2010 SEMI-ANNUAL REPORT
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
Important Note
The Board of Directors, the Supervisory Committee as well as the directors, supervisors and senior management staff of Shenzhen Chiwan Wharf Holdings Limited (hereinafter referred to as “the Company”) hereby confirm that there exists no omission, misstatement, or misleading information in this report, and accept, individually and collectively, the responsibility for the factuality, accuracy and completeness of the contents of this report.
This Semi-Annual Report has been reviewed and approved at the Sixth Session of the Sixth Board of Directors of the Company.
Chairman of the Board Ms. Wang Fen, as well as Chief Financial Officer of the Company Mr. Zhang Jianguo and Deputy Financial Manager Mr. Gao Limin hereby confirm that the financial report contained herein is true and complete.
The financial report contained herein has not been audited.
The Semi-Annual Report is written in both English and Chinese.
In case of any discrepancy between the two versions, Chinese version prevails.Table of Contents
PART Ⅰ COMPANY PROFILE..........................................................................................1
PART II CHANGES IN SHARE CAPITAL AND SHAREHOLDERS...........................3
PART Ⅲ DIRECTORS, SUPERVISORS & SENIOR MANAGEMENT STAFF...........5
PART Ⅳ REPORT OF THE BOARD OF DIRECTORS...................................................5
PART Ⅴ SIGNIFICANT EVENTS......................................................................................9
PART Ⅵ FINANCIAL REPORT (SEE ATTACHED, UN-AUDITED).........................16
PART Ⅶ DOCUMENTS AVAILABLE FOR REFERENCE..........................................16Semi-Annual Report 2010－Chiwan Wharf
1
PART Ⅰ COMPANY PROFILE
I. Corporate Information
A. Company's Name in Chinese 深圳赤湾港航股份有限公司（深赤湾）
Company's Name in English Shenzhen Chiwan Wharf Holdings Limited (Chiwan Wharf)
B. Legal Representative Ms. Wang Fen, Chairman
C. Company Secretary Ms. Pei Jiangyuan
Address 13/F., Chiwan Petroleum Building, Shenzhen, PRC
Tel +86 755 26694222
Fax +86 755 26684117
E-mail cwh@cndi.com
D. Place of Registration Chiwan, Shenzhen, PRC
Office address 13/F., Chiwan Petroleum Building, Chiwan, Shenzhen, PRC
Postal Code 518067
E-mail address cwh@cndi.com
Internet Website http://www.szcwh.com
E. Newspaper for Information "Securities Times" and "Ta Kung Pao”
Disclosure
Website for Annual Report http://www.cninfo.com.cn
Annual Report Preparation Secretariat of the Board of Directors
F. Stock Exchange Shenzhen Stock Exchange
Stock Short Name Chiwan Wharf A/Chiwan Wharf B
Stock Code 000022/200022
G. Other information
Date of Original Registration 19 July 1990
Place of Registration Chiwan, Shenzhen
Business Registration Number 440301501124494
Tax Registration Number Shen-Guo-Shui-Deng-Zi No. 440300618832968
Shen-Di-Shui-Deng-Zi No. 440301618832968
Organization Code 61883296-8
Accounting Firm PricewaterhouseCoopers Zhong Tian Certified Public
Accountants
Room 3706, Di Wang Commercial Centre
5002 Shennan Road East
Shenzhen, 518068, PRCSemi-Annual Report 2010－Chiwan Wharf
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II. Major Financial Highlights
Unit: RMB
As at 30 Jun. 2010
As at 31 Dec. 2009
+/- (%)
Total assets
5,932,786,944.00
5,527,873,569.00
7.32%
Total equity attributable to equity holders of the Company
2,951,579,308.00
2,852,982,756.00
3.46%
Share capital
644,763,730.00
644,763,730.00
-
Net assets per share attributable to equity holders of the Company
4.578
4.425
3.46%
Jan.-Jun. 2010
Jan.-Jun. 2009
+/- (%)
Revenue
833,761,885.00
714,358,140.00
16.71%
Operating profit
491,087,919.00
320,028,779.00
53.45%
Total profit
493,451,736.00
327,514,639.00
50.67%
Net profit attributable to equity holders of the Company
308,963,482.00
200,144,439.00
54.37%
Net profit attributable to equity holders of the Company after extraordinary gains and losses
307,126,626.00
194,446,830.00
57.95%
Earnings per share-Basic
0.479
0.310
54.52%
Earnings per share -Diluted
0.479
0.310
54.52%
Return on equity
10.47%
7.60%
2.87%
Net cash flows arising from operating activities
377,587,237
294,064,935.00
28.40%
Net cash flows per share arising from operating activities
0.586
0.456
28.51%
●
Extraordinary gains and losses
Items Amount
Net gains/(losses) on disposal of non-current assets 1,950,715
Non-operating income (expense) - net 68,412
Government grants 344,690
Tax effects on extraordinary gains and losses (518,077)
Minority interests on extraordinary gains and losses (8,884)
Total 1,836,856
III. Returns on equity and earnings per share calculated in accordance with the requirements of the Rules for the Compilation of Information Disclosure by the Companies Publicly Issuing Securities (No. 9) promulgated by CSRC
Return on equity
Earnings per share
Profit for the reporting period
Fully diluted
Weighted average
Basic
Diluted
Net profit attributable to equity holders of the Company
10.47%
10.27%
0.479
0.479
Net profit attributable to equity holders of the Company after extraordinary gains and losses
10.41%
10.21%
0.476
0.476Semi-Annual Report 2010－Chiwan Wharf
3
PART II CHANGES IN SHARE CAPITAL AND SHAREHOLDERS
. Changes in Share Capital Ⅰ
Unit: share
Before the change
Increase(+)/decrease(-)
After the
change
Number
Percentage
Issue of additional shares
Bonus issue
Reserves
to stocks
Other
Sub-total
Number
Percentage
1. Shares subject to trading moratorium
a. State-owned shares
b. State-owned legal person shares
c. Other domestic shares
Including:
Shares held by domestic on-state-owned legal persons
Shares held by domestic individuals
d. Shares held by overseas shareholders
Including:
Shares held by overseas legal persons
Shares held by overseas individuals
e. Shares held by senior management staff
2. Shares not subject to trading moratorium
a. Ordinary shares denominated in RMB
b. Domestically listed foreign shares
c. Overseas listed foreign shares
d. Others
326,457
13,602
13,602※
312,855
644,437,273
464,789,805
179,647,468
0.051%
0.002%
0.002%
0.049%
99.949%
72.087%
27.862%
+267,693
-13,602
-13,602
+281,295
-267,693
0
-267,693
+267,693
-13,602
-13,602
+281,295
-267,693
0
-267,693
594,150
0
0
594,150
644,169,580
464,789,805
179,379,775
0.092%
0.000%
0.000%
0.092%
99.908%
72.087%
27.821%
3. Total shares
644,763,730
100%
644,763,730
100%
※ Changes on shares held by domestic individuals are caused by ex-supervisor Mr. Fang Jie’s leaving the position since August, 2009. According to the regulations of “Rules on Stock Listing” issued by Shenzhen Stock Exchange, shares held by Fang Jie can be traded half a year after his demission.
. Number of shareholders and particulars about shares Ⅱheld by them (as at 30 Jun. 2010)
Unit: share
Total number of shareholders
35,850, among which 27,691 being shareholders of A shares and 8,159 being shareholders of B shares
Shareholdings of top ten shareholders (all being shareholders holding shares not subject to trading moratorium)
Name of shareholders
Nature of shareholders
Percentage of shareholding (%)
Total shares held
Shares subject to trading moratorium
Shares pledged or frozen
Type of shares (A, B, H or other shares)
CHINA NANSHAN DEVELOPMENT (GROUP) INC.
57.51
370,802,900
0
0
A shares
KEEN FIELD ENTERPRISES LIMITED
Holder of B shares
7.98
51,475,773
0
N/A
B sharesSemi-Annual Report 2010－Chiwan Wharf
4
CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 5496
Holder of B shares
5.64
36,352,658
0
N/A
B shares
BANK OF NEW YORK-MATTHEWS PACIFIC TIGER FUND
Holder of B shares
1.85
11,949,117
0
N/A
B shares
NATIONAL SOCIAL SECURITY FUND 102 PORTFOLIO
1.32
8,503,724
0
N/A
A shares
GOVERNMENT OF SINGAPORE INV. CORP.- A/C "C"
Holder of B shares
1.12
7,245,406
0
N/A
B shares
PLATINUM ASIA FUND
Holder of B shares
0.83
5,360,421
0
N/A
B shares
MIRAE ASSET ASIA PACIFIC INFRA SECTOR EQTY INVSTMT TRS 1
Holder of B shares
0.55
3,576,544
0
N/A
B shares
EMPLOYEES PROVIDENT FUND
Holder of B shares
0.48
3,098,150
0
N/A
B shares
GSIC A/C MONETARY AUTHORITY OF SINGAPORE
Holder of B shares
0.47
3,017,837
0
N/A
B shares
Explanation on associated relationship among the top ten shareholders:
China Nanshan Development (Group) Inc. (hereinafter referred to as “CND”) does not have any relations with the shareholders holding shares not subject to trading moratorium. The Company does not know if there are any inter-relations among other shareholders holding shares not subject to trading moratorium.
III. Within the reporting period, the controlling shareholder of the Company remained unchanged, so did the shares held by CND.
IV. China Merchants Securities (HK) Co., Ltd. (hereinafter referred to as “Merchants Securities HK”), Keen Field Enterprises Limited (hereinafter referred to as “Keen Field Enterprises”) and the China Merchants (CIMC) Holdings Ltd (hereinafter referred to as “China Merchants CIMC Holdings”) signed the Simplified Statement of Change in Equities on January 6, 2010. Merchants Securities HK transferred to Keen Field Enterprises its 49,764,893 Chiwan Wharf B shares (about 7.718% of the total), which it had held for Keen Field Enterprises, as well as 1,710,880 Chiwan Wharf B shares (about 0.265% of the total), which it had held for the China Merchants CIMC Holdings. The related notice was published on Securities Times and Ta Kung Pao on January 8, 2010. During the reporting period, the shares held by Keen Field Enterprises increased from 49,764,893 (about 7.718% of the total) to 51,475,773 (about 7.984% of the total).
V. The Templeton Asset Management Ltd. signed the Simplified Statement of Change in Equities on February 26, 2010. The related notice was published on Securities Times and Ta Kung Pao on March 2, 2010. During the reporting period, the shares held by FTIF Asia Fund, which is managed by the Templeton Asset Management Ltd., increased from 23,552,225 (about 3.650% of the total) to 36,352,658 (about 5.638% of the total).Semi-Annual Report 2010－Chiwan Wharf
5
PART DIRECTORS, SUPERVISORS & SENIOR MANAGEMENT STAFFⅢ
.The shareholding of the Company’s directors, supervisors aⅠnd senior management staff remained unchanged, which was specified as follows:
Name
Title
Number of shares
held at year-begin (share)
Number of shares increased in reporting period (share)
Number of shares decreased in reporting period (share)
Number of shares
held at period-end (share)
Shares subject to trading moratorium (share)
Number of stock options held at period-end (share)
Reason for changes
Wang Fen
Chairwoman of the Board
82,632
0
0
82,632
61,974
0
N/A
Zheng Shaoping
Vice Chairman, General Manager
115,142
75,892
0
191,034
164,400
0
Purchase on market
Fan Zhaoping
Director
53,877
0
0
53,877
40,407
0
N/A
Yuan Yuhui
Director
14,040
0
0
14,040
10,530
0
N/A
Han Guimao
Director
13,988
0
0
13,988
10,491
0
N/A
Zhang Ning
Director, Deputy General Manager
51,885
76,400
0
128,285
115,314
0
Purchase on market
Zhao Chaoxiong
Supervisor
27,558
26,656
0
54,214
48,018
0
Purchase on market
Ni Keqin
Supervisor
17,699
17,226
0
34,925
30,956
0
Purchase on market
Zhang Jianguo
CFO
41,459
42,808
0
84,267
75,032
0
Purchase on market
Pei Jiangyuan
Secretary to the Board
18,149
23,027
0
41,176
37,028
0
Purchase on market
. During the reportⅡing period, the Company did not appoint or dismiss any director, supervisor and senior management staff.
PART Ⅳ REPORT OF THE BOARD OF DIRECTORS
. Business PerformanceⅠ
A.
Core business scope and business performance
The Company is principally engaged in handling, warehousing and transportation of containers and bulk cargoes, as well as the provision of related services.
During the reporting period, China’s import and export volume has risen significantly, compared with the same period of last year. Container throughput of the coastal ports has grown by 22.1% over the same period of last year. Among them, Shenzhen Port’s containers throughput has grown by 29.4%, compared with the same period of last year. With shipping companies launching new transport capacity, the Company has attracted more lines calling and its container throughput has grown by 37.1%, compared with the same period of last year. The Company maintained general stability in its bulk cargo handing business. Since Machong Port was put into operation, the overall throughput of bulk cargo has increased by 29.7%, compared with the sameSemi-Annual Report 2010－Chiwan Wharf
6
period of last year. The supporting services such as tow truck and harbor tugboat services have got corresponding increases with the growth of throughput. Specific business indexes were as follows:
Business Data
Jan.-Jun. 2010
Jan.-Jun. 2009
+/- YoY
Total throughput of cargo (’000 tons)
3,150.5
2,383.3
32.2%
Including: container (’000 TEU)
295.1
215.2
37.1%
Chiwan Port
198.6
153.1
29.7%
Mawan Port
94.9
62.1
52.7%
Machong Port
1.6
-
-
Bulk cargoes (’000 tons)
504.1
388.6
29.7%
Chiwan Port
420.3
388.6
8.2%
Machong Port
83.9
-
-
Hours charged for tow truck service (’000 hours)
61.4
56.9
7.9%
Hours charged for tugboat service (hour)
16,489
14,516
13.6%
B.
Year-on-year changes in revenue, operating profit and net profit attributable to equity holders of the Company
Unit: RMB
Item
Jan.-Jun. 2010
Jan.-Jun. 2009
+/- YoY
Revenue
833,761,885
714,358,140
16.71%
Operating profit
491,087,919
320,028,779
53.45%
Net profit attributable to equity holders of the Company
308,963,482
200,144,439
54.37%
Reason for changes: The Company’s business volume increased 37.1% year-on-year, thus the revenue, operating profit and net profit attributable to equity holders of the Company increased accordingly compared to the same period of last year.
C.
Core business accounting for 10% or above of the revenue for the reporting period:
Unit: RMB
Business
Revenue
Operating cost
Operating profit margin (%)
+/- of revenueYoY (%)
+/- of operating cost YoY (%)
+/- of operatingprofit margin YoY (%)
Cargo handling
780,859,901
318,862,164
59.17%
22.94%
8.97%
5.24%
D.
Profit breakdown, core business structure and profitability of the Company did not have significant changes during the reporting period.
E.
The Company conducted no other business, which exerted significant influence on the Company’s profit during the reporting period.Semi-Annual Report 2010－Chiwan Wharf
7
F.
Media Port Investments Limited (hereinafter referred to as “MPIL”) is jointly incorporated at the British Virgin Islands by Chiwan Wharf Holdings (HK) Ltd. (hereinafter referred to as “CWHK”), a wholly-owned subsidiary company of the Company, and China Merchants Holdings (International) Company Limited as an investment controlling company. The said two companies hold its 50% equity separately. MPIL holds 60% equity of Shenzhen Mawan Wharf Co., Ltd., Shenzhen Mawan Port Service Co., Ltd. and Shenzhen Mawan Terminals Co., Ltd. in total. During the reporting period, MPIL gained net profit of RMB 112,800,212 through the above-mentioned three companies.
For the reporting period, the Company earned investment income amounting to RMB56,400,106 from MPIL, accounting for 18.25% of net profit attributable to equity holders of the Company for the reporting period.
. Financial ⅡStatus
A.
Composition of assets and reasons for significant changes year-on-year:
Unit: RMB
Item
As at 30 Jun. 2010
As at 31 Dec.2009
+/- (%)
Cash at bank and on hand
1,108,008,730
741,096,267
49.51%
Dividend payable
381,438,026
171,889,814
121.91%
Reasons for significant changes:
The cash at bank and on hand increased due to funds raised for investment projects.
The dividend payable increased mainly because it was declared at the Shareholders’ General meeting in June that cash dividend was to be distributed for ordinary shares in August.
B.
Composition of profits and reasons for significant changes year-on-year
Unit: RMB
Item
Jan.-Jun. 2010
Jan.-Jun. 2009
+/- (%)
Investment income
84,416,791
31,207,492
170.50%
Income tax expenses
(65,939,121)
(36,243,693)
81.93%
Reasons for significant changes:
Investment income increased significantly due to the following reasons.
1.
Business volume of associate companies increased, so as their profits.
2.
Partial equities of associate companies was sold, while there was no such case in the same period of last year.
Income tax expenses increased mainly because income tax rate of this year increased and favorite policy for income tax of some berths have expired.Semi-Annual Report 2010－Chiwan Wharf
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C.
Composition of cash flows
Unit: RMB
Item
Jan.-Jun. 2010
Jan.-Jun. 2009
+/- (%)
Net cash flows from operating activities
377,587,237
294,064,935
28.40%
Net cash flows from investing activities
(59,614,883)
(120,923,392)
-50.70%
Net cash flows from financing activities
48,940,109
(220,411,998)
-122.20%
Net (decrease)/increase in cash and cash equivalents
366,912,463
(47,270,455)
-876.20%
Reasons for significant changes:
Net cash inflows from operating activities increased mainly due to the increased operating profit during the reporting period;
Net cash outflows from investing activities decreased mainly because construction funds for the project of “converting diesel-powered RTG engines into electric ones” and Machong Project in Dongguan decreased compared with the same period of last year.
Net cash outflows from financing activities decreased mainly because borrowings increased compared to the same period of previous year.
. Investments in reportⅢing period
A.
The Company did not raise any funds in the reporting period, and the latest funds raised by the Company had been used up by the end of 1996.
B.
2. Significant investment projects with non-raised funds
In the reporting period, the Company made a total investment of RMB 70.61 million of which RMB 14.48 million was invested in fixed assets at Chiwan Port, mainly referring to the project of “converting diesel-powered RTG engines into electric ones”; and RMB 56.13 million was invested in the Machong Project in Dongguan.
. Outlook for future development of the Company Ⅳ
A.
Development trend of the industry in which the Company is engaged
China’s import and export trading recovered and increased rapidly over the first half year. Although the risk of liabilities crisis still exist in Euro zone, so far there is no such a trend that it will further spread. The PMI Index of developed economies such as Europe and the US shows a stable trend after a sharp increase. Global consumption demand is expected to show modest growth in the general recovery environment, and the container ports in China will start a stable period of increase. As the traditional container busy season comes, we can expect the Company’s container handing business to increase in the second half year.
The overall bulk cargo handing business in Shenzhen’s three western ports show stabilization, and this trend is expected to continue in the second half of this year. As all the related works being put forward at Machong Port, bulk cargo handing throughput will increase steadily in the second half year.Semi-Annual Report 2010－Chiwan Wharf
9
B.
Main problems and risks encountered by the Company
With rapid growth of business volume, the Company will be confronted with certain challenges in resources allocation and regional competition.
C.
Business plan for the second half, as well as countermeasures against risks
The Company will continue to carry out its annual business plan and allocate existing resources optimally, efficiently and reasonably, meanwhile try to make the best of external resources to enhance the ability of resource integration. The Company will continuously improve the service, and timely adjust business strategy and structure in accordance with market trends, while at the same time strengthen internal management and cost controls so as to create satisfying economic results.
PART Ⅴ SIGNIFICANT EVENTS
. Corporate governance Ⅰ
Ever since its establishment, the Company has been in strict compliance with the company law and securities law, as well as relevant laws and regulations issued by CSRC. And it has timely formulated and amended its relevant management rules according to the Code of Corporate Governance for Listed Companies, which are conscientiously and carefully executed. An effective system of internal control has thus taken shape in the Company. Along with the development of the Company, it will, as always, keep perfecting its corporate governance and protecting the interests of all shareholders and stakeholders.
Non-compliance of corporate governance standards by the Company during the reporting period: according to the Accounting Standards for Business Enterprises No.33—Consolidated Financial Statements, the Financial Department of the Company should submit the Company’s monthly financial statements around the 10th day of each month to CND, the main shareholder holding 57.51% of the Company’s shares, for the need of the latter’s preparing its consolidated statements.
At the Fifth Session of the Fifth Board of Directors of the Company held on 17 April 2007, the Report Concerning the Submission of Monthly Financial Statements to the Substantial Shareholder was reviewed and approved, and it was agreed that Financial Department shall provide the company’s monthly financial statements to CND. On 25 August 2007, the Company disclosed the details of submitting the financial statements to substantial shareholders in the Self-inspection Report and Rectification Plan for Corporate Governance in 2007 of Shenzhen Chiwan Wharf Holding Co., Ltd. In compliance with the requirements of the Shenzhen Securities Regulatory Bureau, the Company delivered “Undisclosed Information Provided by the Company to its Substantial Shareholders and Actual Controllers” to the Shenzhen Securities Regulatory Bureau before the tenth day every month since September 2007, including the name list of relevant parties and relevant information. The above-mentioned matters did not affect the Company’s independence. In the future, the Company will disclose the relevant information in due course at the request of the regulatory authorities.
. Profit and divⅡidend distribution plan for 2009 and its implementation
As audited by PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd., the net profit of the Company for 2009 was RMB 284,356,677, and the accumulative attributable profit was RMB 431,538,411.Semi-Annual Report 2010－Chiwan Wharf
10
1. In accordance with the Company Law and the Articles of Association of the Company, RMB 28,435,668, i.e. 10% of the Company’s net profit as audited for the year 2009 was to be withdrawn as statutory surplus reserve;
2. It was planned that a cash dividend of RMB 3.25 per ten shares (pre-tax) totaling RMB 209,548,212 would be paid based on the total share capital of 644,763,730 shares as at the end of 2009.
After the aforesaid distribution, the retained profit of the Company was RMB 193,554,531.
The said profit distribution plan was completed on 10 August 2010, with the registration day for A shares and the last trading day for B shares being 5 August 2010, and the ex-dividend day being 6 August 2010.
. For Ⅲ2010, no interim profit distribution will be conducted and no reserves will be transferred into shares.
. During the reportⅣing period, the Company was not involved in any significant lawsuits and arbitrations.
. During the reportⅤing period, the Company did not conduct any significant asset acquisition, sale or reorganization.
. ⅥDuring the reporting period, no shareholders holding over 30% shares of the Company put forward and implemented plans of increasing its equity interest in the company.
