising from borrowings attributable to the construction of property, plant and equipment during the year were capitalized at an annual rate ranging from 4.00% to 6.96% (2017: 4.41% to 8.00%, 2018: 4.54% to 7.00)% (note 28), and were included in additions to property, plant and equipment.

as at december 31, 2019, the group has pledged property, plant and equipment at a net carrying value amounting to rmb4,946 million (december 31, 2018: rmb4,168 million) for bank and other borrowings as set out in note 24 to the financial statements.

as at december 31, 2019, the carrying value of temporarily idle property, plant and equipment of the group was rmb952 million (december 31, 2018: rmb675 million).

the net carrying amounting of the group’s fixed assets held under finance leases included in the total amounts of the machinery and construction in progress at december 31, 2018 were rmb10,678 million and rmb112 million, respectively. the accumulated depreciation of the group’s fixed assets held under finance leases amounted to rmb2,011 million.

impairment testing for property, plant and equipment

when any indicators of impairment are identified, property, plant and equipment are reviewed for impairment based on each cgu. the cgu is an individual plant or entity. the carrying values of these individual plants or entities were compared to the recoverable amounts of the cgus, which were based predominantly on value in use. value-in-use calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. cash flows beyond the five-year period are extrapolated using the same cash flow projections of the fifth year. other key assumptions applied in the impairment testing include the expected product price, demand for the products, product cost and related expenses. management determined these key assumptions based on past performance and their expectations on market development. further, the group adopts a pre-tax and non-inflation rate of 10.16% (2018: 10.16%) that reflects specific risks related to the cgus as discount rates. the assumptions above are used in analyzing the recoverable amounts of the cgus within operating segments. these estimates and judgments may be affected by unexpected changes in the future market or economic conditions.

for the cgus with indicators of impairment identified, the assets were not further impaired during the current year based on the impairment testing (2018: nil).

in addition to the cgus for which impairment was tested based on value in use, the group also assessed the recoverable amounts for property, plant and equipment about to be disposed or abandoned, and impairment losses of rmb259 million were provided during the year ended december 31, 2019 (2018: rmb46 million, 2017: rmb16 million).


	buildings	machinery	land use rights	total
as at january 1, 2019	396,499	6,129,771	11,450,581	17,976,851
additions	21,203	11,606	1,215,049	1,247,858
transfer to investment properties (note 7)	—	—	(239,765)	(239,765)
transfer to property, plant and equipment (note 6)	—	(1,674,260)	—	(1,674,260)
government grants	—	(107,441)	—	(107,441)
contract modification	(45,507)	—	(137,358)	(182,865)
disposal of subsidiaries	—	—	(52,668)	(52,668)
depreciation	(84,940)	(601,891)	(388,994)	(1,075,825)
impairment losses	—	—	(1,448)	(1,448)
as at december 31, 2019	287,255	3,757,785	11,845,397	15,890,437


				computer
				software,
				electrolytic
				aluminium
		mining	mineral	production
		rights and	exploration	quota and
	goodwill	others	rights	others	total
year ended december 31, 2018
opening net carrying amount	2,345,930	7,066,428	1,111,586	113,689	10,637,633
additions	—	98,995	—	4,309	103,304
acquisition of subsidiaries	1,163,949	728,066	—	1,285	1,893,300
reclassification	—	7,072	(7,072)	—	—
disposals	—	—	—	(168)	(168)
amortization	—	(265,108)	—	(30,793)	(295,901)
transfer from property, plant and equipment (note 6)	—	41,148	—	484,068	525,216
currency translation differences	754	5,782	9,445	—	15,981

closing net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365
as at december 31, 2018
cost	3,510,633	9,430,183	1,113,959	888,975	14,943,750
accumulated amortization and impairment	—	(1,747,800)	—	(316,585)	(2,064,385)

net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365


				computer
				software,
				electrolytic
				aluminium
		mining	mineral	production
		rights and	exploration	quota and
	goodwill	others	rights	others	total
year ended december 31, 2019
opening net carrying amount	3,510,633	7,682,383	1,113,959	572,390	12,879,365
additions	—	467,640	—	687,746	1,155,386
reclassification	—	115,871	(115,871)	—	—
disposals	—	—	—	(9)	(9)
amortization	—	(294,766)	—	(44,172)	(338,938)
transfer from property, plant and equipment (note 6)	—	—	—	63,370	63,370
currency translation differences	259	1,783	3,244	—	5,286

closing net carrying amount	3,510,892	7,972,911	1,001,332	1,279,325	13,764,460
as at december 31, 2019
cost	3,510,892	10,016,634	1,001,332	1,640,081	16,168,939
accumulated amortization and impairment	—	(2,043,723)	—	(360,756)	(2,404,479)

net carrying amount	3,510,892	7,972,911	1,001,332	1,279,325	13,764,460


			financial
			liabilities	financial
			included in	liabilities
	financial		other current	included in
	liabilities at fair		payables and	other non-	interest bearing
	value through	trade and	accrued	current	loans and
	profit or loss	notes payables	expenses	liabilities	borrowings	total
as at january 1, 2018	89,426	12,360,441	11,363,236	769,061	103,270,773	127,852,937

net cash generated from operating activities	—	(3,996)	(624,504)	—	—	(628,500)

net cash flows from/(used in) investing activities	(87,660)	1,646,299	(193,345)	—	7,263,251	8,628,545
payment of upfront interest of gold leasing arrangement	—	—	—	—	2,323,105	2,323,105
proceeds from issuance of short-term bonds and medium-term notes, net of issuance costs	—	—	—	—	13,185,034	13,185,034
repayments of medium-term notes and short-term bonds	—	—	—	—	(21,815,000)	(21,815,000)
repayments of gold leasing arrangement	—	—	—	—	(7,519,283)	(7,519,283)
drawdown of short-term and long-term bank and other loans	—	—	—	—	76,899,591	76,899,591
repayments of short-term and long-term bank and other loans	—	—	(1,000,000)	—	(69,560,667)	(70,560,667)
proceeds from finance lease, net of deposit and transaction costs	—	—	—	—	1,204,843	1,204,843
capital elements of finance lease rental payment	—	—	—	—	(3,915,404)	(3,915,404)
dividends paid by subsidiaries to non-controlling shareholders	—	—	277,771	—	—	277,771
amortization of unrecognized finance expenses and interest expense	—	—	—	6,090	521,295	527,385
interest paid	—	—	(460,147)	(24,736)	(85,578)	(570,461)
reclassification	—	—	(90,644)	90,644	—	—
net cash (used in)/ generated from financing activities	—	—	(1,273,020)	71,998	(8,762,064)	(9,963,086)
net foreign exchange differences	—	6,520	14,095	—	916	21,531
as at december 31, 2018	1,766	14,009,264	9,286,462	841,059	101,772,876	125,911,427


			financial
			liabilities	financial
			included in	liabilities
	financial		other current	included in
	liabilities at fair		payables and	other non-	interest bearing
	value through	trade and	accrued	current	loans and
	profit or loss	notes payables	expenses	liabilities	borrowings	total
as at january 1, 2019	1,766	14,009,264	9,286,462	841,059	101,772,876	125,911,427

net cash generated from operating activities	—	(1,385,080)	470,478	—	—	(914,602)

