SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
2012 Annual Report
27 March 2013
2012 Annual Report
I. Important Notes, Contents & Explanation
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management
staff of Shenzhen Chiwan Wharf Holdings Limited (hereinafter referred to as “the Company”)
warrant that this report does not contain any false or misleading statements or omit any material
facts and hereby accept, individually and collectively, responsibility for the factuality, accuracy and
completeness of the contents carried in this report.
Chairman of the Board Mr. Zheng Shaoping, Chief Financial Officer Mr. Zhang Fang and Financial
Manager Ms. Ma Zhihong hereby confirm that the Financial Report in the Annual Report is true,
accurate and complete.
This report has been reviewed and approved at the 5th Session of the 7th Board of Directors.
Independent director Zhang Jianjun did not attend the meeting due to business reason and appointed
Independent director Hao Zhujiang, as his proxy to attend and speak at the meeting on his behalf.
Independent director Zhang Jianjun has given his consents to the full contents of this report.
The Company’s profit distribution preplan upon review and approval of this board session: Based
on the total shares of the Company (644,763,730 shares) as at 31 Dec. 2012, a cash dividend of
RMB 3.63 (tax included) will be distributed for every 10 shares held by shareholders. No bonus
shares will be granted and no capital reserve will be turned into share capital.
This report involves future plans, development strategies and some other forward-looking
statements, which shall not be considered as virtual promises of the Company to investors. And
investors are kindly reminded to pay attention to possible risks.
The Annual Report is written in both English and Chinese. In case of any discrepancy between
the two versions, Chinese version prevails.
According to certain regulations issued by China Securities Regulatory Commission, the
Company needn't to prepare Financial Statements under International Financial Reporting
Standards, and thus all the financial data disclosed in this report were prepared under Chinese
Accounting Standards.
1
2012 Annual Report
Contents
I. Important Notes, Contents & Explanation........................................................................................ 1
II. Company Profile.............................................................................................................................. 5
III. Accounting & Business Highlights ................................................................................................ 7
IV. Report of the Board of Directors .................................................................................................... 8
V. Significant Events .......................................................................................................................... 20
VI. Changes in Share Capital and Particulars about Shareholders .................................................... 25
VII. Directors, Supervisors, Senior Management Staff and Employees ............................................ 29
VIII. Corporate Governance .............................................................................................................. 38
IX. Internal Control ............................................................................................................................ 48
X. Auditor's Report (See attached)..................................................................................................... 52
XI. Documents for Reference ............................................................................................................ 52
2
2012 Annual Report
Explanation
Term Contents
Company, the Company or Chiwan
Refers to Shenzhen Chiwan Wharf Holdings Limited
Wharf
China Merchants Group Refers to China Merchants Group Limited
CMHI Refers to China Merchants Holdings (International) Company Limited
CND Refers to China Nanshan Development (Group) Inc.
Malai Storage Refers to Shenzhen Malai Storage Co., Ltd.
Keen Field Refers to Keen Field Enterprises Limited
State-Owned Assets Supervision and Administration
SASAC of the State Council Refers to
Commission of the State Council
CSRC Refers to China Securities Regulatory Commission
Shenzhen Bureau of China Securities Regulatory
Shenzhen CSRC Refers to
Commission
SZSE Refers to Shenzhen Stock Exchange
“the Company Law” Refers to “the Company Law of the People’s Republic of China”
“the Securities Law” Refers to “the Securities Law of the People’s Republic of China”
“the Articles of Association of Shenzhen Chiwan Wharf
“the Articles of Association” Refers to
Holdings Limited”
“the Stock Listing Rules” Refers to “the Stock Listing Rules of Shenzhen Stock Exchange”
3
2012 Annual Report
Warning of Significant Risks
1. Risk concerning the industry situation
With American and European economies recovering at a rate lower than expected and the
international shipping market staying weak, the foreign-trade container business of the Company
slides obviously. Considering the poor performance of the American and European shipping routes,
the Company has been devoting itself to expansion of the Asian and African routes, as well as the
local cargo sources while trying to maintain basic stability of its key clients and market share
through improving its services.
2. Risk concerning market competition
Along with the gradual release of the capacity of new wharfs in the Pearl River Delta, competition
among wharfs in the region will heat up, with some business irreversibly flowing to these new
wharfs. Base on its rich experiences in wharf operation, stable clients and good services, the
Company is still a strong competitor. In the future, the Company will focus on cooperation with
other competitors in the region, trying to realize positive interaction and avoid vicious competition.
3. Risk concerning rising cost
The price rise of production elements under inflation is affecting the Company’s profit. In particular,
the rising labor cost will impose great pressure on operation of the Company. The Company carries
on with lean management and R&D innovation, as well as putting more effort in the study and
application of new technologies and skills, which relieve the pressure of continually rising cost to
some degree.
Securities Times, Ta Kung Pao and www.cninfo.com.cn were designated by the Company as the
media for information disclosure for 2012. All information of the Company shall be subject to what
is released by the Company on the said media. And Investors are kindly reminded to pay attention
to possible investment risks.
4
2012 Annual Report
II. Company Profile
I. Basic information of the Company
Stock abbreviation Chiwan Wharf A, Chiwan Wharf B Stock code 000022, 200022
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 深圳赤湾港航股份有限公司
Abbr. of the Chinese name of the Company 深赤湾
English name of the Company Shenzhen Chiwan Wharf Holdings Limited
Abbr. of the English name of the Company Chiwan Wharf
Legal representative of the Company Mr. Zheng Shaoping, chairman
Registered address Chiwan, Shenzhen, PRC
Postal code for the registered address 518067
Office address 8/F, Chiwan Petroleum Building, Shenzhen, PRC
Postal code for the office address 518067
Internet website of the Company http://www.szcwh.com
Email address cwh@cndi.com
II. For Contact
Company Secretary Securities Affairs Representative
Name Ms. Bu Dan Ms. Hu Jingjing
Contact address 8/F, Chiwan Petroleum Building, Shenzhen, PRC
Tel. +86 755 26694222 +86 755 26694222
Fax +86 755 26684117 +86 755 26684117
E-mail cwh@cndi.com cwh@cndi.com
III. About information disclosure and where this report is placed
Newspapers designated by the Company for information disclosure "Securities Times" and "Ta Kung Pao”
Internet website designated by CSRC for disclosing this report http://www.cninfo.com.cn
Where this report is placed Secretariat of the Board of Directors
5
2012 Annual Report
IV. Change of the registered information
Registration Registration Business Registration code of Organizational
Query index
date place license No. taxation code
Market
Supervision
Administration of
Initial Chiwan, 440301501 SSDZ No.
19 Jul. 1990 61883296-8 Shenzhen
registration Shenzhen 124494 440301618832968
Municipality
(http://www.szaic.
gov.cn)
CND holds 370,878,000 shares of the Company, representing a shareholding
percentage of 57.52%.
On 17 Sept. 2012, CMHI and CND signed the “Agreement of China Merchants
Holdings (International) Co., Ltd. and China Nanshan Development (Group) Inc.
Concerning Custody of Shares of Shenzhen Chiwan Wharf Holdings Limited”.
According to the Agreement, CND would entrust the management of 370,878,000 A-
shares in the Company (representing a shareholding percentage of 57.52%) to CMHI.
The custody announcement (No. 2012-035) was released on 20 Sept. 2012 on
Securities Times, Ta Kung Pao and www.cninfo.com.cn. Meanwhile, CMHI
indirectly holds 55,314,200 B-shares of the Company (representing a shareholding
percentage of 8.58%) via its wholly-funded subsidiary Keen Field, thereby, China
Changes of the controlling
Merchants Holdings (International) controls 66.10% equity interests of the Company.
shareholder
On 1 Nov. 2012, China Securities Regulatory Commission issued the ZJXK [2012]
No. 1428 Document—“Reply on Approving China Merchants Holdings
(International) Co., Ltd. to Disclose the Acquisition Report on Shenzhen Chiwan
Wharf Holdings Limited and Exempting It from the Tender Offer Duty”, exempting
its tender offer duty due to the entrusted management of 370,878,000 shares of the
Company, which made it the controller of the Company’s 426,192,200 shares in all,
accounting for 66.10% of the Company’s total shares. The relevant announcement
(No. 2012-044) was released on 3 Nov. 2012 on Securities Times, Ta Kung Pao and
www.cninfo.com.cn.
The actual controller of the Company—China Merchants Group—is unchanged after
the said entrustment with share management.
V. Other information
The CPAs firm hired by the Company:
Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Office address 30/F Bund Center, 222 Yan An Road East, Shanghai
Signing accountants Li Weihua, Su Min
6
2012 Annual Report
III. Accounting & Business Highlights
I. Major accounting data and financial indicators
Unit: RMB
Increase or decrease
2012 2011 of this year over last 2010
year
Total operating income 1,783,846,135 1,708,136,899 4.43% 1,740,417,668
Net profit attributable to shareholders
467,103,270 505,645,137 -7.62% 596,680,156
of the parent
Net profit attributable to shareholders
of the parent after extraordinary gains 464,592,323 505,629,810 -8.12% 595,310,399
and losses
Net cash flow from operating activities 698,472,452 746,190,596 -6.39% 926,845,569
Basic EPS (RMB Yuan/share) 0.724 0.784 -7.65% 0.925
Diluted EPS (RMB Yuan/share) 0.724 0.784 -7.65% 0.925
ROE (%) 13.15% 15.19% -2.04% 19.70%
Increase or decrease
As at 31 Dec. As at 31 Dec. As at 31 Dec.
of this year-end than
2012 2011 2010
last year-end
Total assets 6,781,130,450 6,540,228,435 3.68% 6,202,184,742
Total shareholder’s equity attributable
3,678,032,083 3,467,796,751 6.06% 3,239,549,058
to equity holders of the parent
II. Differences between accounting data under domestic and overseas accounting standards
Unit: RMB
Net profit attributable to Net assets attributable to shareholders
shareholders of the parent of the parent
2012 2011 Closing amount Opening amount
According to Chinese accounting
467,103,270 505,645,137 3,678,032,083 3,467,796,751
standards
According to international and overseas accounting standards N/A
III. Items and amounts of extraordinary gains and losses
Unit: RMB
Items 2012 2011 2010
Profit or loss on disposal of non-current assets (1,749,511) (1,889,222) (672,955)
Government grants recognized in profit or loss 494,730 - 1,200,000
Other non-operating income or expenses other than above 5,064,433 1,731,897 1,448,435
Tax effects (251,327) 33,863 (350,605)
Effects of minority interest (after tax) (1,047,378) 138,789 (255,118)
Total 2,510,947 15,327 1,369,757
7
2012 Annual Report
IV. Report of the Board of Directors
I. Overview
The Company is principally engaged in the handling, warehousing and transportation of containers
and bulk cargoes, as well as the provision of related services.
In 2012, the global economy lingered on a low growth rate with a slow recovery. Amid the
disturbance of the sovereign debt crisis, the European economy kept going down. The US economy
saw a recovery, but it’s weak. Japan still suffered from a depressed economy and growth of
emerging economies slowed down. As predicted by WTO, growth of global trade for 2012 was
2.5%, lower than half of the average growth 20 years ago, and the total volume of import and export
of China for 2012 grew 6.2% over last year, down 16.3 percentage points.
Liner companies as a whole gave a lackluster performance. And the container business of the
Company of the year was considerably affected by factors such as the integration and deepening of
the shipping capacity, adjustments to the shipping routes and relocation and transformation of the
manufacture companies in the area around the Company. Restructuring of the Chiwan area led to a
decrease of the container yard resources for bulk cargoes in the Chiwan port area. In view of that,
the Company proactively made use of its internal and external resources, optimized its business
structure and effectively brought up the port operation rates while trying to maintain the stability of
clients.
The Company paid attention to and kept improving services for its clients. It continuously improved
the information system, operation process and production technique. Meanwhile, it was energetic in
promoting R&D innovation, cost reduction and efficiency increase. As a result, some success was
achieved. Due to its effort in utilizing resources in a better way, the overall efficiency of resource
utilization of the Company for 2012 improved.
For the reporting year, the Company achieved a container throughput of 5,311 thousand TEU, down
8.3% as compared with last year. For the same period, the overall container throughput of Shenzhen
grew 1.7%. The container throughput of the Company represented a 23.2% market share of
Shenzhen, down 250 basic points on a year-on-year basis. Chiwan port achieved a throughput of
3,946 thousand TEU, a 4.3% decrease over last year.
Throughout the year, the bulk cargo throughput achieved by the Company was 10,699 thousand
tons, up 15.7% over last year. The bulk cargo throughput achieved by Chiwan port for the year was
almost the same with the previous year, accounting for a 19.5% market share among the three main
bulk cargo wharfs in Shenzhen, down 30 basic points over 2011. And the efforts to expand business
for Machong Port produced a good result. With the input of new resources greatly easing the stress
brought by limited resources, Machong Port achieved an annual throughput of 4,165 thousand tons,
representing a considerable growth of 53.2% on the year-on-year basis.
For the year 2012, the Company achieved a total throughput of 61,533 thousand tons, representing a
decrease of 3.6% over 2011, of which Chiwan Port achieved 57,368 thousand tons, down 6.1% over
2011, accounting for 25.2% of the overall throughput at Shenzhen ports, down by 220 basic points
as compared with 2011.
Business highlights of the Company for the past three years are set out as follows:
8
2012 Annual Report
Business Data 2012 2011 2010
Total throughput (thousand tons) 61,533 63,840 64,174
Among which: Container throughput (thousand TEU) 5,311 5,793 6,147
Chiwan Port 3,946 4,122 4,164
Mawan Port 1,365 1,671 1,958
Throughput of bulk cargo (thousand tons) 10,699 9,251 10,214
Chiwan Port 6,534 6,532 7,987
Machong Port 4,165 2,719 2,227
Hours charged for tow trucks (thousand hours) 1,179 1,231 1,300
Hours charged for tugboats (hour) 31,707 32,121 34,447
In 2012, the Company focused on cost reduction & efficiency increase and lean management.
Through upgrading the container operation system and improving the financial and material
management systems, it provided management tools and technical support for improving
management and promoting lean management. It also effectively controlled growth of the
controllable costs by working on labor cost, operation cost, etc. one by one. At the same time, it
carried out some R&D innovation projects to increase the efficiency and reduce consumption.
Considering changes of the business volume and the revenues, the change of costs of the year was
under effective control.
II. Main business analysis
1. Overview
Unit: RMB
Items 2012 2011 YoY +/-
Total operating income 1,783,846,135 1,708,136,899 4%
Operating profit 737,084,906 816,494,626 -10%
Net profits attributable to shareholders
467,103,270 505,645,137 -8%
of the parent
No significant change occurred to the structures of the main business and profit during the reporting
period.
Operating income increased 4% over last year mainly due to an increased business revenue of bulk
cargoes. Operating profits and net profits attributable to shareholders of the parent decreased 10%
and 8% respectively mainly because ① labor cost and prices of many raw materials went up
considerably from last year; and ② affected by the macro market environment, profits of joint
ventures and associates decreased from last year and the relevant investment income on them
decreased 27% on a year-on-year basis.
9
2012 Annual Report
2. Income
Unit: RMB
Operating Operating
Core business Industry Proportion Proportion
income profit
Load and
Load and unload services unload 1,664,268,714 91% 684,117,661 93%
services
Supporting service for Load and Related road
57,769,316 3% 8,977,801 1%
unload services transportation
Related
Tugboat services 83,351,860 5% 27,768,672 4%
shipping
Agency and others services Agency 19,371,601 1% 16,220,772 2%
Subtotal 1,824,761,491 100% 737,084,906 100%
Elimination (40,915,356)
Total 1,783,846,135 100% 737,084,906 100%
Major customers:
Total sales to the top five customers (RMB Yuan) 1,031,820,012
Ratio of the total sales to the top five customers to the annual total sales (%) 58%
3. Costs
Unit: RMB
2012 2011
Proportion in Proportion in
Industry Item YoY +/-
Amount operating Amount operating
costs costs
Load and unload Load and unload
792,177,702 94% 722,754,928 94% 10%
services services
Supporting service Related road
for Load and unload transportation and 50,589,618 6% 44,151,804 6% 15%
services shipping
Agency and others
Agency 1,834,099 0% 1,133,511 0% 62%
services
Total 844,601,419 100% 768,040,243 100% 10%
4. Expense
Unit: RMB
Item 2012 2011 YoY +/-
Financial expenses 70,763,164 12,370,981 472%
Impairment losses of assets 331,339 251,074 32%
Financial expenses went up mainly because the average interest rate increased and last year, the
exchange earnings had increased due to a Renminbi appreciation of 5% while there was no such an
event this year.
10
2012 Annual Report
Impairment losses of assets increased mainly because provisions for the accounts receivable of this
year increased according to the bad-debt provision policy.
5. Cash flows
Unit: RMB
Item 2012 2011 YoY +/-
Subtotal of cash inflows from operating activities 1,754,822,863 1,681,255,994 4.38%
Subtotal of cash outflows from operating activities 1,056,350,411 935,065,398 12.97%
Net cash flow from operating activities 698,472,452 746,190,596 -6.39%
Subtotal of cash inflows from investing activities 77,630,142 96,963,732 -19.94%
Subtotal of cash outflows from investing activities 592,432,594 806,179,035 -26.51%
Net cash flow from investing activities (514,802,452) (709,215,303) 27.41%
Subtotal of cash inflows from financing activities 2,216,960,000 1,540,990,000 43.87%
Subtotal of cash outflows from financing activities 2,564,602,357 1,871,736,958 37.02%
Net cash flow from financing activities (347,642,357) (330,746,958) 5.11%
Net increase in cash and cash equivalents (163,933,375) (302,931,140) -45.88%
Subtotal of cash inflows from financing activities increased mainly because the Company issued
corporate bonds of RMB 500 million on 26 Apr. 2012 while there had been no such an event last
year.
Subtotal of cash outflows from financing activities increased because mature loans for this year
increased over last year.
III. Breakdown of main business
Unit: RMB
Operating YoY +/- of
YoY +/- of YoY +/- of
Business Operating income Operating costs profit operating profit
income operating costs
margin margin
Load and
1,664,268,714 792,177,702 52.40% 4.45% 9.61% -2.24%
unload services
IV. Asset and liability analysis
1. Major changes of asset items
11
2012 Annual Report
Unit: RMB
As at 31 Dec. 2012 As at 31 Dec. 2011
Proportion
Proportion in Proportion in change
Amount Amount
total assets total assets
Currency funds 314,855,568 4.64% 478,788,943 7.32% -2.68%
Accounts receivable 251,420,961 3.71% 230,797,003 3.53% 0.18%
Inventories 21,325,571 0.31% 23,500,358 0.36% -0.05%
Investment property 33,463,476 0.49% 34,679,229 0.53% -0.04%
Long-term equity
1,544,951,108 22.78% 1,436,856,420 21.97% 0.81%
investments
Fixed assets 2,701,093,453 39.83% 2,482,077,688 37.95% 1.88%
Construction in progress 609,932,609 8.99% 517,818,144 7.92% 1.07%
Currency funds decreased mainly because this year, subsidiaries distributed dividends for the
previous year while there had been no such an event last year.
Construction in progress increased mainly because the Company input funds for Machong projects
as scheduled this year.
2. Major changes of liability items
Unit: RMB
2012 2011
Proportion change
Proportion in total Proportion in
Amount Amount
assets total assets
Short-term
1,180,929,700 17.41% 1,418,830,000 21.69% -4.28%
borrowings
Long-term
150,000,000 2.21% 90,000,000 1.38% 0.83%
borrowings
Bonds payable 496,545,753 7.32% - - 7.32%
The liability items changed mainly because the Company adjusted its loan structure based on its
capital needs and changes of the financial market to rationally arrange financing.
3. Assets and liabilities measured at fair value
12
2012 Annual Report
Unit: RMB
Accumulate
Gain/loss on Sold
d fair value Impairment Purchased
Opening fair value amount Closing
Item changes provided in amount in
balance change in the in the balance
included in the period the period
period period
equity
Financial assets
1. Financial Assets at Fair
Value through Profit or Loss
2. Derivative financial assets
3. Available-for-sale financial
5,690,000 (360,000) 5,210,000
assets
Subtotal of financial assets 5,690,000 (360,000) 5,210,000
Investment property
Bearer biological assets
Other
Total 5,690,000 (360,000) 5,210,000
Financial liabilities
V. Core competitiveness analysis
Upon 30 years of development, the Company has gathered a group of experienced professionals and
an excellent managerial team, with its business management highly recognized by shareholders and
clients. With stable client sources, the Company is considered a leader in the sector in terms of its
business process and operating efficiency. As a mature listed port company in China, the Company
owns an excellent brand and reputation in the market.
Major changes of the Company’s core competitiveness during the reporting period: At the
beginning of 2012, a new tugboat of 5,000 horsepower was put into use, improving the tugboat
service. The Jetty 13# extension project was completed and put into use in Aug. 2012, extending the
deep-water berth line of Chiwan Port by 319 meters and effectively increasing its berthing capacity
for large container ships. Meanwhile, a bonded warehouse—the first phase of the Machong project
was also completed and put into use in Aug. 2012, which partly eased the pressure imposed by
limited warehousing resources and strengthened the regional competitiveness of the wharf.
VI. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
Unit: RMB’000
Investments in external parties
Investment amount in 2012 Investment amount in 2011 +/-%
100,000 220,293 -54.61%
Particulars about investees
13
2012 Annual Report
Proportion of the Company’s
Name of investee Main business investment in the investee’s total
equity interests
China Development Finance Co., Providing clearing, financing and other 20%
Ltd financial services for member units.
(2) Securities investments
Book value Gain/loss
Initial at the end for
Number of Shareholding Number of Shareholding
Variety of Code of Name of investment of the reporting Accounting Source of
shares held at percentage at shares held at percentage at
securities securities securities cost (RMB period period item stock
period-begin period-begin period-end period-end
Yuan) (RMB (RMB
Yuan) Yuan)
Shenzhen
Petro-
chemical Long-term Shares held
Stock 400032 Industry 3,500,000 780,000 0.26% 780,000 0.26% 382,200 - equity by legal
(Group) investment entity
Company
Limited
Guangdong
Guang Jian Long-term Shares held
Stock 400009 Group 27,500 20,000 0.02% 20,000 0.02% 17,000 - equity by legal
Company investment entity
Limited
Shares held
by legal
Available- entity,
Jiang Su
for-sale which is
Stock 600377 Ninghu 1,120,000 1,000,000 0.02% 1,000,000 0.02% 5,210,000 -
financial allowed for
Expressway
assets circulation
after share
reform
Total 4,647,500 1,800,000 -- 1,800,000 -- 5,609,200 - -- --
2. Use of raised funds
Unit: RMB’000
Total raised funds 500,000
Raised funds input in the reporting period 500,000
Accumulative input raised funds 500,000
Raised funds with changed use in the reporting period 0
Accumulative raised funds with changed use 0
Proportion of accumulative raised funds with changed use (%) 0%
General utilization of the raised funds
The Company issued corporate bonds of RMB 500 million in Apr. 2012 and the raised funds have been used to
repay bank loans and supplement the working capital.
14
2012 Annual Report
3. Situations to main subsidiaries and joint stock companies
Unit: RMB
Total
Company Main Registered
Company name Industry shareholders’e Net assets Net profit
variety products/services capital
quity
Non- Handling and
Harbor Division independent Transportation warehousing of N/A 314,282,024 291,496,124 17,274,113
legal entity imported fertilizers
Shenzhen
Handling and RMB 50
Chiwan Terminal Subsidiary Transportation 132,022,293 100,772,441 45,605,009
storage of grains million
Co., Ltd
Shenzhen Loading and
Chiwan Trans- unloading, RMB 45
Subsidiary Transportation 108,218,199 65,591,969 33,400,566
Grains Terminal warehousing and million
Limited packaging of grains
Dongguan
Handling and
Chiwan Wharf RMB 450
Subsidiary Transportation storage of bulk 958,587,470 466,363,165 15,847,348
Company million
cargos
Limited
Shenzhen
Tow truck services
Chiwan RMB 15
Subsidiary Transportation for containers in the 67,442,955 33,654,004 6,609,375
Transportation million
port
Co., Ltd.
Shenzhen
Chiwan Shipping RMB 24
Subsidiary Transportation Tugboat services 155,561,464 51,002,798 20,890,640
& Transportation million
Co., Ltd.
Handling and
China Overseas
Stock- warehousing of
Harbour Affairs USD
participating Transportation petroleum, liquefied 2,181,632,582 1,870,724,051 61,444,116
(Laizhou) Co., 176,407,700
subsidiary products and bulk
Ltd.
cargos
Subsidiaries and joint stock companies affecting the net profit of the Company by 10% or above
Unit: RMB
Main Total
Company Company Registered Operating Operating
Industry products/servi Total assets shareholders’eq Net profit
name variety capital income profit
ces uity
Chiwan
Container Container USD 95.3
Subsidiary Transportation 2,385,775,164 1,263,552,924 1,024,113,811 390,602,582 325,086,973
Terminal handling million
Co., Ltd.