. ⅦDuring the reporting period, there existed no new securities investments. The Company did not acquire equity of financial enterprises such as commercial banks, securities companies, insurance companies, trust companies and futures companies, or equity of the companies to be listed.
Set out below was the equity of other listed companies held by the Company, which was acquired by the Company in the previous periods and carried down to the current period.
Unit: RMB
Stock code
Short name of the stock
Initial investment amount
Shareholding percentage in the listed company
Book value at period-end
Gains/ (losses) in reporting period
Changes in owners’ equity during reporting period
Accounting Title
Source of Shares
600377
JiangSu Expressway
1,120,000
0.02%
6,090,000
-
(819,000)
Financial Assets available for sale
Legal shares that gained transfer rights through Equity Separation Reform
400032
Shenzhen Petrochemical Industry (Group) Co., Ltd.
3,500,000
0.26%
382,200
-
-
Long-term Equity investment
Legal Shares
400009
Guangdong Guang Jian Group Limited Company
27,500
0.02%
17,000
-
-
Long-term Equity investment
Legal Shares
Total
4,647,500
-
6,489,200
-
(819,000)
-
-Semi-Annual Report 2010－Chiwan Wharf
11
. Special explanation and independent opinion Ⅷby independent directors
In accordance with the Circular on Relevant Issues Concerning Regulating Capital Flows between Listed Companies and Related Parties and Provision of External Guaranty By Listed Companies (ZJF [2003] No.56) and the Circular on Regulating Provision of Guarantees for Outside Parties by Listed Companies (ZJF (2005) No.120) (hereinafter referred to as “the Circulars”), as well as the Circular on 2010 Semi-Annual Reports of Listed Companies, independent directors of the Company Mr. Li Wuzhou, Mr. Hao Zhujiang and Mr. Zhang Jianjun, with a sense of responsibility to the Company, all its shareholders and investors and the principle of seeking truth from facts, have carefully and responsibly examined the Company’s provision of guarantees for other parties and the capital occupation by its controlling shareholder and other related parties. Upon the examination, they made the relevant explanation as follows:
1. The Company strictly abided by the requirements of the Circulars. No funds occupation by its controlling shareholder had been found by 30 June 2010, nor that incurred in the previous periods and carried down till 30 June 2010. The funds flows between the Company and its related parties during the reporting period were considered normal operational funds flows.
2. As at 30 June 2010, the balance of guarantee provided to outside parties by the Company was zero.
3. As at 30 June 2010, the accumulative guarantee amount provided by the Company for its wholly-owned and holding subsidiaries reached RMB 256,690,000, taking up 8.70% of the Company’s net assets as at 30 June 2010, The aforesaid guarantees were in line of relevant laws and regulations concerning the provision of guarantees for other parties by listed companies, which were detailed as follows:
Unit: RMB
Guaranteed party
Shareholding percentage
of the Company
Amount
Chiwan Wharf Holdings (Hong Kong) Limited
100%
149,600,000
Dongguan Chiwan Wharf Company Limited
100%
7,650,000
Shenzhen Chiwan Harbor Container Company Limited
100%
99,440,000
To sum up, the independent directors were of the opinion that the Company effectively controlled its financial risks during the reporting period, without doing any harm to the interests of investors.
. Significant related transactionsⅨ
A.
Related transactions arising from routine operation
Payment of Land use fees
Jan.-Jun. 2010
Jan.-Jun. 2009
CND
RMB 20,997,382
RMB 22,930,453
Due to the need of routine operation, the Harbor Division of the Company and Chiwan Container Terminal Co., Ltd. (CCT), in which the Company held a total of 55% equity directly and indirectly, rented lands from CND for bulk cargo and container stacking. Recognized as frequent transactions of the Company, the said transactions occurred in the previous years and will continue to occur in the future.Semi-Annual Report 2010－Chiwan Wharf
12
Almost as same as the land rents in the western Shenzhen ports in 2010, the transaction price was a fair market price decided through negotiation between transaction parties at RMB3.5—12.5/m2. According to the contract signed, the rent was paid by month and a penalty would be charged at a ratio of 0.5% of the monthly rental fee for each day overdue.
During the reporting period, the aforesaid rents accounted for 73.76% of the Company’s total rental expenses for stacking yards and offices, which caused a cost and expense of RMB 21 million.
B.
Creditor’s rights and liabilities with related parties
Accounts receivable
As at 30 Jun. 2010
(RMB)
As at 31 Dec. 2009
(RMB)
Mawan Companies
1,564,600
1,141,315
Shenzhen Southseas Grains Industries Limited
1,245,557
1,281,446
Shenzhen Nantian Oil Mills Co., Ltd.
830,063
685,274
Total
3,640,220
3,108,035
The accounts receivable as set out in the table above were resulted from the operational contacts of the Company’s providing road transportation service and terminal handling service for its related parties mentioned above. As at 30 Jun. 2010, the accounts receivable from related parties took up 1.48% of the Company’s total accounts receivable (1.49% in the year of 2009).
Other receivables
As at 30 Jun. 2010
(RMB)
As at 31 Dec. 2009
(RMB)
China Merchants Maritime & Logistics (Shenzhen) Ltd.
1,911,230
1,408,328
Mawan Companies※
972,146
237,072
Total
2,883,376
1,645,400
※ The Company and Mawan Companies cooperated in marketing, and they shared the common expenses thus incurred according to the numbers of berths each had. Concerning the entrusted collection and disbursement of relevant fees incurred in the course of settlement, the Company confirmed the accounts payable to Mawan Companies after checking the relevant accounts with customers.
As at 30 Jun. 2010, the other receivables from related parties took up 2.70% of the Company’s total other receivables (7.56% in the year of 2009).
Long-term receivables
As at 30 Jun. 2010
As at 31 Dec. 2009
Media Port Investments Ltd.
RMB 108,037,599
RMB 108,037,599
The long-term receivable as set out in the table above was resulted from the interest-free shareholder’s contribution to an associated company of the Company within the total investment amount prescribed in the relevant joint venture agreement. As at 30 Jun. 2010, the long-term receivables from related parties accounted for 100% of the Company’s total long-term receivables (also 100% in the year of 2009).Semi-Annual Report 2010－Chiwan Wharf
13
Accounts payable
As at 30 Jun. 2010
(RMB)
As at 31 Dec. 2009
(RMB)
Shenzhen Haiqin Engineering Supervision Co., Ltd.
9,972,227
10,040,807
CND
6,836,983
4,238,999
Shenzhen Xuqin Industrial Development Co., Ltd.
3,623,885
2,514,454
Total
20,433,095
16,794,260
The accounts payable as set out in the table above were resulted from the debts caused by the Company’s renting lands and receiving engineering construction and supervision services from its related parties mentioned above. As at 30 Jun. 2010, the accounts payable to related parties amounted to 9.34% of the Company’s total accounts payable (7.39% in the year of 2009).
Other payables
As at 30 Jun. 2010
(RMB)
As at 31 Dec. 2009
(RMB)
Mawan Companies
15,863,339
2,376,938
CND
1,278,457
7,752
Total
17,141,796
2,384,690
As at 30 Jun. 2010, other payables to related parties took up 14.15% of the Company’s total other payables (1.95% in the year 2009).
. Significant contracts Ⅹ
A.
During the reporting period, the Company did not hold in trust, contract or lease any significant assets of other companies, or vice versa.
B.
During the reporting period, the Company did not provide any guarantee for external parties.
By the end of the reporting period, the Company provided guarantees only for the bank loans granted to wholly-owned subsidiaries of the Company, i.e. Chiwan Wharf (Hong Kong) Limited, Dongguan Chiwan Wharf Company Limited and Shenzhen Chiwan Harbor Container Co. Ltd., details of which are as follows:
Guarantee
Amount of guarantee
Term of guarantee
Subsisting guarantee liability or not
Type of guarantee
Procedures for guarantee
Chiwan Wharf Holdings (Hong Kong) Limited
HKD17,000
2008.12.5-2010.12.2
Yes
Guarantee with joint liability
Reviewed and approved at the Fifth Special Session of the Sixth Board of Directors for 2008
Dongguan Chiwan Wharf Company Limited
RMB765
2010.2.25-2010.8.25
Yes
Guarantee with joint liability
Reviewed and approved at the Sixth Special Session of the Sixth Board of Directors for 2009 and the first special shareholders' meeting in 2009
Shenzhen Chiwan Harbor Container Co. Ltd.
HKD11,300
2010.4.27-2010.10.26
Yes
Guarantee with joint liability
Applying for the capacity of comprehensive credit line was approved by the Board.Semi-Annual Report 2010－Chiwan Wharf
14
By the end of the reporting period, the Company had provided guarantees for external parties totaling RMB 256.69 million, accounting for 8.70% of the Company’s net assets.
C.
During the reporting period, the Company did not entrust others to manage its cash assets.
Ⅺ. Researches and visits received during the reporting period
During the reporting period, the Company handled warm-heartedly investors’ phone calls and held one-on-one meetings with investors. The Company disclosed relevant information to investors in accordance with the Company Law, the Securities Law, the Rules on the Management of Investors Relations and other laws and regulations. During the reporting period, the Company received in aggregate 19 visits. The Company gave visitors an introduction to the profile of the Company and the development of its business, and made reasonable disclosures regarding the operations, investments and financial status of the Company that the investors were interested in. The Company did not disclose, reveal or divulge to any specific visitors any material information not generally available to the public. Details of such interviews and visits are as follows:
Type
Time
Location
Means
Investor
Topics discussed and information provided
January 2010
Shanghai
UBS Conference
Clients of UBS
May 2010
Qingdao
BOCI Investors Conference
Clients of BOCI
Conference launched
by security firms
May 2010
Huhhot
UBS Conference
Clients of UBS
January 2010
Matthews international capital management. llc., Xiangcai securities Co., ltd., Merrill Lynch(Asia Pacific) Ltd., First Shanghai Group., Orient Securities Co., Ltd., Essence Securities Co., Ltd., Penghua Fund Management Co., Ltd.
One-on-one meeting
Guotai Junan Securities, Guodu Securities Co., Ltd., Great wall fund management Co., ltd., CLSA research limited, Value Partners Ltd.,
February 2010
Tel conference
Keywise Capital Management (HK) Limited
April 2010
One-on-one meeting
Bohai securities Co., Ltd., Zhongtian securities Co., Ltd., Macquarie Capital Securities Limited
Tel conference
UBS, Harvest Fund, Fortune SGAM Fund, Bosera Fund, Acru Asset Management Limited, CCIG, E-Fund, Penghua Fund Management Co., Ltd., Martin Currie
Receiving visits from investors
May 2010
Conference room of the Company
One-on-one meeting Baillie Gifford, Guodu Securities Co., Ltd., Donghai Securities Co., Ltd., Eton Park Asia Limited, Ping An Securities, Bosera Asset Management Co., ltd., SWS research Co., Ltd., EFG Bank AG, Hanwha Investment Trust Management, Fuh Hwa Securities Investment Trust Co., Ltd., OWL CREEK Asset
Basic information
of operations and investments of the Company and the financial status of the Company
Information provided: Brochure of the CompanySemi-Annual Report 2010－Chiwan Wharf
15
Management LP, DFZH Capital Management Pte. Ltd., Emerald Orient Capital, Gansu trust Co., Ltd., Huatai Securities, United Innovation Capital Ltd, Marco Polo Pure Asset Management, BOCI-Prudential asset management limited, Cathay Fortune Corp., Harvest International Capital Management, Tiger Investment Consulting(Shanghai) Co.,Ltd., Dacheng Fund, UG Investment Advisers Limted, Matthews international capital management. llc
June 2010
Harvest Fund Management Co., ltd., Shenzhen Wudang Management Co., Ltd.
Ⅻ. Other significant events
Event
Date of disclosure
Public Notice No.
Newspaper for disclosure and page number
Website for disclosure
The Fourth Special Session of the Sixth Board of Directors for 2010 was held on May 11, 2010. The meeting examined and unanimously adopted the Report on the Investment in Laizhou Port Project. On the same day, the Company signed a Subscription Agreement (hereinafter referred to as “Subscription Agreement”) with the China Overseas Port Investment Co., Ltd. (hereinafter referred to as “China Overseas Port Investment”), Shenzhen China Overseas Port Logistics Co., Ltd. (hereinafter referred to as “China Overseas Port Logistics”) and China Overseas Harbor Affairs (Laizhou) Co., Ltd. (hereinafter referred to as “China Overseas Harbor Affairs”) in Hong Kong, China. Meanwhile, the Company signed the China Overseas Harbor Affairs Joint Venture Contract (hereinafter referred to as “Joint Venture Contract”) with China Overseas Port Investment and China Overseas Port Logistics as well. According to the Subscription Agreement and the Joint Venture Contract, the Company will subscribe capital contribution to China Overseas Harbor Affairs at the cost of RMB 749,655,300 and hold 40% shares of China Overseas Harbor Affairs. This external investment will not constitute an associated transaction.
12 May. 2010
2010-014
Securities Times B11;
Ta Kung Pao A9
http://www.cninfo.
com.cnSemi-Annual Report 2010－Chiwan Wharf
16
PART FINANCIAL REPORT (ⅥSEE ATTACHED, UN-AUDITED)
PART DOCUMENTS AVAILABLE FOR REFERENCEⅦ
I.
Full-text of the Company’s 2010 Semi-Annual Report carrying the signature of Chairwoman of the Board;
II.
2010 Semi-Annual Financial Report carrying the signatures of the Company’s Legal Representative, Chief Financial Officer and Financial Manager;
III.
Original copies of all documents and public notices thereof disclosed during the reporting period on Securities Times and Ta Kung Pao; and
IV.
Other relevant materials.
For and on behalf of the Board
Wang Fen
Chairwoman
Shenzhen Chiwan Wharf Holdings Limited
Dated 18th August, 2010SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
FINANCIAL STATEMENTS AND REPORT
FOR THE MONTH ENDED 30 JUNE 2010
[English Translation for Reference Only. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail.]SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
[English translation for reference only]
Contents
Page
Financial Statements and Report of the Auditors for the month ended 30 June 2010
Consolidated and Company’s balance sheets
1-2
Consolidated and Company’s income statements
3
Consolidated and Company’s cash flow statements
4
Consolidated statement of changes in owners’ equity
5
Company’s statement of changes in owners’ equity
6
Notes to financial statements
7 - 97
Supplementary information to financial statements
98 - 100SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2010
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
ASSETS
Note(s)
30 June 2010 Consolidated
31 December 2009Consolidated
30 June 2010 Company
31 December 2009Company
Current assets
Cash at bank and on hand
5(1)
1,108,008,730
741,096,267
647,142,458
453,407,958
Notes receivable
5(2)
6,500,000
-
6,500,000
-
Accounts receivable
5(4), 13(1)
246,378,085
209,177,364
16,768,080
9,860,135
Advances to suppliers
5(6)
2,886,662
2,575,752
417,000
667,000
Interest receivable
5(3)
142,500
384,750
193,157
389,807
Dividends receivable
-
-
209,973,184
268,588,679
Other receivables
5(5), 13(2)
106,676,818
21,760,241
499,763,606
360,320,056
Inventories
5(7)
24,862,005
25,616,306
1,121,197
1,094,881
Total current assets
1,495,454,800
1,000,610,680
1,381,878,682
1,094,328,516
Non-current assets
Available-for-sale financial assets
5(8)
6,090,000
7,140,000
6,090,000
7,140,000
Long-term receivables
5(9), 7(6)
108,037,599
108,037,599
11,004,304
11,004,304
Long-term equity investments
5(10), 13(3)
336,168,729
346,061,938
824,766,732
861,060,047
Investment properties
5(12)
28,400,958
28,854,510
19,884,356
20,209,734
Fixed assets
5(13)
2,170,413,312
2,209,046,448
165,590,531
169,912,242
Construction in progress
5(14)
566,022,580
575,630,562
821,290
827,356
Disposal of fixed assets
86,672
-
46,002
-
Intangible assets
5(15)
1,053,052,744
1,071,933,095
69,199,425
70,715,345
Goodwill
5(16)
10,858,898
10,858,898
-
-
Long-term prepaid expenses
5(17)
65,608,688
66,638,726
5,412,234
5,547,558
Deferred tax assets
5(19)
33,819,131
44,288,280
11,530,789
20,457,200
Other non-current assets
5(18)
58,772,833
58,772,833
-
-
Total non-current assets
4,437,332,144
4,527,262,889
1,114,345,663
1,166,873,786
TOTAL ASSETS
5,932,786,944
5,527,873,569
2,496,224,345
2,261,202,302
1SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2010 (CONTINUED)
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
LIABILITIES AND
OWNERS’ EQUITY
Note(s)
30 June 2010 Consolidated
31 December 2009Consolidated
30 June 2010 Company
31 December 2009Company
Current liabilities
Short-term borrowings
5(21)
850,080,000
777,040,000
143,440,000
143,440,000
Notes payable
5(22)
8,866,000
20,466,600
-
-
Accounts payable
5(23)
218,857,990
227,293,714
11,889,101
12,113,749
Advances from customers
5(24)
4,438,391
5,057,162
2,068,219
3,281,709
Employee benefits payable
5(25)
18,200,080
43,145,231
11,320,344
26,443,239
Taxes payable
5(26)
50,926,250
79,069,847
(6,249,931)
775,935
Interests payable
5(27)
723,334
492,546
930,545
592,370
Dividends payable
5(28)
381,438,026
171,889,814
209,548,212
-
Other payables
5(29)
121,164,989
122,165,581
500,476,950
267,187,595
Current portion of non-current liabilities
5(30,32)
286,551,750
172,151,750
132,000,000
-
Total current liabilities
1,941,246,810
1,618,772,245
1,005,423,440
453,834,597
Non-current liabilities
Long-term borrowings
5(31)
290,400,000
422,400,000
88,000,000
220,000,000
Deferred tax liabilities
5(19)
1,093,400
1,324,400
1,093,400
1,324,400
Other non-current liabilities
5(32)
62,309,519
64,785,394
-
-
Total non-current liabilities
353,802,919
488,509,794
89,093,400
221,324,400
Total liabilities
2,295,049,729
2,107,282,039
1,094,516,840
675,158,997
Owners' equity
Share capital
5(33)
644,763,730
644,763,730
644,763,730
644,763,730
Capital surplus
5(34)
144,591,155
145,410,155
153,787,428
154,606,428
Surplus reserve
5(35)
383,570,404
355,134,736
383,570,404
355,134,736
Undistributed profits
5(36)
1,792,007,798
1,721,028,196
219,585,943
431,538,411
Foreign exchange translation differences
(13,353,779)
(13,354,061)
-
-
Total equity attributable to equity holders of the Company
2,951,579,308
2,852,982,756
1,401,707,505
1,586,043,305
Minority interests
5(37)
686,157,907
567,608,774
-
-
Total owners' equity
3,637,737,215
3,420,591,530
1,401,707,505
1,586,043,305
TOTAL LIABILITIES AND OWNERS’ EQUITY
5,932,786,944
5,527,873,569
2,496,224,345
2,261,202,302
The accompanying notes form an integral part of these financial statements. 2SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE MONTH ENDED 30 JUNE 2010
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Items
Note(s)
Jan.-Jun.2010
Consolidated
Jan.-Jun.2009
Consolidated
Jan.-Jun.2010 Company
Jan.-Jun.2009Company
Revenue
5(38),13(4)
833,761,885
714,358,140
83,968,138
59,398,927
Less: Cost
5(38),13(4)
(336,890,090)
(341,704,183)
(62,927,819)
(59,758,174)
Tax and levies on operations
5(39)
(29,897,320)
(24,866,617)
(3,155,974)
(2,146,458)
General and administrative expenses
(55,387,647)
(49,078,801)
(19,877,921)
(17,337,513)
Financial (expenses) /income - net
5(40)
(4,915,700)
(10,538,788)
(2,920,881)
(1,522,266)
Asset impairment losses
5(42)
-
651,536
-
651,536
Add: Investment income
5(41), 13(5)
84,416,791
31,207,492
32,906,831
9,526,319
Including: share of results of associates
5(41)
84,106,791
25,678,050
27,706,685
(3,148,222)
Operating profit
491,087,919
320,028,779
27,992,374
(11,187,629)
Add: Non-operating income
5(43)
2,469,174
7,836,283
352,045
59,841
Less: Non-operating expenses
5(44)
(105,357)
(350,423)
(17,939)
(237,621)
Including: Loss on disposals of non-current assets
(57,458)
(97,859)
(12,939)
(29,907)
Total profit
493,451,736
327,514,639
28,326,480
(11,365,409)
Less: Income tax (expenses)/ income
5(45)
(65,939,121)
(36,243,693)
(2,295,068)
4,175,979
Net profit
427,512,615
291,270,946
26,031,412
(7,189,430)
Attributable to equity holders of the Company
308,963,482
200,144,439
Minority interest
118,549,133
91,126,507
Earnings per share (attributable to equity holders of the Company)
Basic earnings per share
5(46)
0.479
0.310
Diluted earnings per share
5(46)
0.479
0.310
Other comprehensive income
5(47)
(818,718)
728,000
(819,000)
728,000
Total comprehensive income
426,693,897
291,998,946
25,212,412
(6,461,430)
Attributable to equity holders of the Company
308,144,764
200,872,439
Minority interest
118,549,133
91,126,507
The accompanying notes form an integral part of these financial statements. 34
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE MONTH ENDED 30 JUNE 2010
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Items
Note(s)
Jan.-Jun.2010
Consolidated
Jan.-Jun.2009
Consolidated
Jan.-Jun.2010Company
Jan.-Jun.2009Company
1. Cash flows from operating activities
Cash received from rendering of services
794,087,904
658,345,387
68,736,435
59,405,302
Cash received from taxes
71,864
-
Cash received relating to other operating activities
8,177,173
17,788,634
236,820,327
126,523,165
Sub-total of cash inflows
802,265,077
676,205,885
305,556,762
185,928,467
Cash paid for goods and services
(161,385,911)
(178,223,532)
(45,053,251)
(45,220,194)
Cash paid to and on behalf of employees
(105,080,062)
(91,411,953)
(29,882,464)
(22,994,571)
Payments of taxes and levies
(117,713,056)
(92,549,662)
(5,059,624)
(4,791,565)
Cash paid relating to other operating activities
5(48)
(40,498,811)
(19,955,803)
(67,976,214)
(270,444)
Sub-total of cash outflows
(424,677,840)
(382,140,950)
(147,971,553)
(73,276,774)
Net cash flows from operating activities
5(49)
377,587,237
294,064,935
157,585,209
112,651,693
2. Cash flows from investing activities
Cash received from disposals of investments
-
10,000,000
70,408,776
Cash received from returns on investments
310,000
11,020,550
63,611,777
65,156,097
Net cash received from disposals of fixed assets and intangible assets
10,681,289
792,685
-
61,350
Net cash received from disposal of subsidiaries and other business units
4(2)
-
1,961,995
-
2,458,847
Sub-total of cash inflows
10,991,289
13,775,230
73,611,777
138,085,070
Cash paid to purchase fixed assets, intangible assets
and other long-term assets
(70,606,172)
(134,698,622)
(3,341,851)
(3,558,085)
Cash paid relating to the investing activities
-
(30,000,000)
(92,408,776)
Sub-total of cash outflows
(70,606,172)
(134,698,622)
(33,341,851)
(95,966,861)
Net cash flows from investing activities
(59,614,883)
(120,923,392)
40,269,926
42,118,209
3. Cash flows from financing activities
Cash received from borrowings
374,880,000
143,440,000
143,440,000
143,440,000
Cash repayments of borrowings
(319,440,000)
(345,840,000)
(143,440,000)
(178,640,000)
Cash payments for interest expenses and distribution of dividends or profits
(5,902,112)
(17,835,998)
(3,822,428)
(6,955,848)
Including: Cash payments for dividends or profit to minority shareholders of subsidiaries
-
-
-
-
Cash payments relating to other financing activities
(597,779)
(176,000)
-
Sub-total of cash outflows
(325,939,891)
(363,851,998)
(147,560,635)
(185,595,848)
Net cash flows from financing activities
48,940,109
(220,411,998)
(4,120,635)
(42,155,848)
4. Effect of foreign exchange rate changes on cash and cash equivalents
-
-
-
-
5. Net (decrease)/increase in cash and cash equivalents
366,912,463
(47,270,455)
193,734,500
112,614,054
Add: Cash and cash equivalents at beginning of year
5(49)
741,096,267
641,475,910
453,407,958
298,644,660
6. Cash and cash equivalent at 30 June 2010
5(49)
1,108,008,730
594,205,455
647,142,458
411,258,714
The accompanying notes form an integral part of these financial statements.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
FOR THE MONTH ENDED 30 JUNE 2010
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to equity holders of the Company
Items
Note
Paid-in capital
Capital surplus
Surplus reserves
Undistributed profits
Translation difference
Minority interest
Total owners' equity
Balance at 1 January 2009
644,763,730
144,170,555
355,134,736
1,624,545,217
(13,349,891)
572,393,030
3,327,657,377
Movement for the year ended 31 December 2009
Net profit
-
-
-
418,864,844
-
185,270,457
604,135,301
Other comprehensive income
5(34)
-
1,239,600
-
-
(4,170)
-
1,235,430
Profit appropriation
- appropriation to surplus reserves
5(35)
-
-
-
-
-
-
-
- profit distribution to equity owners
5(36)
-
-
-
(322,381,865)
-
(190,054,713)
(512,436,578)
Balance at 31 December 2009
644,763,730
145,410,155
355,134,736
1,721,028,196
(13,354,061)
567,608,774
3,420,591,530
Balance at 1 January 2010
644,763,730
145,410,155
355,134,736
1,721,028,196
(13,354,061)
567,608,774
3,420,591,530
Movement for the year ended 30 June2010
Net profit
-
-
-
308,963,482
-
118,549,133
427,512,615
Other comprehensive income
5(34)
-
(819,000)
-
-
282
-
(818,718)
Profit appropriation
- appropriation to surplus reserves
5(35)
-
-
28,435,668
(28,435,668)
-
-
-
- profit distribution to equity owners
5(36)
-
-
-
(209,548,212)
-
-
(209,548,212)
Balance at 30 June 2010
644,763,730
144,591,155
383,570,404
1,792,007,798
(13,353,779)
686,157,907
3,637,737,215
The accompanying notes form an integral part of these financial statements.