net cash flows from/(used in) investing activities	(961)	(41,607)	622,995	474,548	7,157,695	8,212,670
proceeds from gold leasing arrangement	—	—	—	—	6,921,860	6,921,860
proceeds from issuance of short-term bonds and medium-term notes, net of issuance costs	—	—	—	—	37,965,385	37,965,385
repayments of senior perpetual securities	—	—	—	—	(352,648)	(352,648)
repayments of medium-term notes and short-term bonds	—	—	—	—	(22,400,000)	(22,400,000)
repayments of gold leasing arrangement	—	—	—	—	(1,607,905)	(1,607,905)
drawdown of short-term and long-term bank and other loans	—	—	—	—	40,669,197	40,669,197
repayments of short-term and long-term bank and other loans	—	—	—	—	(66,105,388)	(66,105,388)
principal portion of lease payment	—	—	—	—	(3,032,106)	(3,032,106)
dividends paid by subsidiaries to non-controlling shareholders	—	—	(23,715)	—	—	(23,715)
amortization of unrecognized finance expenses and interest expense	—	—	—	—	487,249	487,249
interest paid	—	—	235,310	—	22,631	257,941
reclassification	—	—	162,120	(162,120)	—	—
net cash (used in)/ generated from financing activities	—	—	373,715	(162,120)	(7,431,725)	(7,220,130)
net foreign exchange differences	—	2,178	10,408		31,321	43,907
as at december 31, 2019	805	12,584,755	10,764,058	1,153,487	101,530,167	126,033,272


	2018	2019
share of the associates’ profits and losses	39,335	48,767
share of the associates’ total comprehensive income	39,335	48,767

aggregate carrying amount of the group’s investments in the associates	6,363,462	9,512,401


	2018	2019
share of the joint ventures’ profits and losses for the year	(340,145)	91,250
share of the joint ventures’ total comprehensive income	(340,145)	91,250

aggregate carrying amount of the group’s investments in joint ventures	1,858,386	1,870,538


	2018		2019
cash and cash equivalents	232,022		261,447
other current assets	1,233,669		1,222,290
current assets	1,465,691		1,483,737

non-current assets	5,473,480		5,249,101

financial liabilities	840,000		1,106,593
other current liabilities	961,283		960,077
current liabilities	1,801,283		2,066,670

non-current liabilities	814,691		414,299

net assets	4,323,197		4,251,869
non-controlling interests	—		—

reconciliation to the group’s interest in the joint venture:
proportion of the group’s ownership	33	%	33	%
group’s share of net assets of the joint venture	1,426,655		1,403,117
carrying amount of the investment	1,426,655		1,403,117

35. significant related party balances and transactions

the company is controlled by chinalco, the parent company and a state-owned enterprise established in mainland china. chinalco itself is controlled by the prc government, which also owns a significant portion of the productive assets in mainland china. in accordance with ias 24 related party disclosures, government-related entities and their subsidiaries, directly or indirectly controlled, jointly controlled or significantly influenced by the prc government, are defined as related parties of the group. on that basis, related parties include chinalco and its subsidiaries (other than the group), other government-related entities and their subsidiaries (“other state-owned enterprises”), other entities and corporations over which the company is able to control or exercise significant influence and key management personnel of the company and chinalco as well as their close family members.

for the purposes of the related party transaction disclosures, the directors of the company consider that meaningful information in respect of related party transactions has been adequately disclosed.

in addition to the related party information and transactions disclosed elsewhere in the consolidated financial statements, the following is a summary of significant related party transactions in the ordinary course of business between the group and its related parties during the year.

(a)

significant related party transactions


	note	2017	2018	2019
sales of goods and services rendered:
sales of materials and finished goods to:	(i)
chinalco and its subsidiaries	(ix)	10,658,507	11,248,625	13,612,817
associates of chinalco		682,992	897,642	514,414
joint ventures		2,031,159	4,462,670	5,676,548
associates		724,658	2,626,780	3,812,565

		14,097,316	19,235,717	23,616,344

provision of engineering, construction and supervisory services to:	(iii)
chinalco and its subsidiaries	(ix)	77,095	5,981	—
joint ventures		2,046	—	—
associates		—	1,725	—

		79,141	7,706	—

provision of utility services to:	(ii)
chinalco and its subsidiaries	(ix)	581,566	620,552	687,290
associates of chinalco		8,776	15,719	4,062
joint ventures		118,280	186,672	263,436
associates		1,122	24,309	35,650

		709,744	847,252	990,438

rental revenue of land use rights and buildings from:	(vi)
chinalco and its subsidiaries	(ix)	40,875	31,551	52,571
associates of chinalco		—	—	65
joint ventures		426	1,545	1,967
associates		—	1,511	775

		41,301	34,607	55,378

purchases of goods and services:

purchases of engineering, construction and supervisory services from:	(iii)
chinalco and its subsidiaries	(ix)	1,071,283	2,088,338	2,949,866
joint ventures		—	2,100	69,332
associates		134,072	405,993	218,616

		1,205,355	2,496,431	3,237,814

purchases of key and auxiliary materials, equipment and finished goods from:	(iv)
chinalco and its subsidiaries	(ix)	3,850,073	3,513,420	8,161,223
associates of chinalco		—	18,917	18
joint ventures		6,516,087	8,182,251	2,647,234
associates		1,175	2,108,072	1,893,449

		10,367,335	13,822,660	12,701,924

provision of social services and logistics services by:	(v)
chinalco and its subsidiaries	(ix)	326,830	312,062	309,180

provision of utility services by:	(ii)
chinalco and its subsidiaries	(ix)	1,412,722	992,827	763,812
associates of chinalco		—	96,510	100,835
joint ventures		19,537	26,269	280,523
associates		—	77,432	8,326
		1,432,259	1,193,038	1,153,496


	notes	2017	2018	2019
purchases of goods and services: (continued)


provision of other services by:	(vii)
a joint venture		269,204	226,280	272,220

rental expenses /lease liabilities payments for buildings and land use rights charged by:	(vi)
chinalco and its subsidiaries	(ix)	509,848	501,866	499,191

other significant related party transactions:

borrowing from a subsidiary of chinalco	(viii), (ix)	4,010,000	6,525,000	3,890,000

interest expense on borrowings, discounted notes and factoring arrangement from subsidiaries of chinalco		225,934	143,415	141,991

entrusted loans and other borrowings to:
joint ventures		500,000	—	—
associates		1,100,000	—	—

		1,600,000	—	—

interest income on entrusted loans and other borrowings:
joint ventures		41,005	—	—
an associate		24,425	—	—

		65,430	—	—

interest income from the unpaid disposal proceeds from:
chinalco and its subsidiaries		117,587	—	—

consideration to acquire the shares in the subsidiaries of chinalco	(xiv)
investment to yunnan aluminum		—	—	1,287,608
investment to yixin aluminum		—	—	850,000
		—	—	2,137,608

disposal of electronic aluminium capacity quota to a subsidiary of chinalco	(xiii)	—	—	800,000

disposal of assets under a sale and leaseback contract to a subsidiary of chinalco	(xi)	600,000	224,000	500,000

finance lease under a sale and leaseback contract from a subsidiary of chinalco	(xi), (ix)	600,036	224,000	558,924

trade receivable factoring arrangement from a subsidiary of chinalco	(ix)	1,570,000	470,101	136,656

discounted notes receivable to a subsidiary of chinalco	(viii)	523,253	756,000	679,517

provision of financial guarantees to:
a joint venture	(x)	18,350	12,450	12,450

financial guarantees provided by:
subsidiaries of chinalco		4,000	—	—

all transactions with related parties were conducted at prices and on terms mutually agreed by the parties involved, which are determined as follows:

(i)

sales of materials and finished goods comprised sales of alumina, primary aluminum, copper and scrap materials. transactions entered into are covered by general agreements on a mutual provision of production supplies and ancillary services. the pricing policy is summarized below:

1.the price prescribed by the prc government (“the state-prescribed price”) is adopted;

2.if there is no state-prescribed price, the state-guidance price is adopted;

3.if there is neither a state-prescribed price nor state-guidance price, then the market price (being price charged to and from independent third parties) is adopted; and

4.if none of the above is available, then the adoption of a contractual price (being reasonable costs incurred in providing the relevant services plus not more than 5% of such costs is adopted).

