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Income tax expense (Tables)
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Summary of Income Tax Expense
The major components of income tax expense for the years ended December 31, 2018, 2019 and 2020 are as follows:
 
 
  
31.12.2018
 
  
31.12.2019
 
  
31.12.2020
 
  
31.12.2020
 
 
  
RMB’000
 
  
RMB’000
 
  
RMB’000
 
  
US$’000
 
     
Current income tax
  
   
  
   
  
   
  
   
- Current year
  
 
209,448
 
  
 
193,878
 
  
 
180,254
 
  
 
27,854
 
- Over provision in respect of prior years
  
 
(729
) 
  
 
(6,985
) 
  
 
(124
) 
  
 
(19
) 
Deferred tax
  
   
  
   
  
   
  
   
- Movement in temporary differences
  
 
(2,052
) 
  
 
(14,274
) 
  
 
12,543
 
  
 
1,938
 
- Over provision in respect of prior years
  
 
—  
 
  
 
—  
 
  
 
(135
) 
  
 
(20
) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Consolidated income tax expense reported in the statement of profit or loss
  
 
206,667
 
  
 
172,619
 
  
 
192,538
 
  
 
29,753
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Reconciliation of Income Tax Expense
Income tax expense reported in the consolidated statement of profit or loss differs from the amount computed by applying the PRC income tax rate of 15% (being tax rate of Yuchai) for the years ended December 31, 2018, 2019 and 2020 for the following reasons:
 
 
  
31.12.2018
 
  
31.12.2019
 
  
31.12.2020
 
  
31.12.2020
 
 
  
RMB’000
 
  
RMB’000
 
  
RMB’000
 
  
US$’000
 
     
Accounting profit before tax
  
 
1,181,067
 
  
 
1,033,319
 
  
 
971,864
 
  
 
150,180
 
Computed tax expense at 15% (2019: 15%, 2018: 15%)
  
 
177,160
 
  
 
154,998
 
  
 
145,780
 
  
 
22,527
 
Adjustments resulting from:
  
   
  
   
  
   
  
   
Non-deductible
expenses
  
 
5,146
 
  
 
3,982
 
  
 
9,188
 
  
 
1,420
 
Tax-exempt
income
  
 
(3,634
) 
  
 
(6,171
) 
  
 
(601
)
 
  
 
(93
)
 
Utilization of deferred tax benefits previously not recognized
  
 
(5,518
) 
  
 
(5,076
) 
  
 
(1,996
) 
  
 
(308
) 
Deferred tax benefits not recognized
  
 
2,183
 
  
 
6,613
 
  
 
6,097
 
  
 
942
 
Tax credits for research and development expense
  
 
(22,407
) 
  
 
(31,863
) 
  
 
(26,329
) 
  
 
(4,068
) 
Tax rate differential
  
 
24,437
 
  
 
26,223
 
  
 
24,251
 
  
 
3,747
 
Over provision in respect of previous years
  
 
(729
) 
  
 
(6,985
) 
  
 
(259
) 
  
 
(39
) 
Withholding tax expense
  
 
30,029
 
  
 
30,898
 
  
 
36,332
 
  
 
5,614
 
Others
  
 
—  
 
  
 
—  
 
  
 
75
 
  
 
11
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
 
206,667
 
  
 
172,619
 
  
 
192,538
 
  
 
29,753
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Summary of Deferred Tax
Deferred tax relates to the following:
 
 
  
Consolidated statement of financial position
 
 
Consolidated statement of profit or loss
 
 
  
31.12.2019
 
 
31.12.2020
 
 
31.12.2020
 
 
31.12.2018
 
 
31.12.2019
 
 
31.12.2020
 
 
31.12.2020
 
 
  
RMB’000
 
 
RMB’000
 
 
US$’000
 
 
RMB’000
 
 
RMB’000
 
 
RMB’000
 
 
US$’000
 
        
Accelerated tax depreciation
  
 
(44,920
) 
 
 
(100,802
) 
 
 
(15,577
) 
 
 
(12,432
) 
 
 
(17,366
) 
 
 
(55,882
) 
 
 
(8,635
) 
Interest receivable
  
 
(1,644
) 
 
 
(1,937
) 
 
 
(299
) 
 