56
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN OWNERS’ EQUITY
FOR THE MONTH ENDED 30 JUNE 2010
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Items
Note
Paid-in capital
Capital surplus
Surplus reserves
Undistributed profits
Total owners' equity
Balance at 1 January 2009
644,763,730
153,366,828
355,134,736
469,563,599
1,622,828,893
Movement for the year ended 31 December 2009
Net profit
-
-
-
284,356,677
284,356,677
Other comprehensive income
5(34)
-
1,239,600
-
-
1,239,600
Profit appropriation
- appropriation to surplus reserves
- profit distribution to equity owners
5(36)
-
-
-
(322,381,865)
(322,381,865)
Balance at 31 December 2009
644,763,730
154,606,428
355,134,736
431,538,411
1,586,043,305
Balance at 1 January 2010
644,763,730
154,606,428
355,134,736
431,538,411
1,586,043,305
Movement for the year ended 30 June2010
Net profit
-
-
-
26,031,412
26,031,412
Other comprehensive income
5(34)
-
(819,000)
-
-
(819,000)
Profit appropriation
- appropriation to surplus reserves
5(35)
-
-
28,435,668
(28,435,668)
-
- profit distribution to equity owners
5(36)
-
-
-
(209,548,212)
(209,548,212)
Balance at 30 June 2010
644,763,730
153,787,428
383,570,404
219,585,943
1,401,707,505
The accompanying notes form an integral part of these financial statements.7
1.
General information
Shenzhen Chiwan Wharf Holdings Limited (the “Company”) was incorporated in September 1982 in Shenzhen, the People’s Republic of China (the “PRC”), by China Nanshan Development (Group) Ltd (the “Nanshan Group”), and was registered a sino-foreign joint venture enterprise in July 1990. In January 1993, as approved by the Shenzhen municipal government with document SFBF (1993)357, the Company was reorganized into a joint stock limited company. In February 1993, the Company issued, by public offering, the domestic shares (“A shares”) of 46,000,000 shares and domestically listed foreign shares (“B shares”) of 40,000,000 shares. Both shares were listed in Shenzhen Stock Exchange in May 1993.
In June 1994, 31,047,000 bonus shares were issued in a proportion of “one bonus share for every ten shares”. In June, the bonus A shares and bonus B shares held by Nanshan Group were listed in Shenzhen Stock Exchange. In December 1995, the Company issued additional 40,000,000 B shares, consequently, the total volume of the Company’s shares rose to 381,517,000.
In June 2004, the directors of the Company resolved to increase the share capital by means of capitalization of the share premium and capital reserves of the Company to the extent that 3 additional ordinary shares were issued to each shareholder holding 10 shares of the Company. As the result, the total volume of shares was increased from 381,517,000 to 495,972,100.
In July 2005, again the directors of the Company resolved to increase the share capital by means of capitalization of the share premium and capital reserves of the Company to the extent that 3 additional ordinary shares were issued to each shareholder holding 10 shares of the Company
Consequently, the total volume of shares was increased from 495,972,100 to 644,763,730.
Pursuant to the relevant rules and regulations issued by the PRC authorities and approval from State-owned Asset Supervision and Administration Commission with document No. (2006)405, share segregation reform of the Company was performed in May 2006. Nanshan Group, the non public shares shareholder of the Company, offered RMB11.5 in cash, 1 share and 8 put options, to the holders of every 10 listed A shares. In return the listed A shares shareholders agree to allow the non public shares held by Nanshan Group be converted into listed A shares. From 30 May 2006, the non public A shares held by Nanshan Group (original volume less those offered to tradable A shares shareholders) become listed with restriction on disposal for certain lock up period. As to the put options offered by Nanshan Group, during the required exercise period from 23 May 2007 to 29 May 2007, none was actually exercised by listed A shares shareholders. The lock up period for three batches of A shares with 23,243,415 shares, 23,243,415 shares and 324,316,070 shares held by the Nanshan Group with restriction on disposal expired on 3 July 2007, 6 June 2008, and 19 June 2009 respectively.
The Company and its subsidiaries (collectively the “Group”) are principally engaged in the provision of cargo packing, cargo handling, container terminal, warehousing, land and sea transportation services.
These consolidated financial statements have been approved for issue by the Board of Directors on 16 August 2010.8
2.
Significant accounting policies and accounting estimates
The consolidated and the Company’s financial statements for the year ended 31 December 2009 truly and completely present the financial position as of 31 December 2009 and the operating results, cash flows and other information for the year then ended of the Group and Company in compliance with the Accounting Standards for Business Enterprises.
a.
Basis of preparation
The Group prepared financial statements in accordance with the Basic Standard and 38 specific standards of Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 February 2006, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations issued thereafter (hereafter referred to as “the Accounting Standard for Business Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention of Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2010) by China Securities Regulatory Commission.
b.
Statement of compliance with the Accounting Standards for Business Enterprises
The consolidated and the Company’s financial statements for the month ended 30 June 2010 truly and completely present the financial position as of 30 June 2010 and the operating results, cash flows and other information for the year then ended of the Group and Company in compliance with the Accounting Standards for Business Enterprises.
c.
Accounting year
The Company’s accounting year starts on 1 January and ends on 30 June.
d.
Recording currency
The recording currency is Renminbi (RMB)
e.
Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries.
Subsidiaries are fully consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, came under common control of the ultimate controlling party. The portion of the net profits realized before the combination date is presented separately in the consolidated income statement.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Company and subsidiaries. For subsidiaries acquired from a business combination involving enterprises not under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the period not held by the Company are recognized as minority interests and presented separately in the consolidated balance sheet within equity and net profits respectively.9
2 Significant accounting policies and accounting estimates (continued)
f.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with bank and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
g.
Foreign currency translation
(a) Transactions and balances
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currency are translated into RMB using the spot exchange rate at the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currency that are measured in terms of historical cost are translated at the balance sheet date using the spot exchange rate at the date of the transaction. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for oversea businesses are translated at the spot exchange rate on the balance sheet date. Among the owner’s equity items, the items other than “undistributed profits” are translated at the spot exchange rate of the transaction date. The income and expense items in the income statements of oversea businesses are translated at the spot exchange rate of the transaction date. The differences arising from the above translation are presented separately in the owner’s equities. The cash flows of oversea businesses are translated at the spot exchange rate on the date of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
h.
Financial instruments
i.
Financial assets
(i)
Classification of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss, loans and receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the Group’s intention and ability to hold the financial assets.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of selling in the short term, which are presented as financial assets held for trading on the balance sheet.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.10
2 Significant accounting policies and accounting estimates (continued)
(8) Financial instruments (continued)
(a) Financial assets (continued)
(i) Classification of financial assets (continued)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other current assets in the balance sheet if management intends to dispose of them within 12 months of the balance sheet date.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable payments that management has the positive intention and ability to hold to maturity. Held-to-maturity investments with maturities over 12 months when the investments were made but are due within 12 months at the balance sheet date are included in current portion of non-current assets; held-to maturity investments with maturities no more than 12 months when the investments were made are included in other current assets.
(ii)
Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. In the case of financial assets at fair value through profit or loss, the related transaction costs occurred at the time of acquisition are recognised in profit or loss for the current period. For other financial assets, transaction costs that are attributable to the acquisition of the financial assets are included in their initial recognition amounts. Financial assets are derecognised when the contractual rights to receive the cash flows from the financial assets have expired, or all substantial risks and rewards of ownership of the financial assets have been transferred.
Financial assets at fair value through profit or loss and available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Receivables and held-to-maturity investments are measured at amortised cost using the effective interest method.
A gain or loss arising from a change in the fair value of financial assets at fair value through profit or loss is recognised in profit or loss. Interests and cash dividends received during the period in which such financial assets are held, as well as the gains or losses arising from the disposal of the assets are recognised in profit or loss for the current period.
A gain or loss arising from a change in fair value of an available-for-sale financial asset is recognised directly in equity, except for impairment losses and foreign exchange gains and losses arising from the translation of monetary financial assets. When such financial asset is derecognised, the cumulative gain or loss previously recognised in equity is recognised in profit or loss for the current period. Interests on available-for-sale investments in debt instruments are calculated using the effective interest method during the period in which such investments are held and cash dividends declared by the investee on available-for-sale investments in equity instruments are recognised as investment income in profit or loss.11
2 Significant accounting policies and accounting estimates (continued)
(8) Financial instruments (continued)
(a) Financial assets (continued)
(iii)
Impairment of financial assets
The Group assesses the carrying amount of a financial asset other than that at fair value through profit or loss at each balance sheet date. If there is objective evidence that the financial asset is impaired, the Group shall determine the amount of any impairment loss.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is recognized in profit or loss.
In the case of a significant or prolonged decline in the fair value of an available-for-sale financial asset, the cumulative loss arising from the decline in fair value that had been recognized directly in equity is removed from equity and recognized in impairment loss. For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the previously recognized impairment loss is reversed and recognized in profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the previously recognized impairment loss is reversed and directly recognized in equity.
(iv)
Derecognition of financial assets
Financial assets are derecognized when: i) the contractual rights to receive the cash flows from the financial assets have expired; or ii) all substantial risks and rewards of ownership of the financial assets have been transferred; or iii) the control over the financial asset has been waived even if the Group does not transfer or retain nearly all of the risks and rewards relating to the ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of consideration received and the accumulative amount of the changes of fair value originally recorded in the owner’s equity, is recognised in the income statement.12
2 Significant accounting policies and accounting estimates (continued)
(8) Financial instruments (continued)
ii.
Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: the financial liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities in the Group mainly comprise of other financial liabilities, including payables and borrowings.
Payables comprise accounts payable and other payables, which are recognised initially at fair value and measured subsequently at amortised cost using the effective interest method. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised costs using the effective interest method. Borrowings are classified as the short-term borrowings if they mature within one year (one year included); others are classified as long-term borrowings; long-term borrowings due for repayment within one year since the balance sheet day are classified as current portion of non-current liabilities.
A financial liability (or a part of financial liability) is derecognised when and only when the obligation specified in the contract is discharged or cancelled. The difference between the carrying amount of a financial liability (or a part of financial liability) extinguished and the consideration paid is recognised in the income statement.
iii.
Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument for which the market is not active is determined by using a valuation technique. Valuation techniques include using recent market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same with this instrument, and discounted cash flow analysis. When a valuation technique is used to establish the fair value of a financial instrument, use market data as much as possible and avoid use of data that is particularly related to the Group.13
2 Significant accounting policies and accounting estimates (continued)
i.
Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivables arising from rendering of services are initially recognized at fair value of the contractual payments from the customer.
(a)
The recognition criteria and method of provision for impairment of receivables that are individually significant
- The recognition criteria of receivables that are individually significant
Receivables that are individually significant are subject to separate impairment assessment. A provision for impairment of the receivable is recognized if there is objective evidence that the Group will not be able to collect the full amounts according to the original terms.
- The method of provision for impairment of receivables that are individually significant
The provision for impairment of the receivable is established at the difference between the carrying amount of the receivable and the present value of estimated future cash flows.
(b)
The criteria and method of provision for impairment of receivables that are not individually significant, but grouped as high credit risk on the basis of similar credit risk
Receivables that are not individually significant are grouped on the basis of similar credit risk. The impairment losses are determined by considering the current conditions and the experience of bad debt for the groups of receivables with the similar credit risk.
The basis of similar credit risk group: the ageing of receivables
Provisioning by credit risk portfolio -
Ageing analysis provisioning method
Provision for receivables (%)
Provision for other receivables (%)
Within 1 year
0
0
1 to 2 years
10
10
2 to 3 years
30
30
3 to 4 years
60
60
4 to 5 years
60
60
Over 5 years
100
100
When the Group transfers the accounts receivable to financial institutions without recourse, the difference between proceeds derived from the transaction, net of the carrying amounts of the accounts receivable and relevant taxes is recognized in profit or loss for the current period.14
2 Significant accounting policies and accounting estimates (continued)
j.
Inventories
(a)
Categories
Inventories include spare parts, fuel and low cost consumables, and are presented at the lower of cost and net realisable value.
(b)
Measurement upon issuance
Cost of spare parts and fuel is determined on the weighted average method.
(c)
Determination of net realizable value and the method of provisions for impairment of inventories
Provisions for declines in the value of inventories are determined at the carrying value of the inventories net of their net realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and relevant taxes.
(d)
The Group adopts the perpetual inventory system.
(e)
Amortization of low cost consumables
Low cost consumables are expensed upon issuance.
k.
Long-term equity investments
Long-term equity investments comprise the Company’s equity investments in its subsidiaries, the Group’s long-term equity investments in its associates as well as the long-term equity investments where the Group does not have control, joint control or significant influence over the investees, and which are not quoted in an active market and whose fair value cannot be reliably measured.
Subsidiaries are all investees over which the Company is able to control. Associates are all investees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted using the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method. Other long-term equity investments where the Group does not have control, joint control or significant influence over the investee, and which are not quoted in an active market and whose fair value cannot be reliably measured are accounted for using the cost method.
(a)
Determining initial investment cost
Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Long-term equity investments accounted for using the equity method, where the initial investment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted accordingly.15
2 Significant accounting policies and accounting estimates (continued)
(11) Long-term equity investments (continued)
(b)
Subsequent accounting and recognition of profit or loss
For long-term equity investments accounted for using the cost method, investment income is recognised in profit or loss for the cash dividends or profit declared by the investee.
When using the equity method of accounting, the Group recognised the investment income based on its share of net profit or loss of the investee. The Group discontinues recognising its share of net losses of an investee after the carrying amount of the long-term equity investment together with any long-term interests that, in substance, form part of the investor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and the conditions on recognition of provision are satisfied in accordance with the accounting standards on contingencies, the Group continues to recognise the investment losses and the provision. For changes in owner’s equity of the investee other than those arising from its net profit or loss, the Group record directly in capital surplus its proportion, provided that the Group’s proportion of shareholding in the investee remains unchanged. The carrying amount of the investment is reduced by the Group’s share of the profit or cash dividends declared by an investee. The unrealised profits or losses arising from the intra-group transactions between the Group and its investees are eliminated to the extent of the Group’s interest in the investees, on the basis of which the investment gain or losses are recognised. The loss on the intra-group transaction between the Group and its investees, of which the nature is asset impairment, is recognised in full amount, and the relevant unrealised gain or loss is not allowed to be eliminated.
(c)
Determining control, joint control, significant influence over investees
Control means that the investor has the power to govern the financial and operating policies so as to obtain benefits from their operating activities. The existence and effect of potential voting rights (including that derived from the convertible bonds and warrants that are currently convertible or exercisable) are considered to determine whether the Group has control over the investee.
Joint control means that the investor has contractual obligation to control some economic activity, while such control only exists when the significant financial and operating policies relating to that activity are agreed upon by all investors sharing that control.
Significant influence means that the investor has the right to participate in the determination of the investee’s financial and operating policies, but cannot control or joint control with other parties on the determination of these policies.
(d)
Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(18)). Once the impairment loss is recognised, it is not allowed to be reversed for the value recovered in the subsequent periods.16
2 Significant accounting policies and accounting estimates (continued)
l.
Investment property
Investment property, including land use rights that have already been leased out and buildings that held for the purpose of lease, is measured initially at its actual cost. Subsequent expenditures incurred for an investment property is included in the cost of the investment property when it is probable that economic benefits associated with the investment property will flow to the Group and its cost can be reliably measured, otherwise the expenditure is recognized in profit or loss in the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of the investment property. Buildings and land use rights are depreciated or amortized to allocate the costs of these assets to their estimated net residual values over their estimated useful lives. The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation (amortization) rates of the investment properties are as follows:
Estimated useful lives
Estimated residual value
Annual depreciation (amortization) rate
Buildings
25 - 33 years
10%
2.7% to 3.6%
Land use rights
8 - 38 years
-
2.6% to 12.5%
When an investment property is changed to an owner-occupied property, it is transferred to fixed assets or intangible assets at the date of the change. When an owner-occupied property is changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is transferred to investment property at the date of the change at the relevant carrying amount of the property.
The estimated useful life, net residual value of an investment property and the depreciation (amortization) method applied are reviewed, and adjusted as appropriate at each financial year-end.
An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment property less its carrying amount and related taxes and expenses is recognized in profit or loss for the current period.
The carrying amount of investment property is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2 (18)).17
2 Significant accounting policies and accounting estimates (continued)
m.
Fixed assets
(a)
Fixed assets recognition and initial measurement
Fixed assets comprise harbor facilities, warehouses, container yards and buildings, machinery and equipment, motor vehicles, cargo ships and tugboats, and other equipments.
Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. Fixed assets contributed by the State-owned shareholders at the incorporation of a limited company are initially recorded at the valuation amount recognized by the State-owned assets supervision and administration department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that economic benefits associated with the fixed asset will flow to the Group and its cost can be reliably measured. The carrying amount of those parts that are replaced is derecognized and all other subsequent expenditures are recognized in profit or loss in the period in which it is incurred.
(b)
Fixed assets depreciation
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values over their estimated useful lives. For the fixed assets being provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation rates are as follows:
Estimated useful lives
Estimated residual value
Annual
depreciation rate
Harbor facilities
5 - 50 years
10%
1.8%-18%
warehouses, container yards and buildings
5 - 40 years
10%
2.25%-18%
machinery and equipments
5 - 15 years
10%
6%-18%
motor vehicles, cargo ships and tugboats
5 - 20 years
10%
4.5%-18%
other equipments
5 years
10%
18%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at least at each financial year-end.
(c)
The carrying amount of fix assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(18).
(d)
Fixed assets disposal
A fixed asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognized in profit or loss for the current period.18
2 Significant accounting policies and accounting estimates (continued)
n.
Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, ,installation cost, borrowing costs that are eligible for capitalization and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation begins from the following month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(18)).
o.
Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time of acquisition and construction for its intended use commence to be capitalized and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalization of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use, the borrowing costs incurred thereafter are recognized in profit or loss for the current period. Capitalization of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
For a borrowing specific for the acquisition, construction or production activities for preparing an asset eligible for capitalization, the to-be-capitalized borrowing costs shall be determined according to the actual borrowing costs incurred less any income earned on the unused borrowing fund as a deposit in the bank or as a temporary investment.
For the other borrowings related to acquisition, construction and production of a qualifying asset, the amount of to-be-capitalized borrowing costs shall be the lower of the actual borrowing costs incurred and the amount of qualifying asset not financed by specific borrowings multifying capitalization rate. The capitalization rate is the weighted average interest rate of these borrowings.
p.
Intangible assets
Intangible assets including land use rights, coastal line use rights and computer software are measured at actual cost. Fixed assets contributed by the state-owned shareholders at the incorporation of a limited company are initially recorded at the valuation amount recognized by the state-owned assets supervision and administration department.
(a)
Land use rights
Land use rights are amortized on the straight-line basis over their estimated useful lives of 20 - 50 years. If the purchase costs of land use rights and attached buildings cannot be reliably allocated between the land use rights and buildings, for the purchase costs are recognized as fixed assets.
(b)
Coastal line use rights
Coastal line use rights are amortized on the straight-line basis over periods of 20 - 50 years.19
2 Significant accounting policies and accounting estimates (continued)
(17) Intangible assets (continued)
(c)
Computer software
Computer software is amortized on a straight-line basis over periods of 3 - 5 years.