(ii)

utility services, including electricity, gas, heat and water, are provided at the state-prescribed price.

(iii)

engineering, project construction and supervisory services were provided for construction projects. the state-guidance price or prevailing market price (including the tender price where by way of tender) is adopted for pricing purposes.

(iv)

the pricing policy for purchases of key and auxiliary materials (including bauxite, limestone, carbon, cement and coal) is the same as that set out in (i) above.

(v)

social services and logistics services provided by chinalco group cover public security, fire services, education and training, school and hospital services, cultural and physical education, newspaper and magazines, broadcasting and printing as well as property management, environmental and hygiene, greenery, nurseries and kindergartens, sanatoriums, canteens and offices, public transport and retirement management and other services. provisions of these services are covered by the comprehensive social and logistics services agreement. the pricing policy is the same as that set out in (i) above.

(vi)

pursuant to the land use rights lease agreements entered into between the group and chinalco group, operating leases for industrial or commercial land are charged at the market rent rate. the group also entered into a building rental agreement with chinalco group and paid rent based on the market rate for its lease of buildings owned by chinalco.

(vii)

other services are environmental protection operation services. the prevailing market price is adopted for pricing purposes.

(viii)

chinalco finance company limited (“chinalco finance”)* (中鋁財務有限責任公司), a wholly-owned subsidiary of chinalco and a non-bank financial institution established in the prc, provides deposit services, credit services and miscellaneous financial services to the group. the terms for the provision of financial services to the group are no less favourable than those of the same type of financial services provided by chinalco finance to chinalco and other members of its group or those of the same type of financial services that may be provided to the group by other financial institutions.

(ix)

these related party transactions also constitute connected transactions or continuing connected transactions as defined in chapter 13a of the listing rules.

(x)

in december 2006, ningxia energy, a subsidiary of the company, entered into a financial guarantee contract with china construction bank providing a financial guarantee to tian jing shen zhou wind power co., ltd, a joint venture of the company, for its 14-year bank loan amounting to rmb35 million. as at december 31, 2019, the outstanding amount of the guarantee was rmb6 million.

(xi)

as disclosed in note 20, the group has entered into several sales and leaseback contracts with chalco financial leasing co., ltd..

(xii)

as disclosed in note 38, the group acquired a 100% equity interest in suzhou zhongcai from zhongse technology and suzhou research institute, which constituted a related party transaction.

(xiii) as disclosed in note 27, in may 2019, the group entered into transactions with its fellow subsidiaries including the disposals of subsidiaries and disposal of electronic aluminum capacity quota. these transactions constituted related party transactions.

(xiv) as disclosed in note 8 (b), the company completed the acquisitions of equity interests in yunnan aluminum and yixin aluminum, respectively. these transactions constituted related party transactions.

* the english names represent the best effort made by management of the group in translating the chinese names of the companies as they do not have any official english names.

(b) balances with related parties

other than those disclosed elsewhere in the consolidated financial statements, the outstanding balances with related entities at the year end are as follows:



	december 31, 2018	december 31, 2019
cash and cash equivalents deposited with
a subsidiary of chinalco *	9,101,541	3,285,093

trade and notes receivables
chinalco and its subsidiaries	1,281,395	1,054,168
associates of chinalco	18,655	6,034
joint ventures	819,878	788,183
associates	6,615	25
	2,126,543	1,848,410

provision for impairment of receivables	(77,657)	(17,815)

	2,048,886	1,830,595


	december 31,	december 31,
	2018	2019
other current assets
chinalco and its subsidiaries	830,615	482,195
joint ventures	1,424,678	1,503,505
associates	29,701	47,743
	2,284,994	2,033,443

provision for impairment of other current assets	(40,830)	(30,509)

	2,244,164	2,002,934

other non-current assets
associates	111,845	111,845

interest-bearing loans and borrowings
subsidiaries of chinalco (including lease liabilities)	4,373,033	9,857,187

trade and notes payables
chinalco and its subsidiaries	404,278	334,840
joint ventures	631,570	527,744
associates	13,033	9,789
associates of chinalco	4,012	917

	1,052,893	873,290

	december 31,	december 31,
	2018	2019
other payables and accrued liabilities
chinalco and its subsidiaries	1,930,947	1,810,514
associates of chinalco	17,128	17,056
associates	148,978	80,012
joint ventures	8,860	73,823

	2,105,913	1,981,405

	december 31,	december 31,
	2018	2019
contract liabilities
chinalco and its subsidiaries	22,307	29,210
associates of chinalco	20	—
associates	12,451	223
joint ventures	94,367	56,010

	129,145	85,443

as at december 31, 2019, included in long-term loans and borrowings and short-term loans and borrowings were from other state-owned enterprises amounting to rmb35,029 million (december 31, 2018: rmb42,553 million) and rmb29,781 million (december 31, 2018: rmb41,189 million ), respectively.

the terms of all balances with the exception of the entrusted loans were unsecured and were in accordance with terms as set out in the respective agreements or as mutually agreed between the parties concerned.


	2017	2018	2019
fees	768	756	780
basic salaries, housing fund, other allowances and benefits in kind	3,830	3,953	6,945
pension costs	415	482	715

	5,013	5,191	8,440

* the year-on-year increase in the salaries of key management personnel was mainly due to the company's addition of a salaried supervisor this year and changes in the positions of some key management personnel, which caused the year-on-year changes in the scope and duration of salaries paid by the company.

details of directors' remuneration are included in note 30 to the financial statements.

(d) commitments with related parties

as at december 31, 2019 and 2018, except for the other capital commitments disclosed in note 42(c) to these financial statements, the group had no significant commitments with related parties.

17. reserves

the amounts of the group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity of the financial statements.