Shenzhen
Chiwan
Container RMB 288.2
Harbor Subsidiary Transportation 715,860,447 446,993,104 262,605,732 155,787,737 133,924,682
handling million
Container
Co. ,Ltd.
Chiwan
Wharf Investment Investment HKD 1
Subsidiary 1,309,550,556 1,145,826,948 - 86,394,298 79,318,918
(Hong holding holding million
Kong) Ltd.
15
2012 Annual Report
VII. Outlook of the Company’s future development
1. Development trend and competition status of the industry in which the Company is engaged
In 2013, macro-economy will still be complicated and recovery of global economy is full of
challenges and uncertainties. Economy, trade and shipping will keep lingering on a low level, but
the overall situation is expected to be better than 2012. Rise of prices of production factors under
inflation will still impose some pressure on operation of the Company, competition among ports in
the area will be the biggest challenge from the market, and bigger and bigger ships and limited
storage resources will still be a problem in 2013.
Shenzhen ports mainly handle containers for foreign trade. Restricted by a weak foreign demand
and the market share bottleneck, the foreign-trade container business will enter a stable period.
Relocation of companies of the Pearl River Delta and industrial upgrading resulted in a slow growth
of cargo sources in the area, but it still has the regional advantage, so its market share will remain
stable.
In the long run, along with the berth expansion and upgrading, the overall berth capacity of the
Company’s container business will increase, together with the throughput. As for the bulk cargo
handling business, Machong Port grows more and more mature, the fertilizer and grain handling
business is expected to show a steady growth, and resource allocation and business assignment
between Chiwan Port and Machong Port will be optimized as response to market changes, laying a
foundation for the sustained development of the Company’s bulk cargo handling business in the
future.
2. Business Plan for 2013
The Company will pay close attention to market changes, analyze trends of the industry and
improve its analysis and judgment. Keeping an open mind, it will proactively deal with the complex
and changeable market environment, take the initiative to alter its strategies so as to seize market
opportunities, and keep an eye on influence of state policy amendments on imported cargos, as well
as increasing the throughput of near-sea lines stimulated by development of emerging Asian
economies. It will also look for cooperation with other ports in the region so as to keep competition
in a healthy condition. It will continue to improve quality of all kinds of service it provides, focus
on its core competitive edge, and maintain stability in core business and with major clients.
The Company is well positioned to push forward cost reduction & efficiency increase and lean
management more deeply and widely. Meanwhile, it will also proceed with cost control, energy
saving & emission reduction, the green port project, etc..
In 2013, the company will pay constant attention on investment orientations for resource and
business integration, continuously improve the investment management capability and monitor well
the investments in the investees to strengthen its ability of risk control.
In 2013, the Company will mainly work on the following construction projects: the first phase of
the Machong Port Project—bulk grain warehouses; and the second phase of the Machong Port
Project—the wharf project. The Company will proceed with the said projects as planned.
16
2012 Annual Report
3. Capital requirements and expenditure plan for 2013
To implement our future development strategies and achieve business goals we have set, a capital
expenditure of RMB 643.75 million is planned for 2013, of which RMB 549.82 million will be
invested in wharf warehouses, RMB 70.77 million in equipments and ships, RMB 6.40 million in IT
and RMB 16.76 million in administration and offices. The above capital expenditures will be mainly
funded by cash inflows from operating activities of the Company and bank borrowings.
VIII. Profit allocation and dividend distribution
1. Formulation, execution or adjustment of the Company’s profit distribution policy, especially the
cash dividend policy
Pursuant to the guiding spirit of the Notice of CSRC on Further Implementing Matters Related to
Cash Dividends of Listed Companies, the Notice of CSRC Shenzhen Bureau on Fully Implementing
the Notice of CSRC on Further Implementing Matters Related to Cash Dividends of Listed
Companies (Shen-Zheng-Ju-Gong-Si-Zi (2012) No. 43), the Company has revised some articles in
its Articles of Association in relation to the profit distribution policy, which involves the specific
policy, the decision-making procedure and mechanism, the adjustment and implementation of the
profit distribution policy, profit distributed to foreign shareholders and other aspects (for the revised
Articles of Association of the Company, see www.cninfo.com.cn). The dividend policy of the
Company is in line with its Articles of Association and the relevant resolution of the Shareholders’
General Meeting, with a clear minimum dividend standard and proportion, as well as a complete
decision-making procedure and mechanism. Independent directors have fulfilled their duty to
express their special opinion that the Company has fully taken into account the requests and opinion
of minority shareholders when it formulates the dividend policy, which has fully protected the legal
interests of minority shareholders. If the Company wants to adjust or alter its dividend policy in the
future, the Board of Directors shall make a special demonstration, explain the reasons for
adjustment in detail and form a written demonstration report. Then independent directors shall
express their opinion. After the adjustment proposal is reviewed and approved by the Board of
Directors, it shall be submitted to the Shareholders’ General Meeting for review. Only with over 2/3
of the voting rights held by shareholders (including proxies) attending the general meeting can the
adjustment proposal be approved. In the whole process, the conditions and procedure will be in
compliance with laws and regulations and transparent. (For details, see the announcement on
resolutions of the 1st special shareholders’ general meeting for 2012 disclosed on 22 Aug. 2012,
with the announcement No. being 2012-031.)
2. Profit distribution plan of the Company for the recent three years (including the reporting year)
(1) Profit allocation and dividend distribution plan for 2010
As audited by PricewaterhouseCoopers Zhong Tian Certified Public Accountants Co., Ltd., the net
profit of the Company (without subsidiaries) for 2010 stood at RMB 381,220,010 and the
cumulative distributable profit at RMB 574,774,541.
1) According to the Company Law and the Articles of Association of the Company, RMB
38,122,001, 10% of the audited net profit of the Company (without subsidiaries) for 2010 was taken
out as statutory surplus reserve.
17
2012 Annual Report
2) Based on the total 644,763,730 shares as at the end of 2010, a cash dividend of RMB 4.63 (tax
included) was to be distributed for every 10 shares, with a total of RMB 298,525,607 being
distributed.
After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at
RMB 238,126,933.
(2) Profit allocation and dividend distribution plan for 2011
As audited by PricewaterhouseCoopers Zhong Tian Certified Public Accountants Co., Ltd., the net
profit of the Company (without subsidiaries) for 2011 stood at RMB 430,118,633 and the
cumulative distributable profit at RMB 668,245,566.
1) According to the Company Law and the Articles of Association of the Company, RMB
43,011,863, 10% of the audited net profit of the Company (without subsidiaries) for 2011 was taken
out as statutory surplus reserve.
2) Based on the total 644,763,730 shares as at the end of 2011, a cash dividend of RMB 4.00 (tax
included) was to be distributed for every 10 shares, with a total of RMB 257,905,492 being
distributed.
After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at
RMB 367,328,211.
(3) Profit allocation and dividend distribution pre- plan for 2012
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the
Company (without subsidiaries) for 2012 stood at RMB 189,814,396 and the cumulative
distributable profit at RMB 557,142,607.
1) According to the Company Law and the Articles of Association of the Company, RMB
18,981,440, 10% of the audited net profit of the Company (without subsidiaries) for 2012 was taken
out as statutory surplus reserve.
2) As planned, based on the total 644,763,730 shares as at the end of 2012, a cash dividend of RMB
3.63 (tax included) was to be distributed for every 10 shares, with a total of RMB 234,049,234
being distributed.
After the aforesaid allocations, the retained profit of the Company (without subsidiaries) stood at
RMB 304,111,933.
The above-mentioned allocation plan shall be submitted to the Shareholders’ General Meeting for
review and approval.
3. Cash dividend distribution of the Company over the recent three years
Unit: RMB
Ratio the amount of cash
Net profit attributable to
Amount of cash dividend dividend to the net profit
shareholders of the parent in
Year attributable to shareholders
(tax included) the consolidated statement for
of the parent in the
the year
consolidated statement
2012 234,049,234 467,103,270 50.11%
2011 257,905,492 505,645,137 51.01%
2010 298,525,607 596,680,156 50.03%
18
2012 Annual Report
IX. Social responsibilities
Always keeping fulfillment of its social responsibilities in mind, the Company has been devoting
itself to achieve healthy and harmonious development between the Company and its employees,
between the Company and society and between the Company and environment. The Company has
built up a scientific management system of safty production, strict operation rules and sound
emergency plans. Meanwhile, it also has a safety committee to perfect the examination and
supervision mechanism. In 2012, no grievous bodily harm or worse or group event occurred to the
Company, with all goals of safe production being achieved, representing the best record in the
Company’s history. The Company has also set up a R&D innovation team, which has produced
some positive results in terms of process improvement, technique innovation, energy saving &
emission reduction, etc.. Meanwhile, working on becoming resource-saving green ports, it
encourages employees to save resources and protect the environment. It protects various legal rights
and interests of its employees, cares for them and tries to promote harmonious labor relations.
X. Particulars about researches, visits and interviews received in this reporting period
Main discussion
Time of Place of Way of and materials
Visitor type Visitor
reception reception reception provided by the
Company
30 Jan. 2012 Merrill Lynch (Asia Pacific) Ltd.
China International Fund Management Co.,
Ltd., Alliance Bernstein Holding L.P.,
Cambiar Investors, Samsung Asset Basic
17 May 2012
Shenzhen Management (Hong Kong) Limited, Harvest information of
Global Investments Ltd., CLSA Asia-Pacific operations and
Markets investments of
One-on-one Standard Chartered Bank (Hong Kong) the Company
18 May 2012 meeting and the financial
Limited, Alliance bernstein (Singapore) ltd.
Institution status of the
First State Investments, H.R.L. Morrison & Company
Co Capital Management, Graeme Thomson
Merricks Capital, Nuveen Asset Management,
11 Jun. 2012 Hong Kong BEA Union Investment Management Information
Limited , Daiwa Asset Management Hong provided:
Kong Limited, Turiya Advisors Asia, Heqi Brochure of the
Investment, Janchor Partners Limited Company
Shanghai Simpleway Asset Management Co.,
10 Sept. 2012 Shenzhen Phone talk Changjiang Securities, CLSA Asia-Pacific
Markets, CICC
19
2012 Annual Report
V. Significant Events
I. Significant lawsuit or arbitration
There was no significant lawsuit, arbitration or general query from media during the reporting
period.
II. Capital occupation by the controlling shareholder or its related parties for non-operating
purposes
During the reporting period, the controlling shareholder or its related parties did not occupy capital
for non-operating purposes or repay such capital. Deloitte Touche Tohmatsu Certified Public
Accountants LLP issued the “Special Report on Capital Occupation by the Controlling Shareholder
and Other Related Parties of Shenzhen Chiwan Wharf Holdings Limited. For the detailed report, see
www.cninfo.com.cn.
III. Matters concerning bankruptcy and reorganization
The Company was not involved in any matter concerning bankruptcy or reorganization during the
reporting period.
IV. Asset transactions
The Company did not conduct any significant asset acquisition, sale or business combination during
the reporting period.
V. Implementation of equity incentive and influence
The Company did not work out any equity incentive plan during the reporting period.
VI. Significant related-party transactions
1. Related-party transactions concerning routine operation
Unit: RMB’000
Pricing
Related Contents of Proportion Settlement
Type of the principle of
transact Relati the related- Transaction Transaction in same kind method of the Date of Index of
related-party the related- Market price
ion onship party price amount of related-party disclosure disclosure
transaction party
party transaction transactions transaction
transaction
See
http://www
Share Mutual Payment by 28 Mar. .cninfo.com
CND Lease Land use fee 40,208.18 40,208.18 83% 40,208.18
holder negotiation month 2012 .cn for the
resolution
announcem
20
2012 Annual Report
ent (No.
2012-009)
Total -- -- 40,208.18 83% -- -- -- --
Details about return of large-amount sales N/A
It’s needed for daily operation of the Company. The Company and
Necessity and consistency of the related-party transaction, as well as the reasons why
its controlled subsidiaries lease yards every year from CND for
the related party is chosen over other parties in the market to deal with
containers and bulk cargoes.
Influence of the related-party transaction on independency of the Company
The Company’s independence on the related part and the relevant solutions (if any)
Where the Company classifies and estimates the total amount of routine related-party
N/A
transactions for the reporting period, explain the actual implementation during the
reporting period (if any)
Explain why the transaction price is greatly different from the market price
2. Significant related-party transactions concerning joint investment in external parties
Unit: RMB’000
Registered Total Net Net
Pricing Name of Main business
Joint investor Relationship capital of assets of assets of profit of
principle investee of investee
investee investee investee investee
CND is a Providing
CND, Shenzhen shareholder of financial and
※
Chiwan Petroleum the Company , financing
China
Supply Base Co., Chiwan Base is a Free will, consulting,
Develop
Ltd. (Chiwan controlled fairness credit
ment N/A N/A N/A N/A
Base), Yahgee subsidiary of and mutual authentification
Finance
Modular House CND and negotiation and consulting
Co., Ltd
Co., Yahgee is also agent services
Ltd.( Yahgee) controlled by for member
CND units
Progress of any significant construction in
N/A
process of the investee
※ For details, see Section II. IV and Section VI. III. 4 of this report.
3. Credits and liabilities with related parties
Unit: RMB’000
Non-operating Amount
Type of Reason for capital Opening during Closing
Related party Relation
credit/liability credit/liability occupation balance reporting balance
(Yes/No) period
A director of the
China Credit
Company’s actual
Merchants receivable
controller is also a Bank deposits No 58,813 2,208,010 50,689
Bank Co., from related
director of China
Ltd. party
Merchants Bank.
21
2012 Annual Report
VII. Particulars about significant contracts and their fulfillment
1. Custody
On 17 Sept. 2012, CMHI and CND signed the “Agreement of China Merchants Holdings
(International) Co., Ltd. and China Nanshan Development (Group) Inc. Concerning Custody of
Shares of Shenzhen Chiwan Wharf Holdings Limited”. According to the Agreement, CND would
entrust the management of 370,878,000 A-shares in the Company (representing a shareholding
percentage of 57.52%) to CMHI. The custody announcement (No. 2012-035) was released on 20
Sept. 2012 on Securities Times, Ta Kung Pao and www.cninfo.com.cn. Meanwhile, CMHI
indirectly holds 55,314,200 B-shares of the Company (representing a shareholding percentage of
8.58%) via its wholly-funded subsidiary Keen Field, thereby, China Merchants Holdings
(International) controls 66.10% equity interests of the Company.
On 1 Nov. 2012, China Securities Regulatory Commission issued the ZJXK [2012] No. 1428
Document—“Reply on Approving China Merchants Holdings (International) Co., Ltd. to Disclose
the Acquisition Report on Shenzhen Chiwan Wharf Holdings Limited and Exempting It from the
Tender Offer Duty”, exempting its tender offer duty due to the entrusted management of
370,878,000 shares of the Company, which made it the controller of the Company’s 426,192,200
shares in all, accounting for 66.10% of the Company’s total shares.
2. Guarantees provided by the Company
Unit: RMB’000
Guarantees provided by the Company for its subsidiaries
Disclosure
date of the Date of
Actual Guarantee
public notice occurrence Execution
Amount of amount Type of Term of for a related
Guaranteed party in relation to (date of completed
guarantee of guarantee guarantee party or not
the signing or not
guarantee (Yes or No)
guarantee agreement)
amount
Joint-liability
Dongguan 21 Oct. 2011 90,000 5 years No Yes
guarantee
Chiwan Wharf 22 Jul. 2011 200,000
Company Limited Joint-liability
9 Feb. 2012 95,000 5 years No Yes
guarantee
Dongguan
Chiwan Terminal 26 Apr.2012 100,000 N/A N/A N/A N/A N/A N/A
Company Limited
Shenzhen Chiwan
Harbor Container 26 Apr.2012 100,000 N/A N/A N/A N/A N/A N/A
Co., Ltd.
Dongguan
Joint-liability
Chiwan Wharf 26 Oct. 2012 100,000 6 Dec. 2012 100,000 Half year No Yes
guarantee
Company Limited
Shenzhen Chiwan
18 Dec.
Harbor Container 140,000 N/A N/A N/A N/A N/A N/A
2012
Co., Ltd.
22
2012 Annual Report
Total actual amount of
Total amount of guarantees for
guarantees for
subsidiaries approved in the 440,000 200,000
subsidiaries in the
reporting period
reporting period
Total actual balance of
Total amount of guarantees for
guarantees for
subsidiaries approved by the 640,000 285,000
subsidiaries at the
period-end
period-end
Total guarantee amount of the Company (combination of the two kinds of guarantees above)
Total actual guarantee
Total guarantee amount
440,000 amount in the reporting 200,000
approved in the reporting period
period
Total actual guarantee
Total guarantee amount
640,000 balance at the period- 285,000
approved by the period-end
end
Proportion of the total actual guarantee balance in the
7.75%
Company’s net assets
If the subsidiaries use the credit line, the relevant insolvency
Explanation on possibility to bear joint liability due to
responsibility is born by the companies using the credit line
undue guarantees
actually, and the Company bears joint liability.
Explanation on the external guarantees in violation of
N/A
stipulated procedures
VIII. Performance of commitments
Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period, or such commitments carried down into the reporting period
Time of
Commitment Period of Fulfillme
Commitment Contents making
maker commitment nt
commitment
1. Commitments made by CND and CMHI It is promised
about share custody; that the
Commitment 2. Commitment made by CMHI about horizontal
in the guaranteeing the independency of the competition
acquisition Company; issue will be In the
report or the CMHI 3. Commitment made by China Merchants 20 Sept. 2012 solved through process of
report on Holdings (International) about horizontal ways such as execution
equity competition; and asset
changes 4. Commitment made by China Merchants reorganization
Holdings (International) about regulating in the coming 3-
related-party transactions 5 years.
※ For details of the said commitments, see the share custody announcement and the abstract of the
acquisition report of Shenzhen Chiwan Wharf Holdings Limited disclosed by the Company on 20
Sept. 2012, with the announcement No. being 2012-035.
23
2012 Annual Report
IX. Particulars about engagement and disengagement of CPAs firm
Name of domestic CPAs firm Deloitte Touche Tohmatsu Certified Public Accountants LLP
Remuneration for domestic CPAs firm RMB 1.9 million
Consecutive years of the audit services
1 year
provided by domestic CPAs firm
Names of the certified public accountants
Li Weihua, Su Min
from the CPAs firm
As approved by the 1st Session of the Audit Committee under the 7th Board of Directors for 2012,
the 2nd Special Session of the 7th Board of Directors for 2012 and the Annual General Meeting for
2011, at which agreed on changing to appoint Deloitte Touche Tohmatsu Certified Public
Accountants LLP as the Company’s accounting firm for 2012 to audit the annual financial report
and internal control. The 2012 annual audit fees for financial report and internal control are RMB
1,600,000 and RMB 300,000 respectively, totaling RMB 1,900,000.
X. Other significant events
On 27 Dec. 2012, the Company’s shareholder CND and Malai Storage signed the “Agreement
between China Nanshan Development (Group) Inc. and Shenzhen Malai Storage Co., Ltd.
Concerning Transferring Shares of Shenzhen Chiwan Wharf Holdings Limited”, according to which
it was agreed that CND transferred 161,190,933 circulating A-shares of the Company (representing
a shareholding percentage of 25%) to Malai Storage at the agreed price of RMB 11.088 per share.
The equity transfer annouoncement (No. 2012-054) was published on Securities Times, Ta Kung
Pao and www.cninfo.com.cn dated 29 Dec. 2012. The said transaction was approved by SASAC of
the State Council and the approval announcement (No. 2013-019) was published on Securities
Times, Ta Kung Pao and www.cninfo.com.cn dated 12 Mar. 2013. Up to the disclosure day of this
annual report, the equity transfer procedure is proceeding.
XI. Issue of corporate bonds
On 25 Nov. 2011, the Company was approved to publicly issue the corporate bonds with par value
not more than 1 billion in accordance with CSRC Zheng-Jian-Xu-Ke [2011] No. 1889. The total
issuing amount of corporate bonds for the Company in 2011 (Phase I) stood at RMB 0.5 billion
with an expiration period of five years (attached with the resell rights of investors, repurchase rights
of issuer and right of increasing the coupon rate at the end of the third year) and a par value of
RMB100 by way of parity issuance. The coupon rate is 5.28% and the value date is 26 Apr. 2012,
as well as the interest paying date is each 26 Apr. from the year of 2013 to 2017. As approved by
the Shenzhen Stock Exchange Shen-Zheng-Shang [2012] No. 142, the corporate bonds has been
listed for trading in Shenzhen Stock Exchange since 1 Jun. 2012 with the bond abbreviation of “11
Chiwan 01” and bond code of “112082”. (For details, please refer to the Public Notice on the
Listing Report of Corporate Bonds in 2011 for Shenzhen Chiwan Wharf Holdings Limited (Phase I)
on 31 May 2012, Announcement No: 2012-021).
24
2012 Annual Report
VI. Changes in Share Capital and Particulars about Shareholders
I. Changes in shares
Unit: share
Before the change Increase (+)/ decrease (-) After the change
Issue of Reser
Bonus
Number Percentage additional ves to Other Sub-total Number Percentage
issue
shares stocks
1.Shares subject to trading moratorium 754,504 0.117% -19,038 -19,038 735,466 0.114%
a. State-owned shares
b. State-owned legal person shares
c. Other domestic shares
Including: Shares held by domestic
legal persons
Shares held by domestic individuals
d. Shares held by overseas
50,852 0.008% 76,402 76,402 127,254 0.020%
shareholders
Including: Shares held by overseas
legal persons
Shares held by overseas individuals 50,852 0.008% 76,402 76,402 127,254 0.020%
e. Shares held by senior management
703,652 0.109% -95,440 -95,440 608,212 0.094%
staff
2. Shares not subject to trading
644,009,226 99.883% 19,038 19,038 644,028,264 99.886%
moratorium
a. Ordinary shares denominated in
464,789,805 72.087% 0 0 464,789,805 72.087%
RMB
b. Domestically listed foreign shares 179,219,421 27.796% 19,038 19,038 179,238,459 27.799%
c. Overseas listed foreign shares
d. Others
3.Total shares 644,763,730 100% 644,763,730 100%
※ Changes in the shares were due to the shareholding changes of the Company’s senior
management staff who had already departed. According to the Stock Listing Rules, the
Company shares held by them should be locked up for a half year after their leaving office.
Ⅱ. Issuance and listing of securities
Securities issues in the recent three years
Name of stock Issuing price
Date of Amount of the Amount approved Period for
and its derivative (RMB Public date
issuance issue for trading the issue
securities Yuan/share)
Corporate Bond
26 April 2012 100 RMB 500 million 1 Jun. 2012 RMB 500 million 3+2 years
for 2011 (Phase I)
25
2012 Annual Report
Ⅲ. Shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total number of
Total number of
35,892, with 27,402 being shareholders at the end of 34,148, with 25,666 being A-share
shareholders at the
A-share holders, and 8,490 the fifth trading day before holders, and 8,482 being B-share
end of the reporting
being B-share holders the disclosure date of the holders
period
annual report
Shareholdings of top ten shareholders (all being shareholders holding shares not subject to trading moratorium)
Nature of Type
Shares not Shares
shareholder Percentage of
subject to Increase/decrease pledged
(holder of A of shares
Name of shareholder (full name) trading in reporting or
shares or shareholding (A, B,
moratorium period frozen
holder of B (%) H or
(share) (share)
shares)) other)
CHINA NANSHAN Holder of A A
57.52% 370,878,000 0 0
DEVELOPMENT (GROUP) INC. shares share
KEEN FIELD ENTERPRISES Holder of B B
8.58% 55,314,208 3,605,327 N/A
LIMITED shares share
CMBLSA RE FTIF TEMPLETON Holder of B B
7.43% 47,914,954 0 N/A
ASIAN GRW FD GTI 5496 shares share
PING AN TRUST CO., LTD.－ Holder of A A
0.74% 4,780,000 4,780,000 N/A
RUIFU NO. 2 shares share
GOVERNMENT OF SINGAPORE Holder of B B
0.74% 4,745,858 -1,325,334 N/A
INV. CORP.- A/C "C" shares share
Holder of B B
EMPLOYEES PROVIDENT FUND 0.56% 3,586,266 40,732 N/A
shares share
OMERS ADMINISTRATION Holder of B B
0.44% 2,849,109 -389,200 N/A
CORPORATION(SC03) shares share
TEMPLETON CANADA Holder of B B
0.43% 2,783,848 111,924 N/A
EMERGING MKTS FUND shares share
TEMPLETON ASIAN GROWTH Holder of B B
0.41% 2,657,852 1,026,137 N/A
FUND shares share
FTIF-TEMPLETON EMERGING
Holder of B B
MKT SMALLER COMPANIES 0.39% 2,522,279 0 N/A
shares share
FUND
Explanation on associated
CMHI is a shareholder of CND and Keen Field is a wholly-funded subsidiary of
relationship or persons acting in
CMHI.The Company does not know if there are any inter-relations among other
concert among the above-mentioned
shareholders holding shares not subject to trading moratorium.
shareholders:
2. Particulars about the controlling shareholder
Legal
Name of controlling representative Date of Business license
Registered capital Business scope
shareholder / company establishment No.
principal
China Merchants Port services, bonded
Holdings 14602056-000- logistic and cold chain
Fu Yuning 28 May 1991 RMB 500 million
(International) Co., 05-12-2 services, property
Ltd. development and investment
26
2012 Annual Report
China Merchants Holdings (International) Co., Ltd. (“CMHI”) is the largest public port
operator in China, as well as a leading one in the world. It has a sound port network expanding
across main coastal hub ports in China. It invests or invests and manages wharfs in Hong
Basic introduction Kong, Shenzhen, Ningbo, Shanghai, Qingdao, Tianjin, Xiamen Bay, Zhangjiang and other
container hub ports, with its hands also reaching out for ports in South Asia, Africa, etc. Up
until now, CMHI invests in over 20 ports and more than 130 container berths and can handle
nearly 60 million TEUs per year, accounting for over 30% of the China Mainland market.