(d)
Periodical review of useful life and amortization method
For an intangible asset with a finite useful life, review and adjustment on useful life and amortization method are performed at each year-end.
(e)
A provision for impairment and an impairment loss are recognized when the recoverable amount of an intangible assets is less than its carrying amount (Note 2(18)).
q.
Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under operating lease and other prepayments incurred but should be borne by the current and subsequent periods and amortized over more than one year. Long-term prepaid expenses are amortized on the straight-line basis over the expected beneficial period and are presented at cost net of accumulated amortization.
r.
Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investment properties measured using the cost model and long-term equity investments in subsidiaries, joint ventures and associates are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. A provision for asset Impairment is determined and recognized on an individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Separately recognized goodwill is tested at least annually for impairment, irrespective of whether there is any indication that the asset may be impaired. During the test, the carrying value of goodwill is allocated to the related asset group or groups of asset group which is expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or groups of asset group including the goodwill allocated is lower than its carrying amount, the corresponding impairment loss is recognized. The impairment loss is first deducted from the carrying amount of goodwill allocated to the asset group or groups of asset group, and then deducted from the carrying amount of the remaining assets of the asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed for the value recovered in the subsequent periods.20
2 Significant accounting policies and accounting estimates (continued)
s.
Employee benefits
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff welfare, social security contributions, housing funds, labor union funds, employee education funds and other expenditures incurred in exchange for service rendered by employees.
The Group has established a pension scheme for employee which is a defined contribution plan. The Group pays contributions at 5.5% to 6% of employees’ salary into the plan. The Group has no further obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. The pension assets are hold by a trustee and are managed separately from the Group’s assets.
t.
Profit distribution
Proposed profit distribution is recognized as a liability in the period in which it is approved by the shareholders’ meeting.
u.
Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, rebates, discounts and returns.
Revenue is recognized when the economic benefits associated with the transaction will flow to the Group, the relevant revenue can be reliably measured and specific revenue recognition criteria have been met for each of the Group’s activities as described below:
(a)
Rendering of services
The Group provides loading/unloading, transportation, logistic agency and other related harbor services to external customers. Revenue arising from provision of services is recognized when services are completed and the amount of revenue and cost can be reliably measured
(b)
Transfer of asset use rights
Interest income is recognized on a time-proportion basis using the effective interest method.
Lease income from an operating lease is recognized on a straight-line basis over the period of the lease.21
2 Significant accounting policies and accounting estimates (continued)
v.
Government subsidies
Government subsidy means the monetary or non-monetary assets obtained freely by an enterprise from the government, including tax returns, financial subsidies.
Government subsidy is recognized unless the additional condition can be met and the subsidy can be received by the corporation. If the government subsidy is a monetary asset, it will be measured in the light of the received or receivable amount, if the government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a reliable way, it will be measured at its nominal amount.
The government subsidies pertinent to assets will be recognized as other non-current debt-deferred income, equally amortized within the useful lives of the relevant assets and recognized as profit and loss at the same time. The government subsidies measured at their nominal amounts will be directly recognized as profit and loss in the current period.
The government subsidies pertinent to incomes, those subsidies used for compensating related future expenses or losses will be recognized as deferred income and recognized as profit and loss during the period when the relevant expenses are recognized; those subsidies used for compensating related expenses or losses already existed will be directly recognized as income or cost in the current period.
w.
Deferred revenue
Deferred revenue is the advance from customers which should be amortized on a straight-line basis over the expected beneficial period of 20 years and presented at cost net of accumulated amortization.
x.
Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences arising between the tax base of assets and liabilities and their carrying amount (temporary differences). Deferred tax asset is recognized for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in in accordance with the tax law. No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss) At the balance sheet date, deferred tax assets and deferred tax 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.
Deferred tax assets are only recognized for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilized, the corresponding deferred tax assets are recognized.22
2 Significant accounting policies and accounting estimates (continued)
(25) Deferred tax assets and deferred tax liabilities (continued)
Deferred tax assets and liabilities are offset when:
?The deferred taxes are relate to the same taxable entity and same taxation authority, and;
?That taxable entity has a legally enforceable right to offset current tax assets against current tax liabilities.
y.
Leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. An operating lease is a lease other than a finance lease.
Lease payments under an operating lease are recognized on a straight-line basis over the period of the lease, and are either capitalized as part of the cost of related assets, or charged as an expense for the current period.
z.
Held for sale and discontinuing operations
Non-current asset or components of the corporation which meet all three conditions below can be classified as hold for sale: (1) the agreement of disposal is made. (2) The contract which can not withdraw is signed by both corporation and the transferee. (3) The transfer will be completed with in a year.
A non-current asset classified as an asset held for sale is presented as other current asset at the lower of the carrying amount and the fair value less costs to sell. Any excess of the carrying amount over the fair value less the costs to sell is recognized as asset impairment loss.
Discontinuing operations are disposed or classified as hold for sale components which can be respectively identified from both operating and preparing the financial statements of the corporation.
aa.
Segment information
The Group identifies operating segments based on the internal organization structure, management requirement and internal reporting, than discloses segment information of reportable segments which is based on operating segments.
An operating segment is the component of the Group that all of the following conditions are satisfied: (1) that component can earn revenues and incur expenses from ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management in order to make decisions about resources being allocated to the segment and assess its performance, and (3) for which the information of financial position, operating results and cash flows are available to the Group. If two or more operating segments have similar economic characteristics, and certain conditions are satisfied, they may be aggregated into one operating segment.
bb.
Significant accounting estimates and judgements.
The Group continually evaluates the critical accounting estimates and key judgements applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
There is no critical accounting estimate or key judgments of the Group in current year that will cause significant adjustments to the book value of assets and liabilities of next year.23
3.
Taxation
The types and rates of taxes applicable to the Group are set out below.
Type
Taxable basis
Tax rate
Enterprise income tax
Taxable income
16.5%, 22% and 25%
Value added tax (“VAT”)
Taxable income from vehicle maintenance and utilities supplies on ships in shore (tax payable represents output VAT calculated using the taxable sales amount multiplied by the effective tax rate less deductible input VAT)
17%
Taxable income from sales of scraps
3%
Taxable income from transferof fixed asset (tax inclusive)
4% (levied by half)
Business tax
Taxable loading/unloading and transportation income
3%
Taxable warehousing, logistic agency and rental income
5%
Urban maintenance and construction tax
VAT and Business tax paid
1%
Education surplus
VAT and Business tax paid
3%
The applicable enterprise income tax rate for the Company and the subsidiaries located in Shenzhen Special Economic Zone had been 15%. Under the new CIT Law, the CIT income tax rate applicable to the Company and these subsidiaries will increase gradually to 25% within 5 years from 2008 to 2012. The applicable income tax rate for 2010 is 22%.
The applicable enterprise income tax rate for the subsidiaries located in Dongguan city is 25%.
Chiwan Wharf Holdings (H.K.) Limited (the “WHK”) and Chiwan Shipping (H.K.) Company Limited are subject to Hong Kong CIT income tax rate at 16.5% (2009: 16.5%).
For the year ended 30 June 2010, several subsidiaries of the Company are still in the tax holiday of “5 year exemption and 5 year half reduction”. The details are set out below.
(a) The profit derived from berth #11 of Chiwan Container Terminal Company Limited (“CCT”) is entitled to full exemption from income tax for five years commencing from its first profit making year and a 50% exemption for the following five years. 2010 is the tenth profit-making year of berth #11, CIT has been provided at a rate of 11% (2009: 10%).
(b) The profit derived from berth #12 of CCT is entitled to full exemption from income tax for five years commencing from its first profit making year and a 50% exemption for the following five years. 2010 is the seventh profit-making year of berth #12, CIT has been provided at a rate of 11% (2009: Nil).
(c) The profit derived from berth #13 of CCT is entitled to full exemption from income tax for five years commencing from its first profit making year and a 50% exemption for the following five years when certain requirement met. 2010 is the sixth profit-making year of berth #13, but is the fourth year for it to meet the requirement of related tax circular, CIT has been provided at a rate of 11% (2009: Nil).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and consolidation of financial statements
(1) Particulars of the subsidiaries
(a) Subsidiaries acquired through establishment or investment
Full name of investees
Type of subsidiaries
Place of registration
Nature of business
Registered capital
(in ten thousand Yuan unless otherwise stated)
Principal activities
Type of enterprise
Legal representatives
Organization code
Shenzhen Chiwan International Freight Agency Company Limited
Direct
Shenzhen, PRC
Logistics
550
Shipping agency service
Domestically-funded enterprise
Fan Zhaoping
61885111-4
Shenzhen Chiwan Terminal Company Limited
Direct and indirect
Shenzhen, PRC
Logistics
5,000
Port services
Domestically-funded enterprise
Fan Zhaoping
19231989-1
Shenzhen Chiwan Trains-Grains Terminal Company Limited
Direct
Shenzhen, PRC
Logistics
4,500
Warehousing of grains
Chinese-Foreign equity joint venture
Zhang Jianguo
61893398-8
Chiwan Wharf Holdings (H.K.) Limited
Direct and indirect
Hong Kong SAR, PRC
Investments
HKD1,000,000
Shipping agency service
Foreign company
NA
NA
Dongguan Chiwan Wharf Company Limited
Direct and indirect
Dongguan, PRC
Logistics
26,130
Port services, warehousing and other logistic services
Chinese-Foreign equity joint venture
Wang Fen
79123972-X
Dongguan Chiwan Terminal Company Limited
Direct and indirect
Dongguan, PRC
Logistics
30,000
Port services, warehousing and other logistic services
Chinese-Foreign equity joint venture
Wang Fen
67307267-4
Grossalan Investments Limited
Direct
British Virgin Islands
Investments
USD 1
Investment holding
Foreign company
NA
NA
24SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and consolidation of financial statements (continued)
(1) Particulars of the subsidiaries (continued)
(a) Subsidiaries acquired through establishment or investment (continued)
Name of subsidiaries
Year end actual investment
Substantial net investment on the subsidiaries recorded in other items
Interest held (%)
Voting right held (%)
Consolidated
Minority equity interest
Reversal of minority profit / loss interest from minority equity interest
Reversal of the portion of current year loss attributable to minority shareholders of subsidiaries exceeding their shares in that subsidiary’s opening equity, from the parent company’s owner’s equity
Shenzhen Chiwan International Freight Agency Company Limited
5,500,000
-
100%
100%
Yes
-
-
-
Shenzhen Chiwan Terminal Company Limited
50,000,000
-
100%
100%
Yes
-
-
-
Shenzhen Chiwan Trains-Grains Terminal Company Limited
45,000,000
-
100%
100%
Yes
-
-
-
Chiwan Wharf Holdings (H.K.) Limited
1,070,000
11,004,285
100%
100%
Yes
-
-
-
Dongguan Chiwan Wharf Company Limited
261,300,000
-
100%
100%
Yes
-
-
-
Dongguan Chiwan Terminal Company Limited
300,000,000
-
100%
100%
Yes
-
-
-
Grossalan Investments Limited
8
-
100%
100%
Yes
-
-
-
662,870,008
11,004,285
-
-
-
25SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and consolidation of financial statements (continued)
(1) Particulars of the subsidiaries (continued)
(b) Subsidiaries acquired under common control
Full name of investees
Type of subsidiaries
Place of registration
Nature of business
Registered capital
(in ten thousand Yuan unless otherwise stated)
Principal activities
Type of enterprise
Legal representatives
Organization code
Shenzhen Chiwan Harbour Container Company Limited
Direct and indirect
Shenzhen, PRC
Logistics
10,820
Container handling and other port services
Chinese-Foreign Equity joint venture
Wang Fen
61881729-0
Shenzhen Chiwan Transportation Company Limited
Direct and indirect
Shenzhen, PRC
Logistics
1,500
container transportation, vehicle and port machinery maintenance
Chinese-Foreign Equity joint venture
Zheng Shaoping
61883349-3
Chiwan Container Terminal Company Limited
Direct and indirect
Shenzhen, PRC
Logistics
USD95,300,000
Container handling and other port services
Chinese-Foreign Equity joint venture
Wang Fen
61881700-4
Shenzhen Chiwan Shipping and Transportation Company Limited
Direct and indirect
Shenzhen, PRC
Logistics
600
Cargo shipping
Chinese-Foreign Equity joint venture
Zheng Shaoping
61881638-6
Chiwan Shipping (H.K.) Company Limited
Indirect
Hong Kong, PRC
Logistics
HKD800,000
Shipping agency service
Foreign company
NA
NA
26SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
27
4 Business combination and consolidation of financial statements (continued)
(1) Particulars of the subsidiaries (continued)
(b) Subsidiaries acquired under common control (continued)
Name of subsidiaries
Year end actual investment
Substantial net investment on the subsidiaries recorded in other items
Interest held (%)
Voting right held (%)
Consolidated
Minority equity interest
Reversal of minority profit / loss interest from minority equity interest
Reversal of the portion of current year loss attributable to minority shareholders of subsidiaries exceeding their shares in that subsidiary’s opening equity, from the parent company’s owner’s equity
Shenzhen Chiwan Harbour Container Company Limited
70,920,000
-
100%
100%
Yes
-
-
-
Shenzhen Chiwan Transportation Company Limited
7,000,000
19
100%
100%
Yes
-
-
-
Chiwan Container Terminal Company Limited
485,990,004
-
55%
55%
Yes
686,157,907
-
-
Shenzhen Chiwan Shipping and Transportation Company Limited
6,000,000
-
100%
100%
Yes
-
-
-
Chiwan Shipping (H.K.) Company Limited
856,000
-
100%
100%
Yes
-
-
-
570,766,004
19
686,157,907
-
-
All above subsidiaries and the Company had been under common control by Nanshan Group before and after the acquisition.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
28
4 Business combination and consolidation of financial statements (continued)
(2) Exchange rates adopted on the translation of major financial statement items of the foreign operating entities
Balance Sheet Item
30 June 2010
31 December 2009
Revenue, expense and cash flow item
Chiwan Shipping (H.K.) Company Limited
1HKD = 0.8805RMB
1HKD = 0.8805RMB
Current exchange rate of the transaction
Grossalan Investments Limited
1HKD = 0.8805RMB
1HKD = 0.8805RMB
Current exchange rate of the transaction
5 Notes to the consolidated financial statements
(1)
Cash at bank and at hand
30 June 2010
31 December 2009
Original currency
Exchange rate
RMB equivalent
Original currency
Exchange rate
RMB equivalent
Cash on hand-
RMB
15,125
1.00
15,125
16,461
1.00
16,461
HKD
4,731
0.88
4,164
2,172
0.88
1,911
19,289
18,372
Cash at bank-
RMB
804,936,447
1.00
804,936,447
528,155,273
1.00
528,155,273
USD
4,284,205
6.83
29,261,121
2,764,851
6.83
18,883,932
HKD
309,698,203
0.88
272,534,419
219,158,563
0.88
192,859,535
1,106,731,987
739,898,740
Other cash balances-
RMB
1,132,319
1.00
1,132,319
1,054,020
1.00
1,054,020
USD
3,202
6.83
21,870
3,202
6.83
21,870
HKD
117,347
0.88
103,265
117,347
0.88
103,265
1,257,454
1,179,155
1,108,008,730
741,096,267
(2)
Notes receivable
30 June 2010
31 December 2009
Bank acceptance notes
6,500,000
-SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
29
5 Notes to the consolidated financial statements (continued)
(3)
Interest receivable
31 December 2009
Current year additions
Current year decreases
30 June
2010
Interest receivables
384,750
852,150
(1,094,400)
142,500
There was no interest overdue as at 30 June 2010 and 31 December 2009.
(4)
Accounts receivable
30 June 2010
31 December 2009
Accounts receivable
246,452,419
209,251,698
Less: provision for bad debts
(74,334)
(74,334)
246,378,085
209,177,364
(a)
The ageing of accounts receivable is analysed below:
30 June 2010
31 December 2009
Within 1 year
246,137,767
208,430,782
1 to 2 years
136,960
687,145
2 to 3 years
153,257
91,953
3 to 4 years
24,435
-
Over 5 year
-
41,818
246,452,419
209,251,698
(b)
Accounts receivable are analysed by categories as follows:
30 June 2010
31 December 2009
Book amount
Provision for bad debts
Book amount
Provision for bad debts
Amount
% of total balance
Provision for bad debts
% of balance
Amount
% of total balance
Provision for bad debts
% of balance
Receivables that are individually significant
184,599,052
74.9%
(13,696)
0.0%
159,838,730
76.4%
(13,696)
0.0%
Receivables that are individually insignificant but are comparatively risky when grouped on the basis of similar credit risk characteristics
-
-
-
-
-
-
-
-
Other insignificant receivables
61,853,367
25.1%
(60,638)
0.1%
49,412,968
23.6%
(60,638)
0.1%
246,452,419
100%
(74,334)
0.0%
209,251,698
100%
(74,334)
0.0%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
30
5 Notes to the consolidated financial statements (continued)
(4) Accounts receivable (continued)
The management classified the five largest accounts receivable as “receivables that are individually significant”.
(c)
As at 30 June 2010, the bad debt provision for accounts receivable that are individually significant or individually insignificant but comparatively risky when grouped on the basis of similar credit risk characteristics is made as follows:
Book amount
Provision for bad debts
% of balance
Reason
Customer A
81,325,057
(13,696)
Not applicable
Being long aged and disputedamount
(d)
As at 30 June 2010, no balances included in above accounts receivable are due from the shareholders of the Company who hold over 5% shares with voting rights (31 December 2009: Nil).
(e)
As at 30 June 2010, the Group’s five largest accounts receivable balances are analysed as follows:
Relationship
with the Group
Amount
Duration
% of total accounts receivable balance
Customer A
Third party
81,325,057
Within 1 year and 1 to 2 years
33.0%
Customer B
Third party
49,014,757
Within 1 year
19.9%
Customer C
Third party
21,986,475
Within 1 year
8.9%
Customer D
Third party
16,496,190
Within 1 year
6.7%
Customer E
Third party
15,776,573
Within 1 year
6.4%
184,599,052
74.9%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
31
5 Notes to the consolidated financial statements (continued)
(4) Accounts receivable (continued)
(f)
Accounts receivable due from related parties are analyzed as follows:
30 June 2010
31 December 2009
Relationship
with the Group
Amount
% of total accounts receivables
Provision for bad debt
Amount
% of total accounts receivables
Provision for bad debt
Shenzhen Southsea Grains Industries Limited
Controlled by the same parent company
1,245,557
0.5%
-
1,281,446
0.6%
-
Mawan companies
Associate of the Group
1,564,600
0.7%
-
826,212
0.4%
-
Shenzhen Nantian Oilmills Company Limited “Nantian Oilmills”)
Controlled by the same parent company
830,063
0.3%
-
685,274
0.3%
-
3,640,220
1.5%
-
3,108,035
1.5%
-
(g)
The following accounts receivable are denominated in foreign currencies:
30 June 2010
31 December 2009
Original currency
Exchange rate
RMB equivalent
Original currency
Exchange rate
RMB equivalent
USD
7,167,551
6.83
48,954,370
-
-
-
HKD
-
-
-
3,486,003
0.88
3,067,683
48,954,370
3,067,683SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
32
5 Notes to the consolidated financial statements (continued)
(5)
Other receivables
30 June 2010
31 December 2009
Current accounts with counterparties
104,373,535
20,503,435
Bond and deposits
2,427,929
2,314,581
Reserves
1,925,087
885,662
Others
51,829
158,125
108,778,380
23,861,803
Less: Provision for bad debts
(2,101,562)
(2,101,562)
106,676,818
21,760,241
(a)
The ageing of other receivables is analysed below:
30 June 2010
31 December 2009
Within 1 year
104,797,885
21,079,970
1 to 2 years
1,084,847
231,709
2 to 3 years
488,699
158,648
3 to 4 years
724,698
843,228
4 to 5 years
-
81,300
Over 5 years
1,682,251
1,466,948
108,778,380
23,861,803
(b)
Other receivables are analysed by categories as follows:
30 June 2010
31 December 2009
Book amount
Provision for bad debts
Book amount
Provision for bad debts
Amount
% of total balance
Provision for bad debts
% of balance
Amount
% of total balance
Provision for bad debts
% of balance
Receivables that are individually significant
98,435,156
90.5%
(1,551,780)
1.6%
16,370,732
68.6%
(1,743,780)
10.7%
Receivables that are individually insignificant but are comparatively risky when grouped on the basis of similar credit risk characteristics
-
-
-
-
-
-
-
-
Other insignificant receivables
10,343,224
9.5%
(549,782)
5.3%
7,491,071
31.4%
(357,782)
4.8%
108,778,380
100%
(2,101,562)
1.9%
23,861,803
100%
(2,101,562)
8.8%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
33
5 Notes to the consolidated financial statements (continued)
(5) Other receivables (continued)
(c)
As at 30 June 2010, the bad debt provision for other receivables that are individually significant or individually insignificant as follows:
Book amount
Provision for bad debts
% of balance
Reason
Zhennan Packing Holdings Limited
1,031,780
(1,031,780)
100%
(i)
Beijing Tonggang Co., Ltd.
520,000
(520,000)
100%
(i)
Shenzhen Xuqin Industrial Development Co., Ltd.(“Xuqin”)
320,000
(192,000)
60%
18,71,780
(1,743,780)
(i) As at 30 June 2010, the above items all aged above 3 years, and the former two debtors were already bankrupted. The Group is in the view that these receivables are partially or fully irrecoverable, thus partial or full provision has been made on them.
(d)
None of other receivables were written off during the year.
(e)
As at 30 June 2010, no balances included in above other receivables are due from the shareholders of the Company who hold over 5% shares with voting rights (31 December 2009: Nil).
(f)
As at 30 June 2010, the Group’s five largest other receivables balances are analyzed as follows:
Relationship
with the Group
Amount
Duration
% of total accounts receivable balance
*Hinwin Development Ltd
Third party
94,000,000
Within 1 year
86.4%
China Merchants Maritime & Logistics (Shenzhen) Ltd. (“CMML”)
Associate of the Company
1,911,230
Within 1 year
1.8%
Zhennan Packing Holdings Limited
Third party
1,031,780
Over 3 years
0.9%
Mawan Co, Ltd.
Associate of the Group
972,146
Within 1 year
0.9%
Beijing Tonggang Co., Ltd.