16. share capital

as at december 31, 2018 and 2019, all issued shares were registered and fully paid. both a shares and h shares rank pari passu with each other.

on january 31, 2018, the company and eight investors, including huarong ruitong equity investment management co., ltd. (華融瑞通股權投資管理有限公司), china life insurance co., ltd. (中國人壽保險股份有限公司), shenzhen zhao ping aluminum investment center (limited partnership) (深圳市招平中鋁投資有限(有限合夥)), china pacific life insurance co., ltd. (中國太平洋人壽保險股份有限公司), china cinda asset management co., ltd. (中國信達資產管理股份有限公司), boc financial asset investment co, ltd. (中銀金融資產投資有限公司), icbc financial asset investment co., ltd. (工銀金融資產投資有限公司) and abc financial asset investment co., ltd.(農銀金融資產投資有限公司) (collectively called “transferors“) entered into the equity acquisition agreements, pursuant to which, the company agreed to acquire and the transferors agreed to sell their non-controlling equity interests in chalco shandong co., ltd., chalco zhongzhou aluminum co., ltd., baotou aluminum co., ltd. and chalco mining co., ltd. (collectively called the “target companies”), at a consideration of approximately 2.1 billion ordinary shares of the company, which was determined at the fair value of the non-controlling interests in the target companies of approximately rmb12.7 billion. upon signing the equity acquisition agreements, together with the investment agreements and debt to equity swap agreements signed in 2017, the transferors effectively surrendered their non-controlling interests in the target companies, which included the rights to profit or loss, voting rights and other shareholder rights of the target companies to the group. consequently the carrying values of the transferors’ non-controlling interests in the target companies of rmb10.7 billion were derecognized, and were transferred to the capital reserve of the group in 2018.

on february 25, 2019, the company completed the issuance of ordinary shares to these transferors, and the total number of shares issued was 2,118,874,715.

the number of the company's authorized ordinary shares authorized, issued and outstanding was 14,903,798,236, 14,903,798,236 and 17,022,672,951 at par value of rmb1.00 per share as at december 31, 2017, 2018, and 2019 respectively.

37. partly-owned subsidiaries with material non-controlling interests

other than the senior perpetual securities issued by a subsidiary of the group, which is disclosed in note 40, details of the group’s subsidiaries that have material non-controlling interests are set out below:


	2018		2019
percentage of equity interest held by non-controlling interests

ningxia energy	29.18	%	29.18	%
shanxi zhongrun	60.00	%	56.61	%
guizhou huaren	60.00	%	60.00	%

profit for the year allocated to non-controlling interests

ningxia energy	214,479		240,504
shanxi zhongrun	291,009		69,701
guizhou huaren	20,783		198,016

dividends distributed to non-controlling interests

ningxia energy	351,979		76,469
shanxi zhongrun	200,000		—
guizhou huaren	—		—

accumulated balances of non-controlling interests at the year ended

ningxia energy	4,757,014		4,978,089
shanxi zhongrun	782,176		996,686
guizhou huaren	820,675		1,028,426

the following tables illustrate the summarized financial information of the above subsidiaries. the amounts disclosed are before any inter-company eliminations:


2018		ningxia energy
revenue		6,714,040
total expenses		6,555,933
profit for the year		158,107
total comprehensive income for the year		158,107

current assets		5,036,413
non-current assets		32,677,977
current liabilities		8,723,922
non-current liabilities		18,367,979

net cash flows from operating activities		2,755,612
net cash flows used in investing activities		(1,616,513)
net cash flows from financing activities		(991,998)
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		147,101


2019		ningxia energy
revenue		6,695,724
total expenses		6,314,098
profit for the year		381,626
total comprehensive income for the year		381,626

current assets		5,081,743
non-current assets		32,133,495
current liabilities		8,688,475
non-current liabilities		17,559,995

net cash flows from operating activities		3,274,683
net cash flows used in investing activities		(939,054)
net cash flows from financing activities		(2,611,597)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(275,968)


2018		shanxi zhongrun
revenue		645,413
total expenses		644,596
profit for the year		817
total comprehensive income for the year		817

current assets		605,140
non-current assets		3,421,608
current liabilities		790,819
non-current liabilities		2,258,089

net cash flows from operating activities		(19,718)
net cash flows used in investing activities		(781,869)
net cash flows from/financing activities		(1,335,579)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(2,137,166)


2019		shanxi zhongrun
revenue		2,204,777
total expenses		2,081,652
profit for the year		123,125
total comprehensive income for the year		123,125

current assets		783,726
non-current assets		4,010,818
current liabilities		1,084,890
non-current liabilities		2,093,735

net cash flows from operating activities		234,014
net cash flows used in investing activities		(402,636)
net cash flows from financing activities		307,452
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		138,830


2018		guizhou huaren
revenue		4,282,882
total expenses		4,248,243
profit for the year		34,639
total comprehensive income for the year		34,639

current assets		1,169,453
non-current assets		3,038,875
current liabilities		1,381,541
non-current liabilities		1,458,995

net cash flows from operating activities		134,781
net cash flows used in investing activities		(510,243)
net cash flows from/financing activities		(115,222)
effect of foreign exchange rate changes, net		—

net decrease in cash and cash equivalents		(490,684)


		guizhou
2019		huaren

revenue		5,982,665
total expenses		5,677,075
profit for the year		305,590
total comprehensive income for the year		305,590

current assets		1,034,442
non-current assets		2,650,822
current liabilities		1,164,346
non-current liabilities		1,006,360

net cash flows from operating activities		565,027
net cash flows used in investing activities		(91,319)
net cash flows from financing activities		(354,187)
effect of foreign exchange rate changes, net		—

net increase in cash and cash equivalents		119,521


		significant
	valuation technique	unobservable input	range
equity investments in size industry investment fund

december 31, 2019	net assets method	net assets	5,000,000
december 31, 2018	net assets method	net assets	5,000,000
chinalco innovative
december 31, 2019	net assets method	net assets	350,911

2. basis of preparation and significant accounting policies

the principal accounting policies applied in the preparation of these financial statements are set out below. these policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 basis of preparation

these financial statements are presented in thousands of renminbi ("rmb") unless otherwise stated.

going concern

the group’s expected net cash inflows from operating activities in 2020;

other available sources of financing from banks and other financial institutions given the group’s credit history.

consolidation

power over the investee (i.e, existing rights that give it the current ability to direct the relevant activities of the investee);

exposure, or rights, to variable returns from its involvement with the investee; and

the ability to use its power over the investee to affect its returns.

the contractual arrangement with the other vote holders of the investee;

rights arising from other contractual arrangements; and

the group’s voting rights and potential voting rights.

a change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. if the group loses control over a subsidiary, it:

derecognizes the assets (including goodwill) and liabilities of the subsidiary;

derecognizes the carrying amount of any non-controlling interests;

derecognizes the cumulative translation differences recorded in equity;

recognizes the fair value of the consideration received;

recognizes the fair value of any investment retained;

recognizes any surplus or deficit in profit or loss; and

(a) merger accounting for business combinations under common control

the comparative financial data have been restated to reflect the business combinations under common control occurred during this year as disclosed in note 38.

(b) acquisition method of accounting for other business combinations and goodwill

if the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss.

(a)

the contractual arrangement with the other vote holders of the investee;

(b)

rights arising from other contractual arrangements; and

(c)

the group’s voting rights and potential voting rights.

subsidiaries are fully consolidated from the date on which control is transferred to the group. they are de-consolidated from the date that control ceases.