Shares held by the
controlling
shareholder in other CMHI, the controlling shareholder of the Company, held 24.49% shares of Shanghai
listed companies by International Port (Group) Co., Ltd., 25.54% shares of China International Marine Containers
holding or (Group) Co., Ltd. and 4.55% shares of Ningbo Port Co., Ltd..
shareholding during
the reporting period
For change of the controlling shareholder during the reporting period, see Section II. IV and Section
VI. III. 4 of this report.
3. Particulars about the actual controller
Legal
Name of Date of
representative Organization Registered
the actual establis Business scope
/ company code capital
controller hment
principal
lease and agency of water/land passenger-cargo
transportation, water/land conveyance and facilities;
investment and management of port and storage
business; salvage, refloatation and tugboat; industrial
production; construction, repairing, checking and
marketing of shipping, offshore petroleum drilling
equipment; repairing and checking of drilling
platform and drilling container; overall contracting
of water/land construction projects and the related
offshore petroleum development projects, and their
construction organization and logistic services;
China procurement, supply and sale of water/land
14 Oct. RMB 10.05
Merchants Fu Yuning 10000522-0 communication and transportation equipment; export
1986 billion
Group and import business of transportation; investment
and management of finance, insurance, trust,
securities, futures business; investment and
management of tourism, hotels, catering services and
relevant services; real estate development,
management and consultancy of property;
investment and management of petroleum and
chemical industry; investment and operation of
infrastructure of communication; overseas assets
management. Development and management of
Shenzhen Shekou Industrial Zone and Fujian
Zhangzhou Development Zone.
Currently, China Merchants Group focuses on three core business sectors, namely,
construction, operation and services concerning transportation & related infrastructure
Basic introduction
(ports, roads, energy transportation and logistics); financial investment and management;
and property development and management.
27
2012 Annual Report
4. Relation between the Company and its actual controller in the form of diagram
State-Owned Assets Supervision
and Administration Commission
of the State Council
100%
China Merchants Group
54.80%
China Merchants Holdings (International)
Company Limited
entrusted to
manage
100% 37.02%
57.52% of the
Company's Keen Field Enterprises China Nanshan Development
shares held by Limited (Group) Incorporation
CND 8.58% 57.52%
Shenzhen Chiwan Wharf Holdings Limited
Note 1: On 17 Sept. 2012, CMHI and CND signed the “Agreement of China Merchants Holdings
(International) Co., Ltd. and China Nanshan Development (Group) Inc. Concerning Custody of
Shares of Shenzhen Chiwan Wharf Holdings Limited”. According to the Agreement, CND would
entrust the management of 370,878,000 A-shares in the Company (representing a shareholding
percentage of 57.52%) to CMHI. The custody announcement (No. 2012-035) was released on 20
Sept. 2012 on Securities Times, Ta Kung Pao and www.cninfo.com.cn. Meanwhile, CMHI
indirectly holds 55,314,200 B-shares of the Company (representing a shareholding percentage of
8.58%) via its wholly-funded subsidiary Keen Field, thereby, China Merchants Holdings
(International) controls 66.10% equity interests of the Company.
On 1 Nov. 2012, China Securities Regulatory Commission issued the ZJXK [2012] No. 1428
Document—“Reply on Approving China Merchants Holdings (International) Co., Ltd. to Disclose
the Acquisition Report on Shenzhen Chiwan Wharf Holdings Limited and Exempting It from the
Tender Offer Duty”, exempting its tender offer duty due to the entrusted management of
370,878,000 shares of the Company, which made it the controller of the Company’s 426,192,200
shares in all, accounting for 66.10% of the Company’s total shares.
The actual controller of the Company—China Merchants Group—is unchanged after the said
entrustment with share management.
Note 2: On 27 Dec. 2012, the Company’s shareholder CND and Malai Storage signed the
“Agreement between China Nanshan Development (Group) Inc. and Shenzhen Malai Storage Co.,
Ltd. Concerning Transferring Shares of Shenzhen Chiwan Wharf Holdings Limited”, according to
which it was agreed that CND transferred 161,190,933 circulating A-shares of the Company
28
2012 Annual Report
(representing a shareholding percentage of 25%) to Malai Storage at the agreed price of RMB
11.088 per share. The said transaction was approved by SASAC of the State Council and the
approval announcement (No. 2013-019) was published on Securities Times, Ta Kung Pao and
www.cninfo.com.cn dated 12 Mar. 2013. Up to the disclosure day of this annual report, the equity
transfer procedure is proceeding.
VII. Directors, Supervisors, Senior Management Staff and Employees
I. Changes in shareholding of directors, supervisors and senior management staff
Number of
Number of
Shares held shares
Current shares held
Starting and ending at the year- increased/
Name Office title / Sex Age at the
dates of office term begin decreased at
former period-end
(share) the reporting
(share)
period (share)
Zheng Chairman of the
Current Male 50 May 2011-May 2014 212,652 0 212,652
Shaoping Board
Zhang
Director Current Male 44 Jan. 2013-May 2014 0 0 0
Rizhong
Deng
Director Current Male 45 Jan. 2013-May 2014 0 0 0
Weidong
Wang
Director Current Male 48 Jan. 2013-May 2014 0 0 0
Zhixian
Li Yubin Director Current Male 41 Jan. 2013-May 2014 0 0 0
Zhang
Director Current Male 48 Jan. 2013-May 2014 98,782 0 98,782
Jianguo
Independent
Li Wuzhou Current Male 73 May 2011-May 2014 0 0 0
director
Hao Independent
Current Male 60 May 2011-May 2014 0 0 0
Zhujjiang director
Zhang Independent
Current Male 48 May 2011-May 2014 0 0 0
Jianjun director
Chairman of the
Yu Liming Supervisory Current Male 50 May 2011-May 2014 0 0 0
Committee
Wen Ling Supervisor Current Female 48 Jan. 2013-May 2014 0 0 0
Zhao Jianli Supervisor Current Female 49 Jan. 2013-May 2014 0 0 0
Zhao
Supervisor Current Male 47 May 2011-May 2014 64,954 0 64,954
Chaoxiong
Ni Keqin Supervisor Current Female 48 May 2011-May 2014 38,772 0 38,772
Zhao Qiang GM Current Male 50 Oct. 2012-May 2014 15,103 0 15,103
Xiong Deputy GM, Current Male 49 May 2011-May 2014 83,147 0 83,147
Haiming chief
29
2012 Annual Report
engineering
Pan Ke Deputy GM Current Male 35 Oct. 2012-May 2014 0 0 0
Zhang Fang CFO Current Male 48 Jan. 2013-May 2014 22,111 -18,844 3,267
Company
Bu Dan Current Female 35 Jan. 2012-May 2014 0 0 0
secretary
Tian Junyan Director Former Male 51 May 2011-Jan. 2013 0 0 0
Wang Fen Director Former Female 58 May 2011-Jan. 2013 82,632 0 82,632
Fan
Director Former Male 58 May 2011-Jan. 2013 53,877 0 53,877
Zhaoping
Yuan Yuhui Director Former Male 62 May 2011-Jan. 2013 14,040 0 14,040
Executive
Zhang Ning director, deputy Former Male 52 May 2011-Jan. 2013 146,991 0 146,991
GM
Huang
Supervisor Former Female 56 May 2011-Jan. 2013 0 0 0
Huizhen
Guo
Supervisor Former Female 54 May 2011-Jan. 2013 0 0 0
Songhua
Qu
Deputy GM Former Male 48 May 2011-Oct. 2012 127,254 0 127,254
Jiandong
Zhang Deputy GM,
Former Male 48 May 2011-Dec. 2012 Ditto 0 Ditto
Jianguo CFO
Total -- -- -- -- -- 960,315 -18,844 941,471
II. Post-holding situation
1. Main working experience of current directors, supervisors and senior management staff over the
past five years:
Chairman of the Board, Mr. Zheng Shaoping, majored in Maritime Law and graduated from
Dalian Marine College with a Master’s Degree, received an MBA from University of Wales. He
ever took posts of Deputy GM of CND, Chairman of the Board of Shenzhen Chiwan Harbour
Container Co., Ltd., Deputy GM, GM and Vice Chairman of the Board of the Company. Presently,
he acts as Deputy GM & Executive Director of China Merchants Holdings (International) Company
Limited, Vice Chairman of China Merchants Bonded Logistics Co., Ltd., Chairman of the Board of
Shekou Container Terminals Ltd. and Chiwan Container Terminal Co., Ltd., and GM of Shenzhen
Chiwan Harbour Container Co., Ltd. Director of the Company since May 1999. GM of the
Company from Sept. 2004 to Jan. 2011. He was elected as Vice Chairman of the Company in Apr.
2010, and has been Chairman of the Board of the Company since Jan. 2011.
Director, Mr. Zhang Rizhong, graduated from The Central Finance and Economics University in
the PRC and The University of Westminster of UK with a bachelor’s degree in Economics and a
MBA, ACCA member. He has worked in finance and accounting for over 20 years, with rich
experience in financial management. He was once a deputy GM of the Financial Department of
China Merchants Group and the CFO of China Merchants Holdings (U.K.) Co., Ltd. Joining in
30
2012 Annual Report
2005, he is now deputy GM and the CFO of China Merchants Holdings (International) Company
Limited. He has been a director of the Company since Jan. 2013.
Director, Mr. Deng Weidong, graduated in 1994 from Nanjing University in physical geography
with a doctor’s degree and graduated in Sept. 2002 from Dalhousie University in Canada in marine
stewardship with a master’s degree. With rich experience in port operation and management, he was
once an employee of the Administration Bureau of Hainan Yangpu Economic Development Zone,
the GM of the Development Department of CND, a deputy GM of Chiwan Container Terminal Co.,
Ltd., the GM of Shenzhen Mawan Port Service Co., Ltd. and the GM of Shenzhen Mawan
Terminals Co., Ltd.. Joining in in Jul. 2009, he is now a deputy GM of China Merchants Holdings
(International) Company Limited. He has been a director of the Company since Jan. 2013.
Director, Mr. Wang Zhixian, graduated from Tianjin University and Shanghai Jiao Tong
University with a master’s degree in engineering and then graduated from the Guanghua School of
Management of Peking University with an MBA degree. He has rich experience in port
management. Joining China Merchants Holdings (International) Company Limited (“CMHI”) in Jul.
1992, he was once a deputy GM of the Industrial Management Department and the GM of the
Company Planning Department of CMHI, a deputy GM of Shenzhen Mawan Port Service Co., Ltd.,
the Chairman and CEO of China Merchants International Terminals Co., Ltd. Daxie Ningbo Port.D
and the Managing Director of China Merchants Port Service (Shenzhen) Co., Ltd. and Shenzhen
Haixing Harbor Development Co., Ltd.. He has been a director of the Company since Jan. 2013.
Director, Mr. Li Yubin, graduated from Tianjin University with a bachelor’s degree in port
engineering and a master’s degree in engineering management, and graduated in 2007 from the
University of Hong Kong with a doctor’s degree in real estate and construction. He has rich
experience in port construction and operation, and logistics management. Joining in CMHI in 2007,
he was once an assistant to the GM of the Research and Development Department, International
Division, Commercial and Strategic Planning Department of CMHI and a deputy GM of China
Merchants Bonded Logistics Co., Ltd.. He is now the GM of the Commercial and Strategic
Planning Department of CMHI. And he has been a director of the Company since Jan. 2013.
Director, Mr. Zhang Jianguo, graduated from Shanxi Finance & Economics Institute in
accounting with a bachelor’s degree in economics. Financial Manager of the Company since 1997,
Chief Financial Officer of the Company from Sept. 1999 to 31 Dec. 2012, and Deputy GM of the
Company from Feb. 2011 to 31 Dec. 2012. He is now the CFO of CND. And he has been a director
of the Company since Jan. 2013.
Independent Director, Mr. Li Wuzhou, got Bachelor's Degree in Tianjin University. Previously,
Deputy Director of Construction Department, Deputy Director of Water Transportation Department
of the Ministry of Transport, Head of the Preparation Team and President of China Water
Transportation Construction Association. Currently, Honorary President of China Water
Transportation Construction Association, and Independent Director of the Company since May
2008.
31
2012 Annual Report
Independent Director, Mr. Hao Zhujiang, got Bachelor's Degree in Southwest University of
Political Science and Law. Previously, Director and Secretary of Party Committee of the Bureau of
Legislative Affairs of Shenzhen Municipality, Director of the Administrative Reconsideration
Office of Shenzhen Municipal Government, Director of the Legal Addeputy Office of Shenzhen
Municipal Government. He retired in 2001. Currently, he is a partner and lawyer of Horizon Law
Firm, Shenzhen Office. And Independent Director of the Company since May 2008.
Independent Director, Mr. Zhang Jianjun, got Doctoral Degree in Shanghai University of
Finance and Economics. Previously, Deputy Dean and professor of the Accounting School of
Jiangxi University of Finance and Economics, Deputy President of Pengyuan Credit Rating Co.,
Ltd. (formerly, Sino-Hawk Credit Rating Co., Ltd.), Dean and professor of Business School of
Shenzhen University. Currently, he is the Director and a professor of Accounting & Finance
Institute of Shenzhen University. And Independent Director of the Company since May 2008.
Chairman of the Supervisory Committee, Mr. Yu Liming, got Doctoral Degree in Management
from Fudan University. He graduated from South China University of Technology in 1982 and
studied in Rotterdam, Netherlands and the IHE Institute, Delft from 1987 to 1988. He joined China
Merchants Group in 1984 and has extensive experiences in strategic management, asset acquisition
and business combination, port management and architecture. Currently, Deputy President of China
Merchants Group and Executive Director of CMHI. And Supervisor of the Company since Oct.
2009.
Supervisor, Ms. Wen Ling, graduated from Southwestern University of Finance and Economics
with a postgraduate degree. She was once the Deputy Financial Manager of China Merchants Port
Service (Shenzhen) Co., Ltd., the Financial Manager of Shenzhen Mawan Port Service Co., Ltd. and
the Deputy Financial Manager of CMHI. Joining CMHI in 2004, she is now a senior deputy GM of
the Financial Department of CMHI. And she has been a supervisor of the Company since Jan. 2013.
Supervisor, Ms. Zhao Jianli, graduated from Xi’an Highway Institute, with a bachelor’s degree in
management engineering and a master’s degree in financial management. She was once the internal
control and audit manager, an assistant to the GM and a deputy GM of CMHI. Joining CMHI in
Sept. 2003, she is now the internal control and audit GM of CMHI. And she has been a supervisor
of the Company since Jan. 2013.
Supervisor, Mr. Zhao Chaoxiong, is a university graduate, Deputy Manager and Manager of the
Business Department of the Company since Dec. 1999. Currently, Deputy GM of the Harbour
Division of the Company. And Supervisor of the Company since Aug. 2009.
Supervisor, Ms. Ni Keqin, joined Chiwan Container Terminal Co., Ltd. (“CCT”) in May 1993 and
took the positions of Manager Assistant, Deputy Manager as well as Manager of the Operation
Department and GM Assistant of CCT successively. Currently, Deputy GM of CCT. And
Supervisor of the Company since May 2008.
General Manager Mr. Zhao Qiang, got a Bachelor’s Degree of Land and Chemistry from Jilin
Agricultural University. Previously, he took posts of GM of Harbour Division of the Company,
32
2012 Annual Report
Deputy GM of Chiwan Shipping (H.K.) Company Limited and GM Assistant of the Company.
Presently, he is GM of Harbour Division of the Company and Deputy GM of Chiwan Shipping
(H.K.) Company Limited. He was Deputy GM of the Company from Feb. 2011 to Oct. 2012. And
he has been the GM of the Company since Oct. 2012.
Deputy GM and Chief Engineer Mr. Xiong Haiming, graduated from South China University of
Technology with a Bachelors’ Degree of Naval Architecture Engineering. Previously, he took posts
of Deputy GM, GM of Engineering Technology Division and GM Assistant of Chiwan Container
Terminal Co., Ltd. Presently, he is Chief Engineer of the Company. He has been Deputy GM of the
Company since Feb. 2012.
Deputy GM Mr. Pan Ke, graduated from Dongbei University of Finance and Economics with a
bachelor’s degree in management information system and graduated from Dalian Maritime
University with a master’s degree in logistics engineering. Joining the Company in Oct. 1999, he
was once the Deputy Operation Manager of Shenzhen Chiwan Habor Container Co., Ltd.; the
Deputy Container Manager of the Company’s Harbour Division; and the Logistics Manager, a GM
assistant and the executive deputy GM of Chiwan Container Terminal Co., Ltd.. He has been a
deputy GM of the Company since Oct. 2012.
CFO Mr. Zhang Fang, graduated from Xi’an Highway Institute with a bachelor’s degree in
finance and accounting of transportation. Joining the Company in Mar. 1996, he was once the
Financial Manager of Shenzhen Chiwan Transportation Co., Ltd.,
Shenzhen Chiwan Habor Container Co., Ltd. and Chiwan Container Terminal Co., Ltd.. He has
been the CFO of the Company since Jan. 2013.
Company Secretary Ms. Bu Dan, got a Bachelor Degree of Accounting and a Master Degree of
Enterprise Management from Liaoning Technical University. She was Securities Affairs
Representative of the Company from Sept. 2003 to Aug. 2008, and GM of Enterprise Risk Service
Department of Deloitte Touche Tohmatsu CPA Ltd. from Sept. 2008 to Oct. 2011. She has been
Company Secretary of the Company since Jan. 2012.
2. Taking Positions in shareholder units
Remuneration or
Shareholder Starting and ending
Name Position in shareholder unit allowance from
unit dates of office term
shareholder unit (Yes/No)
Zheng Executive director Feb. 2012-now
CMHI Yes
Shaoping Deputy GM Jan. 2013-now
Zhang Deputy GM Mar. 2012-now
CMHI Yes
Rizhong CFO Feb. 2009-now
Deng
CMHI Deputy GM Dec. 2011-now Yes
Weidong
Wang
CMHI Deputy GM Jul. 2012-now Yes
Zhixian
33
2012 Annual Report
GM of Commercial and
Li Yubin CMHI May. 2012-now Yes
Strategic Planning Dept.
Zhang
CND CFO Jan. 2013-now Yes
Jianguo
Yu Liming CMHI Executive director Dec. 1998-now No
Wen Ling CMHI Senior vice financial GM Sep. 2010-now Yes
Zhao Jianli CMHI Internal control and audit GM Jun. 2010-now Yes
3. Taking positions in other units
Remuneration
Position in Starting and ending or allowance
Name Other unit
other unit dates of office term from other unit
(Yes/No)
Chiwan Container Terminal Co., Ltd. Chairman Mar. 2011-now No
Shenzhen Mawan Terminals Co., Ltd. Chairman Aug. 2011-now No
Zheng Shenzhen Mawan Port Service Co., Ltd. Chairman Aug. 2011-now No
Shaoping Shenzhen Mawan Wharf Co., Ltd. Chairman Aug. 2011-now No
Shekou Container Terminals Ltd. Chairman Apr. 2011-now No
China Merchants Bonded Logistics Co., Ltd. Vice Chairman Apr. 2010-now No
Shenzhen Haixing Harbor Development Co.,
Vice Chairman Jun. 2009-now No
Ltd.
China Merchants Port Service (Shenzhen)
Vice Chairman Apr. 2010-now No
Co., Ltd.
Zhang
Rizhong Shekou Container Terminals Ltd. Director May 2009-now No
Shenzhen Malai Storage Co., Ltd. Director Oct. 2012-now No
Apr. 2011-Apr.
Shanghai International Port (Group) Co., Ltd. Supervisor No
2014
Chiwan Container Terminal Co., Ltd. Vice Chairman Sept. 2012-now No
Deng
China Merchants Bonded Logistics Co., Ltd. Director Dec. 2011-now No
Weidong
Shekou Container Terminals Ltd. Director Jul. 2010-now No
Shenzhen Haiqin Engineering. Management
Chairman Aug. 2012-now No
Co., Ltd.
China Merchants Port Service (Shenzhen)
Chairman Sep. 2012-now No
Co., Ltd.
Wang Shenzhen Haixing Harbor Development Co.,
Chairman Aug. 2012-now No
Zhixian Ltd.
Shenzhen Malai Storage Co., Ltd. Chairman Oct. 2012-now No
China Merchants International Terminals
Director Jul. 2012-now No
Co,Ltd. Daxie Ningbo Port.D
Zhangzhou China Merchants Port Co., Ltd. Director Aug. 2012-now No
Shekou Container Terminals Ltd. Director Aug. 2012-now No
Li Yubin
Shenzhen Mawan Wharf Co., Ltd. Director Sept. 2012-now No
34
2012 Annual Report
China Merchants Holdings (International)
Director Apr. 2012-now No
Information Technology Company Limited
China Merchants Group (HK) Director Apr. 2000-now No
China Merchants Loscam International
Director Jun. 2010-now No
Holdings Co., Ltd.
Yu
Liming Modern Terminals Co., Ltd. Director Apr. 2007-now No
China Merchants Finance Holdings Co., Ltd. Director Feb. 2011-now No
China Merchants Capital Co., Ltd. Director Jan. 2012-now No
Vice Chairmen
of the
Zhanjiang Port (Group) Co., Ltd. Nov.2007-now No
Supervisory
Committee
Wen Shenzhen Haiqin Engineering. Management
Ling Supervisor Sept. 2012-now No
Co., Ltd.
China Merchants Port Service (Shenzhen)
Supervisor Mar. 2008-now No
Co., Ltd.
Shenzhen Malai Storage Co., Ltd. CFO Dec. 2012-now No
Zhao China Merchants Port Service (Shenzhen)
Director Apr. 2010-now No
Jianli Co., Ltd.
III. Remuneration for directors, supervisors and senior management
1. Decision-making procedure, determining basis and actual payment for the remuneration of
directors, supervisors and senior management
(1) Decision-making procedure for the remuneration of directors, supervisors and senior
management:
Remunerations for the Company’s directors, supervisors and senior management shall be
determined upon review of the Nomination, Remuneration and Evaluation Committee. Allowance
for Independent Directors is RMB100,000/year (tax included), which has been approved at the 2010
Annual General Meeting with effect from 1 Jun. 2011.
(2) Determining basis for the remuneration of directors, supervisors and senior management:
The remuneration modes and levels of directors, supervisors and senior executives are determined
based on the market orientation, with post value, functions, etc. taken into account.
(3) Actual payment for the remuneration of directors, supervisors and senior management:
Salaries and independent director allowances were paid to directors, supervisors and senior
executives on a monthly basis. And the other bonuses were paid all at one time according to the
performance of each of them.
2. Remuneration of the directors, supervisors and senior management of the Company during the
reporting period
35
2012 Annual Report
Unit: RMB’000
Total remuneration gained Total remuneration gained
Name Position
from the Company from shareholder’s unit
Zheng Shaoping Chairman of the Board N/A 1,230
Tian Junyan Director N/A 1,390
Wang Fen Director N/A 1,390
Fan Zhaoping Director N/A 1,180
Yuan Yuhui Director N/A 870
Zhang Ning Director, standing deputy GM 1,280 N/A
Li Wuzhou Independent directors 100 N/A
Hao Zhujiang Independent directors 100 N/A
Zhang Jianjun Independent directors 100 N/A
Guo Songhua Supervisor N/A 780
Zhao Chaoxiong Supervisor 740 N/A
Ni Keqin Supervisor 720 N/A
Zhao Qiang GM 1,110 N/A
Qu Jiandong Deputy GM 1,040 N/A
Zhang Jianguo Deputy GM, CFO 1,000 N/A
Xiong Haiming Deputy GM, chief engineer 1,040 N/A
Pan Ke Deputy GM 920 N/A
Bu Dan Company Secretary 480 N/A
※ During the reporting period, the actual remunerations paid to all the directors, supervisors and
senior executives of the Company stood at RMB 19.11 million.