Third party
520,000
Over 3 years
0.5%
98,435,156
90.5%
*The company signed stock rights transfer contracts with Hinwin Development Ltd on 29th,Jan,2010。The company had closed out its 20% share of the CMML at a cost of RMB 94,000,000. Hinwin Development Ltd had paid it at the end of June, but until to the 30th, Jun, because the related government was still making entry approved procedure, the company didn’t received this payment. Such payment had received on 12th, Jul, 2010.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
34
5 Notes to the consolidated financial statements (continued)
(5) Other receivables (continued)
(g)
Other receivables due from related parties are analyzed as follows:
30 June 2010
31 December 2009
Relationship
with the Group
Amount
% of total accounts receivables
Provision for bad debt
Amount
% of total accounts receivables
Provision for bad debt
COCL
Controlled by the same parent company
-
-
-
13,090,624
54.9%
-
CMML
Associate of the Company
1,911,230
1.8%
-
1,408,328
5.9%
-
Mawan
Associate of the Company
972,146
0.9%
-
237,072
1.0%
Xuqin
Controlled by the same parent company
320,000
0.3%
(192,000)
320,000
1.3%
(192,000)
China Petroleum Supply Base Co., Ltd. (“CPSB”)
Controlled by the same parent company
135,622
0.1%
-
135,622
0.6%
-
3,338,998
3.1%
(192,000)
15,191,646
63.7%
(192,000)
(h)
The following other receivables are denominated in foreign currencies:
30 June 2010
31 December 2009
Foreign currency
Original currency
Exchange rate
RMB equivalent
Original currency
Exchange rate
RMB equivalent
USD
115,849
6.83
791,249
18,191
6.83
124,245
HKD
280,556
0.88
246,889
84,438
0.88
74,305
1,038,138
198,550SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
35
5 Notes to the consolidated financial statements (continued)
(6)
Advance to suppliers
(a)
The ageing of advance to suppliers is analyzed below
30 June 2010
31 December 2009
Amount
% of total balance
Amount
% of total balance
Within 1 year
1,515,964
53%
2,575,562
100%
1 to 2 years
1,370,698
47%
190
0%
2,886,662
100%
2,575,752
100%
(b)
As at 30June 2010, the Group’s five largest advance to suppliers balances are analysed as follows:
Relationship
with the Group
Amount
% of total
advance to suppliers
Time of
prepayment
Unsettled reason
The People’s Insurance Company (Group) of China Limited
Third party
944,532
32.7%
Year 2009
Relevant goods or services
were not provided
Hoi Tung (shanghai) company
limited
Third party
581,305
20.1%
Year 2010
Relevant goods or services
were not provided
Shenzhen Yue Chengda information technology Limited
Third party
511,111
17.7%
Year 2010
Relevant goods or services
were not provided
Yantai Eastern China Electronic
Software Technology Co., Ltd.
Third party
417,000
14.4%
Year 2009
Relevant goods or services
were not provided
China life property and cansualty
insurance company limited
Third party
307,450
10.7%
Year 2010
Relevant goods or services
were not provided
2,761,398
95.6%
(c)
As at 30 June 2010, the Group did not have any balances which were due to parties having 5% or above shareholdings in the Company (31 December 2009: Nil).
(d)
As at 30 June 2010, no balances of advance to suppliers were against related parties (31 December 2009: Nil).
(e)
As at 30 June 2010, no balances of advance to suppliers were denominated in foreign currencies (31 December 2009: Nil).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
36
5 Notes to the consolidated financial statements (continued)
(7)
Inventories
(a)
Inventories by categories are analyzed as follows:
30 June 2010
31 December 2009
Book amount
Provision for declines in the value of inventories
Book value
Book amount
Provision for declines in the value of inventories
Book value
Spare parts
27,024,035
(3,396,128)
23,627,907
27,217,440
(3,396,128)
23,821,312
Fuel
1,185,672
-
1,185,672
1,736,947
-
1,736,947
Low cost consumables
48,426
-
48,426
58,047
-
58,047
28,258,133
(3,396,128)
24,862,005
29,012,434
(3,396,128)
25,616,306
(b)
Provision for declines in the value of inventories is analyzed as follows:
31 December 2009
Current year provisions
Current year decreases
30 June 2010
Reversals
Write offs
Spare parts
(3,396,128)
-
-
-
(3,396,128)
(3,396,128)
-
-
-
(3,396,128)
(c)
Details about provision for declines in the value of inventories is as follows:
Basis of provision
Reason of current year reversals
% of current year reversals to
stock year end balance
Spare parts
Net realizable value lower than the book value of spare parts
Not applicable
Not applicable
(8)
Available-for-sale financial assets
30 June 2010
31 December 2009
Available-for-sale equity instruments
6,090,000
7,140,000
Available-for-sale financial asset represented 1,000,000 PRC legal person shares of Jiangsu Expressway (the “Jiangsu Expressway”) held by the Company. As at 30 June 2010, the market value of the stocks in Shanghai Stock Exchange per the closing market price of the last trading day of year 2010 was RMB 6,090,000. Fair value change has lead to increase of capital surplus by RMB 819,000.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
37
5 Notes to the consolidated financial statements (continued)
(9)
Long term receivables
31 December
2009
Current year
decrease
30 June
2010
Media Port Investments Limited
108,037,599
-
108,037,599
On 30 September 2002, China Merchants Holdings (International) Company Limited (the “CMHI”, a listed company in Hong Kong) and Shenzhen South Oil (Group) Company Limited (the “SSOG”) entered into an agreement called the “Agreement on Cooperation and Development of Mawan Port” (the “Development Agreement”) to incorporate three joint ventures, namely SMW, SMP and Shenzhen Mawan Terminals Co., Ltd. (“SMT”) (together referred to as “Mawan Companies”), to construct and operate the berth 0#, 5#, 6#, 7# and 8# in Mawan Port.
According to the Development Agreement, CMHI and the Group will incorporate an associated company (Note 5 (10)) Media Port Investments Limited (the “MPIL”) first with equal percentage of equity held respectively. MPIL then incorporates the abovementioned three joint ventures together with SSOG, at 60% and 40% equity interest therein respectively. The total investment by the shareholders in these three Mawan joint ventures amounts to RMB 1,200,000,000.
In 2003, according to the arrangement under the Development Agreement, WHK, a subsidiary of the Company, provided an interest free shareholder’s loan of HKD 169,815,000 to MPIL, and MPIL then injected the amount to the three Mawan companies as their paid-in capital. In 2006, the interest free shareholder’s loan was increased by HKD 39,320,388 and the increment was paid to the three companies by MPIL as paid-in capital. As at 31 December 2008, the RMB equivalent of the shareholder’s loan amounted to RMB 184,039,141. During year 2009, pursuant to meeting of board of directors of MPIL, such shareholders’ loans were decided to be partially repaid by portion according to the operation and funding situation of the Mawan companies. Therefore, the balance reduced to RMB 108,037,599 as at 31 December 2009. The above long-term receivable is part of the substantial investment to associates and the exchange differences arising in current year was recorded in “Equity – Translation differences of foreign currency financial statements”. The total investments by exceeding these three companies over their paid-in capital have been financed by bank loans. As at 30 June 2010, the total paid-in capital of these three Mawan companies was RMB 735,000,000.
The shareholder’s loans to MPIL are unsecured, interest-free and have no fixed term of repayment. The Group has confirmed that it will not call for repayment of the loans if the associates are in need of them.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
38
5 Notes to the consolidated and the Company’s financial statements (continued)
(10)
Long-term equity investments
30 June 2010
31 December 2009
Associates (a)
322,259,529
332,152,738
Other long-term equity investments (b)
17,037,500
17,037,500
339,297,029
349,190,238
Less: Provision for impairment of long-term equity investments (c)
(3,128,300)
(3,128,300)
336,168,729
346,061,938
As at 30 June 2010, the long-term equity investments of the Group were not subject to restriction on disposal or remittance of return on investments.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated and the Company’s financial statements (continued)
(10) Long-term equity investments (continued)
(a)
Associates
Current year additions / decreases
Accounting method
Initial investment cost
31 December 2009
Additional investment
Share of net profit or loss of associates
Cash dividends announced by associates
Other
equity
changes
30 June 2010
Interest %
Voting
right %
Reason of inconsistent interest % and voting right
Provision
for impairment balance
Provision
for impairment made in current year
Shenzhen Cyber-harbour Network Co., Ltd.(“Cyber Network”)
Equity
method
1,875,000
12,489,764
-
939,805
-
-
13,429,569
37.5%
37.5%
Not applicable
-
-
CMML
Equity
method
160,000,000
131,572,884
(64,232,743)
(3,000,377)
-
-
64,339,764
20%
20%
Not applicable
-
-
MPIL*
Equity
method
139,932
188,090,090
-
56,400,106
-
-
244,490,196
50%
50%
Not applicable
-
-
332,152,738
(64,232,743)
54,339,534
-
-
322,259,529
-
-
* The Company held 50% equity in MPIL, but has no control over it. Thus MPIL was treated as an associate of the Company. As stated in Note 5(9), the Company held 30% equity of the three Mawan Companies through MPIL.
39SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (continued)
(10) Long-term equity investments (continued)
(b)
Other long-term equity investment
Accounting method
Initial investment cost
31 December 2009
Current year additions / decreases
30 June 2010
Interest %
Voting
right %
Reason of inconsistent interest % and voting right
Provision
for impairment balance
Provision
for impairment made in current year
Current year declared cash dividend
China Ocean Shipping Agency (Shenzhen) Company Limited
Cost
method
13,510,000
13,510,000
-
13,510,000
15%
15%
Not applicable
-
-
-
Shenzhen Petro-chemical Industry (Group) Company Limited.
Cost
method
3,500,000
3,500,000
-
3,500,000
0.26%
0.26%
Not applicable
(3,117,800)
-
-
Guangdong Guang Jian Group Company Limited
Cost
method
27,500
27,500
-
27,500
0.02%
0.02%
Not applicable
(10,500)
-
-
17,037,500
-
17,037,500
(3,128,300)
-
-
40SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
41
5 Notes to the consolidated financial statements (continued)
(10) Long-term equity investments (continued)
(c)
Provision for impairment of long-term equity investments
31 December 2009
Current year additions
Current year decreases
30 June 2010
Other long-term equity investment
-Shenzhen Petro-chemical Industry (Group) Company Limited
(3,117,800)
-
-
(3,117,800)
-Guangdong Guang Jian Group Company Limited
(10,500)
-
-
(10,500)
(3,128,300)
-
-
(3,128,300)
(11)
Investment in associates
The particular of the associates are set out as below.
30 June 2010
2010
Entity type
Place of incorporation
Legal
representative
Organisation
code
Nature of business
Registered capital
Interest held
Voting right
held
Total assets
Total liabilities
Net assets
Operating revenue
Net profit / (loss)
Associates –
Cyber Network
Sino-foreign
invested enterprise
Shenzhen, China
Luo Huilai
73207614-X
Network
service
5 million
37.5%
37.5%
44,093,594
9,274,725
34,818,869
23,028,762
2,506,146
CMML
Sino-foreign
iivested enterprise
Shenzhen, China
Hu Jianhua
75045115-0
Warehousing service
400 million
20%
20%
1,297,700,100
976,001,280
321,698,820
54,211,971
(7,233,389)
MPIL
Foreign
enterprise
British
Virgin Islands
Not
applicable
Not
applicable
Investment
USD 10
50%
50%
HKD 481,080,513
HKD
245,582,804
HKD
235,497,709
-
HKD
(2,076)
All above summary financial information of associates are extracted from their statutory financial statements or management accounts. The Group has applied the accounting policy of the Group to the results of the associates in equity accounting of the share of results of the associates.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
42
5 Notes to the consolidated financial statements (continued)
(12)
Investment property
31 December 2009
Current year
additions
Current year
decreases
30June
2010
Cost totals
45,014,939
-
-
45,014,939
Buildings / properties
13,505,974
-
-
13,505,974
Land use right
31,508,965
-
-
31,508,965
Accumulated depreciation / amortization totals
16,160,429
453,552
-
16,613,981
Buildings / properties
3,729,153
146,669
-
3,875,822
Land use right
12,431,276
306,883
-
12,738,159
Book value totals
28,854,510
(453,552)
-
28,400,958
Buildings / properties
9,776,821
(146,669)
-
9,630,152
Land use right
19,077,689
(306,883)
-
18,770,806
In the first half of 2010, investment property depreciation / amortization of RMB 453,552 (Jan.-Jun.2009: RMB 443,774) has been charged.
Part of the previously self used properties was leased out in current year, thus reclassified as investment property at such change. All the above investment property is held for lease.
As at 30 June 2010 and at 31 December 2009, none of the investment property has obtained Building and Land Ownership Certificate. Please refer to Note 5(15) for the reason and response from management.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
43
5 Notes to the consolidated financial statements (continued)
(13)
Fixed assets
31 December 2009
Current year
additions
Current year
decreases
30 June
2010
Cost totals
3,642,788,499
54,630,282
(9,067,708)
3,688,351,073
Harbor facilities
953,316,348
-
-
953,316,348
Warehouses, container yards and buildings
548,348,131
241,400
-
548,589,531
Machinery and equipments
1,793,509,327
50,063,014
(419,318)
1,843,153,023
Motor vehicles, cargo ships and tugboats
260,879,490
1,296,755
(7,946,836)
254,229,409
Other equipments
86,735,203
3,029,113
(701,554)
89,062,762
Accumulated depreciation totals
1,373,017,850
89,525,942
(5,326,032)
1,457,217,760
Harbor facilities
204,281,404
9,851,791
-
214,133,195
Warehouses, container yards and buildings
178,480,382
15,030,346
-
193,510,728
Machinery and equipments
818,321,237
52,206,400
(376,379)
870,151,258
Motor vehicles, cargo ships and tugboats
110,872,450
7,810,851
(4,641,850)
114,041,451
Other equipments
61,062,377
4,626,554
(307,803)
65,381,128
Net book amount totals
2,269,770,649
(34,895,660)
(3,741,676)
2,231,133,313
Harbor facilities
749,034,944
(9,851,791)
-
739,183,153
Warehouses, container yards and buildings
369,867,749
(14,788,946)
-
355,078,803
Machinery and equipments
975,188,090
(2,143,386)
(42,939)
973,001,765
Motor vehicles, cargo ships and tugboats
150,007,040
(6,514,096)
(3,304,986)
140,187,958
Other equipments
25,672,826
(1,597,441)
(393,751)
23,681,634
Provision for impairment loss totals
60,724,201
-
(4,200)
60,720,001
Harbor facilities
-
-
-
-
Warehouses, container yards and buildings*
60,695,381
-
-
60,695,381
Machinery and equipments
-
-
-
-
Motor vehicles, cargo ships and tugboats
28,820
-
(4,200)
24,620
Other equipments
-
-
-
-
Net book value totals
2,209,046,448
(34,895,660)
(3,737,476)
2,170,413,312
Harbor facilities
749,034,944
(9,851,791)
-
739,183,153
Warehouses, container yards and buildings
309,172,368
(14,788,946)
-
294,383,422
Machinery and equipments
975,188,090
(2,143,386)
(42,939)
973,001,765
Motor vehicles, cargo ships and tugboats
149,978,220
(6,514,096)
(3,300,786)
140,163,338
Other equipments
25,672,826
(1,597,441)
(393,751)
23,681,634
(*) In 2007, the Group planned to relocate part of the general cargo business and facilities to Dongguan Machong Port, and made certain impairment provision of certain demolition for related warehouses, container yards and buildings accordingly. As at 30 June 2010, the management of the Group considered that impairment provision against the fixed assets were sufficient.
Depreciation charge In the first half of 2010 amounted to RMB 89,525,942 (Jan.-Jun.2009: RMB 86,834,860). Fixed assets amounted to RMB 46,085,622 (Jan.-Jun.2009: 2,798,354) were transferred from construction in progress in current year.
In the first half of 2010, depreciation expenses of RMB 86,107,646 (Jan.-Jun.2009: RMB 81,960,395) and RMB 3,418,296 (Jan.-Jun.2009: RMB 4,874,465) were charged to cost of revenue and general and administrative expenses, respectively.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
44
5 Notes to the consolidated financial statements (continued)
(13) Fixed assets (continued)
(a)
Temporary idle fixed assets
As at 30 June 2010, buildings, machinery and equipment with a net book amount of approximately RMB 4,364,375 (cost: RMB 30,927,998) were temporary idle (31 December 2009: net book amount: RMB 4,517,799, cost: 30,927,998), due to that management has not designated their usage. Details are as follows:
Cost
Accumulated depreciation
Impairment
Net book amount
Warehouses, container yards and buildings
30,927,998
(26,563,623)
-
4,364,375
(b)
Fixed assets with ownership certificates to be obtained
As at 30 June 2010, ownership certificates of buildings (“Buildings and Land Ownership Certificates”) for certain buildings of the Group with carrying amount of approximately RMB 130,161,391 (cost: RMB 222,362,485) had not yet been obtained (31 December 2009: carrying amount: RMB 83,326,227, cost: RMB 111,437,724). Please refer to Note 5(15) for the reason and response from management.
(14)
Construction in progress
30 June 2010
31 December 2009
Book value
Provisionfor impairment
Net
book value
Book value
Provision for impairment
Net
book value
Land formation and dredging projects for berth 2#-3# at Machong Port
236,458,187
-
236,458,187
236,230,716
-
236,230,716
Berth 2#-3#, Machong Port
269,208,976
-
269,208,976
260,324,130
-
260,324,130
MQ2535/4025 RTGs
20,981,217
-
20,981,217
40,988,241
-
40,988,241
Berth 4#-5#, Machong Port
3,893,592
-
3,893,592
3,793,592
-
3,793,592
Others
35,480,608
-
35,480,608
34,293,883
-
34,293,883
566,022,580
-
566,022,580
575,630,562
-
575,630,562SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
45
5 Notes to the consolidated financial statements (continued)
(14) Construction in progress (continued)
(a) Movement of significant construction in progress
Name of projects
Budget
31 December 2009
Current year additions
Transfer to fixed assets during the current year
Other reduction
30 June
2010
% of
actual cost to budget
Percentage of completion
Accumulated
capitalised
borrowing cost
Borrowing
cost
capitalised
In Jan.-Jue.2010
Weighted average interest rate
Sources of fund
Land formation and dredging projects for berth 2# -3# at Machong Port
321,778,940
236,230,716
227,471
-
-
236,458,187
73%
73%
6,534,010
227,471
2.5-4.779%
Self Funding and loan
Berth 2# and 3#, Machong Port
304,522,494
260,324,130
8,884,846
-
-
269,208,976
88%
88%
3,173,406
457,844
2.5-4.779%
Self Funding and loan
MQ2535/4025 RTGs
71,680,000
40,988,241
18,029,062
(38,036,086)
-
20,981,217
82%
82%
643,304
29,063
2.5-4.779%
Self Funding and loan
Berth 4# - 5#, Machong Port
9,006,200
3,793,592
100,000
-
-
3,893,592
43%
43%
-
-
2.5-4.779%
Self Funding
Others
59,708,105
34,293,883
10,527,305
(8,049,536)
(1,291,044)
35,480,608
-
-
122,172
-
Self Funding and loan
575,630,562
37,768,684
(46,085,622)
(1,291,044)
566,022,580
10,472,892
714,378SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
46
5 Notes to the consolidated financial statements (continued)
(14) Construction in progress (continued)
(b)
As at 30 June 2010, the progresses for significant constructions are analysed as below:
Progress
Notes
Land formation and dredging projects for berth 2# - 3# at Machong Port
Buildings partially completed, port nearly completed. Project not checked and accepted
Progress is estimated basing on
injection vs budget
Berth 2# and 3#, Machong Port
Buildings partially completed, port nearly completed. Project not checked and accepted
Progress is estimated basing on
injection vs budget
MQ2535/4025 RTGs
Machinery partially arrived and under installment, partially in transit
Progress is estimated basing on
injection vs budget
Berth 4# - 5#, Machong Port
In prophase survey and flattening
Progress is estimated basing on
injection vs budget
(15)
Intangible assets
31 December 2009
Current year additions
Current year reductions
30 June
2010
Original cost totals
1,491,145,095
-
-
1,491,145,095
Land use rights – prepaid under lease (a)
1,419,159,549
-
-
1,419,159,549
Land use rights– purchased
19,343,189
-
-
19,343,189
Computer software
18,940,657
-
-
18,940,657
Coastal line use rights
33,701,700
-
-
33,701,700
Accumulated amortization totals
(419,212,000)
(18,880,351)
-
(438,092,351)
Land use rights – prepaid under lease (a)
(400,519,896)
(15,233,677)
-
(415,753,573)
Land use rights– purchased
(1,069,211)
(2,872,222)
-
(3,941,433)
Computer software
(17,005,426)
(362,807)
-
(17,368,233)
Coastal line use rights
(617,467)
(411,645)
-
(1,029,112)
Net book value totals
1,071,933,095
(18,880,351)
-
1,053,052,744
Land use rights – prepaid under lease (a)
1,018,639,653
(15,233,677)
-
1,003,405,976
Land use rights– purchased
18,273,978
(2,872,222)
-
15,401,756
Computer software
1,935,231
(362,807)
-
1,572,424
Coastal line use rights
33,084,233
(411,645)
-
32,672,588
In the first half of 2010, the amortization of intangible assets amounted to RMB18,880,351 (Jan.-Jun.2009: RMB 18,698,420).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
47
5 Notes to the consolidated financial statements (continued)
(15) Intangible assets (continued)
(a) Group has leased from Nanshan Group several plots of land with a total area of 752,699 sq. meters within Chiwan port for a lease term of 20 - 50 years with up-front payments of RMB 684,453,783 made. The lands were injected by Shenzhen Investment Holding Corporation in 1982 as part of the consideration in acquiring the equity interests of Nanshan Group. As the PRC laws prevailing at that time did not provide for a mechanism for the issuance of official certificates of the land use rights, Nanshan Group has not obtained the land use right certificates of the leased land so far.
In June 2003 and September 2004, CCT entered into a land use agreement with Nanshan Group and leased two plots of land, one with an area of 117,827.2 square meters for 40.5 years and the other with an area of 171,089.478 square meters for 39 years, at the consideration of RMB 271,002,558 and RMB 444,832,643 respectively. Also no official certificates for such lands were obtained by Nanshan Group. Correspondingly, the buildings located on such lands have not obtained relevant real estate certificates.
Nanshan Group issued irrevocable and unconditional letters of indemnity to the Group in March 2001, June 2003 and September 2004, undertaking to indemnify the Group against any losses arising from or in connection with the leased land use rights.
The directors of the Company therefore considered there was no significant impairment risk nor any significant contingent liabilities related to the above assets.
The Company realises that Nanshan Group is actively discussing such historical problem with relevant governmental organizations, however, it is not in a position to reliably estimate the time of obtaining relevant certificates.