2.2 changes in accounting policies and disclosures

the group has adopted the following new and revised ifrss for the first time for the current year’s financial statements.


amendments to ifrs 9		prepayment features with negative compensation
ifrs 16		leases
amendments to ias 19		plan amendment, curtailment or settlement
amendments to ias 28		long-term interests in associates and joint ventures
amendments to ifrs 10 and ias 28 (2011)		sale or contribution of assets between an investors and its associate or joint venture
ifric interpretation 23		uncertainty over income tax treatments
annual improvements 2015-2017 cycle		amendments to ifrs 3, ifrs 11, ias 12 and ias 23

(a) ifrs 16 leases

new definition of a lease

as a lessee- leases previously classified as operating leases

nature of the effect of adoption of ifrs 16

impacts on transition

the group has used the following elective practical expedients when applying ifrs16 at january 1, 2019:

· applied the short-term leases exemptions to leases with a lease term that ends within 12 months from the date of initial application

· applying a single discount rate to a portfolio of leases with reasonably similar characteristics when measuring the lease liabilities at january 1, 2019

· using hindsight in determining the lease term where the contract contains options to extend or terminate the lease

· and excluding initial direct costs from the measurement of the right-of-use assets at the date of initial application

the impact arising from the adoption of ifrs16 at january 1, 2019 is as follows:


		increase/(decrease)
		rmb'000
assets
increase in right-of-use assets		17,976,851
decrease in property, plant and equipment		(6,720,610)
decrease in land use rights		(4,306,865)
decrease in other non-current assets		(20,323)

increase in total assets		6,929,053

liabilities
increase in interest-bearing loans and borrowings		11,010,323
decrease in finance lease payables		(4,081,270)

increase in total liabilities		6,929,053

decrease in retained earnings		—
decrease in non-controlling interests		—

the lease liabilities as at january 1, 2019 reconciled to the operating lease commitments as at december 31, 2018 is as follows:


	increase/(decrease)
	rmb'000
operating lease commitments as at december 31, 2018	12,989,524
less: commitments relating to short-term leases, low-value assets leases and those leases with a remaining lease term ending on or before december 31, 2019	59,819
undiscounted operating lease commitments as at january 1, 2019 under ifrs 16	12,929,705

weighted average incremental borrowing rate as at january 1, 2019	4.97	%

discounted operating lease commitments as at january 1, 2019 under ifrs 16	6,929,053
add: recognized finance leases as at december 31, 2018	4,081,270

lease liabilities as at january 1, 2019	11,010,323

(b) amendments to ias 28

(c)ifric 23

(d)amendments to ifrs 10 and ias 28

2.3 issued but not yet effective international financial reporting standards

the group has not applied the following new and revised ifrss that have been issued but are not yet effective, in these financial statements.



amendments to ifrs 3		definition of a business1
amendments to ifrs 9, ias 39 and ifrs 7		interest rate benchmark reform1
ifrs 17		insurance contracts2
amendments to ias 1 and ias 8		definition of material1

1 effective for annual periods beginning on or after january 1, 2020

2 effective for annual periods beginning on or after january 1, 2021

further information about those ifrss that are expected to be applicable to the group is described below.

2.4 investments in associates and joint ventures

when an investment in an associate or a joint venture is classified as held for sale, it is accounted for in accordance with ifrs 5 non-current assets held for sale and discontinued operations.

2.5 segment reporting

2.6 related parties

a party is considered to be related to the group if:

(a) the party is a person or a close member of that person’s family and that person:

(i)

has control or joint control over the group;

(ii)

has a significant influence over the group; or

(iii)

is a member of the key management personnel of the group or of a parent of the group;

(b) the party is an entity where any of the following conditions applies:

(iv)

the entity and the group are members of the same group;

(v)

one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);

(vi)

the entity and the group are joint ventures of the same third party;

(vii)

one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(viii)

(ix)

a person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and

(x)

the entity, or any member of a group of which it is a part, provides key management personnel services to the group or to the parent of the group.

(xi)

the entity, or any member of a group of which it is a part, provides key management personnel services to the group or to the parent of the group.

2.7 fair value measurement

the group measures its derivative financial instruments and equity investments at fair value at the end of each reporting period.

level 1 — based on quoted (unadjusted) prices in active markets for identical assets or liabilities

level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly

level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

2.8 impairment of non-financial assets

2.9 foreign currency translation

functional and presentation currency

transactions and balances

group companies

(i)

assets and liabilities in each statement of financial position presented are translated at the closing rates at the end of the reporting period;

(ii)

(iii)

2.10 property, plant and equipment


buildings		8 - 45 years
machinery		3 - 30 years
transportation facilities		6 - 10 years
office and other equipment		3 - 10 years

2.11 investment properties

depreciation is calculated on the straight-line basis to write off the cost to investment property's residual value over its estimated useful life. the estimated useful lives are as follows:


buildings		50 years
land use rights		40-70 years

any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of the retirement or disposal.

2.12 non-current assets and disposal groups held for sale

2.13 intangible assets (other than goodwill)

(a) mining rights and mineral exploration rights

the group’s mineral exploration rights and mining rights relate to coal, bauxite and other mines.

(i) recognition

(ii) reclassification

(iii) amortization

(iv) impairment

(b) computer software

(d) other intangible assets

for intangible assets with finite useful life, the estimated useful lives and amortization method are reviewed annually at the end of each reporting period and adjusted when necessary.

2.14 research and development costs

research expenditures are recognized in profit or loss for the current period. development expenditures are recognized as assets when all of the following criteria are met:

(i)

it is technically feasible to complete the asset so that it will be available for use or sale;

(ii)

management intends to complete the asset and intends and has ability to use or sell it;

(iii)

it can be demonstrated that the asset will generate probable future economic benefits;

(iv)

there are adequate technical, financial and other resources to complete the development of the asset and management has the ability to use or sell the asset; and

(v)

the expenditure attributable to the asset during its development phase can be reliably measured.

2.15 leases (applicable from january 1, 2019)

group as a lessee

(a)right-of-use assets


buildings		2-20 years
machinery		2-10 years
land use rights		10-50 years

(b)lease liabilities

the group’s lease liabilities are included in interest-bearing bank and other borrowings.

(c)short-term leases and leases of low-value assets

lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.

group as a lessor

when the group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease.

2.16 leases (applicable before january 1, 2019)

assets acquired through hire purchase contracts of a financing nature are accounted for as finance leases, but are depreciated over their estimated useful lives.

prepaid land lease payments under operating leases are initially stated at cost and subsequently recognized on the straight-line basis over the lease terms.

2.17 investments and other financial assets

initial recognition and measurement

financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.

subsequent measurement

the subsequent measurement of financial assets depends on their classification as follows:

financial assets at amortized cost (debt instruments)

financial assets at fair value through other comprehensive income (debt instruments)

financial assets designated at fair value through other comprehensive income (equity investments)

financial assets at fair value through profit or loss

financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in profit or loss.

derecognition of financial assets

the rights to receive cash flows from the asset have expired; or

impairment of financial assets

general approach

stage 1 - financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ecls

simplified approach

2.18 financial liabilities

initial recognition and measurement

all financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

the group’s financial liabilities include trade and other payables, derivative financial instruments and interest-bearing bank and other borrowings.

subsequent measurement

the subsequent measurement of financial liabilities depends on their classification as follows:

financial liabilities at fair value through profit or loss

financial liabilities at amortized cost (loans and borrowings)

financial guarantee contracts

derecognition of financial liabilities

2.19 offsetting financial instruments

2.20 derivative financial instruments

initial recognition and subsequent measurement

any gains or losses arising from changes in fair value of derivatives are taken directly to profit or loss.