The Company did not formulate and carry out any equity incentive plan during the reporting period.
IV. Resignation condition of Directors, supervisors and senior management staff
Name Position Type Date Reason
Tian Junyan Director Resign 7 Jan. 2013 Change of job
Wang Fen Director Resign 7 Jan. 2013 Change of job
Fan Zhaoping Director Resign 7 Jan. 2013 Change of job
Yuan Yuhui Director Resign 7 Jan. 2013 Change of job
Standing deputy GM Resign 15 Oct. 2012 Change of job
Zhang Ning
Director Resign 7 Jan. 2013 Change of job
Huang Huizhen Supervisor Resign 7 Jan. 2013 Change of job
Guo Songhua Supervisor Resign 7 Jan. 2013 Change of job
Qu Jiandong Deputy GM Resign 29 Oct. 2012 Change of job
Zhang Jianguo Deputy GM, CFO Resign 31 Dec. 2012 Change of job
36
2012 Annual Report
V. Particulars about work force
As at 31 December 2012, the Company had 1,795 employees, with 834 being university graduates,
61 financial personnel, 71 sales persons, 279 technicians, 70 management personnel, and the others
being staff for production. The Company did not need to pay remuneration or any fees for retired
staff.
37
2012 Annual Report
VIII. Corporate Governance
I. Basic information of corporate governance
(I) Strictly in line with requirements stipulated in Company Law, Securities Law, Corporate
Governance Principle for Listed Company and relevant laws and regulations of CSRC, the
Company made efforts to improve corporate governance, promote the level of corporate governance,
form modern corporate system and standardize corporate operation. Details about corporate
governance within the reporting period are set out as below:
1. According to spirit of documents such as Provisions for Establishing a Registration and
Administration System for Persons with Insider Information in Listed Companies (ZJHGG
【 2011 】 No. 30) issued by CSRC and Public Notice on Establishment of Registration and
Management System of Insiders on Inside Information (SZJGSZ【2011】 No. 108) issued by
Shenzhen SRC and Information Disclosure Business Memo No. 34-Registration and Administration
System Issues for Persons with Insider Information, the Company revised Administration System of
Inside Information and Insiders. Such system has been reviewed and approved at the First Special
Session of the Seventh Board of Directors for 2012 held on 27 Feb. 2012.
2. According to requirements of Announcement of【2011】No. 41 issued by CSRC and actual
circumstances of the Company, the Company revised Management Rules on Information Disclosure.
The new versions has been examined and approved by the First Special Session of the Seventh
Board of Directors for 2012 held on 27 Feb. 2012.
3. In accordance with the requirements of the Notice【2011】No. 107-“Notice on Printing and
Distribution of Mr. Zhang Yundong’ Speech on Working Conference of Governance and Practices
of Shenzhen Listed Companies for 2011”, the Company established Management System on Person
in Charge of Finance and CFO. The above system has been examined and approved on the First
Special Session of the Seventh Board of Directors for 2012 on 27 Feb. 2012.
4. Pursuant to relevant requirements of the “CSRC Notice on Further Implementing Matters Related
to Cash Dividends of Listed Companies” and the “Shenzhen CSRC Notice on Earnestly
Implementing the ‘CSRC Notice on Further Implementing Matters Related to Cash Dividends of
Listed Companies’” (SZJGSZ 【2012】 No. 43), the Company revised Article 153 and Article
154 in its Articles of Association concerning profit allocation. The amendments were reviewed and
approved at the 5th Special Session for 2012 of the 7th Board of Directors on 3 Aug. 2012, and then
at the 1st Special Shareholders’ General Meeting for 2012 on 21 Aug. 2012.
5. According to the requirement of National Association of Financial Market Institutional Investors,
there should be an information disclosure mechanism for the inter-bank market debt financing
instrument when issuing bonds in the inter-bank market. Considering its need to issue short-term
financing bonds in the inter-bank market, the Company formulated the “Information Disclosure
Management Rules for the Inter-bank Debt Financing Instrument of Shenzhen Chiwan Wharf
38
2012 Annual Report
Holdings Limited” according to relevant laws, regulations, the Company’s Management Rules for
Information Disclosure, Articles of Association, etc., which was reviewed and approved at the 4th
Special Session for 2013 of the 7th Board of Directors on 8 Mar. 2013.
6. Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders,
especially minority shareholders, are equal and could enjoy their full rights. The Company called
and held shareholders’ general meeting strictly in compliance with the Rules for Shareholders’
General Meeting.
7. Relationship between the controlling shareholder and the Company: controlling shareholder of
the Company acted in line with rules during the reporting period, did not intervened the decisions,
productions or operations of the Company directly or indirectly in exceeding the authority of the
shareholders’ general meeting, and did not appropriate any funds of the Company.
8. Directors and the Board of Directors: the Company elected directors in strict accordance with the
Articles of Association. Number and composition of members of the Board were in compliance
with relevant laws and regulations; all Directors attend Board meetings and shareholders’ general
meeting in a serious and responsible manner and participated enthusiastically relevant training so as
to know better about laws and regulations as well as the rights, obligations and liabilities of
Directors. The Company set up the Audit Committee as approved by the First Special Shareholders’
Meeting for Y2004 and the Nomination, Remuneration and Evaluation Committee and Strategy
Committee of the Board as approved by the Annual General Meeting for Y2005, with a view to
ensuring the efficient operation and scientific decision-making of the Board of Directors.
9. Supervisors and the Supervisory Committee: number and composition of the members of the
Supervisory Committee were in compliance with the requirements of laws and regulations. The
supervisors diligently and seriously performed their duties and obligations, took responsible
attitudes to all shareholders and supervised the financial affair as well as the performance by the
Company’s Directors, managers and other senior executives of their duties in compliance with the
laws and regulations.
10. Stakeholders: the Company fully respected and safeguarded the legal rights and interests of the
banks and other creditors, staff, consumers and other stakeholders so as to develop the Company in
a consistent and healthy way.
11. Information disclosure and transparency: the Company authorized the Company Secretary to
take charge of information disclosure, and the Chairman as well as related Directors to meet with
shareholders. The Company disclosed relevant information in a true, accurate, complete and timely
way in strict accordance with the requirements of laws, regulations and the Articles of Association,
formulated the Management Rules on Information Disclosure, the Management System on Inside
Information and Insiders and the Rules on the Management of Investors Relations, and designated
Securities Times, Ta Kung Pao and http://www.cninfo.com.cn as its newspaper and website for
information disclosure, so as to ensure all shareholders have equal opportunity to obtain the
information.
39
2012 Annual Report
12. Corporate governance mechanisms and rules that the Company already established:
Articles of Association of the Company, Rules of Procedure for General Meetings, Working
Articles of Audit Committee of the Board of Directors, Working Rules of Annual Report for Audit
Committee of the Board of Directors, Working Articles for Nomination, Remuneration and
Evaluation Committee of the Board of Directors; Working Articles of Strategy Committee of the
Board of Directors, Working System for Independent Directors, Working Rules of Annual Report
for Independent Directors, Rules of Procedure for Supervisory Committee, Working Articles of
General Manager, Management System for Company Shares held by Directors, Supervisors and
Senior Executives and Its Changes, Management System of Foreign Investment, Decision-making
Mechanism of Related Transactions, Management System of Fund-raising, Management Rules on
Information Disclosure, Rules of Accountability for Significant Mistakes in Annual Report
Information Disclosure, Management System on Inside Information and Insiders, Internal Audit
System, Management System of Investors’ Relations, Specific System for Engaging Accountants,
Management Method of Financial Tools, Management System on Person in Charge of Finance and
CFO, Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument, etc.
Details for the above systems please refer to website of the Company http://www.szcwh.com. There
isn’t difference between the actual circumstances of the Company and all established systems.
Since the foundation, the Company was consistently in strict accordance with Company Law and
relevant laws and regulations to make a standard operation, continued business-running in line with
relevant requirements of Corporate Governance Principle for Listed Companies and earnestly made
effort to protect profit and interests of shareholders and stakeholders.
13. Non-compliance of corporate governance standards by the Company
As the controlling shareholder of the Company, CND holds 57.52% of the shares of the Company,
it is required to consolidate the Company’s financial statements in its accounts under the Enterprise
Accounting Standard No. 33-Consolidated Financial Statements. Accordingly, CND requires the
Company’s Financial Department to submit our monthly financial statements on or about the tenth
day every month for the purpose of the preparation of its consolidated financial statements.
At the 5th Session of the 5th 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, 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
from September 2007 to September 2012, 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.
40
2012 Annual Report
(II) Special campaigns for corporate governance & formulation and implementation of the
registration management rules for information insiders
1. Promoting investor protection
In order to further promote investor protection, help investors formulate a rational and long-term
investment philosophy, help form a healthy investment culture among investors and further improve
the management mechanism of returns for shareholders, pursuant to the “Notice on Doing a Good
Job in Promoting Investor Protection in Listed Companies” (SZJGSZ 【2012】 No. 60, hereinafter
referred to as “the Notice”) issued by Shenzhen CSRC on 28 Aug. 2012, the Company conducted a
publicity campaign with the theme being “Good Returns for Shareholders”, with main details as
follows:
Investor protection has always been an important task for the Company. When communicating with
investors, the Company has always adhered to its “Investor Management Rules” and its disclosed
periodical reports or announcements. It has never disclosed any information that should not be
disclosed or over-publicized to mislead investors. The Company has set up a data base of investors,
which is monitored and updated by special personnel on a regular basis. When being disclosed on
designated websites, announcements of the Company will be emailed by the Company Secretary
Office to investors in the data base so that they can receive the announcements in time. Having been
treating all investors in an open, fair and honest way according to laws, regulations and its own
rules, the Company voluntarily discloses its business volume on a monthly basis so that investors
can follow up the Company’s operation situation in a timely manner, which will help them make
investment judgments in a rational way. The Company adopts a serious attitude in implementing its
“Management Rules for Information Disclosure Affairs” so that it can be in compliance with laws
and regulations governing information disclosure during the investor protection publicity period.
A column of “Investor Relations” has been set up at the front-page of the Company’s website. So
far, the Company has completed the sub-columns under the “Investor Relations” column according
to the requirement of the Notice, namely, “Information Disclosure” (interim announcements and
periodical reports), “Financial Highlights”, “Information about Shareholders” (share capital
structure and latest information about the shareholders), “Corporate Governance” (Articles of
Association, directors, supervisors and senior executives), “Shareholders’ General Meeting”,
“Returns for Shareholders” (report on planning for returns for shareholders, dividend and bonus
share distribution), “Investor Protection”, “Communication with Investors” (announcement
subscription and email address for shareholders to contact the Company), “Visits” (materials
showed to visitors and name list of visitors), “Contact us”, etc. Under the “Investor Protection” sub-
column, there are investor protection publicity materials from the Investor Protection Bureau of
CSRC such as “Top 50 Q&A for Investors”, “Replies to Investors’ Questions” and “Public- services
Commercials for Education of Investors”. In the said sub-columns, the Company also introduces
dividend distribution for previous years, its Articles of Association (the dividend policy),
implementation of the CSRC notices on matters related to cash dividends of listed companies, the
planning for returns for shareholders, the dividend status, etc. The Company will continue to update
these columns to enable investors to know better about it.
41
2012 Annual Report
Upon this special campaign, the Company has formed a working mechanism for investor protection
publicity. The Company will continue to take investor protection publicity as an important task,
keep investor protection in mind in daily work, improve its activities concerning investor protection
and help investors invest in a rational and long-term way as a habit.
2. “Insider Dealing Caution & Education Exhibition”
Pursuant to the requirement of the “Shenzhen CSRC Notice on the ‘Insider Dealing Caution &
Education Exhibition’ Campaign”, and in order to further promote insider dealing caution and
education effectively, the Company conducted, based on its actual situation, publicity and education
activities concerning insider dealing warning. In order to let relevant personnel have a better
understanding about the dangers of insider dealings, the Company Secretary Office organized
personnel often exposed to insider information in their daily work (including personnel from the
Financial Department, the Business Department, the Clearing Center, the HR Department and the
Audit Office) to go to the exhibition at Shenzhen Civil Center on 25 Oct. 2012. Afterwards, in order
to maximize the publicity effect of this education exhibition and promote better compliance with
laws among employees, the Company Secretary Office sent the relevant education materials to
directors, supervisors and senior executives and also put these materials at the show window for
employees to learn.
3. Establishment and Execution of the Management Rules on Insider Information and Insiders
The Company established the Management Rules on Inside Information and Insiders in accordance
with the Articles of Association of the Company and other laws and regulations, which was
reviewed and approved at the Seventh Special Session of the Sixth Board of Directors for 2009 held
on 29 Oct. 2009. In compliance with the document requirement of Regulation on Establishing
Management Rules of Insiders Registration in Listed Company from CSRC, Notice on
Establishing Management Rules of Insiders Registration from Shenzhen Securities Regulatory
Bureau and Memorandum of Information Disclosure No. 34— Management Issues on Insiders
Registration from Shenzhen Stock Exchange, the Company revised the Management Rules on
Inside Information and Insiders by connecting with the practice, which was reviewed and approved
at the First Special Session of the Seventh Board of Directors for 2012 on 27 Feb. 2012. The rules
set forth specific provisions regarding the management on information submitted to external entities.
The Company submitted “Undisclosed Information Provided by the Company to its Substantial
Shareholders and Actual Controller” to the Shenzhen Securities Regulatory Bureau every month,
including the name list and related information of parties aware of such undisclosed information
and relevant information. No information insiders have been found trading the Company’s shares
by taking advantage of insider information.
42
2012 Annual Report
II. Particulars about the annual shareholders’ general meeting and special shareholders’
general meetings held during the reporting period
1. Particulars about annual shareholders’ general meeting held during the reporting period
Convening Disclosure
Session Name of proposal Resolution Disclosure index
date date
1. 2011 Annual Work Report of the
Board of Directors;
2. 2011 Annual Work Report of the
For the resolution
Supervisory Committee;
announcement
2011 Annual 3. 2011 Annual Final Financial Reviewed
28 May 29 May (No. 2012-020),
Shareholders’ Report; and
2012 2012 see
General Meeting 4. 2011 Annual Preplan for Profit approved
http://www.cninfo
Allocation and Dividend
.com.cn
Distribution;
5. Proposal on Reengaging the
CPAs Firm for 2012.
2. Particulars about special shareholders’ general meetings held during the reporting period
Convening Disclosure
Session Name of proposal Resolution Disclosure index
date date
For the resolution
The First Special announcement
Reviewed
Shareholders’ 21 Aug. Proposal on Amending the 22 Aug. (No. 2012-031),
and
General Meeting 2012 Company’s Articles of Association 2012 see
approved
for 2012 http://www.cninfo
.com.cn
For the resolution
The Second
announcement
Special Proposal on the Company Planning Reviewed
(No. 2012-050),
Shareholders’ 5 Dec. 2012 to Issue Short-term Financing and 6 Dec. 2012
see
General Meeting Bonds approved
http://www.cninfo
for 2012
.com.cn
III. Performance of the Independent Directors
1. Particulars about the independent directors attending the board sessions and the shareholders’
general meetings
Particulars about the independent directors attending the board sessions
Sessions required to Attendance by way Number of Non-attendance in
Attendance Attendance
Name attend during the of times of person for two
in person by proxy
reporting period telecommunication absence consecutive times
Li Wuzhou 11 2 9 0 0 No
Hao Zhujiang 11 2 9 0 0 No
Zhang Jianjun 11 1 9 1 0 No
General meetings sat in on by independent directors 3
43
2012 Annual Report
2. Particulars about independent directors proposing objection on relevant events
During the reporting period, no independent directors proposed any objection on relevant events of
the Company.
3. Other explanations about the duty performance of independent directors
During the reporting period, all independent directors of the Company honestly performed their
duties and brought their roles as independent directors into full play by participating in discussions
on reports reviewed at board sessions and other issues of the Company, and proposed constructive
suggestions which had been adopted by the Company. They carefully reviewed and issued
independent opinions in written form on significant events such as material related-party
transactions in accordance with relevant requirements. In accordance with the requirements of
CSRC and Shenzhen Stock Exchange, the “Working Rules for Independent Directors” and the
“Working Rules for Independent Directors Concerning Annual Reports, they performed their
obligations with due diligence and fully oversaw the preparation and disclosure of the Annual
Report of the Company for 2010. Independent directors of the Company proactively performed
their duties, monitored the Company’s business and operation, actively protected the interests of
minority shareholders, and thus played significant roles in the scientific decision-making by the
Board of Directors. For details of performance by independent directors of their duties, please refer
to the work report of independent directors for 2012 as disclosed at http://www.cninfo.com.cn.
IV. Performance of the Special Committees under the Board during the reporting period
(I) Establishment, improvement and principal contents of the working rules for the Audit
Committee and performance of the Audit Committee
In accordance with the Company Law of the PRC, the Corporate Governance Principle for Listed
Companies, the Articles of Association and other relevant requirements, the Company established
the Audit Committee under its Board of Directors and formulated the Working Rules for the Audit
Committee of the Board (“Working Rules”) and the Working Practices for the Audit Committee of
the Board on Annual Report (“Working Practices”). The Working Rules and the Working Practices
set forth specific provisions regarding the composition, responsibility and authority, decision-
making process and rules of the Audit Committee and the works that need to be done in preparing
and auditing annual reports, which improved the Company’s corporate governance structure and
mechanism, reinforced the construction of internal control of the Company, and brought into full
play the critical role of the Audit Committee of the Board in preventing risks.
1. The Audit Committee of the Company held a total of three meetings during the year, with details
as follows:
(1) On 26 Mar. 2012, the First Session of the Audit Committee of the Seventh Board of Directors
for 2012 was held at 9:00 a.m. at Conference Room I, 13/F., Chiwan Petroleum Building, Shenzhen,
at which the following proposals were reviewed and approved unanimously:
● “Internal Auditing Report of the Company for 2011” was reviewed and approved;
44
2012 Annual Report
● “Internal Auditing Plan of the Company for 2012” was reviewed and approved;
● “Working Report of the Audit Committee of the Board in 2011” was reviewed and approved;
● “The Financial Statements of 2011” was reviewed and approved and was submitted to the Board
of Directors of the Company for approval;
● “Working Report of the Accounting Firm in 2011” was reviewed and approved and was
submitted to the Board of Directors of the Company for approval;
● “Report on the Change of the Accounting Firm for 2012” was reviewed and approved. The Audit
Committee proposed to change the CPAs firm of the Company to Deloitte Touche Tohmatsu
Certified Public Accountants LLP to shoulder the audit of the annual financial statements and the
internal audit for 2012. This proposal was submitted to the Board of Directors of the Company for
approval.
(2) On 21 Aug. 2012, the Second Session of the Audit Committee of the Seventh Board of Directors
for 2012 was held at 8:30 a.m. at Conference Room I, 8/F., Chiwan Petroleum Building, Shenzhen,
at which the following proposals were reviewed and approved unanimously:
● “The Semi-Annual Financial Report for 2012 of the Company” was reviewed and approved and
was submitted to the Board of Directors of the Company for approval;
● “The Semi-Annual Internal Auditing Report of the Company for 2012” was reviewed and
approved.
(3) On 21 Dec. 2012, the First Special Session of the Audit Committee of the Seventh Board of
Directors for 2012 was held at 9:00 a.m. at Conference Room I, 8/F., Chiwan Petroleum Building,
Shenzhen, at which the Report on the Company’s Auditing Work of Finance and Internal Control
by Deloitte Touche Tohmatsu Certified Public Accountants LLP for 2012 was debriefed.
2. In accordance with relevant requirements of CSRC and Shenzhen Stock Exchange, the specific
working rules and procedure for the Audit Committee, during the reporting period, the Audit
Committee of the Board of the Company oversaw the auditing of the Annual Report of the
Company for 2011 with due diligence, details of which are as follows:
(1) Before the auditors started their work, the Audit Committee discussed with the principal auditor
of the accounting firm and determined, inter alia, the timing schedule for the auditing work of the
financial statements for the year.
(2) The Audit Committee expressed its audit opinions two times on the annual financial statements
of the Company for 2011.
During the reporting period, the Audit Committee expressed its audit opinions two times on the
annual financial statements of the Company for 2011 in accordance with relevant requirements
from CSRC.
The Audit Committee reviewed the Financial Statements prepared by the Company and issued the
following opinions before the Auditors started their work: the Company was in full compliance
with relevant laws, regulations and the Articles of Association of the Company, the units and items
of the Company's financial statements to be consolidated were complete, and the consolidation
basis thereof was accurate and the information included in the Financial Statements submitted by
the Company was objective, comprehensive and true. The Company's accounting policies were
properly adopted and the accounting estimates made were reasonable. No significant mistake or
omission has been identified so far. Due to the time-lag between this review of Financial Statements
and the dates of the Auditors' Report, we suggest the Finance Department focus on and deal with
45
2012 Annual Report
subsequent events properly in accordance with the New Enterprises Accounting Standards to ensure
the fairness, truthfulness and completeness of the Financial Statements.
After the Auditors issued their preliminary audit opinions, the Audit Committee reviewed the
Financial Statements again and issued the following opinions: the Company prepared the Financial
Statement in full compliance with the New Enterprise Accounting Standards and relevant
provisions of the financial control system of the Company, the procedures for the preparation of the
Financial Statements were reasonable and proper, which gave a true and fair view of the Company's
assets, liabilities, equity interests and operation results as at 31 December 2011. Information
included in the Financial Statements was objective and complete. Financial Statements for 2011
which was preliminarily audited by PricewaterhouseCoopers Zhong Tian Certified Public
Accountants may be submitted for review at the Third Session of the Seventh Board of Directors.
(3) Supervision over the Auditing Work of the Accounting firm
The Audit Committee issued letters to PricewaterhouseCoopers Zhong Tian Certified Public
Accountants on 19 Jan. and 17 Feb. 2012 respectively to urge them to produce their audit report in a
timely manner, so as to ensure the annual audit and information disclosure proceed as scheduled.
(4) Opinions on the Auditing Work Performed by the Accountants for the previous year
During the auditing period, the Audit Committee of the Board focused on the problems discovered
in process of audit, urged auditors to finish the preparation of their report within a prescribed period
of time and ensured the truthfulness, accuracy and completeness of the annual report. The Certified
Public Accountants issued a standard unqualified audit report on 27 Mar. 2012. The Audit
Committee considered that the Certified Public Accountants conducted their audit in accordance
with China’s Independent Auditing Standards, the audit time was sufficient, the deployment of the
auditors was appropriate and their practicing capability was excellent, and that the audit report
issued sufficiently reflected the Company's financial condition as at 31 Dec. 2011 and its operation
results and cash flows for the year 2011 and the audit conclusion made was in line with the actual
situation of the Company.
(5) During the reporting period, the Audit Committee placed great emphasis on the establishment of
the internal control and supervision department of the Company and its personnel deployment. The
Audit Department was required to submit its working report for the previous year and working plan
for the current year to the Audit Committee and report the establishment and implementation of the
internal control system, which enabled the Audit Committee to understand the implementation and
effect of the internal control system. In addition, the Audit Committee advised on the improvement
for the work of the Audit Department and the Company relating to internal control for the next year.
(II) Performance of the Nomination, Remuneration and Evaluation Committee
During the reporting period, the Nomination, Remuneration and Evaluation Committee under the
Board of Directors held a total of three meetings, details of which are as follows:
1. On 26 Mar. 2012, the First Session of the Nomination, Remuneration and Evaluation Committee
of the Seventh Board of Directors for 2012 was held at 2:00 p.m. at Conference Room I, 13/F.,
Chiwan Petroleum Building, Shenzhen, at which the “Working Report of the Nomination,
Remuneration and Evaluation Committee of the Board for 2011” and the “Report on the
Remuneration of the Directors, Supervisors and Senior Management Staff for 2011” were reviewed
and approved;
46
2012 Annual Report
2. On 11 Oct. 2012, the Second Special Session of the Nomination, Remuneration and Evaluation
Committee of the Seventh Board of Directors for 2012 was held by way of telecommunication
voting, at which “Report on the Engagement of the Company’s GM” was reviewed and approved
unanimously and submitted to the Board of Directors of the Company for approval;
3. On 19 Oct. 2012, the Third Special Session of the Nomination, Remuneration and Evaluation
Committee of the Seventh Board of Directors for 2012 was held by way of telecommunication
voting, at which “Report on the Engagement of the Company’s Deputy GM” was reviewed and
approved unanimously and submitted to the Board of Directors of the Company for approval.
(III) Performance of the Strategy Committee
During the reporting period, the Strategy Committee of the Board of Directors of the Company held
two meetings. Details of the meetings are set out as follows:
1. On 26 Mar. 2012, the First Session of the Strategy Committee of the Seventh Board of Directors
for 2012 was held at 2:30 p.m. at Conference Room I, 13/F., Chiwan Petroleum Building, Shenzhen,
at which the following proposals were reviewed and approved unanimously:
(1) “The Working Report of the Strategy Committee of the Board for 2011” was reviewed and
approved;
(2) “The Business Development Plan for 2012 to 2016” was reviewed and approved.