(16)
Goodwill
31 December
2009
Current year additions
Current year
decreases
30 June
2010
CCT
10,858,898
-
-
10,858,898
The goodwill arose from the acquisition of the minority interests in CCT, being the difference of the additional cost of investment and the Group’s share of the fair value of the identifiable net assets in CCT.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
48
5 Notes to the consolidated financial statements (continued)
(16) Goodwill (continued)
(a)
Impairment
Goodwill allocated to the asset groups or compositions of asset groups of the Group at impairment tests are summarized by operating segments as follows:
30 June 2010
31 December 2009
Loading and unloading business -
Mainland China
10,858,898
10,858,898
The recoverable amount of the asset groups and compositions of asset groups was determined according to the 5-year budget approved by the management, and calculated per cash flow forecasts. Estimated growth rate in cash flow above this 5-year was calculated as follows.
Major assumptions applied in the future cash flow forecast method:
Loading and unloading business – Mainland China
Growth rate
0%
Gross margin
53%
Discount rate
13.2%
The weighted average growth rate that management adopted is consistent with forecasts in relevant industry analysis reports, and did not exceed the long-term average growth rate of various services. Management developed a budgeted gross profit margin according to experience and forecast in market development, as well as the pre-tax interest rate that can reflect the specific risk of relevant asset group or combination of asset group, as discount rate. Such assumptions are applied to analyze the asset group or combination of asset group within relevant operating segment.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
49
5 Notes to the consolidated financial statements (continued)
(17)
Long-term prepaid expenses
31 December 2009
Current year
additions
Current year amortizations
Other
decreases
30 June 2010
Construction expenditure of Tonggu sea-route (a)
60,870,857
-
(922,286)
-
59,948,571
Foresea packing ground
4,832,736
-
(604,092)
-
4,228,644
Cement fender
-
979,000
(16,317)
-
962,683
Improvement to fixed assets under operating leases
129,988
-
(129,988)
-
-
Golf membership
495,915
-
(80,286)
-
415,629
Building decoration
22,083
-
(22,083)
-
-
Others
287,147
-
(233,986)
-
53,161
66,638,726
979,000
(2,009,038)
-
65,608,688
(a) In 2007, the Shenzhen municipal government commenced the construction work of the public sea route connecting Tonggu sea route, Shekou port area, Chiwan port area, Mawan port area, Qianhaiwan port area and Dachanwan port area (“Tonggu Sea Route”). As required by a decision by the government, 60% of construction expenditure would be allocated to the port operators while the remaing 40% born by the government. The port operators in Western Shenzhen port areas were allocated 35% of the total expenditure, and subsequently agreed the portion to each operator, taking into accounts of the factors including the function, waterfront length, berthing ship of each porter etc. The total expenditure of RMB 64,560,000 were allocated to the Group and accounted for as Long term prepaid expenses, being amortized on a straight line basis over 35 years which is the expected useful live of Tonggu Sea Route starting from 2008 when the Tonggu Sea Route was ready for use.
(18)
Other non-current assets
In March 2006, the Company entered into the agreement of “Frame contract for cooperation on usage of quay and land for berth 2# & 5# at Machong Port in Dongguan” with Dongguan Humen Port Administration Commission to purchase a land with an area of 800,000 square meters and area of water with depth of 700 meters from the front of terminal, together with the use right of 1,200 meters coast line, for berth 2# to berth 5# in Dongguan Machong Port at a consideration of RMB 260,000,000. Up to 30 June 2010, the Company has paid the first、second and third installments of the consideration. As parts of land and water area have not been made available for use by the Company, the relevant payments were therefore recognized as other non-current assets.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
50
5 Notes to the consolidated financial statements (continued)
(19)
Deferred tax assets and deferred tax liabilities
(a)
Deferred tax assets before offsetting
30 June 2010
31 December 2009
Deferred
tax assets
Deductible temporary difference and losses
Deferred
tax assets
Deductible
temporary
difference and
losses
Provision for asset impairment
14,339,429
66,522,429
14,289,664
66,296,225
Depreciation of fixed assets and amortization of intangible assets
11,772,483
48,315,832
11,770,601
48,307,278
Deductible losses
3,731,207
13,370,108
9,477,396
39,489,150
Accrued expenses
1,659,888
11,116,079
5,461,258
28,395,034
Pre-operational expenses
1,137,504
10,111,148
1,137,504
10,111,148
Compensation for Pingnan railway
955,277
4,342,170
1,910,555
8,684,341
Others
223,343
1,015,196
241,302
1,096,827
33,819,131
154,792,962
44,288,280
202,380,003
(b)
Deferred tax liabilities before offsetting
30 June 2010
31 December 2009
Deferred tax
liabilities
Taxable temporary difference
Deferred tax
liabilities
Taxable temporary difference
Change in fair value of available for sale equity financial assets recorded in capital surplus
1,093,400
4,970,000
1,324,400
6,020,000SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
51
5 Notes to the consolidated financial statements (continued)
(19) Deferred tax assets and deferred tax liabilities (continued)
(c)
As at 30 June 2010, there were no offsets between deferred tax assets and liabilities (31 December 2009: Nil).
(20)
Provision for impairment of assets
Current year reduction
31 December
2009
Current year
addition
Reverse
Utilized
30 June
2010
Bad debt provisions
2,175,896
-
-
-
2,175,896
Provision for declines in the value of inventories(Note 5(7))
3,396,128
-
-
-
3,396,128
Provision for impairment of long-term equity investments (Note 5(10))
3,128,300
-
-
-
3,128,300
Provision for impairment of fixed assets (Note 5(13))
60,724,201
-
-
(4,200)
60,720,001
69,424,525
-
-
(4,200)
69,420,325SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
52
5 Notes to the consolidated financial statements (continued)
(21)
Short-term borrowings
(a)
Category of short-term borrowings
30 June 2010
31 December 2009
Bank loans - unsecured
850,080,000
777,040,000
All the above bank loans were denominated in HKD. As at 30 June 2010, the balance represented HKD 966,000,000.
As at 30 June 2010, the weighted average interest rate of the short-term borrowings was 0.87% per annum (31 December 2009: 1.59%).
(b)
As at 30 June 2010 and 31 December 2009, there were no due but unpaid short-term borrowings.
(22)
Notes payable
30 June 2010
31 December 2009
Bank acceptance notes
8,866,000
20,466,600
As at 30 June 2010, RMB 8,866,000 had an expected maturity within 1 year (31 December 2009: RMB 20,466,600)。
(23)
Accounts payable
30 June 2010
31 December 2009
Construction amounts payable
173,303,178
193,173,197
Material purchase amounts payable
25,371,478
12,677,330
Service amounts payable
15,398,305
17,975,209
Rental payables
3,932,695
3,051,569
Machinery procurement amounts payable
852,334
416,409
218,857,990
227,293,714
(a)
As at 30 June 2010, the Group did not have any accounts payable balances which were due to parties having 5% or above shareholdings in the Company (31 December 2009: nil).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
53
5 Notes to the consolidated financial statements (continued)
(23) Accounts payable (continued)
(b)
Accounts payable due to related parties:
31 June 2010
31 December 2009
Shenzhen Haiqin Engineering Supervision Co. Ltd. (“Haiqin Engineering”)
9,972,227
10,040,807
Nanshan Group
6,836,983
4,238,999
Xuqin
3,623,885
2,514,454
Cyber Network
-
1,147,398
20,433,095
17,941,658
(c)
As at 30 June 2010, accounts payable with aging over 1 year amounting to RMB 11,607,960 (31 December 2009: RMB 5,224,028) were mainly payable for construction and project management services. As the related construction projects have not been completed yet, the accounts have not been settled. Up to the approval date of these financial statements, there is no significant repayment.
(d)
The following accounts payable balances are denominated in foreign currency:
30 June 2010
31 December 2009
Original currency
Exchange rate
RMB equivalent
Original currency
Exchangerate
RMB
equivalent
USD
7,432
6.83
50,761
107,539
6.83
734,491
HKD
1,849,564
0.88
1,627,616
2,988,369
0.88
2,629,765
1,678,377
3,364,256SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
54
5 Notes to the consolidated financial statements (continued)
(24)
Advances from customers
31 June2010
31 December 2009
Service fee receipt in advance
4,438,391
5,057,162
(a)
As at 30 June 2010, the Group did not have any advance from customers balances which were due to parties having 5% or above shareholdings in the Company (31 December 2009: Nil).
(b)
As at 30 June 2010, no balances of advance from customers were from related parties (31 December 2009: Nil).
(c)
As at 30 June 2010, no balances of advance from customers were aged above 1 year (31 December 2009: Nil).
(d)
As at 30 June 2010, no balances of advance from customers were denominated in foreign currencies (31 December 2009: Nil).
(25)
Employee benefits payable
31 December 2009
Current year additions
Current year reductions
30 June
2010
Wages and salaries, bonuses, allowances and subsidies
35,421,059
61,595,930
(87,758,014)
9,258,975
Staff welfare
-
2,882,426
(2,882,426)
-
Social security contributions
6,261
7,591,718
(7,588,597)
9,382
Including: Medical insurance
-
1,582,080
(1,582,080)
-
Basic pension
-
5,515,818
(5,515,818)
-
Unemployment insurance
-
131,246
(131,246)
-
Employment injury insurance
6,261
177,699
(174,578)
9,382
Generational insurance
-
184,875
(184,875)
-
Defined contribution plan *
125,952
3,052,359
(3,052,359)
125,952
Housing funds
-
5,331,150
(5,331,150)
-
Labor union and employee education funds
7,591,957
3,299,004
(2,085,192)
8,805,769
Others
2
-
-
2
43,145,231
83,752,587
(108,697,738)
18,200,080
* On 3 June 2008, the Group participated in a group defined contribution plan of Nanshan Group approved by Shenzhen government. The above pension contributions were paid into the plan through Nanshan Group.
As at 30 June 2010, employee benefits payable balance did not include default items (31 December 2009: Nil).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
55
5 Notes to the consolidated financial statements (continued)
(25) Employee benefits payable (continued)
Pursuant to the resolution of 9th meeting of the 4th session board of directors on 29 March 2009, it s resolved that the management team will be granted a performance reward scheme basing on the current year net profit and yearly net asset return ratio. The Company has provided RMB 2,932,054 of management reward in the first half of 2010 (Jan.-Jun.2009: nil), which was debited to general and administrative expenses.
(26)
Taxes payable
30 June 2010
31 December 2009
Enterprise income tax payable
24,494,757
54,579,863
Withholding tax payable
18,971,988
18,971,988
Value-added-tax payable
780,474
464,777
Business tax payable
4,852,241
4,320,008
Others
1,826,790
733,211
50,926,250
79,069,847
(27)
Interest payable
31 June 2010
31 December 2009
Interest payable for long-term borrowings that interests are payable by installment and principal at maturity
723,334
492,546
Interest payable for short-term borrowings
-
-
723,334
492,546
(28)
Dividends payable
30 June 2010
31 December 2009
Payable to International Enterprise Co., Ltd.
97,781,630
97,781,630
Payable to Hidoney Developments Co., Ltd.
74,108,184
74,108,184
Public A Shares
30,571,255
-
Public B Shares
58,466,015
-
Nanshan Group
120,510,942
-
381,438,026
171,889,814SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
56
5 Notes to the consolidated financial statements (continued)
(29)
Other payables
30 June 2010
31 December 2009
Refunds of Harbor Construction Fee (*)
62,418,606
65,350,430
Temporary receipts
24,978,422
15,273,141
Security expense payable
14,504,464
12,901,204
Relocation compensation for subway (**)
3,999,234
3,999,234
Rental payable
3,325,000
2,660,000
Deposits received
1,678,014
1,815,175
Insurance indemnity
1,305,459
1,148,358
Due to Nanshan Group
1,278,457
7,752
Service fees
1,272,431
1,438,019
Due to employees
1,103,007
1,194,515
Others
5,301,895
16,377,753
121,164,989
122,165,581
(*) The amount was refunds of Port Construction Fee received by the Company and CCT from Shenzhen Communication Bureau. According to the related circular “Port construction fee supervising method“ issued by the Ministry of Finance, the use of the refunds should be controlled strictly and separately for port facility construction.
(**) The amount was unutilized compensation awarded by Shenzhen Nanshan District government through Nanshan Group pursuant to document SNDTCZ[2008]008# for stacking yards relocation due to municipal railway construction. The balances will be used to offset the expenses occurred in the future stacking yards relocation.
(a)
As at 30 June 2010, except for the amount due to Nanshan Group, the Group did not have any other payables which were due to parties having 5% or above shareholdings in the Company.
(b)
Other payables due to related parties:
30 June 2010
31 December 2009
Due to Mawan companies
15,863,339
2,376,938
Due to Nanshan Group
1,278,457
7,752
Due to COCL
138,650
10,642,043
17,280,446
13,026,733SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
57
5 Notes to the consolidated financial statements (continued)
(29) Other payables (continued)
(c)
As at 30 June 2010, other payables with aging over 1 year amounting to RMB 14,283,059 (2009: RMB 2,761,619) are mainly deposits. As the relevant business keeps running, the amounts have not been settled. Up to the approval date of these financial statements, there was no significant repayment.
(d)
The following other payable balances are dominated in foreign currency:
30 June 2010
31 December 2009
Original currency
Exchange rate
RMB equivalent
Original currency
Exchange rate
RMB equivalent
USD
751,998
6.83
5,136,146
326,184
6.83
2,227,837
HKD
505,368
0.88
444,724
523,548
0.88
460,722
5,580,870
2,688,559
(30)
Current portion of non-current liabilities
30 June 2010
31 December 2009
Current portion of long-term borrowings (a)
281,600,000
167,200,000
Current portion of deferred revenue(Note 5(32))
4,951,750
4,951,750
286,551,750
172,157,750
(a)
Current portion of long-term borrowings
30 June 2010
31 December 2009
Bank borrowings - unsecured
281,600,000
167,200,000
As at 30 June 2010, the balance of current portion of long-term borrowings represented the borrowing of HKD 150,000,000 by the company and the borrowing of HKD 170,000,000 by the subsidiary of the Company, Chiwan Wharf Holding (H.K.) Limited. The borrowing was secured by a standby letter of credit of HKD 170,000,000 issuer by China Minsheng Bank Corp. Ltd. The borrowing does not include overdue but extended balance.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
58
5 Notes to the consolidated financial statements (continued)
(30) Current portion of non-current liabilities
Top five current portion of long-term borrowings:
30 June 2010
31 December 2009
Borrowing beginning
Borrowing ending
Currency
Interest rate (%)
Original
currency
RMB
equivalent
Original
currency
RMB
equivalent
2008.06.25
2011.06.25
HKD
1.45%
11,000,000
9,680,000
-
-
2008.07.22
2011.06.25
HKD
1.45%
139,000,000
122,320,000
-
-
2008.12.05
2010.12.02
HKD
1.33%
170,000,000
149,600,000
190,000,000
167,200,000
281,600,000
167,200,000
(31)
Long-term borrowings
30 June 2010
31 December 2008
Bank borrowings - unsecured(a)
290,400,000
422,400,000
(a)
Top five long-term borrowing
30 June 2010
31 December 2009
Borrowing beginning
Borrowing ending
Currency
Interest rate (%)
Original
currency
RMB
equivalent
Original
currency
RMB
equivalent
Nanyang Commercial Bank
19 October 2009
19 October 2011
HKD
0.71%
150,000,000
132,000,000
150,000,000
132,000,000
Nanyang Commercial Bank
22 July
2008
25 June 2011
HKD
0.67-5.59%
139,000,000
122,320,000
Nanyang Commercial Bank
17 September 2009
17 September 2011
HKD
1.13%
100,000,000
88,000,000
100,000,000
88,000,000
Nanyang Commercial Bank
31 July
2008
25 July 2011*
HKD
1.44-5.30%
80,000,000
70,400,000
80,000,000
70,400,000
Nanyang Commercial Bank
25 June 2008
25 June 2011
HKD
0.66-5.72%
11,000,000
9,680,000
290,400,000
422,400,000
* This loan had an original maturity of 25 July 2010 as well as 55%, namely HKD44,000,000, guarantee by the Company. It was subsequently extended by one year, at the same time the guarantee had been cancelled.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
59
5 Notes to the consolidated financial statements (continued)
(b)
Long-term borrowings are repayable as follows:
30 June 2010
31 December 2009
1 to 2 years
290,400,000
422,400,000
The weighted average interest rate of the long-term borrowings in the first half of 2010 was 0.90% per annum (Jan.-Jun.2009: 2.03%)
(c)
Undrawn committed borrowing facilities
The Group has the following undrawn committed borrowing facilities as at 30 June 2010:
Expiring within 1 year
1,262,400,000
Expiring in 1 to 2 years
400,000,000
Expiring in 2 to 3 years
1,891,134,000
Expiring more than 3 years
102,450,000
3,655,984,000
The undrawn committed borrowing facilities mentioned above would be used for the commitment capital expenditure (Note 8).
As most of the bank borrowings were short-term, as at 30 June 2010, the Group had net current liabilities of RMB 445,792,010. The directors of the Company are confident that the Group can roll over the current borrowings and has sufficient bank borrowing facilities and other financial resources to repay bank borrowings when they fall due. Therefore, the financial statements of the Group for the month ended on 30 June 2010 are prepared on going concern basis.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
60
5 Notes to the consolidated financial statements (continued)
(32)
Other non-current liabilities
30 June 2010
31 December 2009
Deferred revenue
62,309,519
64,785,394
Deferred revenue
31 December 2009
- the portion of current liabilities
4,951,750
- the portion of non-current liabilities
64,785,394
69,737,144
Current year reduction
(2,475,875)
Less: the portion of current liabilities
4,951,750
30 June 2010
62,309,519
Residual useful years
13-14年
Deferred revenue is amortised on a straight-line basis over the expected beneficial period of 20 years and is presented at cost net of accumulated amortisation.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (continued)
(33)
Share capital
31 December 2009
Current year additions / decreases
31 June 2010
Issuance of
new shares
Presented
shares
Shares converted from accumulation fund
Others
Sub-total
Shares with restriction on disposal -
State shares
-
-
-
-
-
-
-
PRC legal person shares
-
-
-
-
-
-
-
Other domestic shares
361,942
-
-
-
232,208
232,208
594,150
Including: Domestic shares of legal person other than the State
-
-
-
-
-
-
-
Natural person shares
361,942
-
-
-
232,208
232,208
594,150
Foreign shares
-
-
-
-
-
-
-
Including: Foreign legal person shares股
Natural person shares
-
-
-
-
-
-
-
361,942
-
-
-
232,208
232,208
594,150
Shares without restriction on disposal -
Common shares in RMB
464,789,805
-
-
-
-
-
464,789,805
Domestically listed foreign shares
179,611,983
-
-
-
(232,208)
(232,208)
179,379,775
Others
-
-
-
-
-
-
-
644,401,788
-
-
-
(232,208)
(232,208)
644,169,580
644,763,730
-
-
-
-
-
644,763,730
Since the share reformation scheme came into effect on 30 May 2006, the non tradable shares became tradable in 1 to 3 years. Up to 30 June 2010, all the shares held by Nanshan Group become tradable (Note 1).
61SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
62
5 Notes to the consolidated financial statements (continued)
(33) Share capital (continued)
31 December 2008
Current year additions / decreases
31 December 2009
Issuance of
new shares
Presented
shares
Shares converted from accumulation fund
Others
Sub-total
Shares with restriction on disposal -
State shares
PRC legal person shares
Other domestic shares
324,608,912
-
-
-
(324,246,970)
(324,246,970)
361,942
Including: Domestic shares of legal person other than the State
324,316,070
-
-
-
(324,316,070)
(324,316,070)
-
Natural person shares
292,842
-
-
-
69,100
69,100
361,942
Foreign shares
-
-
-
-
-
-
-
Including: Foreign legal person shares股
Natural person shares
-
-
-
-
-
-
-
324,608,912
-
-
-
(324,246,970)
(324,246,970)
361,942
Shares without restriction on disposal -
Common shares in RMB
140,473,735
-
-
-
324,316,070
324,316,070
464,789,805
Domestically listed foreign shares
179,681,083
-
-
-
(69,100)
(69,100)
179,611,983
Others
-
-
-
-
-
-
-
320,154,818
-
-
-
324,246,970
324,246,970
644,401,788
644,763,730
-
-
-
-
-
644,763,730SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
63
5 Notes to the consolidated financial statements (continued)
(34)
Capital surplus
31 December 2009
Current year additions
Current year reductions
30 June
2010
Share premium
142,786,083
-
-
142,786,083
Other capital surplus—
Change in fair value of available-for-sale financial assets
- Total (Note 5(8))
6,020,000
-
（1,050,000）
4,970,000
- Deferred tax liabilities (Note 5(19))
(1,324,400)
-
231,000
(1,093,400)
Transfer from the balance of capital surplus recognized under previous accounting system
(2,781,133)
-
-
(2,781,133)
Others
709,605
-
-
709,605
145,410,155
-
(819,000)
144,591,155
31 December 2008
Current year additions
Current year reductions
31 December 2009
Share premium
142,786,083
-
-
142,786,083
Other capital surplus—
Change in fair value of available-for-sale financial assets
- Total(Note 5(8))
4,320,000
1,700,000
-
6,020,000
- Deferred tax liabilities (Note 5(19))
(864,000)
(460,400)
-
(1,324,400)
Transfer from the balance of capital surplus recognized under previous accounting system
(2,781,133)
-
-
(2,781,133)
Others
709,605
-
-
709,605
144,170,555
1,239,600
-
145,410,155
(35)
Surplus reserve
31 December 2009
Current year additions
Current year reductions
30 June 2010
Statutory surplus reserve
355,134,736
28,435,668
383,570,404
Discretionary surplus reserve
-
-
-
355,134,736
28,435,668
383,570,404
31 December 2008
Current year additions
Current year reductions
31 December 2009
Statutory surplus reserve
355,134,736
-
-
355,134,736
Discretionary surplus reserve
-
-
-
-
355,134,736
-
-
355,134,736SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
64
5 Notes to the consolidated financial statements (continued)
In accordance with the Company Law and the Company’s Articles of Association, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the paid in capital. The statutory surplus reserve can be used to make up for the loss or increase the paid in capital after approval.
The Company appropriates discretionary surplus reserve after shareholders’ meeting approves the Board of Director’s proposal. The discretionary surplus reserve can be used to make up for the loss or increase the paid in capital after approval.
Pursuant to the board resolution on 8 April 2010, the Company appropriates 10% of net profit to statutory surplus reserve, namely RMB 28,435,668 (2008: 10% of net profit of 2008 and 2007, RMB 142,010,813 in total), no appropriation to discretionary reserve is provided. This proposal was approved by the annual general meeting of the shareholders on 11th, June, 2010, and has been recorded in this set of financial statements.