 
(1,478
) 
 
 
608
 
 
 
(293
) 
 
 
(45
) 
PRC withholding tax on dividend income
(i)
  
 
(106,922
) 
 
 
(112,456
) 
 
 
(17,378
) 
 
 
(29,842
) 
 
 
(30,721
) 
 
 
(36,255
) 
 
 
(5,602
) 
Impairment of property, plant and equipment
  
 
6,648
 
 
 
40,104
 
 
 
6,197
 
 
 
3,624
 
 
 
(9,295
) 
 
 
33,456
 
 
 
5,170
 
Write-down of inventories
  
 
18,403
 
 
 
22,628
 
 
 
3,497
 
 
 
(1,433
) 
 
 
2,343
 
 
 
4,225
 
 
 
653
 
Allowance for doubtful account receivables
  
 
10,077
 
 
 
8,056
 
 
 
1,245
 
 
 
(2,199
) 
 
 
4,900
 
 
 
(2,021
) 
 
 
(312
) 
Accruals
  
 
250,662
 
 
 
298,766
 
 
 
46,168
 
 
 
(186
) 
 
 
46,108
 
 
 
48,149
 
 
 
7,440
 
Deferred income
  
 
107,731
 
 
 
108,942
 
 
 
16,834
 
 
 
43,820
 
 
 
12,232
 
 
 
1,211
 
 
 
187
 
Others
  
 
29,439
 
 
 
24,441
 
 
 
3,777
 
 
 
2,178
 
 
 
5,465
 
 
 
(4,998
) 
 
 
(774
) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Deferred tax benefits/(expenses)
  
   
 
   
 
   
 
 
2,052
 
 
 
14,274
 
 
 
(12,408
) 
 
 
(1,918
) 
               
 
 
  
 
 
  
 
 
  
 
 
 
Net deferred tax assets
  
 
269,474
 
 
 
287,742
 
 
 
44,464
 
 
   
 
   
 
   
 
   
   
 
 
  
 
 
  
 
 
                 
Reflected in the consolidated statement of financial position as follows:
  
   
 
   
 
   
 
   
 
   
 
   
 
   
Deferred tax assets
  
 
422,960
 
 
 
400,198
 
 
 
61,842
 
 
   
 
   
 
   
 
   
Deferred tax liabilities
  
 
(153,486
) 
 
 
(112,456
) 
 
 
(17,378
) 
 
   
 
   
 
   
 
   
   
 
 
  
 
 
  
 
 
                 
 
  
 
269,474
 
 
 
287,742
 
 
 
44,464
 
 
   
 
   
 
   
 
   
   
 
 
  
 
 
  
 
 
                 
 
(i) 
The movement of PRC withholding tax on dividend income is as follows:
 
 
  
31.12.2019
 
  
31.12.2020
 
  
31.12.2020
 
 
  
RMB’000
 
  
RMB’000
 
  
US$’000
 
    
At January 1
  
 
(106,922
) 
  
 
(106,922
) 
  
 
(16,522
) 
Provision made to consolidated statement of profit or loss
  
 
(30,721
) 
  
 
(36,255
) 
  
 
(5,602
) 
Utilization
  
 
30,721
 
  
 
30,721
 
  
 
4,746
 
   
 
 
   
 
 
   
 
 
 
December 31
  
 
(106,922
) 
  
 
(112,456
) 
  
 
(17,378
) 
   
 
 
   
 
 
   
 
 
 
Deferred Tax Assets That Have Not Been Recognized
Deferred tax assets have not been recognized in respect of the following items:
 
 
  
31.12.2019
 
  
31.12.2020
 
  
31.12.2020
 
 
  
RMB’000
 
  
RMB’000
 
  
US$’000
 
Unutilized tax losses
  
 
414,226
 
  
 
404,215
 
  
 
62,463
 
Unutilized capital allowances and investment allowances
  
 
107,613
 
  
 
105,622
 
  
 
16,322
 
Other unrecognized temporary differences relating to asset impairment and deferred grants
  
 
215,296
 
  
 
204,423
 
  
 
31,589
 
   
 
 
   
 
 
 
  
 
 
 
 
  
 
737,135
 
  
 
714,260
 
  
 
110,374