2. On 4 Jun. 2012, the Second Session of the Strategy Committee of the Seventh Board of Directors
for 2012 was held by way of telecommunication voting, at which the “Proposal on the Company
and a Related Party Jointly Incorporating a Finance Company” was reviewed and approved
unanimously.
During the reporting period, members of the Strategy Committee conducted research and advised
on the investment plans and assets operation projects related to the medium to long term
development strategy of the Company.
V. Performance of the Supervisory Committee
The Supervisory Committee has no objection on the supervised events during the reporting period.
VI. Particulars about the Company’s separation from the controlling shareholder in respect
of business, personnel, assets, organization and financial affairs
The Company is absolutely independent in business, personnel, assets, finance and organization
from its controlling shareholder. Details are set out as follows.
The Company has the assets, personnel, qualifications and capability to conduct operating
activities,with the ability of independent operation in the market. The Company has basically
separated its staff from its controlling shareholder. No senior management staff of the Company
holds positions at controlling shareholder of the Company. The Company possesses its own self-
governed assets and domicile. The Company has established and improved the corporate
governance structure according to laws and has an independent and complete institutional
framework. The Company has set up its own financial department as well as independent normative
accounting system and the financial management system on its subsidiaries. The Company has its
own bank accounts and does not sharethe same bank account with its controlling shareholder. The
47
2012 Annual Report
Company has been paying tax in accordance with the laws and regulations on its own behalf.
VIII. Performance Evaluation and Incentive Mechanism for Senior Management Staff
All senior management staff of the Company is appointed by the Board of Directors. The Board sets
up the Company’s business objectives and financial budget for each year and signs KPI contracts
accordingly with senior management staff. The Board then determines the incentive standards to
senior management staff according to their respective performance during the year.
IX. Internal Control
I. Internal control progress
Based on the Basic Norms for Internal Control of Enterprises and the mating guideline, the
Company worked out the “Work Plan for Internal Control of 2012”, which was reviewed and
approved by the management and then reported to the supervisory authority as required for file-
keeping. The Company kept the original two-tier internal control task group and changed some
members. At the tier of the Company, the task group was headed by the chairman of the board, with
divisional leaders and departmental leaders as the members for the internal control steering
committee, and important professionals of all functional departments as the members for the task
group. At the tier of a subsidiary, the task group was headed by the general manager of the
subsidiary, with important professionals in the subsidiary as the members for the task group.
In order to solidify the previous internal control achievements, optimize the internal control system
and improve the internal control capability, according to the features and significant levels of its
business lines, and based on the improvements of the internal control process about financial
reporting in 2011, the scope of the Company’s internal control task for 2012 was extended to cover
various processes and links of its operation.
1. Subjects included in the internal control improvement and self-evaluation task for 2012 were: the
Company, Chiwan Container Terminal Co., Ltd., Shenzhen Chiwan Harbor Container Co. Ltd.,
Shenzhen Chiwan Terminal Co., Ltd., Shenzhen Chiwan Trans-Grains Terminal Limited,
Dongguan Chiwan Wharf Company Limited and Dongguan Chiwan Terminal Company Limited.
The evaluated subjects accounted for 90% of the Company’s total assets.
2. Internal control processes included in the internal control improvement and self-evaluation task
for 2012 were: the organizational structure, development strategy, human resources, social
responsibilities, corporate culture, capital operation, procurement, asset management, marketing,
R&D, engineering projects, guarantees, outsourcing, financial reporting, overall budget, contract
management, internal information transmission and the information system.
According to the contents and schedule of the work plan, internal control task groups, through
examining processes, evaluating the existing process and mechanism design and other measures,
48
2012 Annual Report
completed the defect-looking phase for the internal control improvement project, formulated
internal control defect lists and rectification plans, and rectified internal control problems found.
The Audit Office of the Company organized and carried out the self-evaluation of internal control.
Via talks and sampling tests, and according to the previously-set evaluation standards, the office
evaluated the defects found, prepared a defect evaluation summary sheet, and then offered their
rectification addeputy. It then, according to the results of its aforesaid work, prepared the 2012
annual internal control self-evaluation report, which was later reviewed and approved at the 5th
Session of the 7th Board of Directors.
The Company engaged Deloitte Touche Tohmatsu Certified Public Accountants LLP to audit the
effectiveness of its 2012 financial reporting internal control. A standard auditor’s report with
unqualified opinion was issued by DDT and later disclosed by the Company as required by the
regulator.
II. Board statement on its responsibility towards internal control
As required by the CSRC and Shenzhen Stock Exchange, the board made a statement on the
Company’s internal control self-evaluation report as follows:
The Board of Directors of Shenzhen Chiwan Wharf Holdings Limited (hereinafter referred to as
“the Company”) and all directors herby ensure that this report does not carry any false record,
misleading statement or material omission. And they are jointly and severally liable for the
factuality, accuracy and completeness of the contents carried in this report.
Formulating, improving and effectively executing internal control is the responsibility of the Board
of Directors. The Supervisory Committee supervises the internal control formulation and execution
by the board and the management organizes the daily operation of the internal control.
The goal of internal control is to rationally ensure compliance of the Company’s operation with
laws and regulations, asset safety, and factuality and completeness of financial statements and the
relevant information; improve the operating efficiency and effects; and promote the materialization
of the development strategies. Due to the inherent limitations in internal control, it can only provide
rational guarantee for the aforesaid objectives.
III. Basis for the financial reporting internal control
Based on the Company Law, the Accounting Law, the Accounting Standards for Business
Enterprises, the Basic Norms for Internal Control of Enterprises & its mating guideline and the
Stock Listing Rules of Shenzhen Stock Exchange, as well as applicable laws, regulations, standards
and guidelines, and considering its actual situation, the Company has formulated a comparatively
sound financial reporting internal control system upon years of improvement. The system is based
on the financial management system, with relevant management rules as the control means and the
daily management system as the control guarantee.
The financial reporting internal control system includes: the Accounting Management Rules as the
basis; the Internal Control Rules for Monetary Funds, the Internal Audit Rules, the Approval Power
49
2012 Annual Report
and Process for Significant Matters, the Management Rules for Fixed Assets, the Management
Rules for Outward Investments, the Bidding and Bidding Invitation Management Rules, the Overall
Budget Management Rules, the Decision-making Rules for Related-party Transactions, the
Management Rules for Raised Funds, the Accountability Mechanism for Material Errors in Annual
Report Disclosure, the Special Rules for Engaging a CPAs Firm, the Management Methods for
Financial Instruments, the Management Rules for Financial Chief and Accounting Chief and other
rules, which have been executed to effectively control the financial reporting internal control system;
and the ISO9001 Quality Management System, the ISO14001 Environmental Management System,
the ISO28000 Supply Chain Safety Management System, the safety management rules and other
daily management rules, which have formed a solid guarantee for the financial reporting internal
control system.
IV. Internal control self-evaluation report
No major defect of internal control was found during the reporting period. For the whole contents of
the self-evaluation report prepared by the Company, see the “2012 Annual Self-evaluation Report
on Internal Control of the Company” disclosed on www.cninfo.com.cn.
V. Internal control audit report
Auditors’ Report on Internal Control
De Shi Bao (Shen) Zi (13) No. S0049
To the Shareholders of Shenzhen Chiwan Wharf Holdings Limited:
We have audited Shenzhen Chiwan Wharf Holdings Limited’s (the "Company") internal control
over financial reporting as of December 31, 2012, based on the requirements of the Enterprise
Internal Control Assurance Guidance, and the professional standards of Chinese Certified Public
Accountants.
1.Company responsibilities over internal controls
According to the Basic Standard for Enterprise Internal Control, Enterprise Internal Control
Practical Guidance and Enterprise Internal Control Assessment Guidance, the Company's Board of
Directors is responsible for establishing and maintaining effective internal controls and for its
assessment of the effectiveness of internal controls.
2．Auditors 'responsibilities
Our responsibilities are to express opinion on the effectiveness of the Company's internal control
over financial reporting base on our audit and to disclose any material weakness we noted in
relation to internal control over the non-financial reporting area.
3．Inherent Limitation of Internal control
Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
50
2012 Annual Report
4．Opinion on the effectiveness of internal control over financial reporting
In our opinion, the Company, based on the Basic Standard for Enterprise Internal Control and the
related requirements, maintained, in all material respects, effective internal control over financial
reporting as at December 31, 2012.
Deloitte Touche Tohmatsu Certified Public Accountants LLP
25 March 2013
VI. Formulation and execution of the accountability system for material mistakes in annual
report preparation
Pursuant to the Securities Law, the Administrative Methods for Information Disclosure of Listed
Companies and other laws and regulations, as well as the Company’s Articles of Association, the
Company has formulated the Accountability Mechanism for Material Errors in Annual Report
Disclosure, which was reviewed and approved at the Fifth Session of the Sixth Board of Directors
on 8 Apr. 2010. During the reporting period, the Company strictly executed the Accountability
Mechanism for Material Errors in Annual Report Disclosure, with no such cases as correction of
material accounting errors, supplementation due to material omissions or correction of performance
forecasts.
51
2012 Annual Report
X. Auditor's Report (See attached)
Type of audit opinion Standard unqualified audit opinion
Date of signing the audit report 25 Mar. 2013
Name of the auditor Deloitte Touche Tohmatsu Certified Public Accountants LLP
No. of the audit report De Shi Bao (Shen) Zi (13) No. P0348
XI. Documents for Reference
I. Financial Statements carrying the signatures and stamps of the Company Principal, the Chief
Financial Officer and the person in charge of accounting firm;
II. Original copy of the Auditor's Report stamped by the accounting firm and signed and stamped by
registered accountants;
III. Original copies of all documents and the announcements thereof disclosed in the reporting
period on “Securities Times” and “Ta Kung Pao”; and
IV. Original copy of the Annual Report signed by the Chairman.
For and on behalf of the Board
Zheng Shaoping
Chairman
Shenzhen Chiwan Wharf Holdings Limited
Dated 27 March 2013
52
SHENZHEN CHIWAN
WHARF HOLDINGS LIMITED
AUDITORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2012
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2012
Contents Page
Auditor's Report 1-2
The Company and Consolidated balance sheets 3-4
The Company and Consolidated income statements 5-6
The Company and Consolidated cash flow statements 7-8
The Company and Consolidated statements of changes in
shareholders' equity 9 - 10
Notes to the financial statements 11 - 107
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (13) No. P0348
To the Shareholders of Shenzhen Chiwan Wharf Holdings Limited
We have audited the accompanying financial statements of Shenzhen Chiwan Wharf Holdings
Limited (hereinafter "Chiwan Wharf"), which comprise the company and consolidated balance
sheets as at 31 December 2012, and the company and consolidated income statements, the company
and consolidated statements of changes in shareholders' equity and the company and consolidated
cash flow statements for the year then ended, and the notes to the financial statements.
1. Management's responsibility for the financial statements
Management of Chiwan Wharf is responsible for the preparation and fair presentation of these
financial statements. This responsibility includes: (1) preparing the financial statements in
accordance with Accounting Standards for Business Enterprises to achieve fair presentation of the
financial statements; (2) designing, implementing and maintaining internal control which is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
2. Auditor's responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with China Standards on Auditing. Those standards require that
we comply with the Code of Ethics for Chinese Public Accountants and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, we consider the internal control relevant to
the preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
-1-
3. Opinion
In our opinion, the financial statements of Chiwan Wharf present fairly, in all material respects,
the company's and consolidated financial position as of 31 December 2012, and the company's and
consolidated results of operations and cash flows for the year then ended in accordance with
Accounting Standards for Business Enterprises.
Deloitte Touche Tohmatsu Chinese Certified Public Accountant:
Certified Public Accountants LLP
Shanghai, China Li Weihua
Chinese Certified Public Accountant:
Su Min
25 March 2013
The auditor's report and the accompanying financial statements are English translations of the
Chinese auditor's report and financial statements prepared in accordance with Accounting
Standards for Business Enterprises. These financial statements are not intended to present the
financial position and results of operations and cash flows in accordance with accounting principles
and practices generally accepted in other countries and jurisdictions. Where the English version
does not conform to the Chinese version, the Chinese version prevails.
-2-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Consolidated Balance Sheet
Unit: RMB
LIABILITIES AND
ASSETS Notes Closing balance Opening balance SHAREHOLDERS' EQUITY Notes Closing balance Opening balance
Current Assets: Current Liabilities:
Currency funds (V)1 314,855,568 478,788,943 Short-term borrowings (V)18 1,180,929,700 1,418,830,000
Notes receivable 1,680,000 - Notes payable (V)19 826,000 8,704,900
Accounts receivable (V)2 251,420,961 230,797,003 Accounts payable (V)20 145,987,941 160,112,954
Prepayments (V)3 1,623,037 3,497,668 Advances (V)21 299,453 5,045,311
Interest receivable - 51,667 Employee benefits payable (V)22 65,535,790 55,945,867
Other receivables (V)4 15,984,053 11,833,877 Taxes payable (V)23 40,854,861 121,781,050
Inventories (V)5 21,325,571 23,500,358 Interest payable (V)24 18,541,173 1,637,790
Other current assets 8,956,589 1,003,913 Dividends payable (V)25 - 365,161,451
Total current assets 615,845,779 749,473,429 Other payables (V)26 41,574,838 50,809,293
Non-current liabilities due
Non-current Assets: (V)27 39,727,207 14,951,750
within one year
Available-for-sale
(V)6 5,210,000 5,690,000 Total current liabilities 1,534,276,963 2,202,980,366
financial assets
Long-term equity
(V)7,8 1,544,951,108 1,436,856,420 Non-current Liabilities:
investments
Investment property (V)9 33,463,476 34,679,229 Long-term borrowings (V)28 150,000,000 90,000,000
Fixed assets (V)10 2,701,093,453 2,482,077,688 Bonds payable (V)29 496,545,753 -
Construction in progress (V)11 609,932,609 517,818,144 Special payables (V)30 80,622,976 81,790,541
Intangible assets (V)12 1,007,534,028 1,038,926,892 Deferred tax liabilities (V)15 1,022,500 1,142,500
Goodwill (V)13 10,858,898 10,858,898 Other non-current liabilities (V)31 53,652,356 58,250,957
Long-term prepaid
(V)14 60,962,668 62,488,532 Total non-current liabilities 781,843,585 231,183,998
expenses
Deferred tax assets (V)15 67,969,034 59,250,919 TOTAL LIABILITIES 2,316,120,548 2,434,164,364
SHAREHOLDERS'
Other non-current assets (V)16 123,309,397 142,108,284
EQUITY:
Total non-current assets 6,165,284,671 5,790,755,006 Share capital (V)32 644,763,730 644,763,730
Capital reserve (V)33 165,866,055 166,226,055
Special reserve (V)34 1,394,832 -
Surplus reserve (V)35 464,704,268 421,692,405
Unappropriated profit (V)36 2,414,907,916 2,248,722,001
Translation differences
arising on translation of
financial statements (13,604,718) (13,607,440)
denominated in foreign
currencies
Total shareholders' equity
attributable to equity holders of 3,678,032,083 3,467,796,751
the parent
Minority interests 786,977,819 638,267,320
TOTAL SHAREHOLDERS'
4,465,009,902 4,106,064,071
EQUITY:
TOTAL LIABILITIES AND
TOTAL ASSETS 6,781,130,450 6,540,228,435 6,781,130,450 6,540,228,435
SHAREHOLDER' EQUITY
The accompanying notes form part of the financial statements.
The financial statements on pages 3 to 107 were signed by the following:
Legal Representative: Zheng Shaoping
Person in Charge of the Accounting Body: Zhang Fang
Chief Accountant: Ma Zhihong
-3-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Balance Sheet of the Parent Company
Unit: RMB
LIABILITIES AND
ASSETS Notes Closing balance Opening balance SHAREHOLDERS' EQUITY Notes Closing balance Opening balance
Current Assets: Current Liabilities:
Currency funds 149,792,425 187,090,694 Short-term borrowings 334,901,700 584,530,000
Notes receivable 200,000 - Notes payable - 7,493,900
Accounts receivable (XII)1 17,754,009 16,623,725 Accounts payable 13,264,803 12,225,607
Prepayments 93,006 1,210,724 Advances 246,980 3,907,291
Interest receivable 218,084 206,151 Employee benefits payable 42,214,995 31,818,160
Dividends receivable 145,359,112 529,289,881 Taxes payable 2,213,148 1,392,629
Other receivables (XII)2 358,588,904 243,256,537 Interest payable 21,204,530 2,361,250
Inventories 860,702 922,921 Other payables 369,642,044 749,075,206
Other current assets 323,406 - Total current liabilities 783,688,200 1,392,804,043
Total current assets 673,189,648 978,600,633 Non-current Liabilities:
Non-current Assets: Bonds payable 496,545,753 -
Available-for-sale financial
5,210,000 5,690,000 Deferred tax liabilities 1,022,500 1,142,500
assets
Long-term receivables 11,004,285 11,004,304 Total non-current liabilities 497,568,253 1,142,500
Long-term equity investments (XII)3 2,131,519,862 2,002,116,574 TOTAL LIABILITIES 1,281,256,453 1,393,946,543
Investment property 25,587,744 26,547,149 SHAREHOLDERS' EQUITY
Fixed assets 144,059,820 156,481,155 Share capital 644,763,730 644,763,730
Construction in progress 687,894 614,894 Capital reserve 153,078,328 153,438,328
Intangible assets 62,376,911 65,552,356 Special reserve 240,349 -
Long-term prepaid expenses 7,488,719 5,770,046 Surplus reserve 464,704,268 421,692,405
Deferred tax assets 40,060,852 29,709,461 Unappropriated profit 557,142,607 668,245,566
TOTAL SHAREHOLDERS'
Total non-current assets 2,427,996,087 2,303,485,939 1,819,929,282 1,888,140,029
EQUITY
TOTAL LIABILITIES AND
TOTAL ASSETS 3,101,185,735 3,282,086,572 3,101,185,735 3,282,086,572
SHAREHOLDERS' EQUITY
The accompanying notes form part of the financial statements.
-4-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Consolidated Income Statement
Unit: RMB
Amount in the Amount in the
ITEM Notes current period prior period
I. Total operating income 1,783,846,135 1,708,136,899
Including: Operating income (V)37 1,783,846,135 1,708,136,899
II. Total operating costs 1,130,280,142 1,009,870,456
Including: Operating costs (V)37 844,601,419 768,040,243
Business taxes and levies (V)38 61,151,246 71,021,926
Administrative expenses 153,432,974 158,186,232
Financial expenses (V)39 70,763,164 12,370,981
Impairment losses of assets (V)40 331,339 251,074
Add: Gains from changes in fair values - -
Investment income (V)41 83,518,913 118,228,183
Including: Income from investments in associates
(V)41 83,158,913 113,968,183
and joint ventures
III. Operating profit 737,084,906 816,494,626
Add: Non-operating income (V)42 7,638,388 1,878,537
Less: Non-operating expenses (V)43 3,828,736 2,035,862
Including: Losses from disposal of non-current assets (V)43 2,940,283 1,960,173
IV. Total Profit 740,894,558 816,337,301
Less: Income tax expenses (V)44 125,125,048 148,561,633
V. Net profit 615,769,510 667,775,668
Net profit attributable to shareholders of the parent 467,103,270 505,645,137
Profit or loss attributable to minority interests 148,666,240 162,130,531
VI. Earnings per share: (V)47
(I) Basic earnings per share 0.724 0.784
(II) Diluted earnings per share 0.724 0.784
VII. Other comprehensive income (V)48 (357,278) (855,837)
VIII.Total comprehensive income attributable to: 615,412,232 666,919,831
Shareholders of the parent 466,745,992 504,789,300
Minority interests 148,666,240 162,130,531
The accompanying notes form part of the financial statements.
-5-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Income Statement of the Parent Company
Unit: RMB
Amount in the Amount in the
ITEM Notes current period prior period
I. Total operating income (XII)4 204,419,907 189,122,522
Less: Operating costs (XII)4 144,778,846 136,475,924
Business taxes and levies 8,091,481 8,055,454
Selling and distribution expenses - -
Administrative expenses 58,189,834 62,568,055
Financial expenses 37,920,457 13,970,049
Impairment loss of assets 79,777 38,601
Add: Gains from changes in fair values - -
Investment income (XII)5 225,487,156 453,339,564
Including: Income from investments in associates
(XII)5 29,403,288 34,396,865
and joint ventures
II. Operating profit 180,846,668 421,354,003
Add: Non-operating income 1,038,993 1,718,849
Less: Non-operating expenses 2,422,655 1,442,326
Including: Losses from disposal of non-current assets 2,416,755 1,437,106
III. Total Profit 179,463,006 421,630,526
Less: Income tax expenses (10,351,390) (8,488,107)
IV. Net profit 189,814,396 430,118,633
V. Earnings per share:
(I) Basic earnings per share N/A N/A
(II) Diluted earnings per share N/A N/A
VI. Other comprehensive income (360,000) (667,700)
VII. Total comprehensive income 189,454,396 429,450,933
The accompanying notes form part of the financial statements.
-6-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Consolidated Cash Flow Statement
Unit: RMB
Amount in the Amount in the
ITEM Notes current period prior period
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the rendering of services 1,740,376,274 1,649,531,912
Receipts of tax refunds 1,003,913 -
Other cash receipts relating to operating activities (V)49 13,442,676 31,724,082
Sub-total of cash inflows 1,754,822,863 1,681,255,994
Cash payments for goods purchased and services received 472,056,724 412,465,800
Cash payments to and on behalf of employees 234,641,704 218,888,671
Payments of all types of taxes 282,874,707 225,859,493
Other cash payments relating to operating activities (V)49 66,777,276 77,851,434
Sub-total of cash outflows 1,056,350,411 935,065,398
Net Cash Flow from Operating Activities (V)50 698,472,452 746,190,596
II. Cash Flows from Investing Activities:
Cash receipts from disposals and returns of investments - 44,879,120
Cash receipts from investments income 72,263,700 51,044,863
Net cash receipts from disposals of fixed assets, intangible assets
5,366,442 1,039,749
and other long-term assets
Sub-total of cash inflows 77,630,142 96,963,732
Cash payments to acquire or construct fixed assets, intangible
492,432,594 585,894,854
assets and other long-term assets
Net cash payments for acquisitions of subsidiaries and other
100,000,000 220,284,181
business units
Sub-total of cash outflows 592,432,594 806,179,035
Net Cash Flow from Investing Activities (514,802,452) (709,215,303)
III. Cash Flows from Financing Activities:
Cash receipts from investors' capital contribution - 91,940,000
Including: cash receipts from minorities' capital contribution - 91,940,000
Cash receipts from borrowings 1,720,960,000 1,449,050,000
Cash receipts from issue of bonds 496,000,000 -
Sub-total of cash inflows 2,216,960,000 1,540,990,000
Cash repayments of borrowings 1,875,060,000 1,506,050,000
Cash payments for distribution of dividends or profit or interest 689,142,357 361,238,309
Including: payments for distribution of dividends or profit to
365,161,451 -
minorities
Other cash payments relating to financing activities (V)49 400,000 4,448,649
Sub-total of cash outflows 2,564,602,357 1,871,736,958
Net Cash Flow from Financing Activities (347,642,357) (330,746,958)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
38,982 (9,159,475)
Equivalents
V. Net Increase in Cash and Cash Equivalents (163,933,375) (302,931,140)
Add: Opening balance of Cash and Cash Equivalents (V)50 478,788,943 781,720,083
VI. Closing Balance of Cash and Cash Equivalents (V)50 314,855,568 478,788,943
The accompanying notes form part of the financial statements.
-7-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Cash Flow Statement of the Parent Company
Unit: RMB
Amount in the Amount in the
ITEM Notes current period prior period
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the rendering of
196,415,023 181,861,014
services
Other cash receipts relating to operating activities 483,754,807 726,128,371
Sub-total of cash inflows 680,169,830 907,989,385
Cash payments for goods purchased and services received 98,019,838 98,191,799
Cash payments to and on behalf of employees 64,026,116 60,366,911
Payments of all types of taxes 9,956,453 9,322,699
Other cash payments relating to operating activities 980,803,385 427,548,733
Sub-total of cash outflows 1,152,805,792 595,430,142
Net Cash Flow from Operating Activities (XII)7 (472,635,962) 312,559,243
II. Cash Flows from Investing Activities:
Cash receipts from investments income 580,014,637 195,892,213
Net cash receipts from disposals of fixed assets,
208,360 807,083
intangible assets and other long-term assets
Sub-total of cash inflows 580,222,997 196,699,296
Cash payments to acquire or construct fixed assets,
10,669,758 13,063,802
intangible assets and other long-term assets
Cash payments to acquire investments 100,000,000 379,200,000
Sub-total of cash outflows 110,669,758 392,263,802
Net Cash Flow from Investing Activities 469,553,239 (195,564,506)
III. Cash Flows from Financing Activities:
Cash receipts from borrowings 719,060,000 728,550,000
Cash receipts from issue of bonds 496,000,000 -
Sub-total of cash inflows 1,215,060,000 728,550,000
Cash repayments of borrowings 969,060,000 818,550,000
Cash payments for distribution of dividends or profit or
279,799,308 330,952,458
interest
Other cash payments relating to financing activities 400,000 2,606,625
Sub-total of cash outflows 1,249,259,308 1,152,109,083
Net Cash Flow from Financing Activities (34,199,308) (423,559,083)
IV. Effect of Foreign Exchange Rate Changes on Cash
(16,238) (709,315)
and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents (37,298,269) (307,273,661)
Add: Opening balance of Cash and Cash Equivalents (XII)7 187,090,694 494,364,355
VI. Closing Balance of Cash and Cash Equivalents (XII)7 149,792,425 187,090,694
The accompanying notes form part of the financial statements.