(36)
Retained earnings
Jan.-Jun.2010
Jan.-Jun.2009
Amount
Appropriate or distribution %
Amount
Appropriate or distribution %
Opening retained earnings
1,721,028,196
-
1,624,545,217
-
Add: Current year net profit attributable to the equity owners of the parent company
308,963,482
-
200,144,439
-
Less: Appropriation of statutory reserves
(28,435,668)
-
-
-
Common share dividends payable
(209,548,212)
50%
(322,381,865)
50%
Reserve offsetting losses
-
-
-
-
Closing retained earnings
1,792,007,798
1,502,307,791
As at 30 June 2010, included in the undistributed profits, the amount of RMB 462,317,849 is subsidiaries’ surplus reserve attributable to the Company (30 June 2009: RMB 460,621,058), among which nothing is appropriated for the first half year (Jan.-Jun.2009: nil).
In accordance with the resolution at the Shareholder’s meeting dated on 9 April 2009, the Company paid the dividends of RMB 5 for each 10 shares of the issued shares as at 31 December 2008 which was 644,763,730 in total, with an aggregated amount of RMB 322,381,865 to the shareholders.
In accordance with a resolution at the Board of Directors meeting dated 8 April 2010, the Board of Directors proposed dividend of RMB 3.25 for each 10 shares of the issued shares as at 31 December 2009 which was 644,763,730 in total, with an aggregated amount of RMB 209,548,212. The proposed dividend was approved by the annual general meeting of the shareholders on 11th, June, 2010, and has been recorded as liability as at 30 June 2010.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
65
5 Notes to the consolidated financial statements (continued)
(37)
Minority interests
30 June 2010
31 December 2009
CCT
686,157,907
567,608,774
(38)
Revenue and cost of sales
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from main operations
809,922,098
690,973,171
Revenue from other operations
23,839,787
23,384,969
833,761,885
714,358,140
Jan.-Jun.2010
Jan.-Jun.2009
Cost of main operations
333,013,099
336,432,750
Cost of other operations
3,876,991
5,271,433
336,890,090
341,704,183
(a)
Revenue and cost from main operations
Analysis by business is as follows:
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from
main operations
Cost from main
operations
Revenue from
main operations
Cost from main
operations
Loading and unloading services
757,020,116
314,985,173
612,395,512
288,238,773
Transportation service
70,188,863
38,870,144
96,006,908
68,224,145
Agency and others services
3,555,337
-
2,600,919
-
Elimination
(20,842,218)
(20,842,218)
(20,030,168)
(20,030,168)
809,922,098
333,013,099
690,973,171
336,432,750SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
66
5 Notes to the consolidated financial statements (continued)
(38) Revenue and cost of sales (continued)
(a) Revenue and cost from main operations (continued)
Analysis by geographic area is as follows:
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from
main operations
Cost from main
operations
Revenue from
main operations
Cost from main
operations
Mainland China
808,068,595
333,013,099
689,565,053
336,432,750
Hong Kong
1,853,503
-
1,408,118
-
809,922,098
333,013,099
690,973,171
336,432,750
(b)
Other revenue and cost
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from
other operations
Cost from other
operations
Revenue from
other operations
Cost from other
operations
Lease income
7,769,043
1,265,627
7,256,445
1,554,909
Security fee
5,592,274
-
4,760,147
-
Other logistic services in port
3,782,631
223,312
3,493,280
808,553
Agency fee
2,236,507
1,183,204
2,168,896
936,041
Sales of material
690,565
-
430,636
-
Containers management fee
-
-
985,300
-
Parking lot income
-
-
377,499
708,521
Documentation fee
300,535
-
258,789
-
Others
3,468,232
1,204,848
3,653,977
1,263,409
23,839,787
3,876,991
23,384,969
5,271,433
(c) Particulars of revenue from the top five customers of the Group
Revenue from the top 5 customers with aggregate amount of 521,509,348 (Jan.-Jun.2010: RMB 447,313,484) accounted for 62.5% (Jan.-Jun.2009: 62.6%) of the Group’s total revenue. Details are as follows:
Revenue
% of total revenue
of the Group
Customer A
235,154,032
28.2%
Customer B
176,746,117
21.1%
Customer C
39,802,571
4.8%
Customer F
38,278,166
4.6%
Customer G
31,528,462
3.8%
521,509,348
62.5%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
67
5 Notes to the consolidated financial statements (continued)
(39)
Tax and surcharges
Jan.-Jun.
2010
Jan.-Jun.
2009
Accrual
basis
Business tax
28,739,075
24,394,461
See Note 3
City maintenance and construction tax
994,959
263,312
See Note 3
Educational surcharge
46,444
38,552
See Note 3
Others
116,842
170,292
29,897,320
24,866,617
(40)
Financial (income)/expenses - net
Jan.-Jun.
2010
Jan.-Jun.
2009
Interest expenses -Interests on borrowings
6,132,898
12,700,809
Less: interest income
(2,825,461)
(3,319,655)
Exchange gains
668,086
680,905
- Exchange gains from operating
activities
668,086
680,905
Others
940,177
476,729
4,915,700
10,538,788
* Relevant forward contract was completed in 2008. There was no similar transaction in 2009.
(41)
Investment income
Jan.-Jun.2010
Jan.-Jun.2009
Investment income from investments under cost method of accounting
-
7,270,550
Investment income from investments under equity method of accounting (Note 5 (10)(a))
54,339,534
25,678,050
Loss from disposal of long-term investment
29,767,257
-
Income from available-for-sale financial assets
310,000
-
Sold the subsidiary
-
(1,741,108)
84,416,791
31,207,492
There is no significant restriction in receipt in remittance for investment income.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
68
5 Notes to the consolidated financial statements (continued)
(41) Investment income (continued)
(a)
Investment income from long-term equity investments under cost method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are analysed as below:
Jan.-Jun.2010
Jan.-Jun.2009
Reason of fluctuation
China Ocean Shipping Agency (Shenzhen) Company Limited
-
7,270,550
The investee did not appropriate profit to shareholders this year
(b)
Investment income from long-term equity investments under equity method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are analyzed as below:
Jan.-Jun.2010
Jan.-Jun.2009
Reason of fluctuation
MPIL
56,400,106
28,826,272
Increase in performance
Cyber Network
939,805
1,485,854
Decrease in performance
CMML
(3,000,377)
(4,634,076)
Increase in performance
54,339,534
25,678,050
(42)
Impairment (reversals) / losses
Jan.-Jun.2010
Jan.-Jun.2009
Impairment losses for bad debts
-
(651,536)
Impairment losses on fixed asset
-
-
Impairment losses on long-term investment
-
-
-
(651,536)SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
69
5 Notes to the consolidated financial statements (continued)
(43)
Non-operating income
Jan.-Jun.2010
Jan.-Jun.2009
Gain on disposal of non-current assets
2,008,173
6,702,553
Including:disposal of fixed assets
2,008,173
6,702,553
Government grant (a)
344,690
1,000,000
Others
116,311
133,730
2,469,174
7,836,283
(a)
Details of government grants
Jan.-Jun.2010
Jan.-Jun.2009
Subsidy in environmental conservancy project
-
1,000,000
Special award of water saving
344,690
-
344,690
1,000,000
(44)
Non-operating expenses
Jan.-Jun.2010
Jan.-Jun.2009
Losses on disposal of non-current assets
57,458
97,859
Including: disposal of fixed assets
57,458
97,859
Donation
6,000
61,000
Penalty expenditure
-
28,850
Others
41,899
162,714
105,357
350,423SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
70
5 Notes to the consolidated financial statements (continued)
(45) Income tax expenses
Jan.-Jun. 2010
Jan.-Jun. 2009
Current income tax
55,289,972
33,061,710
Deferred income tax
10,649,149
3,181,983
65,939,121
36,243,693
The reconciliation from income tax calculated based on applicable tax rate and total profit presented in the consolidated financial statements to the income tax expenses is as follows:
Jan.-Jun. 2010
Jan.-Jun. 2009
Profit before income tax
493,451,736
327,514,639
Income tax calculated at the applicable tax rate of 22% (2009: 20%)
108,559,382
65,502,928
Effect of tax holidays
(27,093,995)
(24,423,891)
Income not subject to tax
(15,491,694)
(6,241,498)
Effect of different tax rate in other tax jurisdictions
(34,572)
(9,524)
Tax losses of subsidiaries for which no deferred income tax asset as recognised
-
209,608
Withholding tax (a)
-
1,206,070
Costs and expenses not deductible for tax purposes
-
-
Income tax expenses
65,939,121
36,243,693
(a) Withholding income tax was accrued at the rate of 5% or 10% for dividend payable to WHK for the year ended 31 December 2009, declared by those Group’s PRC subsidiaries of which WHK is a shareholderSHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
71
5 Notes to the consolidated financial statements (continued)
(46) Earning per share
(a)
Earnings per share - basic
Basic earning’s per share is calculated by dividing the profit attributable to shareholders of the Company by the weighted average number of ordinary shares in issue during the year.
Jan.-Jun. 2010
Jan.-Jun. 2009
Consolidated profit attributable to shareholders of the Company
308,963,482
200,144,439
Weighted average number of ordinary shares in issue
644,763,730
644,763,730
Basic earnings per share
0.479
0.310
Includes:
- Basic earnings per share from continuing operations:
0.479
0.310
(b) Earnings per share - diluted
The Company had not potential dilutive outstanding equity instruments issued as at Jan.-Jun. 2010 and 2009, accordingly the diluted earnings per share are the same as the basic ones.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
72
5 Notes to the consolidated financial statements (continued)
(47) Other comprehensive income
Jan.-Jun. 2010
Jan.-Jun. 2009
Gain/(loss) arising from available-for-sale financial assets
(1,050,000)
910,000
Less: Income tax relating to available-for-sale financial assets
231,000
(182,000)
Subtotal
(819,000)
728,000
Exchange differences arising from translating foreign operations
282
-
Subtotal
282
-
Loss from effective hedging portion of cash flow hedging instruments
-
-
Less: Income tax relating to cash flow hedging instruments
-
-
Subtotal
-
-
Others
-
-
Subtotal
-
-
(818,718)
728,000SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
73
5 Notes to the consolidated financial statements (continued)
(48) Notes to consolidated cash flow statements
(a) Cash received relating to other operating activities
Jan.-Jun. 2010
Jan.-Jun. 2009
Refunds of Harbor Construction Fee received by CCT
(981,521)
11,780,460
Interest income
3,059,031
3,571,212
Government grant
344,690
-
Others
5,754,973
2,436,962
8,177,173
17,788,634
(b) Cash paid relating to other operating activities
Jan.-Jun. 2010
Jan.-Jun. 2009
Collection and payment on others behalf
8,645,922
(6,090,752)
Lease expenses
172,853
140,995
Office expenses & utilities
7,450,339
6,633,041
Port expenses
3,143,587
4,599,695
Car expenses
1,991,373
1,682,908
Entertainment expenses
2,430,689
2,207,503
Asset insurance fee
1,954,592
2,060,000
Consulting & auditing fee
2,076,638
1,723,684
Travel & accommodation
1,559,967
1,390,894
Advertisements & exhibition expense
319,691
443,968
Others
10,753,160
5,163,867
40,498,811
19,955,803SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
74
5 Notes to the consolidated financial statements (continued)
(49) Notes to consolidated cash flow statements
(a)
Notes to consolidated cash flow statements
Reconciliation from the net profit to the cash flows from operating activities
Jan.-Jun. 2010
Jan.-Jun. 2009
Net profit
427,512,615
291,270,946
Add: (Provisions for)/reversal of assets impairment
-
(651,536)
Depreciation of fixed assets
89,525,942
86,834,860
Depreciation/amortization of
investment property
453,552
443,774
Amortization of intangible assets
18,880,351
18,698,420
Amortization of long-term prepaid
expenses
2,009,038
1,977,279
Gains on disposal of fixed assets and
intangible assets
(1,950,715)
(6,604,694)
Losses on scrapping of fixed assets
-
-
Finance expenses/(income)
5,703,729
11,625,664
Investment (income)/lose
(84,416,791)
(31,207,491)
Increase in deferred tax assets
10,469,149
3,181,982
Decrease/(increase) in inventories
754,301
253,052
(Increase)/decrease in operating
receivables
(34,928,208)
(59,488,948)
Increase/(decrease) in operating
payables
(56,425,726)
(22,268,373)
Net cash flows from operating activities
377,587,237
294,064,935
Net increase/(decrease) in cash and cash equivalents
Jan.-Jun. 2010
Jan.-Jun. 2009
Cash at end of year
1,108,008,730
594,205,455
Less: cash at beginning of year
741,096,267
641,475,910
Net increase/(decrease) in cash
366,912,463
(47,270,455)SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
75
5 Notes to the consolidated financial statements (continued)
(49) Notes to consolidated cash flow statements (continued)
(b)
Cash and cash equivalents
30 June 2010
31 December 2009
Cash
Including: Cash on hand
19,290
18,372
Cash at bank without restriction
1,106,731,987
739,898,740
Other cash balance without restriction
1,257,453
1,179,155
Cash and cash equivalents at end of year
1,108,008,730
741,096,267SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
76
6 Segment information
The management of the Company assesses the operating performance of load and unload operation, transportation, agency services and others respectively.
The management of the Company identifies reviews the group internal reports regularly in order to assess their performance and make decisions of resources being allocated to the segment, which is the foundation of the Group identifying operation segments.
The management of The Group evaluates the group operating performance on types of businesses and geography respectively. For types of businesses, the management evaluates the operating performances of loaded and unloaded operation, transportation and agency service and other services. Besides, the management evaluates the operation performance of agency service and other services in Mainland China and Hong Kong.
Inter-segment transfers are measured by making reference to the sales to third parties. Expenses indirectly attributable to each segment are allocated among the segments based on the proportion of segment revenue.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
77
6 Segment information (continued)
(a)
Segment information as at and for the period ended 30 June 2010 is as follows:
Load and
unload operation
Transportation
Agency service
and others
Unallocated
Elimination
Total
Revenue
780,859,901
70,188,864
3,555,338
-
(20,842,218)
833,761,885
Including: revenue from external customers
780,859,901
49,346,646
3,555,338
-
-
833,761,885
Inter-segment revenue
-
20,842,218
-
-
(20,842,218)
-
Operating expenses
385,506,207
43,972,814
2,509,668
15,944,286
(20,842,218)
427,090,757
Operating profit
451,753,800
26,216,050
28,752,355
(15,634,286)
-
491,087,919
Assets
5,326,921,672
198,893,451
94,401,502
339,668,995
(27,098,676)
5,932,786,944
Liabilities
474,978,262
16,110,941
166,948,988
1,664,110,214
(27,098,676)
2,295,049,729
Depreciation and amortization
102,805,827
8,000,228
62,828
-
-
110,868,883
(Reversals)/loss on asset impairment
-
-
-
-
-
-
Capital expenditures
46,575,956
346,141
7,898
-
-
46,929,995SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
78
6 Segment information (continued)
(b)
Segment information as at and for the period ended 30 June 2010 is as follows:
Load and unload operation
Transportation
Agency service and others
Unallocated
Elimination
Total
Revenue
635,163,208
96,370,824
3,015,456
-
(20,191,348)
714,358,140
Including: revenue from external customers
635,163,208
76,179,476
3,015,456
-
-
714,358,140
Inter-segment revenue
-
20,191,348
-
-
(20,191,348)
-
Operating expenses
347,593,293
75,123,827
2,787,080
20,224,001
(20,191,348)
425,536,853
Operating profit/(loss)
316,396,187
21,246,997
2,609,596
(20,224,001)
-
320,028,779
Assets
4,548,380,262
225,314,065
162,312,566
282,742,381
(34,723,702)
5,184,025,572
Liabilities
252,817,033
19,200,608
26,380,187
1,627,861,244
(34,723,702)
1,891,535,370
Depreciation and amortization
95,982,414
11,690,723
231,300
-
-
107,904,437
Loss/(reversals) on asset impairment
(651,536)
-
-
-
-
(651,536)
Capital expenditures
122,360,603
11,070,666
1,267,353
-
-
134,698,622SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
79
6 Segment information (continued)
The Group’s revenue from external customers of Mainland China and other countries or geographical areas for Jan.-Jun. 2010, and the total non-current assets other than financial assets and deferred tax assets located in the Mainland China and other countries or geographical areas as at 30 Jun 2010 are as follows:
Revenue from external customers
Jan.-Jun.2010
Jan.-Jun.2009
Mainland PRC
831,908,382
712,912,982
Hong Kong
1,853,503
1,445,158
833,761,885
714,358,140
Total non-current assets other than financial assets and deferred tax assets
30 June 2010
31 December 2009
Mainland PRC
4,403,492,537
4,482,949,170
Hong Kong
20,476
25,439
4,403,513,013
4,482,974,609
The revenues of RMB 521,509,348 of load and unload operation segment are derived from top 5 customers, represent 62.5% of the Group’s total revenue.
7 Related parties and related party transactions
(1)
The parent company
(a)
General information of the parent company
Entity type
Place of registration
Legal
representative
Nature of business
Organization
code
Nanshan Group
Sino-foreign invested enterprise
Shenzhen
Fu Yuning
Land development, port service and transportation, industry and commerce, tour, real estate and others
61883297-6
Nanshan Group is the ultimate controlling party of the Group.
(b)
Registered capital and changes in registered capital of the parent company
31 December 2009
Current year additions
Current year decreases
30 June 2010
Nanshan Group
500,000,000
-
-
500,000,000SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
80
7 Related parties and related party transactions (continued)
(1) The parent company (continued)
(c)
The proportion of interests and voting rights in the Company held by the parent company
30 June 2010
31 December 2009
% interest held
% voting rights
% interest held
% voting rights
Nanshan Group
57.51%
57.51%
57.51%
57.51%
(2)
Subsidiaries
The general background and other related information of the subsidiaries is set out in Note 4.
(3)
Associates
The general background and other related information of the associates is set out in Note 5(11).
(4)
Other related parties
Relationship with the Group
Organization code
CPSB
A fellow subsidiary of the Company
61883389-9
Shenzhen Chixiao Engineering Construction Co. Ltd. (“Chixiao Engineering”)
A fellow subsidiary of the Company
61883136-7
Haiqin Engineering
a subsidiary of the shareholder of the parent company
61888000-1
Mawan companies (SMW, SMP, SMT)
Indirect associates of the Company, and common key management personnel with the Company
74322579-6
74322582-5
74322581-7
Cyber Network
Associate of the Company
73207614-X
MPIL
Indirect associate of the Company
Not applicable
Xuqin
Controlled by the same parent company
70845749-5
Nantian Oilmills
Common key management personnel with the Company
61881614-0
CMML
Associate of the Company
75045115-0
Shenzhen Southsea Grains Industries Limited (“Southsea Grains”)
Common key management personnel with the Company
61883769-7
COCL
A fellow subsidiary of the Company
72616516-2SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
81
7 Related parties and related party transactions (continued)
(5)
Related party transactions
Saved for disclosed in above, other major related party transactions are as follows:
(a)
Services provided or received
Jan.-Jun. 2010
Jan.-Jun. 2009
Related party
Type of transaction
Nature of transaction
Policies and determination procedures
Amount
% of total transaction
Amount
% of total transaction
Nantian Oilmills
Service received
Loadand unload service
Negotiation
1,453,185
0.58%
1,732,222
0.77%
Cyber Network
Service received
Network service
Negotiation
1,921,430
100%
2,150,750
100%
Xuqin
Service received
Construction
Negotiation
360,000
4.64%
76,695
0.66%
Nantian Oilmills
Loadand unload service
5,375,660
0.75%
6,814,345
1.18%
Mawan companies
Service provided
Transportation service
Negotiation
8,015,081
16.24%
6,530,811
14.65%
Southsea grains
Service provided
Loadand unload service
Negotiation
1,067,316
0.15%
917,761
0.15%
CPSB
Service provided
Loadand unload service
Negotiation
96,217
0.01%
345,150
0.06%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
82
7 Related parties and related party transactions (continued)
(5) Related party transactions (continued)
(b)
Lease
The related parties’ pricing policies on lease of container yards and office land and buildings from Nanshan Group, Nantian Oilmills and CPSB are based on negotiation.
Lessor
Lessee
Jan.-Jun. 2010
Jan.-Jun. 2009
Leased assets
Start end
Ending date
Nanshan Group
Entities of the
Group
20,997,382
22,930,453
Land, buildings and packing yards
various
Respective expiry
of operation of the
group companies
Nantian Oilmills
CGCL
1,453,185
-
Packing yards
Mar 2010
March 2010
CPSB
The Company
852,400
843,347
Land and buildings
Jan 2010
Decrmber 2009
23,302,967
23,773,800
In Jan.-Jun. 2010, the operating lease payment to related parties accounted for 81.86% of total operating lease payment (Jan.-Jun. 2009: 74.34%).
The Group lease buildings or others to related parties at negotiated price.
Lessor
Lessee
Leased assets
Leased asset value
Start date
Ending date
Lease income
Lease income recognition basis
Lease income impact to the Group
CCT
Southsea Grains
Office land
17,757,591
2010.01.01
2011.12.31
2,132,690
Agreed beneficiary period
Less than 1% of the netprofit of the group
CCT
CMML
Crane
1,716,610
2006.05
Not applicable
400,000
Agreed beneficiary period
Less than 1% of the netprofit of the group
The Company
Haiqin Engineering
Building
1,906,000
2010.01.01
2010.12.31
132,000
Agreed beneficiary period
Less than 1% of the netprofit of the group
2,664,690SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
83
7 Related parties and related party transactions (continued)
(6)
Receivables from and payables to related parties
30 June 2010
31 December 2009
Accounts receivable
Southsea Grains
1,245,557
1,281,446
Mawan companies
1,564,600
1,141,315
Nantian Oilmill
830,063
685,274
3,640,220
3,108,035
Other receivables
COCL(a)
-
13,090,624
CMML
1,911,230
1,408,328
Xuqin
320,000
320,000
Mawan companies
972,146
237,072
CPSB
135,622
135,622
3,338,998
15,191,646
Long-term receivables
MPIL(Note 5(9))
108,037,599
108,037,599
Accounts payables
Haiqin Engineering
9,972,227
10,040,807
Nanshan Group
6,836,983
4,238,999
Xuqin
3,623,885
2,514,454
Cyber Network
-
1,147,398
20,433,095
17,941,658
Other payables
Mawan companies(b)
15,863,339
2,376,938
Nanshan Group
1,278,457
7,752
COCL(a)
138,650
10,642,043
17,280,446
13,026,733
(a) COCL was a subsidiary of the Company and sold to Nanshan Group in 2009, after which it became a related party of the Company. The current account balances represented those unsettled amount relating to relevant business at the disposal of COCL.