2.21 inventories

2.22 cash and cash equivalents

2.23 provisions

2.24 government grants

2.25 employee benefits

(a) bonus plans

(b) retirement benefit obligations

(d) termination benefit obligations and early retirement benefit obligations

2.26 income tax

deferred tax liabilities are recognized for all taxable temporary differences, except:

2.27 perpetual securities

2.28 revenue recognition

revenue from contracts with customers

(a)

sale of industrial products

(b)

rendering of services

revenue from other sources

(a)

rental income

(b)

other income

2.29 contract liabilities

2.30 borrowing costs

2.31 dividend distribution


				unrealized
	provision	accrued		profit at
	for impairment	expenses	tax losses	consolidation	others	total
as at january 1, 2018	525,439	264,209	539,899	166,043	168,647	1,664,237

acquisition of subsidiaries	360	—	—	—	7,734	8,094
(charged)/credited to profit or loss	(139,956)	(21,839)	76,338	3,833	5,989	(75,635)

as at december 31, 2018	385,843	242,370	616,237	169,876	182,370	1,596,696

as at january 1, 2019	385,843	242,370	616,237	169,876	182,370	1,596,696
credited/(charged) to profit or loss	59,218	(33,214)	(40,047)	(521)	(2,956)	(17,520)

as at december 31, 2019	445,061	209,156	576,190	169,355	179,414	1,579,176

movements in deferred tax liabilities:


				fair value
		fair value		adjustments arising
	interest	changes of	depreciation	from acquisition of
	capitalisation	financial assets	and amortization	subsidiaries	total
as at january 1, 2018	52,934	5,972	7,659	988,848	1,055,413
exchange realignment	—	—	—	1,353	1,353
credited to other comprehensive income	—	(3,769)	—	—	(3,769)
acquisition of subsidiaries	—	—	—	822,229	822,229
(credited)/charged to profit or loss	(9,102)	3,403	24,830	(27,511)	(8,380)

as at december 31, 2018	43,832	5,606	32,489	1,784,919	1,866,846

as at january 1, 2019	43,832	5,606	32,489	1,784,919	1,866,846
exchange realignment	—	—	—	416	416
credited to other comprehensive income	—	14,642	—	—	14,642
credited to profit or loss	(5,825)	(12,517)	(8,616)	(85,247)	(112,205)

as at december 31, 2019	38,007	7,731	23,873	1,700,088	1,769,699

23. trade and notes payables


	december 31,	december 31,
	2018	2019
trade payables	8,570,102	7,858,214
notes payable	5,439,162	4,726,541

	14,009,264	12,584,755

as at december 31, 2019, except for trade and notes payables of the group amounting to rmb52 million (december 31, 2018: rmb213 million) which were denominated in usd, all trade and notes payables were denominated in rmb.

the ageing analysis of trade and notes payables is as follows:


	december 31,	december 31,
	2018	2019
within 1 year	13,598,039	12,145,985
between 1 and 2 years	140,665	229,221
between 2 and 3 years	47,654	30,713
over 3 years	222,906	178,836

	14,009,264	12,584,755

the trade and notes payables are non-interest-bearing and are normally settled within one year.

13. trade and notes receivables


	december 31	december 31,
	2018	2019
trade receivables	5,868,796	5,273,969
less: provision for impairment	(659,261)	(714,857)
	5,209,535	4,559,112

notes receivable	2,894,482	2,834,011

	8,104,017	7,393,123

as at december 31, 2019, except for trade and notes receivables of the group amounting to rmb1,111 million (december 31, 2018: rmb1,403 million) which were denominated in usd, all trade and notes receivables were denominated in rmb.

included in the group’s trade and notes receivables are amounts due from the group’s joint ventures and associates of rmb788 million (december 31, 2018: rmb820 million) and rmb0.03 million (december 31, 2018: rmb7 million), respectively, which are repayable on credit terms similar to those offered to the major customers of the group.

as at december 31, 2019, the group had pledged notes receivable amounting to rmb667 million to exchange notes receivable (december 31, 2018: notes receivable amounting to rmb934 million) as set out in note 24 to the financial statements.

trade receivables are non-interest-bearing and are generally on terms of 3 to 12 months. certain of the group’s sales were on advance payments or documents against payment. in some cases, these terms are extended for qualifying long term customers that have met specific credit requirements. as at december 31, 2019, the ageing analysis of trade and notes receivables was as follows:


	december 31,	december 31,
	2018	2019
within 1 year	3,320,735	2,907,407
between 1 and 2 years	906,302	742,477
between 2 and 3 years	158,162	377,836
over 3 years	1,483,597	1,246,249
	5,868,796	5,273,969

less: provision for impairment	(659,261)	(714,857)

	5,209,535	4,559,112

impairment under ifrs 9 for the year ended december 31, 2018 and 2019

an impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. the provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). the calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

set out below is the information about the credit risk exposure on the group’s trade receivables using a provision matrix:

as at december 31, 2018


	gross carrying	expected credit	expected credit
	amount	losses	loss rate (%)
alumina and primary aluminum
within 1 year	401,691	3,696	0.92
between 1 and 2 years	55,766	6,179	11.08
between 2 and 3 years	16,546	14,893	90.01
over 3 years	379,213	359,759	94.87
	853,216	384,527	/
trading
within 1 year	473,153	662	0.14
between 1 and 2 years	4,146	70	1.68
between 2 and 3 years	74	3	3.80
over 3 years	19,422	3,787	19.50
	496,795	4,522	/
energy
within 1 year	88,462	3,388	3.83
between 1 and 2 years	3,217	685	21.28
between 2 and 3 years	15,417	3,688	23.92
over 3 years	12,710	6,216	48.91
	119,806	13,977	/
corporate and other operating segments
within 1 year	108,627	6,539	6.02
between 1 and 2 years	10,974	7,767	70.78
between 2 and 3 years	4,026	3,823	94.96
over 3 years	25,800	25,142	97.45
	149,427	43,271	/

	1,619,244	446,297

individually assessed trade receivables	4,249,552	212,964

	5,868,796	659,261

as at december 31, 2019


	gross carrying	expected credit	expected credit
	amount	losses	loss rate (%)
alumina and primary aluminum
within 1 year	207,602	1,910	0.92
between 1 and 2 years	47,883	5,305	11.08
between 2 and 3 years	20,712	18,643	90.01
over 3 years	205,395	194,858	94.87
	481,592	220,716	/
trading
within 1 year	113,596	159	0.14
between 1 and 2 years	—	—	1.69
between 2 and 3 years	1,001	41	4.05
over 3 years	79,793	15,560	19.50
	194,390	15,760	/
energy
within 1 year	348,399	13,343	3.83
between 1 and 2 years	11,722	2,496	21.29
between 2 and 3 years	9,073	2,170	23.92
over 3 years	7,269	3,555	48.91
	376,463	21,564	/
corporate and other operating segments
within 1 year	51,774	3,117	6.02
between 1 and 2 years	18,129	12,831	70.78
between 2 and 3 years	5,399	5,127	94.96
over 3 years	6,176	6,019	97.45
	81,478	27,094	/

	1,133,923	285,134

individually assessed trade receivables	4,140,046	429,723

	5,273,969	714,857

movements in the loss allowance for impairment of trade and notes receivables are as follows:


	2018	2019
as at january 1	546,102	659,261
effect of adoption of ifrs 9	112,407	—
at beginning of year	658,509	659,261

impairment loss	64,544	236,238
written off	(33,469)	(97,554)
reversal	(20,466)	(83,095)
others	(9,857)	7

as at december 31	659,261	714,857

as at december 31, 2019, the group has derecognized notes receivable that have been discounted or endorsed but not yet due carrying amount in aggregate of rmb34,506 million (december 31, 2018: rmb29,273 million). in addition, as at december 31, 2019, the group has not derecognized notes receivable that have been discounted or endorsed but not yet due with a carrying amount of rmb357 million (december 31, 2018: rmb444 million).