-8-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Consolidated Statement of Changes in Shareholders’ Equity
Unit: RMB
Amount in the current period Amount of the same period of last year
Attributable to shareholders of the parent Attributable to shareholders of the parent
Total Total
Special Surplus Unappropriated Minority shareholders' Special Surplus Unappropriated Minority shareholders'
ITEM Share capital Capital reserve reserve reserve profit Others interests equity Share capital Capital reserve reserve reserve profit Others interests equity
I. Closing balance of the preceding
644,763,730 166,226,055 - 421,692,405 2,248,722,001 (13,607,440) 638,267,320 4,106,064,071 644,763,730 144,909,755 - 383,570,404 2,079,724,472 (13,419,303) 567,608,774 3,807,157,832
year
Add: Changes in accounting policies - - - - - - - - - - - - - - - -
Corrections of prior period errors - - - - - - - - - - - - - - - -
Others - - - - - - - - - - - - - - - -
II. Opening balance of the year 644,763,730 166,226,055 - 421,692,405 2,248,722,001 (13,607,440) 638,267,320 4,106,064,071 644,763,730 144,909,755 - 383,570,404 2,079,724,472 (13,419,303) 567,608,774 3,807,157,832
III. Changes for the year - (360,000) 1,394,832 43,011,863 166,185,915 2,722 148,710,499 358,945,831 - 21,316,300 - 38,122,001 168,997,529 (188,137) 70,658,546 298,906,239
(I) Net profit - - - - 467,103,270 - 148,666,240 615,769,510 - - - - 505,645,137 - 162,130,531 667,775,668
(II) Other comprehensive income - (360,000) - - - 2,722 - (357,278) - (667,700) - - - (188,137) - (855,837)
Subtotal of (I) and (II) - (360,000) - - 467,103,270 2,722 148,666,240 615,412,232 - (667,700) - - 505,645,137 (188,137) 162,130,531 666,919,831
(III) contributions and reduction in
- - - - - - - - - 20,774,000 - - - - 71,166,000 91,940,000
capital
1. Capital contribution from
- - - - - - - - - 20,774,000 - - - - 71,166,000 91,940,000
shareholders
2. Share-based payment recognised in
- - - - - - - - - - - - - - - -
shareholders' equity
3. Others - - - - - - - - - - - - - - - -
(IV) Profit distribution - - - 43,011,863 (300,917,355) - - (257,905,492) - - - 38,122,001 (336,647,608) - (163,627,985) (462,153,592)
1. Transfer to surplus reserve - - - 43,011,863 (43,011,863) - - - - - - 38,122,001 (38,122,001) - - -
2. Transfer to general reserve - - - - - - - - - - - - - - - -
3. Distributions to shareholders - - - - (257,905,492) - - (257,905,492) - - - - (298,525,607) - (163,627,985) (462,153,592)
4. Others - - - - - - - - - - - - - - - -
(V) Transfers within shareholders'
- - - - - - - - - - - - - - - -
equity
1. Capitalisation of capital reserve - - - - - - - - - - - - - - - -
2. Capitalisation of surplus reserve - - - - - - - - - - - - - - - -
3. Loss made up by surplus reserve - - - - - - - - - - - - - - - -
4. Others - - - - - - - - - - - - - - - -
(VI) Special reserve - - 1,394,832 - - - 44,259 1,439,091 - - - - - - - -
1. Withdrawn in the period - - 10,853,324 - - - 3,953,633 14,806,957 - - - - - - - -
2. Utilized in the period - - (9,458,492) - - - (3,909,374) (13,367,866) - - - - - - - -
(VII) Others - - - - - - - - - 1,210,000 - - - - 990,000 2,200,000
IV. Closing balance of the year 644,763,730 165,866,055 1,394,832 464,704,268 2,414,907,916 (13,604,718) 786,977,819 4,465,009,902 644,763,730 166,226,055 - 421,692,405 2,248,722,001 (13,607,440) 638,267,320 4,106,064,071
The accompanying notes form part of the financial statements.
-9-
Shenzhen Chiwan Wharf Holdings Limited
FOR THE YEAR ENDED 31 DECEMBER 2012
Statement of Changes in Shareholders' Equity of the Parent Company
Unit: RMB
Amount in the current period Amount of the same period of last year
Special Unappropriated Total shareholders' Special Unappropriated Total shareholders'
Share capital Capital reserve reserve Surplus reserve profit equity Share capital Capital reserve reserve Surplus reserve profit equity
I. Closing balance of the preceding year 644,763,730 153,438,328 - 421,692,405 668,245,566 1,888,140,029 644,763,730 154,106,028 - 383,570,404 574,774,541 1,757,214,703
Add: Changes in accounting policies - - - - - - - - - - - -
Corrections of prior period errors - - - - - - - - - - - -
Others - - - - - - - - - - - -
II. Opening balance of the year 644,763,730 153,438,328 - 421,692,405 668,245,566 1,888,140,029 644,763,730 154,106,028 - 383,570,404 574,774,541 1,757,214,703
III. Changes for the year - (360,000) 240,349 43,011,863 (111,102,959) (68,210,747) - (667,700) - 38,122,001 93,471,025 130,925,326
(I) Net profit - - - - 189,814,396 189,814,396 - - - - 430,118,633 430,118,633
(II) Other comprehensive income - (360,000) - - - (360,000) - (667,700) - - - (667,700)
Subtotal of (I) and (II) - (360,000) - - 189,814,396 189,454,396 - (667,700) - - 430,118,633 429,450,933
(III) Shareholders' contributions and reduction
- - - - - - - - - - - -
in capital
1. Capital contribution from shareholders - - - - - - - - - - - -
2. Share-based payment recognised in
- - - - - - - - - - - -
shareholders' equity
3. Others - - - - - - - - - - - -
(IV) Profit distribution - - - 43,011,863 (300,917,355) (257,905,492) - - - 38,122,001 (336,647,608) (298,525,607)
1. Transfer to surplus reserve - - - 43,011,863 (43,011,863) - - - - 38,122,001 (38,122,001) -
2. Transfer to general reserve - - - - - - - - - - - -
3. Distributions to shareholders - - - - (257,905,492) (257,905,492) - - - - (298,525,607) (298,525,607)
4. Others - - - - - - - - - - - -
(V) Transfers within shareholders' equity - - - - - - - - - - - -
1. Capitalisation of capital reserve - - - - - - - - - - - -
2. Capitalisation of surplus reserve - - - - - - - - - - - -
3. Loss made up by surplus reserve - - - - - - - - - - - -
4. Others - - - - - - - - - - - -
(VI) Special reserve - - 240,349 - - 240,349 - - - - - -
1. Withdrawn in the period - - 1,431,301 - - 1,431,301 - - - - - -
2. Utilized in the period - - (1,190,952) - - (1,190,952) - - - - - -
(VII) Others - - - - - - - - - - - -
IV. Closing balance of the year 644,763,730 153,078,328 240,349 464,704,268 557,142,607 1,819,929,282 644,763,730 153,438,328 - 421,692,405 668,245,566 1,888,140,029
The accompanying notes form part of the financial statements.
- 10 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(I) GENERAL
Shenzhen Chiwan Wharf Holdings Limited (the "Company") was a joint stock limited company
reorganized from Shenzhen Chiwan Wharf Co.,Ltd on 16 January 1993 as approved by General
Office of Shenzhen Municipal People's Government (filed as Shen Fu Ban Fu [1993] No. 357).
On 18 February 1993, under the approval released by People's Bank of China Shenzhen Branch
(filed as Shen Ren Yin Fu Zi [1993] No.038), the Company issued, by public offering, the
ordinary shares of 310,470,000 shares, including the domestic shares ("A shares") of 46,000,000
share, and domestically listed foreign shares ("B shares") of 40,000,000 shares. Both shares were
listed on Shenzhen Stock Exchange on 5 May 1993.
As of 31 December 2005, the total shares of the Company amounted to 644,763,700, after several
times of capitalization of capital reserves and additional issuances during the period between 1993
and 2005.
On 26 May 2006, the stockholders' meeting of the Company approved the spilt-share reform
under which a consideration comprising of every 1 A-share, cash of RMB11.5 and 8 put warrants
was granted by China Nanshan Development (Group) Incorporation ("Nanshan Group"), the non-
circulating shareholder of the Company, to each circulating shareholder holding 10 A-shares of
the Company. After implementation of the split-share reform, the total number of A-shares
remained unchanged with 370,802,900 shares held by Nanshan Group, occupying 57.51% of the
total shares.
On 13 July 2011, Nanshan Group obtained 75,100 shares of A shares in the secondary market; as
a result, the number of A-shares held by Nanshan Group arrived at 370,878,000, occupying
57.52% of the total shares.
On 17 September 2012, China Merchants Holdings International Company Limited (the "CMHI")
signed a shareholding entrustment agreement with Nanshan Group, subject to which Nanshan
Group entrusted CMHI with its holding in Shenzhen Chiwan Wharf of A-shares of 370,878,000
shares (57.52% of the total shares). Additionally, 55,314,200 B-shares indirectly held by CMHI
via Jing Feng Co., Ltd, a subsidiary of CMHI, plus the voting rights obtained via entrustment,
make up of 66.10% of the voting right of the Company.
On 1 November 2012, the China Securities Regulatory Commission ("CSRC") approved the
Announcement of China Merchants Holdings International Company Limited Concerning the
Purchase Report of Shenzhen Chiwan Wharf Holding Limited and the Exemption of the Offer
Obligation (filed as Zhen Jian Xu Ke [2012] No.1428), exempting CMHI from the offer
obligation resulted from the fact of controlling Shenzhen Chiwan Wharf's 370,878,000 shares
through stock custody.
On 27 December 2012, Nanshan Group signed an equity transfer agreement with Shenzhen Malai
Warehouse Co., Ltd, a subsidiary of CMHI, subject to which Nanshan Group would transfer
161,190,933 A-shares of the Company to Shenzhen Malai Warehouse Co., Ltd.
- 11 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(I) BASIC INFORMATION ABOUT THE GROUP- continued
On 6 March 2013, the Company received the Reply on Certain Issues Regarding Agreed Transfer
of State-owned Shares of Shenzhen Chiwan Wharf Holdings Ltd. released by the State-owned
Assets Supervision and Administration Commission (filed as Guo Zi Chan Quan [2013] No. 94),
which approved Nanshan Group to transfer 161,190,933 A-shares of the Company to Shenzhen
Malai Warehouse Co., Ltd.
Therefore, the parent of the Company has been changed from Nanshan Group to CMHI since 1
November 2012, with the ultimate actual controller of the Company having always been China
Merchants Group ("CMG").
The headquarters of the Company is located in Shenzhen Guangdong Province. The Company
and its subsidiaries (collectively the "Group") are principally engaged in the provision of cargo
handling, warehousing, land and sea transportation services, cargo packing, agency business and
the other services.
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES AND PRIOR PERIOD ERRORS
1. Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises issued by the Ministry
of Finance (MoF) on 15 February 2006. In addition, the Group has disclosed relevant financial
information in accordance with Information Disclosure and Presentation Rules for Companies
Offering Securities to the Public No. 15-General Provisions on Financial Reporting (Revised in
2010).
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instruments
which are measured at fair value, the Group adopts the historical cost as the principle of
measurement of the financial statements. Upon being restructured into a stock company, the fixed
assets and intangible assets initially contributed by the state-owned shareholders are recognized
based on the valuation amounts confirmed by the state-owned assets administration department.
Where assets are impaired, provisions for asset impairment are made in accordance with the
relevant requirements.
2. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with Accounting
Standards for Business Enterprises, and present truly and completely, the Company's and
consolidated financial position as of 31 December 2012, and the Company's and consolidated
results of operations and cash flows for the year then ended.
3. Accounting period
The Group has adopted the calendar year as its accounting year, from 1 January to 31 December.
- 12 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS – continued
4. Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Company
and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries
choose RMB as their functional currency. The Company's foreign subsidiary chooses Currency
RMB or Currency HKD as its functional currency on the basis of the primary economic
environment in which it operates. The Group adopts RMB to prepare its financial statements.
5. The accounting treatment of business combinations involving enterprises under common
control and business combinations not involving enterprises under common control
Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded
by the combining entities at the date of the combination. The difference between the carrying
amount of the net assets obtained and the carrying amount of the consideration paid for the
combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in
which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquire, the intermediary expenses (fees in respect of auditing, legal services,
valuation and consultancy services, etc.) and other administrative expenses attributable to the
business combination are recognized in profit or loss in the periods when they are incurred.
Where a business combination not involving enterprises under common control is achieved in
stages that involves multiple transactions, the cost of combination is the sum of the consideration
paid at the acquisition date and the fair value of the equity in the acquire held before the
acquisition. The equity held in the acquire before the acquisition date is remeasured at its fair
value at the acquisition date, with any difference between its fair value and its carrying amount
being recognized as investment income, and the other comprehensive income relating to the
equity held in the acquire before the acquisition date being transferred to investment income.
- 13 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
5. The accounting treatment of business combinations involving enterprises under common
control and business combinations not involving enterprises under common control - continued
The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a
business combination that meet the recognition criteria shall be measured at fair value at the
acquisition date. Where the cost of combination exceeds the acquirer's interest in the fair value of
the acquiree's identifiable net assets, the difference is treated as an asset and recognized as
goodwill, which is measured at cost on initial recognition. Where the cost of combination is less
than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer
reassesses the measurement of the fair values of the acquiree's identifiable assets, liabilities and
contingent liabilities and measurement of the cost of combination. If after that reassessment, the
cost of combination is still less than the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the acquirer recognizes the remaining difference immediately in profit or
loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements. It is tested for
impairment at least at the end of each year.
For the purpose of impairment testing, goodwill is considered together with the related assets
groups, i.e., goodwill is reasonably allocated to the related assets groups or each of assets groups
expected to benefit from the synergies of the combination. In testing an assets group with
goodwill for impairment, an impairment loss is recognized if the recoverable amount of the assets
group or sets of assets groups (including goodwill) is less than its carrying amount. The
impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to
such assets group or sets of assets groups, and then to the other assets of the group pro-rata basis
on the basis of the carrying amount of each asset (other than goodwill) in the group.
The recoverable amount of an asset is the higher of its fair value less costs of disposal and the
present value of the future cash flows expected to be derived from the asset. An asset's fair value
is the price in a sale agreement in an arm's length transaction. If there is no sale agreement but an
asset is traded in an active market, fair value is the current bid price. If there is no sale agreement
or active market for an asset, fair value is assessed based on the best information available. Costs
of disposal include legal costs related to the disposal of the asset, related taxes, costs of removing
the asset and direct costs to bring the asset into condition for its sale. The present value of
expected future cash flows of an asset shall be determined by estimating the future cash flows to
be derived from continuing use of the asset and from its ultimate disposal and applying the
appropriate discount rate to those future cash flows.
The impairment of goodwill is recognized in profit or loss for the period in which it is incurred
and will not be reversed in any subsequent period.
- 14 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
6. Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as
to obtain benefits from its operating activities.
For a subsidiary already disposed of by the Group, the operating results and cash flows before the
date of disposal (the date when control is lost) are included in the consolidated income statement
and consolidated statement of cash flows, as appropriate.
For subsidiaries acquired through a business combination involving enterprises not under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative
figures in the consolidated financial statements.
No matter when the business combination occurs in the reporting period, subsidiaries acquired
through a business combination involving enterprises under common control are included in the
Group's scope of consolidation as if they had been included in the scope of consolidation from the
date when they first came under the common control of the ultimate controlling party. Their
operating results and cash flows from the date when they first came under the common control of
the ultimate controlling party are included in the consolidated income statement and consolidated
statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the parent is treated as minority
interests and presented as "minority interests" in the consolidated balance sheet within
shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable
to minority interests is presented as "minority interests" in the consolidated income statement
below the "net profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the
subsidiary, the excess amount are still allocated against minority interests.
Acquisition of minority interests or disposals of interests in a subsidiary that do not result in the
loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts
of the parent's interests and minority interests are adjusted to reflect the changes in their relative
interests in the subsidiary. The difference between the amount by which the minority interests are
adjusted and the fair value of the consideration paid or received is adjusted to shareholders' equity
(capital reserve). If the capital reserve is not sufficient to absorb the difference, the excess are
adjusted against retained earnings.
- 15 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
6. Preparation of consolidated financial statements - continued
When the group loses control over a subsidiary due to disposal of equity investment or other
reason, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value of
any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated
from the acquisition date according to the original proportion of ownership interests is recognized
as investment income in the period in which control is lost. Other comprehensive income
associated with investment in the former subsidiary is reclassified to investment income in the
period in which control is lost.
7. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
8. Translation of transactions and financial statements denominated in foreign currencies
8.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot
exchange rates at the balance sheet date. Exchange differences arising from the differences
between the spot exchange rates prevailing at the balance sheet date and those on initial
recognition or at the previous balance sheet date are recognized in profit or loss for the period,
except that (1) exchange differences related to a specific-purpose borrowing denominated in
foreign currency that qualify for capitalization are capitalized as part of the cost of the qualifying
asset during the capitalization period; (2) exchange differences related to hedging instruments for
the purpose of hedging against foreign currency risks are accounted for using hedge accounting;
(3) exchange differences arising from change in the carrying amounts other than the amortized
cost of available-for-sale monetary items are recognized as other comprehensive income and
included in capital reserve.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions; the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value including changes of exchange rate and is
recognized in profit and loss or as other comprehensive income included in capital reserve.
- 16 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
8. Translation of transactions and financial statements denominated in foreign currencies
- continued
8.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for retained earnings are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the amount of profit distributed are translated at the spot exchange rates
on the dates of the transactions; the opening balance of retained earnings is the translated closing
balance of the previous year's retained earnings; the closing balance of retained earnings is
calculated and presented on the basis of each translated income statement and profit distribution
item. The difference between the translated assets and the aggregate of liabilities and
shareholders' equity items is separately presented, as the translation difference of financial
statements denominated in foreign currencies, under the shareholders' equity in the balance sheet.
Cash flows arising from transaction in a foreign currency and the cash flows of a foreign
subsidiary are translated at the spot exchange rate on the date of the cash flows. The effect of
exchange rate changes on cash and cash equivalents is regarded as a reconciling item and
presented separately in the cash flow statement as "effect of exchange rate changes on cash and
cash equivalents ".
The opening balances and the comparative figures of previous year are presented at the translated
amounts of previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or disposal of certain interest or
due to other reasons resulting in a loss of control over a foreign operation, the Group transfers the
accumulated translation differences attributable to the shareholders' equity of the parent that
relating to translation of the financial statements of that foreign operation, presented under
shareholders' equity, to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign
operation, the proportionate share of accumulated translation differences are re-attributed to non-
controlling interests and are not recognized in profit and loss. For partial disposals of associates or
joint ventures, the proportionate share of the accumulated translation differences is reclassified to
profit or loss.
- 17 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments
Financial assets and financial liabilities are recognized when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial liabilities are initially
measured at fair value. For financial assets and financial liabilities at fair value through profit or
loss, transaction costs are immediately recognized in profit or loss. For other financial assets and
financial liabilities, transaction costs are included in their initial recognized amounts.
9.1 Determination of fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm's length transaction. For a financial instrument which
has an active market, the Group uses the quoted price in the active market to establish its fair
value. For a financial instrument which has no active market, the Group establishes fair value by
using a valuation technique. Valuation techniques include using recent arm's length market
transactions between knowledgeable, willing parties, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow analysis and option pricing models.
9.2 Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial asset or a
financial liability (or a group of financial assets or financial liabilities) and of allocating the
interest income or interest expense over the relevant period, using the effective interest rate. The
effective interest rate is the rate that exactly discounts estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to
the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group estimates future cash flows considering all
contractual terms of the financial asset or financial liability (without considering future credit
losses), and also considers all fees paid or received between the parties to the contract giving rise
to the financial asset and financial liability that are an integral part of the effective interest rate,
transaction costs, and premiums or discounts etc.
9.3 Classification, recognition and measurement of financial assets
On initial recognition, the Group’s financial assets are classified into one of the four categories,
including financial assets at fair value through profit or loss ("FVTPL"), held-to-maturity
investments, loans and receivables, and available-for-sale financial assets. All regular way
purchases or sales of financial assets are recognized and derecognized on a trade date basis.
- 18 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.3 Classification, recognition and measurement of financial assets - continued
9.3.1 Financial Assets at Fair Value through Profit or Loss ("FVTPL")
Financial assets at fair value through profit or loss ("FVTPL") include financial assets held for
trading and those designated as at fair value through profit or loss.
A financial asset is classified as held for trading if one of the following conditions is satisfied: (1)
It has been acquired principally for the purpose of selling in the near term; or (2) On initial
recognition it is part of a portfolio of identified financial instruments that the Group manages
together and there is objective evidence that the Group has a recent actual pattern of short-term
profit-taking; or (3) It is a derivative that is not designated and effective as a hedging instrument,
or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery
of an unquoted equity instrument (without a quoted price in an active market) whose fair value
cannot be reliably measured.
A financial asset may be designated as at FVTPL upon initial recognition only when one of the
following conditions is satisfied: (1) Such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise result from measuring assets or
recognizing the gains or losses on them on different bases; or (2) The financial asset forms part of
a group of financial assets or a group of financial assets and financial liabilities, which is managed
and its performance is evaluated on a fair value basis, in accordance with the Group's documented
risk management or investment strategy, and information about the grouping is reported to key
management personnel on that basis.
Financial assets at FVTPL are subsequently measured at fair value. Any gains or losses arising
from changes in the fair value and any dividend or interest income earned on the financial assets
are recognized in profit or loss.
9.3.2 Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Group's management has the positive intention and
ability to hold to maturity.
Held-to-maturity investments are subsequently measured at amortized cost using the effective
interest method. Gain or loss arising from derecognition, impairment or amortization is
recognized in profit or loss.
9.3.3 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Financial assets classified as loans and receivables by the
Group include notes receivable, accounts receivable, interest receivable, dividends receivable, and
other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortization is recognized in
profit or loss.
- 19 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.3 Classification, recognition and measurement of financial assets - continued
9.3.4 Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on
initial recognition as available for sale, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included
in the capital reserve, except that impairment losses and exchange differences related to amortized
cost of financial assets are recognized in profit or loss, until the financial assets are derecognized,
at which time the gains or losses are released and recognized in profit or loss.
Interests obtained and the dividends declared by the investee during the period in which the
available-for-sale financial assets are held, are recognized in investment gains.
For investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured, and derivative financial assets that are linked to
and must be settled by delivery of such unquoted equity instruments, they are measured at cost.
9.4 Impairment of financial assets
The Group assesses at each balance sheet date the carrying amounts of financial assets other than
those at fair value through profit or loss. If there is objective evidence that a financial asset is
impaired, the Group determines the amount of any impairment loss. Objective evidence that a
financial asset is impaired is evidence that, arising from one or more events that occurred after the
initial recognition of the asset, the estimated future cash flows of the financial asset, which can be
reliably measured, have been affected.
Objective evidence that a financial asset is impaired includes the following observable events:
(1) Significant financial difficulty of the issuer or obligor;
(2) A breach of contract by the borrower, such as a default or delinquency in interest or principal
payments;
(3) The Group, for economic or legal reasons relating to the borrower's financial difficulty,
granting a concession to the borrower;
(4) It becoming probable that the borrower will enter bankruptcy or other financial
reorganizations;
(5) The disappearance of an active market for that financial asset because of financial difficulties
of the issuer;
- 20 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.4 Impairment of financial assets - continued
(6) Upon an overall assessment of a group of financial assets, observable data indicates that there
is a measurable decrease in the estimated future cash flows from the group of financial assets
since the initial recognition of those assets, although the decrease cannot yet be identified
with the individual financial assets in the group. Such observable data includes:
- Adverse changes in the payment status of borrower in the group of assets;
- Economic conditions in the country or region of the borrower which may lead to a failure to
pay the group of assets;
(7) Significant adverse changes in the technological, market, economic or legal environment in
which the issuer of equity instruments operates, indicating that the cost of the investment in
the equity instrument may not be recovered by the investor;
(8) A significant or prolonged decline in the fair value of an investment in an equity instrument
below its cost;
(9) Other objective evidence indicating there is an impairment of a financial asset.