(b) The Company cooperates with Mawan companies in marketing promotion activities. Some common expenses incurred in the cooperation are allocated to both parties based on certain reasonable criteria. For those payments and receipts made on behalf, the Company and Mawan companies recorded the amounts in other receivables or other payables.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
84
8 Commitments
(1)
Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but not yet necessary to be recognised on the balance sheet are as follows:
30 June 2010
31 December 2009
Land and coastal line use rights
181,991,051
181,991,051
Harbour facilities
76,721,491
5,645,000
Buildings
15,559,061
19,022,361
Machinery and equipments
7,464,331
46,526,056
Others
13,216,907
993,942
294,952,841
254,178,410
(2)
Operating lease commitments
The future aggregate minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows:
30 June 2010
31 December 2009
Within one year
13,735,206
5,575,703
Between 1 and 2 years
3,756,800
2,037,141
Between 2 and 3 years
1,000,000
1,158,741
More than 3 years
-
2,523,069
18,492,006
11,294,654
(3)
Implementation of prior period commitments
The Group has fulfilled the capital and operating lease commitments as of 31 December 2009 based on the relevant contracts.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
85
9 Discontinued operation
None.
10 Events after the balance sheet date
Significant events after balance sheet date
Item
Contents
Impact to financial position and operation results
Reason of inability to estimate
Purchase of long-term equity investments
Purchase of 40% of the COHA’s equity interest
Asset and owner’s equity
Increase by RMB749,655,300
Not applicable
The Company has signed Agreement for Acquiring Increased Registered Capital (referred to as agreement for increased registered capital) with China Overseas port investment Co., LTD (referred to as China Overseas port investment in the following) and Shenzhen China Port Logistics Co., LTD (referred to as China port logistics) and China Harbor (Laizhou) Co., LTD (referred to as China Harbor) , while signed China harbour joint venture management contract (referred to as joint venture contract) with China Overseas port investment and China port logistics.In Accordance with agreement for increased registered capital and joint venture contract, the company will contribute seven hundred forty nine million six hundred fifty five thousand three hundred Yuan (RMB RMB 749,655,300 )to China Harbor occupying 40% shares. The investment fund will be paid on August 2010.
11 Assets and liabilities measured at fair value
31 December 2009
Current year fair value changes in profit or loss
Current year fair value changes in
equity
Impairment provision
made during the year
30 June 2010
Financial assets -
Available-for-sale financial assets
7,140,000
(1,050,000)
-
-
6,090,000
12
Financial assets and liabilities denominated in foreign currency
31 December 2009
Impairment provision made during the year
30 June 2010
Financial assets -
Loans and receivables
215,136,746
-
351,917,350
Financial liabilities
1,373,185,361
-
1,430,062,581SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
86
13 Notes to the Company’s financial statements
(1)
Accounts receivable
30 June 2010
31 December 2009
Accounts receivable
16,768,080
9,860,135
Less: provision for bad debts
-
-
16,768,080
9,860,135
(a)
The ageing of accounts receivable is analysed below:
30 June 2010
31 December 2009
Within 1 year
16,768,080
9,860,135
1 to 2 years
-
-
16,768,080
9,860,135
(b)
Accounts receivable are analysed by categories as follows:
30 June 2010
31 December 2009
Book amount
Provision for bad debts
Book amount
Provision for bad debts
Amount
% of total balance
Provision for bad debts
% of balance
Amount
% of total balance
Provision for bad debts
% of balance
Receivables that are individually significant
11,599,855
69.2%
-
-
7,938,914
80.5%
-
-
Receivables that are individually insignificant but are comparatively risky when grouped on the basis of similar credit risk characteristics
-
-
-
-
-
-
-
-
Other insignificant receivables
5,168,225
30.8%
-
-
1,921,221
19.5%
-
-
16,768,080
100%
-
-
9,860,135
100%
-
-
The management classified the five largest accounts receivable as “receivables that are individually significant”. They are all aged within one year and the management considered no provision for bad debts is needed.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
87
13 Notes to the Company’s financial statements (continued)
(1) Accounts receivable (continued)
(c)
As at 30 June 2010,, no bad debt provision has been made for accounts receivable that are individually significant or individually insignificant but comparatively risky when grouped on the basis of similar credit risk characteristics.
(d)
No accounts receivable have been written off during the year.
(e)
As at 30 June 2010, no balances included in above accounts receivable are due from the shareholders of the Company who hold over 5% shares with voting rights (31 December 2009: Nil).
(f)
As at 30 June 2010, the Group’s five largest accounts receivable balances are analysed as follows:
Relationship
with the Group
Amount
Duration
% of total accounts receivable balance
Customer H
Third party
3,746,445
Within 1 year
22.3%
Customer I
Third party
3,137,264
Within 1 year
18.7%
Customer J
Third party
2,059,891
Within 1 year
12.3%
Customer K
Third party
2,000,610
Within 1 year
11.9%
Customer L
Third party
655,645
Within 1 year
4.0%
11,599,855
69.2%
(g)
As at 30 June 2010, there were no balances due from related parties (31 December 2009: Nil).SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
88
13 Notes to the Company’s financial statements (continued)
(2)
Other receivables
30 June 2010
31 December 2009
Loans to subsidiaries
399,968,776
349,668,776
Others
101,425,259
12,281,709
501,394,035
361,950,485
Less: Provision for bad debts
(1,630,429)
(1,630,429)
499,763,606
360,320,056
(a)
The ageing of other receivables is analysed below:
30 June 2010
31 December 2009
Within 1 year
496,088,525
350,364,077
1 to 2 years
1,629,773
9,822,757
2 to 3 years
1,965,308
76,063
3 to 4 years
80,000
439,351
Over 5 years
-
1,248,237
499,763,606
361,950,485
(b)
Other receivables are analysed by categories as follows:
30 June 2010
31 December 2009
Book amount
Provision for bad debts
Book amount
Provision for bad debts
Amount
% of total balance
Provision for bad debts
% of balance
Amount
% of total balance
Provision for bad debts
% of balance
Receivables that are individually significant
497,066,019
99.1%
-
-
360,929,665
99.7%
(1,031,780)
0.3%
Receivables that are individually insignificant but are comparatively risky when grouped on the basis of similar credit risk characteristics
1,551,780
0.3%
(1,551,780)
100%
520,000
0.2%
(520,000)
100%
Other insignificant receivables
2,776,236
0.6%
(78,649)
2.8%
500,820
0.1%
(78,649)
15.7%
501,394,035
100%
(1,630,429)
0.3%
361,950,485
100%
(1,630,429)
0.5%
The management classified the five largest accounts receivable as “receivables that are individually significant”. They are all aged within one year.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
89
13 Notes to the Company’s financial statements (continued)
(2) Other receivables (continued)
(c)
As at 30 June 2010, the bad debt provision for other receivables that are individually significant or individually insignificant but comparatively risky when grouped on the basis of similar credit risk characteristics is made as follows:
Book Amount
Provision for bad debt
% of balance
Reason
ZhennanPacking Holdings Limited
1,031,780
(1,031,780)
100%
(i)
BeijingTonggang Co., Ltd.
520,000
(520,000)
100%
(i)
1,551,780
(1,551,780)
(i) As at 30 June 2010, the above items were all aged above 3 years and bankrupted, thus full provision has been made against them.
(d)
Other receivables that are individually insignificant but comparatively risky when grouped on the basis of similar credit risk characteristics are analysed as follows:
30 June 2010
31 December 2009
Book amount
Provision for bad debts
Book amount
Provision for bad debts
Amount
% of total balance
Provision for bad debts
% of
balance
Amount
% of total balance
Provision for bad debts
% of
balance
Over 5 years
1,551,780
0.3%
(1,551,780)
100%
520,000
0.1%
(520,000)
100%
(e)
None of other receivables were written off during the year.
(f)
As At 30 June 2010, no balances included in above other receivables are due from the shareholders of the Company who hold over 5% shares with voting rights (31 December 2009: Nil).
(g)
The company’s five largest other receivable balances are analysed as follows:
Relationship with the Group
Amount
Duration
% of total other receivables balance
DGW
Subsidiary of the Company
361,500,000
Within 1 year
72.1%
HINWIN DEVELOPMENT LTD
Third party
94,000,000
Within 1 year
18.7%
CSTC
Subsidiary of the Company
37,408,776
Within 1 year
7.5%
WHK
Subsidiary of the Company
3,097,243
Over 1 year
0.6%
CIFA
Subsidiary of the Company
1,060,000
Within 1 year
0.2%
497,066,019
99.1%SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
90
13 Notes to the Company’s financial statements (continued)
(2) Other receivables (continued)
(h)
Other receivables due from related parties are analysed as follows:
30 June 2010
31 December 2009
Relationship
With the Group
Amount
% of total accounts receivables
Provision for bad debt
Amount
% of total accounts receivables
Provision for bad debt
DGW
Subsidiary of the Group
361,500,000
72.1%
-
301,200,000
83.2%
-
CSTC
Subsidiary of the Company
37,408,776
7.5%
-
47,408,776
13.1%
-
WHK
Subsidiary of the Company
3,097,243
0.6%
-
10,229,109
2.8%
-
CIFA
Subsidiary of the Company
1,060,000
0.2%
-
1,060,000
0.3%
-
CPSB
Controlled by the same parent
135,622
0.0%
-
135,622
0.1%
-
403,201,641
80.4%
-
360,033,507
99.5%
-
(3)
Long-term equity investments
30 June 2010
31 December 2009
Subsidiaries (a)
733,088,199
703,088,199
Associates (b)
77,769,333
144,062,648
Other long-term equity investments (c)
17,037,500
17,037,500
827,895,032
864,188,347
Less: provision for impairment loss (d)
(3,128,300)
(3,128,300)
824,766,732
861,060,047
The long-term equity investments of the Company are not subject to restriction on conversion into cash.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
91
13 Notes to the Company’s financial statements (continued)
(3) Long-term equity investments (continued)
(a)
Subsidiaries
Accounting method
Investment cost
31 December 2009
Current year
changes
30 June
2010
Interest %
Voting
right %
Reason of inconsistent interest % and voting right
Provision
For
impairment balance
Provision
for impairment made in current year
Current year
declared cash dividend
Shenzhen Chiwan Terminal Company Limited
Cost method
47,500,000
47,500,000
-
47,500,000
95%
95%
Not applicable
-
-
-
Shenzhen Chiwan International Freight Agency Company Limited
Cost method
5,500,000
5,500,000
-
5,500,000
100%
100%
Not applicable
-
-
-
Shenzhen Chiwan Harbor Container Company Limited
Cost method
70,920,000
70,920,000
-
70,920,000
60%
60%
Not applicable
-
-
-
Shenzhen Chiwan Transportation Company Limited
Cost method
7,000,000
7,000,000
-
7,000,000
75%
75%
Not applicable
-
-
-
Chiwan Wharf Holdings (H.K.) Limited
Cost method
1,070,000
1,070,000
-
1,070,000
100%
100%
Not applicable
-
-
-
Shenzhen Chiwan Shipping and Transportation Company Limited
Cost method
6,000,000
6,000,000
-
6,000,000
60%
60%
Not applicable
-
-
-
Shenzhen Chiwan Trains-Grains Terminal Company Limited
Cost method
33,750,000
33,750,000
-
33,750,000
75%
75%
Not applicable
-
-
-
Chiwan Container Terminal Company Limited
Cost method
421,023,199
421,023,199
-
421,023,199
51%
51%
Not applicable
-
-
-
Dongguan Chiwan Wharf Company Limited
Cost method
65,325,000
65,325,000
-
65,325,000
25%
25%
Not applicable
-
-
-
Dongguan Chiwan Terminal Company Limited
Cost method
45,000,000
45,000,000
30,000,000
75,000,000
25%
25%
Not applicable
-
-
-
703,088,199
30,000,000
733,088,199
-
-
-SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
92
13 Notes to the Company’s financial statements (continued)
(3) Long-term equity investments (continued)
(b)
Associates
Current year additions / decreases
Accounting method
Nitial
Investment
cost
31 December 2009
Additional investment
Share of
net profit
or loss of
associates
Cash dividends announced by associates
Other
equity
changes
30 June 2010
Interest %
Voting
right %
Reason of inconsistent interest % and voting right
Provision
for impairment balance
Provision
for impairment made in current year
Cyber Network
Equity
method
1,875,000
12,489,764
-
939,805
-
-
13,429,569
37.5%
37.5%
Not applicable
CMML
Equity
method
160,000,000
131,572,884
(64,232,743)
(3,000,377)
-
-
64,339,764
20%
20%
Not applicable
144,062,648
(64,232,743)
(2,060,572)
-
-
77,769,333
-
-SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
93
- -
13 Notes to the Company’s financial statements (continued)
(3) Long-term equity investments (continued)
(c)
Other long-term equity investment
Accounting method
Initial
Investment
cost
31 December 2009
Current year additions / decreases
30 June
2010
Interest %
Voting
right %
Reason of inconsistent interest % and voting right
Provision
for impairment balance
Provision
for impairment made in current year
Current year declared cash dividend
China Ocean Shipping Agency (Shenzhen) Company Limited
Cost
method
13,510,000
13,510,000
-
13,510,000
15%
15%
Not applicable
-
Shenzhen Petro-chemical Industry (Group) Company Limited.
Cost
method
3,500,000
3,500,000
-
3,500,000
0.26%
0.26%
Not applicable
(3,117,800)
-
-
Guangdong Guang Jian Group Company Limited
Cost
method
27,500
27,500
-
27,500
0.02%
0.02%
Not applicable
(10,500)
-
-
17,037,500
-
17,037,500
(3,128,300)
-
-
(d) Provision for impairment of long-term equity investments
31 December 2009
Current year additions
Current year decreases
30 June 2010
Other long-term equity investment
-Shenzhen Petro-chemical Industry (Group) Company Limited
(3,117,800)
-
-
(3,117,800)
-Guangdong Guang Jian Group Company Limited
(10,500)
-
-
(10,500)
(3,128,300)
-
-
(3,128,300)SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
94
13 Notes to the Company’s financial statements (continued)
(4)
Operating income and operating cost
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from main operations
79,131,875
55,333,268
Revenue from other operations
4,836,263
4,065,659
83,968,138
59,398,927
Jan.-Jun.2010
Jan.-Jun.2009
Cost from main operations
62,573,536
59,376,451
Cost from other operations
354,283
381,723
62,927,819
59,758,174
(a) Revenue and cost from main operations
Jan.-Jun.2010
Jan.-Jun.2009
Revenue frommain operations
Cost from main operations
Revenue from main operations
Cost from main operations
Load and unload operation
79,131,875
62,573,536
55,333,268
59,376,451
(b) Other revenue and cost
Jan.-Jun.2010
Jan.-Jun.2009
Revenue from
other operations
Cost from
other operations
Revenue from
other operations
Cost from
other operations
Lease income
1,999,985
354,283
1,993,822
381,723
Labor management income
1,862,704
-
-
-
Documentation fee
300,229
-
258,789
-
Sales of materials
290,374
-
223,097
-
Other logistic services in port
82,540
-
141,435
-
Others
300,431
-
1,448,516
-
4,836,263
354,283
4,065,659
381,723SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
95
13 Notes to the Company’s financial statements (continued)
(4) Operating income and operating cost (continued)
(c) Particulars of the top five customers in revenue
Revenue from top five customers of the Company totaled RMB 26,310,353 (Jan.-Jun.2009: RMB33,470,288), which accounted for 31.3% (Jan.-Jun.2009: 56.3%) of the total revenue from main operations. Details are showed as below:
Revenue
% of total revenue from main operations of the Company
Customer H
6,638,824
7.9%
Customer K
6,613,580
7.9%
Customer M
6,274,488
7.5%
Customer N
3,598,348
4.3%
Customer I
3,185,113
3.8%
26,310,353
31.3%
(5)
Investment income
Jan.-Jun.2010
Jan.-Jun.2009
Investment income from investments under cost method of accounting (a)
-
12,692,707
Investment income from investments under equity method of accounting (b)
(2,060,572)
(3,148,222)
Loss from disposal of long-term investment
29,767,257
(2,541,153)
Income from available-for-sale financial assets
310,000
-
Interest income for short-term loans to subsidiaries
4,890,146
2,522,987
32,906,831
9,526,319
There is no significant restriction in receipt in remittance for investment income.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
96
13 Notes to the Company’s financial statements (continued)
(5) Investment income (continued)
(a)
Investment income from long-term investment under cost method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are analysed as below:
Jan.-Jun.2010
Jan.-Jun.2009
Reason of fluctuation
CCT
-
5,422,157
The investee did not appropriate profit to shareholders this period
China Ocean Shipping Agency (Shenzhen) Company Limited
-
7,270,550
The investee did not appropriate profit to shareholders this period
-
12,692,707
(b)
Investment income from long-term investment under equity method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are analysed as below:
Jan.-Jun.
2010
Jan.-Jun.
2009
Reason of fluctuation
Cyber Network
939,805
1,485,854
Increase in performance
CMML
(3,000,377)
(4,634,076)
Increase in performance
(2,060,572)
(3,148,222)SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
97
13 Notes to the Company’s financial statements (continued)
(6) Supplementary information to cash flow statements
(a)
Reconciliation from the net profit to the cash flows from operating activities
Jan.-Jun.2010
Jan.-Jun.2009
Net profit
26,031,412
(7,189,430)
Add: Provisions for assets impairment
-
(651,536)
Depreciation of fixed assets
7,887,155
9,078,137
Depreciation/amortization of investment property
325,378
325,378
Amortization of intangible assets
1,465,775
1,468,795
Amortization of long-term prepaid expenses
135,324
135,324
Gains on disposal of fixed assets and intangible assets
15,735
(10,534)
Finance (income)/expenses
6,819,649
8,604,995
Investment income
(32,906,831)
(9,526,319)
(Increase)/decrease in deferred tax assets
8,926,411
1,697,844
(Increase)/decrease in inventories
(26,316)
(330,019)
(Increase)/decrease in operating receivables
(58,601,495)
(4,363,546)
Increase/(decrease) in operating payables
197,513,012
113,412,604
Net cash flows from operating activities
157,585,209
112,651,693
(b)
Net changes in cash and cash equivalents
Jan.-Jun.2010
Jan.-Jun.2009
Cash at end of year
647,142,458
411,258,714
Less: cash at beginning of year
453,407,958
298,644,660
Net increase/(decrease) in cash
193,734,500
112,614,054SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
98
1
Breakdown of extraordinary gains and losses
Jan.-Jun.2010
Jan.-Jun.2009
Net loss on disposal of non-current assets
1,950,715
6,604,694
Government grants in current year profit
344,690
-
Receivables impairment reversal by individual assessment
-
-
Other non-operating (income)/expenses, net
68,412
881,166
2,363,817
7,485,860
Tax effects
(518,077)
(1,390,265)
Minority interests effects (after tax)
(8,884)
(397,986)
1,836,856
5,697,609
The basis of preparation of net profit before extraordinary gains and losses reconciliation
According to the Interpretation Bulletin on Information Disclosure by Public Companies No [2008] 1 – Extraordinary gains and losses, extraordinary gain and losses are the gain and losses resulted from the transactions/events which are not incurred by the operation of the entity, or, though incurred by the operation, the nature, amounts or the frequency of such transactions/events will lead to a misleading presentation of the normal performance and profitability of the operation of the entity.
2
Return on equity and earnings per share
Earnings per share
Weighted average return on equity (%)
Basic earnings per share
Diluted earnings per share
Jan.-Jun.2010
Jan.-Jun.2009
Jan.-Jun.2010
Jan.-Jun.2009
Jan.-Jun.2010
Jan.-Jun.2009
Consolidated net profit attributable to shareholders of the Company
10.27%
7.14%
0.479
0.310
0.479
0.310
Consolidated net profit excluding non-routine items attributable to shareholders of the Company
10.21%
6.94%
0.476
0.302
0.476
0.302SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
99
3
Notes for significant fluctuation of major accounts in financial statements (continued)
The following represents analysis to financial statements line items with a fluctuation above 30% (inclusive), or take up 5% of total assets as at balance sheet date (inclusive) or 10% of net profit for the reported period (inclusive):
30 June 2010
31 December 2009
Increase /
(decrease)(%)
Cash at bank and on hand
1
1,108,008,730
741,096,267
49.51%
Accounts receivable
2
246,378,085
209,177,364
17.78%
Other receivables
3
106,676,818
21,760,241
390.24%
Fix assets
4
2,170,413,312
2,209,046,448
(1.75%)
Construction in progress
5
566,022,580
575,630,562
(1.67%)
Intangible assets
6
1,053,052,744
1,071,933,095
(1.76%)
Deferred tax assets
7
33,819,131
44,288,280
(23.64%)
Short-term borrowings
8
850,080,000
777,040,000
9.40%
Accounts payable
9
218,857,990
227,293,714
(3.71%)
Taxes payable
10
50,926,250
79,069,847
35.59%
Dividends payable
11
381,438,026
171,889,814
121.91%
Current portion of non-current liabilities
12
286,551,750
172,151,750
66.45%
Long-term borrowings
13
290,400,000
422,400,000
(31.25%)
Other non-current liabilities
14
62,309,519
64,785,394
(3.82%)
Jan.-Jun.2010
Jan.-Jun.2009
Revenue
15
833,761,885
714,358,140
16.71%
Cost
16
(336,890,090)
(341,704,183)
(1.41%)
Investment income
17
84,416,791
31,207,492
170.50%
Income tax
18
(65,939,121)
(36,243,693)
81.93%
(1) The company raised fund for the “Lai zhou” project which led to increase of Cash at bank and on hand.
(2) The volume of business rose and the revenue increased which led to the increase of accounts receivable balance.SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
100
3 Notes for significant fluctuation of major accounts in financial statements (continued)
(3) Due to the document was not approved and issued from the government department, the fund of disposal of 20% of the CMML’s equity interest was not received. The fund was received on 12 July 2010.
(4) The reason is due to some subsidiaries sold part of the assets.
(5) The fluctuation is due to the completion of some projects of DGW and DGT.
(6) The decrease is due to amortization of intangible assets.
(7) The distribution of bonus led to the decrease of deferred tax assets.
(8) The increase of the short-term borrowings is due to raising fund for Lai zhou project.
(9) DGW paid for some construction payment which led to the decease of Accounts payable.
(10) The decrease is due to paying the income tax of 2009
(11) The increase is due to the pronouncement of whacking up dividend on August from the shareholders’ meeting held on June.
(12) The significant increase is due to that the loan which should be repayed before 30 Jun 2011 is increased.
(13) The reason of fluctuation is the same as (12).
(14) The decrease is due to amortization of deferred revenue.
(15) The throughputs’ recover is the mainly reason of the revenue’s growth.
(16) Decrease in cost is mainly due to that some subsidiaries sold part of the assets and the fixed cost such as depreciation and amortization was decreased.
(17) The volume business’ increase of the associated company and selling part of the equity interest is the mainly reason of the investment income’s growth.
(18) Increase in income tax is due to that the income tax rate was raised and part of the berths’ income tax preferential policy was over.