the derecognized notes receivable had a maturity of one to six months at the end of the reporting period. in accordance with the law of negotiable instruments in the prc, the holders of the derecognized notes receivable have a right of recourse against the group if the prc banks default (the “continuing involvement”). in the opinion of the directors, the group has transferred substantially all risks and rewards relating to the derecognized notes receivable. accordingly, it has derecognized the full carrying amounts of the derecognized notes receivable and the associated trade payables. the maximum exposure to loss from the group’s continuing involvement in the derecognized notes receivable and the undiscounted cash flows to repurchase these derecognized notes receivable is equal to their carrying amounts. in the opinion of the directors, the fair values of the group’s continuing involvement in the derecognized notes receivable are not significant.

during the year ended december 31, 2019, the group has not recognized any gain or loss on the date of transfer of the derecognized notes receivable. no gains or losses were recognized from the continuing involvement, both during the year or cumulatively. the endorsement has been made evenly throughout the year.


	note	2017	2018	2019
sales of goods and services rendered:
sales of materials and finished goods to:	(i)
chinalco and its subsidiaries	(ix)	10,658,507	11,248,625	13,612,817
associates of chinalco		682,992	897,642	514,414
joint ventures		2,031,159	4,462,670	5,676,548
associates		724,658	2,626,780	3,812,565

		14,097,316	19,235,717	23,616,344

provision of engineering, construction and supervisory services to:	(iii)
chinalco and its subsidiaries	(ix)	77,095	5,981	—
joint ventures		2,046	—	—
associates		—	1,725	—

		79,141	7,706	—

provision of utility services to:	(ii)
chinalco and its subsidiaries	(ix)	581,566	620,552	687,290
associates of chinalco		8,776	15,719	4,062
joint ventures		118,280	186,672	263,436
associates		1,122	24,309	35,650

		709,744	847,252	990,438

rental revenue of land use rights and buildings from:	(vi)
chinalco and its subsidiaries	(ix)	40,875	31,551	52,571
associates of chinalco		—	—	65
joint ventures		426	1,545	1,967
associates		—	1,511	775

		41,301	34,607	55,378

purchases of goods and services:

purchases of engineering, construction and supervisory services from:	(iii)
chinalco and its subsidiaries	(ix)	1,071,283	2,088,338	2,949,866
joint ventures		—	2,100	69,332
associates		134,072	405,993	218,616

		1,205,355	2,496,431	3,237,814

purchases of key and auxiliary materials, equipment and finished goods from:	(iv)
chinalco and its subsidiaries	(ix)	3,850,073	3,513,420	8,161,223
associates of chinalco		—	18,917	18
joint ventures		6,516,087	8,182,251	2,647,234
associates		1,175	2,108,072	1,893,449

		10,367,335	13,822,660	12,701,924

provision of social services and logistics services by:	(v)
chinalco and its subsidiaries	(ix)	326,830	312,062	309,180

provision of utility services by:	(ii)
chinalco and its subsidiaries	(ix)	1,412,722	992,827	763,812
associates of chinalco		—	96,510	100,835
joint ventures		19,537	26,269	280,523
associates		—	77,432	8,326
		1,432,259	1,193,038	1,153,496


	notes	2017	2018	2019
purchases of goods and services: (continued)


provision of other services by:	(vii)
a joint venture		269,204	226,280	272,220

rental expenses /lease liabilities payments for buildings and land use rights charged by:	(vi)
chinalco and its subsidiaries	(ix)	509,848	501,866	499,191

other significant related party transactions:

borrowing from a subsidiary of chinalco	(viii), (ix)	4,010,000	6,525,000	3,890,000

interest expense on borrowings, discounted notes and factoring arrangement from subsidiaries of chinalco		225,934	143,415	141,991

entrusted loans and other borrowings to:
joint ventures		500,000	—	—
associates		1,100,000	—	—

		1,600,000	—	—

interest income on entrusted loans and other borrowings:
joint ventures		41,005	—	—
an associate		24,425	—	—

		65,430	—	—

interest income from the unpaid disposal proceeds from:
chinalco and its subsidiaries		117,587	—	—

consideration to acquire the shares in the subsidiaries of chinalco	(xiv)
investment to yunnan aluminum		—	—	1,287,608
investment to yixin aluminum		—	—	850,000
		—	—	2,137,608

disposal of electronic aluminium capacity quota to a subsidiary of chinalco	(xiii)	—	—	800,000

disposal of assets under a sale and leaseback contract to a subsidiary of chinalco	(xi)	600,000	224,000	500,000

finance lease under a sale and leaseback contract from a subsidiary of chinalco	(xi), (ix)	600,036	224,000	558,924

trade receivable factoring arrangement from a subsidiary of chinalco	(ix)	1,570,000	470,101	136,656

discounted notes receivable to a subsidiary of chinalco	(viii)	523,253	756,000	679,517

provision of financial guarantees to:
a joint venture	(x)	18,350	12,450	12,450

financial guarantees provided by:
subsidiaries of chinalco		4,000	—	—

all transactions with related parties were conducted at prices and on terms mutually agreed by the parties involved, which are determined as follows:

(i)

1.the price prescribed by the prc government (“the state-prescribed price”) is adopted;

2.if there is no state-prescribed price, the state-guidance price is adopted;

3.if there is neither a state-prescribed price nor state-guidance price, then the market price (being price charged to and from independent third parties) is adopted; and

4.if none of the above is available, then the adoption of a contractual price (being reasonable costs incurred in providing the relevant services plus not more than 5% of such costs is adopted).

(ii)

utility services, including electricity, gas, heat and water, are provided at the state-prescribed price.

(iii)

(iv)

the pricing policy for purchases of key and auxiliary materials (including bauxite, limestone, carbon, cement and coal) is the same as that set out in (i) above.

(v)

(vi)

(vii)

other services are environmental protection operation services. the prevailing market price is adopted for pricing purposes.

(viii)

(ix)

these related party transactions also constitute connected transactions or continuing connected transactions as defined in chapter 13a of the listing rules.

(x)

(xi)

as disclosed in note 20, the group has entered into several sales and leaseback contracts with chalco financial leasing co., ltd..

(xii)

as disclosed in note 38, the group acquired a 100% equity interest in suzhou zhongcai from zhongse technology and suzhou research institute, which constituted a related party transaction.

168000

143401000

89486000

52537000

36949000

3074935000

39827000

251212000

275391000

2505158000

3347000

548907000

19672000

79280000

70201000

378816000

938000

36157000

236253000

50314000

222024000

309465000

327645000

222930000

32022000

351979000

200000000

76469000

44960000

327983000

236708000

34001000

40260000

109914000

132000000

97775000

14044000

198000000

312135000

605416000

199215000

236556000

32. earnings per share attributable to ordinary equity holders of the parent


	2017	2018	2019
profit attributable to ordinary equity holders of the parent (rmb)	1,413,221	707,460	850,999
other equity instruments’ distribution reserved (rmb)	(110,000)	(129,282)	(219,249)
	1,303,221	578,178	631,750
weighted average number of ordinary shares in issue	14,903,798,236	14,903,798,236	14,903,798,236
effect of equity exchange arrangement	—	1,938,915,502	—
issuance of share capital* (note 16)	—	—	2,118,874,715
	14,903,798,236	16,842,713,738	17,022,672,951

basic and diluted earnings per share (rmb)	0.087	0.034	0.037

* the group had no potentially dilutive ordinary shares in issue during the years ended december 31, 2019, 2018 and 2017.