- Impairment of financial assets measured at amortized cost
If financial assets carried at cost or amortized cost are impaired, the carrying amounts of the
financial assets are reduced to the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset's original effective
interest rate. The amount of reduction is recognized as an impairment loss in profit or loss. If,
subsequent to the recognition of an impairment loss on financial assets carried at amortized cost,
there is objective evidence of a recovery in value of the financial assets which can be related
objectively to an event occurring after the impairment is recognized, the previously recognized
impairment loss is reversed. However, the reversal does not result in a carrying amount of the
financial asset that exceeds what the amortized cost would have been had the impairment not been
recognized at the date the impairment is reversed.
For a financial asset that is individually significant, the Group assesses the asset individually for
impairment. For a financial asset that is not individually significant, the Group assesses the asset
individually for impairment or includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. If the Group determines that no
objective evidence of impairment exists for an individually assessed financial asset (whether
significant or not), it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses them for impairment. Assets for which an impairment
loss is individually recognized are not included in a collective assessment of impairment.
- 21 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.4 Impairment of financial assets - continued
- Impairment of available-for-sale financial assets
When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in
fair value previously recognized directly in capital reserve is reclassified from the capital reserve
to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to
profit or loss is the difference between the acquisition cost (net of any principal repayment and
amortization) and the current fair value, less any impairment loss on that financial asset
previously recognized in profit or loss.
If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there
is objective evidence of a recovery in value of the financial assets which can be related
objectively to an event occurring after the impairment is recognized, the previously recognized
impairment loss is reversed. The amount of reversal of impairment loss on available-for-sale
equity instruments is recognized as other comprehensive income and included in the capital
reserve, while the amount of reversal of impairment loss on available-for-sale debt instruments is
recognized in profit or loss.
- Impairment of financial assets measured at cost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without
a quoted price in an active market) whose fair value cannot be reliably measured, or on a
derivative financial asset that is linked to and must be settled by delivery of such an unquoted
equity instrument, the carrying amount of the financial asset is reduced to the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial
asset. The amount of reduction is recognized as an impairment loss in profit or loss. The
impairment loss on such financial asset is not reversed once it is recognized.
9.5 Transfer of financial assets
The Group derecognizes a financial asset if one of the following conditions is satisfied: (1) the
contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has
been transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (3) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset.
- 22 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.5 Transfer of financial assets - continued
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a
financial asset, and it retains control of the financial asset, it recognizes the financial asset to the
extent of its continuing involvement in the transferred financial asset and recognizes an associated
liability. The extent of the Group's continuing involvement in the transferred asset is the extent to
which it is exposed to changes in the value of the transferred asset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the
difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of
the consideration received from the transfer and any cumulative gain or loss that has been
recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the
part that is derecognized, based on the respective fair values of those parts. The difference
between (1) the carrying amount allocated to the part derecognized; and (2) the sum of the
consideration received for the part derecognized and any cumulative gain or loss allocated to the
part derecognized which has been previously recognized in other comprehensive income, is
recognized in profit or loss.
9.6 Classification and recognition of financial liabilities
Debt and equity instruments issued by the Group are classified into financial liabilities or equity
on the basis of the substance of the contractual arrangements and definitions of financial liability
and equity instrument.
On initial recognition, financial liabilities are classified into financial liabilities at fair value
through profit or loss and other financial liabilities.
9.6.1 Financial liabilities at fair value through profit or loss
Financial liabilities at FVTPL consist of financial liabilities held for trading and those designated
as at FVTPL on initial recognition.
A financial liability is classified as held for trading if one of the following conditions is satisfied:
(1) It has been acquired principally for the purpose of repurchasing in the near term; or (2) On
initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and there is objective evidence that the Group has a recent actual pattern of
short-term profit-taking; or (3) It is a derivative, except for a derivative that is a designated and
effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and
must be settled by delivery of an unquoted equity instrument (without a quoted price in an active
market) whose fair value cannot be reliably measured.
- 23 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.6 Classification and recognition of financial liabilities - continued
9.6.1 Financial liabilities at fair value through profit or loss - continued
A financial liability may be designated as at FVTPL upon initial recognition only when one of the
following conditions is satisfied: (1) Such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise result from measuring liabilities
or recognizing the gains or losses on them on different bases; or (2) The financial liability forms
part of a group of financial liabilities or a group of financial assets and financial liabilities, which
is managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is
reported to key management personnel on that basis.
Financial liabilities at FVTPL are subsequently measured at fair value, any gains or losses arising
from changes in the fair value or any dividend or interest expense related with the financial
liabilities are recognized in profit or loss.
9.6.2 Other financial liabilities
For a derivative liability that is linked to and must be settled by delivery of an unquoted equity
instrument (without a quoted price in an active market) whose fair value cannot be reliably
measured, it is subsequently measured at cost. Other financial liabilities are subsequently
measured at amortized cost using the effective interest method, with gain or losses arising from
derecognition or amortization recognized in profit or loss.
9.6.3 Financial guarantee contracts
A financial guarantee contract is a contract by which the guarantor and the lender agree that the
guarantor would settle the debts or bear obligations in accordance with terms of the contract in
case the borrower fails to settle the debts. Financial guarantee contracts that are not designated as
financial liabilities at fair value through profit or loss, are initially measured at their fair values
less the directly attributable transaction costs. Subsequent to initial recognition, they are measured
at the higher of: (i) the amount determined in accordance with "Accounting Standard for Business
Enterprises No. 13 - Contingencies"; and (ii) the amount initially recognized less cumulative
amortization recognized in accordance with the principles set out in "Accounting Standard for
Business Enterprises No. 14 - Revenue".
- 24 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.7 Derecognition of Financial Liabilities
The Group derecognizes a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged. An agreement between the Group (an existing borrower)
and an existing lender to replace the original financial liability with a new financial liability with
substantially different terms is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognized and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
9.8 Derivatives and embedded derivatives
Derivative financial instruments include forward exchange contracts, currency swaps, interest rate
swaps and foreign exchange options, etc. Derivatives are initially measured at fair value at the
date when the derivative contracts are entered into and are subsequently re-measured to fair value.
The resulting gain or loss is recognized in profit or loss unless the derivative is designated and
highly effective as a hedging instrument, in which case the timing of the recognition in profit or
loss depends on the nature of the hedge relationship.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is
not designated as a financial asset or financial liability at fair value through profit or loss, and
treated as a standalone derivative if 1) the economic characteristics and risks of the embedded
derivative are not closely related to the economic characteristics and risks of the host contract; and
2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative. If the Group is unable to measure the embedded derivative separately
either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid
instrument as a financial asset or financial liability at fair value through profit or loss.
9.9 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized amounts,
and intends either to settle on a net basis, or to realize the financial asset and settle the financial
liability simultaneously, a financial asset and a financial liability shall be offset and the net
amount presented in the balance sheet. Except for the circumstances above, financial assets and
financial liabilities shall be presented separately in the balance sheet and shall not be offset.
- 25 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
9. Financial instruments - continued
9.10 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. The consideration received from issuing equity instruments,
net of transaction costs, are added to shareholders' equity.
All types of distributions (excluding stock dividends) made by the Group to holders of equity
instruments are deducted from shareholders' equity. The Group does not recognize any changes in
the fair value of equity instruments.
10. Receivables
10.1 Receivables that are individually significant and for which bad debt provision is individually
assessed
Basis or monetary criteria for Top five balances of receivables are deemed as
determining individually individually significant receivables by the Group.
significant receivables
For receivables that are individually significant, the Group
assesses the receivables individually for impairment; for a
Provision methods for receivables financial asset that is not impaired individually, the Group
that are individually significant includes the asset in a group of financial assets with
and for which bad debt provision similar credit risk characteristics and collectively assesses
is individually assessed them for impairment. Receivables for which an
impairment loss is individually recognized are not
included in a collective assessment of impairment.
10.2 Receivables for which bad debt provision is collectively assessed
Basis for determining a portfolio
Portfolio 1 The portfolio primarily includes amounts due from related
parties of the Group, deposits and petty cash etc. The risk
characteristics of such receivables are different from those
of portfolio 2. The Group individually assesses receivables
in this portfolio and determines the bad debt provision.
Portfolio 2 This portfolio excludes amounts due from related parties of
the Group, deposits and petty cash etc. The Group
collectively assesses receivables in this portfolio with
aging analysis method, by taking historical experience into
consideration.
Bad debt provision methods for a portfolio
Portfolio 1 Specific identification Method
Portfolio 2 Aging Analysis Method
- 26 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
10. Receivables - continued
10.2.1 Portfolios that use aging analysis for bad debt provision:
Aging analysis
Provision proportion for Provision proportion for
Aging accounts receivable (%) other receivables (%)
Within 1 year (inclusive) 0 0
More than 1 year but not exceeding 2 0-10 0-10
years
More than 2 years but not exceeding 3 0-30 0-30
years
More than 3 years but not exceeding 4 0-60 0-60
years
More than 4 years but not exceeding 5 0-60 0-60
years
More than 5 years 50-100 50-100
10.3 Accounts receivable that are not individually significant but for which individual bad debt
provision is individually assessed:
Reasons for making individual As objective evidence indicates the Group is unable to
bad debt provision collect the receivables under original terms, the company
makes individual bad debt provision.
Bad debt provision methods Under bad debt provision method, the provision is
recognized by the differences between the expected present
value of future cash flows and carrying value.
11. Inventories
11.1 Categories of inventories
Inventories include spare parts, fuel, and low value consumables. Inventories are initially
measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and
other expenditures incurred in bringing the inventories to their present location and condition.
11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
- 27 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
11. Inventories - continued
11.3 Basis for determining net realizable value of inventories and provision methods for decline
in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If
the cost of inventories is higher than the net realizable value, a provision for decline in value of
inventories is made.Net realizable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion, the estimated costs necessary to make the sale and
relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and
takes into consideration the purposes of inventories being held and effect of post balance sheet
events.
Provision for decline in value of other inventories is made based on the excess of cost of
inventory over its net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that the net
realizable value of inventories is higher than their cost, the original provision for decline in value
is reversed and the reversal is included in profit or loss for the period.
11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
11.5 Amortization methods for low cost and short-lived consumable items and packaging
materials
Packaging materials and low cost and short-lived consumable items are amortized using the
immediate write-off method.
12. Long-term equity investments
12.1 Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises
under common control, the investment cost of the long-term equity investment is the attributable
share of the carrying amount of the shareholders' equity of the acquiree at the date of combination.
For a long-term equity investment acquired through business combination not involving
enterprises under common control, the investment cost of the long-term equity investment
acquired is the cost of acquisition. The long-term equity investment acquired otherwise than
through a business combination is initially measured at its cost.
- 28 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
12. Long-term equity investments - continued
12.2 Subsequent measurement and recognition of profit or loss
12.2.1 A long-term equity investment accounted for using the cost method
For long-term equity investments over which the Group does not exercise joint control or
significant influence and those without quoted prices in an active market and the fair values
cannot be reliably measured, the Group accounts for such long-term equity investments using the
cost method. Besides, long-term equity investments in subsidiaries are accounted for using the
cost method in the Company's separate financial statements. A subsidiary is an investee that is
controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Except for cash dividends or profits already declared but not yet paid that are included in the price
or consideration actually paid upon acquisition of the long-term equity investment, investment
income is recognized in the period in accordance with the attributable share of cash dividends or
profit distributions declared by the investee.
12.2.2 A long-term equity investment accounted for using the equity method
The Group accounts for investment in associates and joint ventures using the equity method. An
associate is an entity over which the Group has significant influence and a joint venture is an
entity over which the Group exercises joint control along with other investors.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of
acquisition, no adjustment is made to the initial investment 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 recognized in profit or loss for the period, and the cost of the long-
term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss of the investee
for the period as investment income or loss for the period. The Group recognizes its share of the
investee's net profit or loss based on the fair value of the investee's individual separately
identifiable assets at the acquisition date after making appropriate adjustments to conform to the
Group's accounting policies and accounting period. Unrealized profits or losses resulting from the
Group's transactions with its associates and joint ventures are recognized as investment income or
loss to the extent that those attributable to the Group's, equity interest are eliminated. However,
unrealized losses resulting from the Group's transactions with its associates and joint ventures
which represent impairment losses on the transferred assets are not eliminated. Changes in
shareholder's equity of the investee other than net profit or loss are correspondingly adjusted to
the carrying amount of the long-term equity investment, and recognized as other comprehensive
income which is included in the capital reserve.
- 29 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
12. Long-term equity investments - continued
12.2 Subsequent measurement and recognition of profit or loss - continued
12.2.2 A long-term equity investment accounted for using the equity method - continued
The Group discontinues recognizing its share of net losses of the investee after the carrying
amount of the long-term equity investment together with any long-term interests that in substance
form part of its net investment in the investee are reduced to zero. Except that if the Group has
incurred obligations to assume additional losses, a provision is recognized according to the
obligation expected, and recorded in the investment loss for the period. Where net profits are
subsequently made by the investee, the Group resumes recognizing its share of those profits only
after its share of the profits exceeds the share of losses previously not recognized.
12.2.3 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period. For
a long-term equity investment accounted for using the equity method, the amount included in the
shareholders' equity and attributable to the percentage interest disposed is transferred to profit or
loss for the period.
12.3 Basis for determining joint control and significant influence over investee
Control is the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Joint control is the contractually agreed sharing of control over an
economic activity, and exists only when the strategic financial and operating policy decisions
relating to the activity require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies. When determining whether an investing
enterprise is able to exercise control or significant influence over an investee, the effect of
potential voting rights of the investee (for example, warrants and convertible debts) held by the
investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
12.4 Impairment assessment and provision method for impairment loss
The Group reviews the long-term equity investments at each balance sheet date to determine
whether there is any indication that they have suffered an impairment loss. If an impairment
indication exists, the recoverable amounts are estimated. If such recoverable amount is less than
its carrying amount, a provision for impairment losses in respect of the deficit is recognized in
profit or loss for the period.
Once an impairment loss is recognized for a long-term equity investment, it will not be reversed
in any subsequent period.
- 30 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
13. Investment properties
Investment property is property held to earn rentals or for capital appreciation or both. It includes
a land use right that is leased out; a land use right held for transfer upon capital appreciation; and
a building that is leased out.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that
economic benefits associated with an investment property will flow to the Group and the
subsequent expenditures can be measured reliably, other subsequent expenditures are recognized
in profit or loss in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
The Group reviews the investment properties at each balance sheet date to determine whether
there is any indication that they have suffered an impairment loss. If an impairment indication
exists, the recoverable amounts are estimated. Recoverable amount is estimated on individual
basis. If it is not practical to estimate the recoverable amount of an individual asset, the
recoverable amount of the asset group to which the asset belongs will be estimated. If such
recoverable amount is less than its carrying amount, a provision for impairment losses in respect
of the deficit is recognized in profit or loss for the period.
Once an impairment loss is recognized for an investment property, it will not be reversed in any
subsequent period.
When an investment property is sold, transferred, retired or damaged, the Group recognizes the
amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss
for the period.
14. Fixed assets
14.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognized only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost. Upon being restructured into a stock company, the
fixed assets initially contributed by the state-owned shareholders are recognized based on the
valuation amounts confirmed by the state-owned assets administration department.
- 31 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
14. Fixed assets - continued
14.1 Recognition criteria for fixed assets - continued
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognized. Other subsequent expenditures are recognized in profit or loss in
the period in which they are incurred.
14.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net residual
value rate and annual depreciation rate of each category of fixed assets are as follows:
Estimated Estimated Annual
Category useful lives residual value depreciation rate
Harbor facilities 5 - 50 years 10% 1.8%-18%
Warehouses, container
5 - 40 years 10% 2.25%-18%
yards and buildings
Machinery and
5 - 15 years 10% 6%-18%
equipments
Motor vehicles, cargo
5 - 20 years 10% 4.5%-18%
ships and tugboats
Other equipments 5 years 10% 18%
Estimated net residual value of a fixed asset is the estimated amount that the Group would
currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
14.3 The method of impairment test and provision for impairment losses of fixed assets
The Group assesses at the balance sheet date whether there is any indication that the fixed assets
may be impaired. If there is any indication that such assets may be impaired, recoverable amounts
are estimated for such assets. Recoverable amount is estimated on individual basis. If it is not
practical to estimate the recoverable amount of an individual asset, the recoverable amount of the
asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or
an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss
and is recognized in profit or loss.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent
period.
- 32 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
14. Fixed assets - continued
14.4 Other explanations
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and account for any change
as a change in an accounting estimate.
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognized in profit or loss for the period.
15. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
The Group assesses at the balance sheet date whether there is any indication that construction in
progress may be impaired. If there is any indication that such assets may be impaired, recoverable
amounts are estimated for such assets. Recoverable amount is estimated on individual basis. If it
is not practical to estimate the recoverable amount of an individual asset, the recoverable amount
of the asset group to which the asset belongs will be estimated. If the recoverable amount of an
asset or an asset group is less than its carrying amount, the deficit is accounted for as an
impairment loss and is recognized in profit or loss.
Once the impairment loss of construction in progress is recognized, it is not be reversed in any
subsequent period.
16. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalized when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalization of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is interrupted abnormally and when
the interruption is for a continuous period of more than 3 months. Capitalization is suspended
until the acquisition, construction or production of the asset is resumed. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
- 33 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be
capitalized is the actual interest expense incurred on that borrowing for the period less any bank
interest earned from depositing the borrowed funds before being used on the asset or any
investment income on the temporary investment of those funds. Where funds are borrowed under
general-purpose borrowings, the Group determines the amount of interest to be capitalized on
such borrowings by applying a capitalization rate to the weighted average of the excess of
cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose
borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing
denominated in foreign currency are all capitalized. Exchange differences in connection with
general-purpose borrowings are recognized in profit or loss in the period in which they are
incurred.
17. Intangible assets
17.1 Intangible assets
Intangible assets include land use rights, coastal line use rights and computer software.
An intangible asset is measured initially at cost. Upon being restructured into a stock company,
the intangible assets initial contributed by the state-owned shareholders are recognized based on
the valuation amounts confirmed by the state-owned assets administration department. When an
intangible asset with a finite useful life is available for use, its original cost is amortized over its
estimated useful life.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization
method at the end of the period, and makes adjustments when necessary.
17.2 The method of impairment test and provision for impairment losses of intangible assets
The Group assesses at the balance sheet date whether there is any indication that the intangible
assets with a finite useful life may be impaired. If there is any indication that such assets may be
impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on
individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the
recoverable amount of the asset group to which the asset belongs will be estimated. If the
recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is
accounted for as an impairment loss and is recognized in profit or loss.
Intangible assets with indefinite useful life and intangible assets not yet available for use are
tested for impairment annually, irrespective of whether there is any indication that the assets may
be impaired.
Once the impairment loss of such asset is recognized, it is not be reversed in any subsequent
period.
- 34 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
18. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over
the current and subsequent periods (together of more than one year). Long-term prepaid expenses
are amortized using the straight-line method over the expected periods in which benefits are
derived.
19. Revenue
19.1 Revenue from rendering of services
The Group provides load and unload services, tugboat and trailer services, logistics agency and
other related harbor services to customers. Revenue from rendering of services is recognized
when (1) the amount of revenue can be measured reliably; (2) it is probable that the associated
economic benefits will flow to the enterprise; and (3) the associated costs incurred or to be
incurred can be measured reliably.
19.2 Rental income
The operating lease income of investment property should be recognized in the lease terms at the
price stated in contract and agreements with straight-line method.
19.3 Interest income
Interest income is calculated by taking it into consideration that the time occupying the Group's
currency funds by external users and effective interest rate.
20. Government grants
Government grants are transfer of monetary assets or non-monetary assets from the government to
the Group at no consideration. A government grant is recognized only when the Group can
comply with the conditions attaching to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable. If a government grant is in the form of a non-monetary asset, it is
measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal
amount. A government grant measured at a nominal amount is recognized immediately in profit
or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset.
- 35 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
20. Government grants - continued
For a government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, the grant is recognized as deferred income, and
recognized in profit or loss over the periods in which the related costs are recognized. If the grant
is a compensation for related expenses or losses already incurred, the grant is recognized
immediately in profit or loss for the period.
21. Deferred tax assets/ deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
21.1 Current Income Tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
21.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets for deductible temporary differences are recognized to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can be utilized.
However, for temporary differences associated with the initial recognition of goodwill and the
initial recognition of an asset or liability arising from a transaction ( not a business combination)
that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group
is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be taxable profits against which to utilize
the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
- 36 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
21. Deferred tax assets/ deferred tax liabilities - continued
21.2 Deferred tax assets and deferred tax liabilities - continued
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates.
According to tax laws, that are expected to apply in the period in which the asset is realized or the
liability is settled.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except
when they arise from transactions or events that are directly recognized in other comprehensive
income or in equity, in which case they are recognized in other comprehensive income or in
equity, and when they arise from business combinations, in which case they adjust the carrying
amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilized. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realize the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realize the assets and liabilities simultaneously,
in each future period in which significant amounts of deferred tax assets or liabilities are expected
to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net
basis.
22. Operating leases and finance leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
22.1 The Group as lessee under operating leases
Operating lease payments are recognized on a straight-line basis over the term of the relevant
lease, and are either included in the cost of related asset or charged to profit or loss for the period.
Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are
charged to profit or loss in the period in which they are actually incurred.
- 37 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
22. Operating leases and finance leases - continued
22.2 The Group as lessor under operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs with more than an insignificant amount are
capitalized when incurred, and are recognized in profit or loss on the same basis as rental income
over the lease term. Other initial direct costs with an insignificant amount are charged in profit or
loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the
period in which they actually arise.
23. Safety Production Cost
According to the Administrative Rules on Provision and Use of Enterprise Safety Production Cost
jointly issued by the Ministry of Finance and the State Administration of Work Safety on 14
February 2012 (filed as Cai Qi [2012] No. 16), safety production cost set aside by the Group is
directly included in the cost of relevant products or recognized in profit or loss for the period, as
well as the special reserve. When safety production cost set aside is utilized, if the costs incurred
can be categorized as expenditure, the costs incurred should be charged against the special reserve.
If the costs set aside are used to build up fixed assets, the costs should be charged to construction
in progress, and reclassified to fixed assets when the safety projects reach the stage when it is
ready for intended use. Meantime, expenditures in building up fixed assets are directly charged
against the special reserve with the accumulated depreciation recognized at the same amount.
Depreciation will not be made in the future period on such fixed assets.
24. Other significant accounting policies, accounting estimates, and preparation of financial
statements
24.1 Employee benefits
In an accounting period in which an employee has rendered service to the Group, the Group
recognizes the employee benefits for that service as a liability, except for compensation for
termination of employment relationship with the employees.
The Group participates in the employee social security systems, such as basic pensions, medical
insurance, housing funds and other social securities established by the government in accordance
with relevant requirements. The related expenditures are either included in cost of related assets or
charged to profit or loss for the period when they occur.
When the Group terminates the employment relationship with employees before the expiry of the
employment contracts or provides compensation as an offer to encourage employees to accept
voluntary redundancy, if the Group has a formal plan for termination of employment relationship
or has made an offer for voluntary redundancy which will be implemented immediately, and the
Group cannot unilaterally withdraw from the termination plan or the redundancy offer, a
provision for the compensation payable arising from the termination of employment relationship
with employees is recognized with a corresponding charge to the profit or loss for the period.
- 38 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
25. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates
In the application of accounting policies as set out below, the Company is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainty of the operating
activities. These judgments, estimates and assumptions are based on historical experiences of the
Company's management as well as other factors that are considered to be relevant. Actual results
may differ from these estimates.
The company does regular review for the judgments, estimates and assumptions on a going
concern basis, changes in accounting estimates which only affect the current should be recognized
in current period; for those changes which not only affects the current but the future period, they
should be recognized in current and future period also. At the balance sheet date, accounting
estimate which is likely to lead to key assumptions and uncertainties changes relating to assets
and debts book value are:
25.1 Goodwill Impairment
At 31 December 2012, the book value of goodwill is RMB10, 858,898. For the purpose of
impairment testing, goodwill is considered together with the related assets group(s), the
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present
value of the future cash flows expected to be derived from the asset.
25.2 Recognition of Deferred tax
The Group calculates and accrues the provision for deferred income tax liabilities according to the
provisions of the profit distribution plan of subsidiary companies, associate companies and the
joint venture company and the related law, and for retained earnings which is not allocated by the
investment company, since the profits will be used to invest the company's daily operation and
future development, so no deferred income tax liabilities is recognized. If the actual quota of
future profits exceeds expectation, corresponding deferred income tax liabilities will be declared
at the earlier periods between date of changing allocation of profits and the declaration date, and
recognized in the profit and loss of current period.