-221567000

57364000

21202000

3045000

6975281000

7433027000

7773170000

56008429000

132202000

38379384000

14903798000

17629045000

952878000

2019288000

970069000

45901000

-4635378000

18123069000

5867557000

345986000

65782030000

146934000

39727463000

14903798000

26054567000

952878000

2019288000

335276000

6836000

-3332937000

18827833000

5867557000

65642594000

146934000

39604952000

14903798000

26037642000

952878000

2019288000

335276000

17671000

-3466283000

18827833000

5867557000

5330410000

67669619000

145938000

52415307000

14903798000

15254312000

11690292000

3988000000

214520000

6588000

-2856064000

18454678000

5867557000

67669619000

145938000

52415307000

14903798000

15254312000

11690292000

3988000000

214520000

6588000

-2856064000

18454678000

5867557000

70725060000

10159019000

139891000

54659633000

17022673000

16065427000

1108544000

5487104000

182197000

49511000

-2216946000

27019102000

5867557000

200964751000

203070664000

29169276000

52415307000

54659633000

7851365000

529966000

448991000

2665205000

591000

0.1108

0.7078

0.2128

0.0168

0.9487

0.9745

0.4891

0.1950

0.9001

0.9496

0.2392

0.0380

0.0092

0.0602

0.0383

0.0014

0.2129

0.1108

0.7078

0.0169

0.9487

0.9745

0.4891

0.1950

0.9001

0.9496

0.2392

0.0405

0.0092

0.0602

0.0383

0.0014

1800000

63626000


	increase/(decrease)
	rmb'000
operating lease commitments as at december 31, 2018	12,989,524
less: commitments relating to short-term leases, low-value assets leases and those leases with a remaining lease term ending on or before december 31, 2019	59,819
undiscounted operating lease commitments as at january 1, 2019 under ifrs 16	12,929,705

weighted average incremental borrowing rate as at january 1, 2019	4.97	%

discounted operating lease commitments as at january 1, 2019 under ifrs 16	6,929,053
add: recognized finance leases as at december 31, 2018	4,081,270

lease liabilities as at january 1, 2019	11,010,323

12 months

1–10 years

20%

17%

546102000

659261000

384527000

43271000

13977000

446297000

4522000

659261000

212964000

6179000

7767000

685000

70000

359759000

25142000

6216000

3787000

14893000

3823000

3688000

3000

3696000

6539000

3388000

662000

714857000

220716000

27094000

21564000

285134000

15760000

714857000

429723000

2496000

5305000

12831000

194858000

6019000

3555000

15560000

18643000

5127000

2170000

41000

1910000

3117000

13343000

159000

-5206000

-15491000

57815000

8305000

29748000

162093000

98957000

6704000

12143000

32880000

23052000

250000

4135000

53392000

44522000

6828000

44706000

3485000

2758000

100000000

350000000

5203422000

708655000

1814663000

1000767000

1212249000

467088000

4882496000

399344000

1937438000

1047285000

1131622000

366807000

4921179000

706883000

651238000

1652514000

1064769000

1328730000

223928000

706690000

233016000

153336000

44015000

83996000

192327000

492234000

100125000

185392000

15744000

54458000

136515000

261151000

37512000

61644000

5540000

35093000

53252000

105622000

36226354000

182132000

-658509000

34492833000

16141000

1729825000

34480388000

182132000

204718000

4875525000

204718000

182132000

19130835000

2894482000

1715779000

2165288000

5209535000

25506228000

121432000

3655638000

12450000

5209535000

182132000

204718000

1098455000

121432000

3655638000

204718000

19130835000

2894482000

2165288000

12450000

5209535000

28053117000

111935000

-659261000

22316463000

2834011000

111935000

19476680000

3503175000

2239251000

128673000

5723924000

128673000

111935000

7759190000

2834011000

1768207000

1305781000

4559112000

13666193000

120538000

3970620000

5772000

4559112000

111935000

128673000

1632766000

120538000

3970620000

128673000

7759190000

2834011000

1305781000

5772000

4559112000

6441000

1723384000

1745966000

16141000

6441000

1723384000

22582000

1723384000

16141000

16000000

2834011000

3500000000

8853000

2230398000

8576437000

3175000

2834011000

3500000000

8853000

2230398000

12028000

6334011000

2230398000

3175000

3000000

125911427000

840000000

125909661000

1766000

54023581000

55048445000

816529000

841059000

53207052000

54207386000

126052212000

1106593000

52099569000

126051407000

805000

53386442000

1146893000

1153487000

50952676000

52232955000

54023581000

816529000

53207052000

54023581000

816529000

53207052000

52099569000

1146893000

50952676000

52099569000

1146893000

50952676000

1766000

2000000

805000

1000000

1766000

805000

116000

3280641000

4501633000

117640000

68313000

55360000

748086000

616425000

38000000

-26000000

254659000

2000000

-2000000

8000000

3014000

113000

160000

76739000

272098000

259684000

541000000

-634793000

-120756000

-32323000

-4643000

-131621000

7889000

2315000

-4758000

4000000

102000000

-2000000

258000000

4551237000

3959177000

3956604000

568333000

189419000

1924259000

15739000

217267000

1163949000

1369107000

2141526000

189419000

1924259000

15998000

217267000

1163949000

1369366000

2141526000

1063000

158848000

11218000

83497000

58319000

413000

1163949000

10700000000

-217000

14732367000

1844116000

13211998000

979991000

12127885000

1742062000

1303254000

147318000

52001000

849699000

48995000

141554000

6698000

68404000

70944000

82671000

1324915000

1122477000

80830000

152571000

87943000

5669000

4166461000

417000

454000

188000

26124000

137000

749000

25731000

728067000

26574000

216953000

107956000

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131248000


	loans from banks and other				total of long-term bank and
	financial institutions		other loans		other loans
	december 31,	december 31,	december 31,	december 31,	december 31,	december 31,
	2018	2019	2018	2019	2018	2019
within 1 year	3,382,325	3,337,202	2,075	2,485	3,384,400	3,339,687
between 1 and 2 years	7,375,557	7,523,290	2,399	2,485	7,377,956	7,525,775
between 2 and 5 years	16,586,390	9,151,573	7,197	7,455	16,593,587	9,159,028
over 5 years	18,777,275	18,806,428	7,522	4,969	18,784,797	18,811,397

	46,121,547	38,818,493	19,193	17,394	46,140,740	38,835,887

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109758376000

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3106000

1542655000

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8648000

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2884000

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391824000

258448000

879794000

842734000

	2018	2019
primary aluminum	decrease/increase rmb14 million	decrease/increase rmb40 million
copper	increase/decrease rmb0.9 million	increase/decrease rmb0.9 million
zinc	decrease/increase rmb1.0 million	decrease/increase rmb5.1 million
coal	decrease/increase rmb2.7 million	decrease/increase rmb0.2 million

212309000

52962000

17952000

98150000

23425000

4594000

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1619244000

496795000

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55766000

10974000

3217000

4146000

379213000

25800000

12710000

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