Deferred tax assets are recognized based on the deductible temporary difference and the
corresponding tax rate, to the extent that it has become probable that future taxable profit will be
available for the deductible temporary difference. If in the future the actual taxable income does
not coincide with the amount currently expected, the deferred tax assets resulting will be
recognized or reversed in the period when actually incurred, and recognized in profit or loss.
- 39 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(III) TAXES
1. Major categories of taxes and tax rates
Category of tax Basis of tax computation Tax rate
Enterprise income Taxable profit
Note1
tax
Value-add Tax Load and unload income, tugboat income, trailer income,
6%(Note 2)
warehousing income, agency income and rental income
Taxable income from vehicle maintenance and utilities
13% and17%
supplies on ships in shore
Taxable income from sales of scraps 3%
Business tax Taxable load and unload income, tugboat income and
3 %( Note 2)
trailer income
Taxable warehousing, agency and rental income 5 %( Note 2)
Urban maintenance VAT and Business tax paid
5% and 7 %( Note
and construction
3)
tax
Education surplus VAT and Business tax paid 3%
Regional education VAT and Business tax paid
2%
surplus
Note 1: The income tax rate applicable to the Company and these subsidiaries for 2012 is 25%.
(2011: 24%)
Chiwan Wharf Holdings (H.K.) Limited and Chiwan Shipping (H.K.) Company Limited
are subject to Hong Kong CIT income tax rate at 16.5% (2011: 16.5%).
The applicable enterprise income tax rate for the subsidiaries located in Dongguan city is
25%.
- 40 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
1. Major categories of taxes and tax rates - continued
On 21 February 2012, Machong Branch of National Taxation Bureau in Dongguan City
approved that Dongguan Chiwan Wharf Co., Ltd (DGW), a subsidiary of the Group, was
subjected to tax preference of "3 year exemption and 3 year half reduction "commencing
from its first profit-making year. 2012 is its third profit-making year; hence, DGW is free
of enterprise income tax.
According to Doc. [2004] No.538 issued by the Third Branch of Local Taxation Bureau in
Shenzhen, the profit derived from berth #12 of Chiwan Container Terminal Company
Limited which has been under construction and put into operation by stages, 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 requirements are met.
2012 is the ninth profit-making year of berth #12; hence, Chiwan Container Terminal
Company Limited has calculated its income tax at a rate of 12.5% (2011: 12%).
According to Doc. [2007] No.40 issued by Shekou Local Taxation Bureau in Shenzhen,
the profit derived from berth #13 of Chiwan Container Terminal Company Limited which
has been under construction and put into operation by stages, 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 requirements are met. 2012 is the
eighth profit-making year of berth #13; hence, Chiwan Container Terminal Company
Limited has calculated its income tax at a rate of 12.5% (2011: 12%).
According to Doc. [2013] No.3 issued by Shekou Local Taxation Bureau In Shenzhen, the
profits derived from berth #13A of Shenzhen Chiwan Harbour Container Company
Limited, is entitled to full exemption from income tax for three years commencing from
its first profit making year and 50% exemption for the following three year when certain
requirements are met. 2012 is the first profit-making year of berth #13A; hence, it has
been exempted from enterprise income tax.
- 41 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING
ESTIMATES, AND PRIOR PERIOD ERRORS - continued
1. Major categories of taxes and tax rates - continued
Note 2: The load and unload income, tugboat income and trailer income derived from 1 January to
31 October 2012 were subject to business tax rate of 3%, and warehousing income,
agency income and rental income were subject to business tax rate of 5%. According to
the Notice on Pilot Transforming Business Tax to Value Added Tax in Transportation and
Certain Modern Service Sectors in 8 Provinces/Municipalities issued by the Ministry of
Finance and State Administration of Taxation (filed as Cai Shui [2012] No.71), the above-
mentioned income of the Group is subject to VAT rate of 6% applicable in modern
service industry instead of business tax, since the date of November 1st 2012.
According to the Notice on Taxable Services Subject to "VAT" Tax Rate of Zero and
Exemption issued by the Ministry of Finance and State Administration of Taxation (filed
as Cai Shui [2011] No.131),and approvals released by Shekou National Taxation Bureau
in Shenzhen (filed as Jian Mian Bei [2012] No.0686, No.0693, No.0834 and No.0760
respectively), Container Terminal Company Limited, Shenzhen Chiwan Harbor Container
Company Limited and Shenzhen Chiwan Shipping and Transportation Company Limited,
the subsidiaries of the Company, are exempt from "VAT" when providing logistics
support service (except for warehousing service).
Note 3: The Company and subsidiaries set up in Shenzhen are provided at an urban maintenance
and construction tax rate of 7%, and those set up in Dongguan are provided at an urban
maintenance and construction tax rate of 5%.
- 42 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS
1. Information of subsidiaries
(1) Subsidiaries established or acquired through investments
Unit: RMB
Registered Balance of other the amount of the
Capital(in ten items substantively Proportion minority interest used
thousand Yuan Actual capital constitutes net of Proportion to absorb profit or loss
Type of the Place of Nature of unless otherwise Business contribution at the investments in the ownership of voting Consolida Minority attributable to minority
Full name of the subsidiary subsidiary incorporation business stated) scope end of the period subsidiary Interest (%) power (%) ted or not interests interest
Logistics
Shenzhen Chiwan International Limited liability
Shenzhen, PRC support 550 Shipping agency service 5,500,000 - 100 100 Yes N/A N/A
Freight Agency Company Limited Company
services
Logistics
Shenzhen Chiwan Terminal Company Limited liability
Shenzhen, PRC support 5,000 Port services 50,000,000 - 100 100 Yes N/A N/A
Limited Company
services
Logistics
Shenzhen Chiwan Trains-Grains Limited liability
Shenzhen, PRC support 4,500 Warehousing of grains 45,000,000 - 100 100 Yes N/A N/A
Terminal Company Limited Company
services
Limited liability Hong Kong SAR,
Chiwan Wharf Holdings (H.K.) Limited Investments HKD1,000,000 Shipping agency service 1,070,000 11,004,285 100 100 Yes N/A N/A
Company PRC
Logistics
Dongguan Chiwan Wharf Company Limited liability Port services, warehousing and
Dongguan, PRC support 45,000 382,500,000 - 85 85 Yes 72,089,908 -
Limited Company supporting services
services
Logistics
Dongguan Chiwan Terminal Limited liability Port services, warehousing and
Dongguan, PRC support 30,000 300,000,000 - 100 100 Yes N/A N/A
Company Limited Company supporting services
services
Limited liability British Virgin
Grossalan Investments Limited Investments USD 1 Investment holding 8 - 100 100 Yes N/A N/A
Company Islands
Hinwin Development Company Limited liability Hong Kong SAR,
Investments HKD10,000 Investment holding 6,278,500 94,014,181 100 100 Yes N/A N/A
Limited Company PRC
- 43 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS
- continued
1. Information of subsidiaries - continued
(2) Subsidiaries acquired through a business combination involving enterprises under common control
Unit: RMB
Registered Balance of other Proportion the amount of the
Capital(in ten items substantively of minority interest used to
thousand Yuan Actual capital constitutes net ownership Proportion absorb profit or loss
Type of the Place of Nature of unless otherwise Business contribution at the investments in the interest of voting Consolidated attributable to minority
Full name of the subsidiary subsidiary incorporation business stated) scope end of the period subsidiary (%) power (%) or not Minority interests interest
Logistics
Shenzhen Chiwan Harbour Container Limited liability Container handling and other
Shenzhen, PRC support 28,820 250,920,000 - 100 100 Yes N/A N/A
Company Limited Company port services
services
Logistics container transportation, vehicle
Shenzhen Chiwan Transportation Limited liability
Shenzhen, PRC support 1,500 and port machinery 7,000,000 - 100 100 Yes N/A N/A
Company Limited Company
services s maintenance
Logistics
Chiwan Container Terminal Limited liability Container handling and other
Shenzhen, PRC support USD 95,300,000 485,990,004 - 55 55 Yes 714,887,911 N/A
Company Limited Company port services
services
Logistics
Shenzhen Chiwan Shipping and Limited liability
Shenzhen, PRC support 2,400 Cargo shipping 24,000,000 - 100 100 Yes N/A N/A
Transportation Company Limited Company
services
Logistics
Chiwan Shipping (H.K.) Company Limited liability Hong Kong SAR,
support HKD 800,000 Shipping agency service 856,000 - 100 100 Yes N/A N/A
Limited Company PRC
services
- 44 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(IV) BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS
- continued
2. No new entities that have been consolidated in the current period or entities that are
excluded from consolidation in the current period
3. No subsidiaries reduced in the current period due to the sale of equity interest which
resulting in a loss of control
4. Exchange rate for translating major financial statement items of foreign operations
Unit: RMB
Currency Balance Sheet Income statement
HKD 0.8109 0.8105
(V) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Currency Fund
Unit: RMB
Closing balance Opening balance
Original Exchange Amount in Original Exchange Amount in
Item currency rate RMB currency rate RMB
Cash:
RMB 12,058 1.0000 12,058 9,914 1.0000 9,914
USD 71 6.2855 446 71 6.3000 447
HKD 2,326 0.8109 1,886 4,535 0.8100 3,674
Subtotal 14,390 14,035
Bank deposit:
RMB 182,788,276 1.0000 182,788,276 292,000,350 1.0000 292,000,350
USD 4,459,141 6.2855 28,027,932 3,992,510 6.3000 25,152,810
HKD 126,184,467 0.8109 102,322,985 197,714,953 0.8100 160,149,112
Subtotal 313,139,193 477,302,272
Other currency funds:
(Note)
RMB 1,688,162 1.0000 1,688,162 1,458,828 1.0000 1,458,828
USD - 6.2855 - - 6.3000 -
HKD 17,047 0.8109 13,823 17,047 0.8100 13,808
Subtotal 1,701,985 1,472,636
Total 314,855,568 478,788,943
Note: The balance of other currency funds is mainly the amount deposited in the securities
settlement account.
- 45 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
2. Accounts receivable
(1) Disclosure of accounts receivable by categories:
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportion Proportion Proportion Proportion
Item Amount (%) Amount (%) Amount (%) Amount (%)
Accounts receivable that are individually
significant and for which bad debt provision - - - - - - - -
has been assessed individually(Note)
Accounts receivable for which bad debt provision has been assessed by portfolios
Portfolio 1 4,854,248 1.93 - - 3,310,635 1.43 - -
Portfolio 2 246,890,646 98.07 323,933 0.13 227,535,759 98.57 49,391 0.02
Subtotal of portfolios 251,744,894 100.00 323,933 0.13 230,846,394 100.00 49,391 0.02
Total 251,744,894 100.00 323,933 0.13 230,846,394 100.00 49,391 0.02
Note: Top five balances of accounts receivable are deemed as individually significant accounts
receivable by the Group.
Aging analysis of accounts receivable is as follows:
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book value amount (%) provision Book value
Within 1 year 251,172,094 99.77 147,781 251,024,313 230,011,499 99.64 - 230,011,499
More than 1 year
495,810 0.20 99,162 396,648 757,905 0.33 - 757,905
but not exceeding 2 years
More than 2 years
- - - - - - - -
but not exceeding 3 years
More than 3 years 76,990 0.03 76,990 - 76,990 0.03 49,391 27,599
Total 251,744,894 100.00 323,933 251,420,961 230,846,394 100.00 49,391 230,797,003
Accounts receivable portfolios for which bad debt provision has been assessed using the
aging analysis approach:
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book value amount (%) provision Book value
Within 1 year 246,317,846 99.77 147,781 246,170,065 226,700,864 99.64 - 226,700,864
More than 1 year
495,810 0.20 99,162 396,648 757,905 0.33 - 757,905
but not exceeding 2 years
More than 2 years
- - - - - - - -
but not exceeding 3 years
More than 3 years 76,990 0.03 76,990 - 76,990 0.03 49,391 27,599
Total 246,890,646 100.00 323,933 246,566,713 227,535,759 100.00 49,391 227,486,368
- 46 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
2. Accounts receivable - continued
(2) Top five companies with the largest balances of accounts receivable:
Unit: RMB
Proportion of the
Relationship amount to the
with the total accounts
Name of customer Company Amount Aging receivable (%)
Customer A Customer 113,056,893 Within 1 year 44.91
Customer B Customer 42,263,728 Within 1 year 16.79
Customer C Customer 15,633,779 Within 1 year 6.21
Customer D Customer 6,265,042 Within 1 year 2.49
Customer E Customer 5,971,459 Within 1 year 2.37
Total 183,190,901 72.77
(3) As at 31 December 2012, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% voting right. Please see Note (VI) 6 for
receivables due from related parties.
3. Prepayments
(1) Aging analysis of prepayments is as follows:
Unit: RMB
Closing balance Opening balance
Proportion Proportion
Item Amount (%) Amount (%)
Within 1 year 1,623,037 100 3,497,668 100
(2) Disclosure of Prepayments by categories:
Unit: RMB
Item Closing balance Opening balance
Insurance Fee 1,375,092 1,631,823
Prepayment for Equipment 138,439 142,232
Decoration Fee 93,006 1,210,724
Software Maintenance Expense - 496,389
Consultancy and Advisory Fee 16,500 16,500
Total 1,623,037 3,497,668
(3) As at 31 December 2012, no balances included in above prepayments are due from the
shareholders of the Company who hold over 5% voting right.
- 47 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
4. Other receivables
(1) Disclosure of other receivables by categories:
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportion Proportion Proportion Proportion
Category Amount (%) Amount (%) Amount (%) Amount (%)
Other receivables that are individually
significant and for which bad debt provision - - - - - - - -
has been assessed individually
Other receivables for which bad debt provision has been assessed by portfolios
Portfolio 1 9,923,060 60.91 89,569 0.90 9,619,402 79.60 89,297 0.93
Portfolio 2 6,368,240 39.09 217,678 3.42 2,464,828 20.40 161,056 6.53
Subtotal of portfolios 16,291,300 100.00 307,247 1.89 12,084,230 100.00 250,353 2.07
Total 16,291,300 100.00 307,247 1.89 12,084,230 100.00 250,353 2.07
Note: Top five balances of other receivables are deemed as individually significant other
receivables by the Group.
Aging analysis of other receivables is as follows:
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book value amount (%) provision Book value
Within 1 year 9,629,103 59.10 26,071 9,603,032 7,496,780 62.04 - 7,496,780
More than 1 year
but not exceeding 2 years 3,743,931 22.98 55,669 3,688,262 1,627,980 13.47 141,728 1,486,252
More than 2 years
but not exceeding 3 years 1,439,452 8.84 195,728 1,243,724 280,326 2.32 - 280,326
More than 3 years 1,478,814 9.08 29,779 1,449,035 2,679,144 22.17 108,625 2,570,519
Total 16,291,300 100.00 307,247 15,984,053 12,084,230 100.00 250,353 11,833,877
Other receivables portfolios for which bad debt provision has been assessed using the aging
analysis
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book value amount (%) provision Book value
Within 1 year 5,984,783 93.98 25,950 5,958,833 2,033,381 83.80 - 2,033,381
More than 1 year
but not exceeding 2 years - - - - 399,234 16.20 141,728 257,506
More than 2 years
but not exceeding 3 years 383,457 6.02 191,728 191,729 - - - -
More than 3 years - - - - 32,213 - 19,328 12,885
Total 6,368,240 100.00 217,678 6,150,562 2,464,828 100.00 161,056 2,303,772
- 48 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
4. Other receivables - continued
(2) Top five companies with the largest balances of other receivables:
Unit: RMB
Proportion of the
amount to the total
Relationship with accounts receivable
Name of company the Company Amount Aging (%)
China National Petroleum Offshore
Partner 2,535,000 Within 1 year 15.56
Engineering Co., Ltd.
Financial Secretary of Transport Ministry Government Sector 1,600,000 Within 1 year 9.82
China Merchant Bonded Logistics )Co.,
Related party 1,427,200 Within 1 year 8.76
Ltd.("CMBL")
Shenzhen Mawan Wharf Co.,
Related party 1,327,947 Within 1 year 8.15
Ltd.("SMW")
Maxtop Shipping Ltd. Customer 692,655 Within 1 year 4.25
Total 7,582,802 46.54
(3) As at 31 December 2012, no balances included in above other receivables are due from the
shareholders of the Company who hold over 5% voting right. Please see Note (VI).6 for
receivables due from related parties.
5. Inventories
(1) Categories of inventories
Unit: RMB
Closing Balance Opening Balance
Provision for Provision for
Carrying decline in value Carrying decline in value
Item amount of inventories Book value amount of inventories Book value
Spare parts 20,457,425 792,118 19,665,307 23,198,355 792,118 22,406,237
Fuel 1,635,457 - 1,635,457 1,062,721 - 1,062,721
Low value consumables 24,807 - 24,807 31,400 - 31,400
Total 22,117,689 792,118 21,325,571 24,292,476 792,118 23,500,358
(2) Movement of inventories is analyzed as follows:
Unit: RMB
Increase in the Decreased in the
Item Opening balance current period current period Closing balance
Spare parts 23,198,355 38,042,697 40,783,627 20,457,425
Fuel 1,062,721 50,333,800 49,761,064 1,635,457
Low value consumables 31,400 2,261,652 2,268,245 24,807
Total 24,292,476 90,638,149 92,812,936 22,117,689
(3) Provision for decline in value of inventories
Unit: RMB
Increase in the Decreased in the current period
Item Opening balance current period Reversals Written off Closing balance
Spare parts 792,118 - - - 792,118
- 49 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
6. Available-for-sale financial assets
Unit: RMB
Item Closing balance Opening balance
Available-for-sale financial assets (Note) 5,210,000 5,690,000
Note: The value of Available-for-sale financial assets held by the company is the closing market
price of last trading day in 2012 of the Jiang Su Ninghu Expressway Company Ltd.
7. Investments in joint ventures and associates
Unit: RMB
Proportion
Proportion of voting
of power in
ownership the
interests investee
held by held by Investee's total Investee's total Total operating
the entity the entity assets at the end of liabilities at the end Total net assets at income for the Net profit for the
Investee (%) (%) the period of the period the end of the period period period
I. Joint ventures
China Overseas Harbor
Affairs (Laizhou) Co., 40 40 2,181,632,582 310,908,531 1,870,724,051 267,050,832 61,444,116
Ltd.(Note 1)
II. Associates
China Merchants Holdings
(international) information 23.16 23.16 80,888,144 19,452,319 61,435,825 55,017,244 8,714,391
technology company Ltd.
CMBL 40 40 1,571,992,558 913,671,716 658,320,842 176,515,276 15,494,851
Media Port Investments
50 50 HKD 2,829,039,917 HKD 1,996,928,636 HKD 832,111,281 HKD 634,120,631 HKD197,254,289
Limited("MPIL")(Note 2)
China Development Finance
20 20 N/A N/A N/A N/A N/A
Co., Ltd. (Note 3)
Note 1: The Company holds 40% equity interests in China Overseas Harbor Affairs (Laizhou) Co.,
Ltd. According to the investment agreement with shareholders of China Overseas Harbor
Affairs (Laizhou) Co., Ltd (hereinafter "COHA (Laizhou)") and its constitutions,
significant affairs in its business operation can only be effective when approved by
directors of Chiwan Wharf, therefore COHA (Laizhou) is deemed to be under common
control of Chiwan Wharf and its other shareholders, accordingly COHA (Laizhou) is
accounted for as a joint-venture.
Note 2: At 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 jointly set up Media Port Investments Limited (the "MPIL") with equal
percentage of equity held respectively. MPIL then incorporates the abovementioned three
joint ventures together with SSOG, and MPIL has 60% equity in each of the three joint
ventures.
- 50 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
7. Investments in joint ventures and associates - continued
The Company has 50% equity of MPIL which is the investment holding company. Thus,
MPIL is accounted for as an associate and the share of equity in its consolidated financial
statements is based on proportion of shareholding since the Company holds 30% voting
rights in Mawan Company despite no director being sent to MPIL.
Note 3: In June 2012, the Company and Nanshan Group, China Petroleum Supply Base Co., Ltd
and Yahgee Modular House Co., Ltd., entered into an agreement to jointly set up a new
company named China Nanshan Development Group Finance Co., Ltd. The Company
contributes RMB100, 000,000, holding 20% equity interests. On 30 October 2012, China
Banking Regulatory Commission (CBRC) released approval (filed as Yin Jian Fu [2012]
No.613) agreeing Nanshan Group to set up Enterprise Group Finance Company. For the
year ended 31 December 2012, the abovementioned capital contribution has already
finished and the establishment of China Nanshan Development Group Finance Co., Ltd
is in progress.
8. Long-term equity investments
(1) Categories of Long-term equity investment
Unit: RMB
Increase in the Decreased in the
Item Opening Balance current period current period Closing Balance
Joint ventures 795,776,215 24,286,065 - 820,062,280
Associates 627,171,005 158,991,771 75,183,148 710,979,628
Other long-term equity investment 17,037,500 - - 17,037,500
Subtotal 1,439,984,720 183,277,836 75,183,148 1,548,079,408
Less: Provision for impairment of
3,128,300 - - 3,128,300
long-term equity investments
Net amount 1,436,856,420 183,277,836 75,183,148 1,544,951,108
As at 31 December 2012, the long-term equity investments of the Group were not subject to
restriction on disposal or remittance of return on investments.
- 51 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
8. Long-term equity investments - continued
(2) Details of long-term equity investments are as follows:
Unit: RMB
Explanation of the
proportion of
Proportion of Proportion ownership
ownership of voting interests being not Provision Provision for
Changes interests in power in consistent with for impairment
Accounting (increase/ the investee the investee the proportion of impairment losses for the Cash dividends
Investee method Investment cost Opening balance decrease) Closing balance (%) (%) voting power losses period for the period
China Overseas Harbor Affairs
Equity method 749,655,300 795,776,215 24,286,065 820,062,280 40 40 N/A - - -
(Laizhou) Co., Ltd
China Merchants Holdings
(international) information Equity method 1,875,000 11,664,263 2,018,253 13,682,516 23.16 23.16 N/A - - -
technology company Ltd
CMBL Equity method 280,000,000 292,799,444 6,316,864 299,116,308 40 40 N/A - - -
MPIL Equity method 139,932 322,707,298 (24,526,494) 298,180,804 50 50 N/A - - 75,183,148
China Development Finance Co., Ltd Equity method 100,000,000 - 100,000,000 100,000,000 20 20 N/A - - -
China Ocean Shipping Agency
Cost method 13,510,000 13,510,000 - 13,510,000 15 15 N/A - - -
(Shenzhen) Company Limited
Shenzhen Petro-chemical Industry
Cost method 3,500,000 3,500,000 - 3,500,000 0.26 0.26 N/A 3,117,800 - -
(Group) Company Limited.
Guangdong Guang Jian Group
Cost method 27,500 27,500 - 27,500 0.02 0.02 N/A 10,500 - -
Company Limited
Total 1,439,984,720 108,094,688 1,548,079,408 3,128,300 - 75,183,148
- 52 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
(3) Long-term equity investment under equity method
Unit: RMB
Income adjustment
Changes in Accrued Other
Investment Opening Investment profit and Dividends in the equity Closing
Investee cost balance cost loss year changes Balance
Joint ventures
China Overseas Harbor Affairs
749,655,300 795,776,215 - 24,286,065 - - 820,062,280
(Laizhou) Co., Ltd
Associates
China Merchants Holdings
(international) information 1,875,000 11,664,263 - 2,018,253 - - 13,682,516
technology company Ltd
CMBL 280,000,000 292,799,444 - 6,197,941 - 118,923 299,116,308
MPIL 139,932 322,707,298 - 50,656,654 (75,183,148) - 298,180,804
China Development Finance Co.,
100,000,000 - 100,000,000 - - - 100,000,000
Ltd
Total 1,131,670,232 1,422,947,220 100,000,000 83,158,913 (75,183,148) 118,923 1,531,041,908
(4) Long-term equity investment under cost method
Unit: RMB
Increase in the Decrease in the
Item Accounting method Investment cost Opening balance current period current period Closing balance
China Overseas Harbor Affairs (Laizhou)
Cost method 13,510,000 13,510,000 - - 13,510,000
Co., Ltd
Shenzhen Petro-chemical Industry (Group)
Cost method 3,500,000 3,500,000 - - 3,500,000
Company Limited.
Guangdong Guang Jian Group Company
Cost method 27,500 27,500 - - 27,500
Limited
Total 17,037,500 17,037,500 - - 17,037,500
(5) Provision for impairment loss of assets
Unit: RMB
Increase in the Decrease in the
Item Opening balance current period current period Closing balance
Shenzhen Petro-chemical Industry (Group)
Company Limited. 3,117,800 - - 3,117,800
Guangdong Guang Jian Group Company
Limited 10,500 - - 10,500
Total 3,128,300 - - 3,128,300
- 53 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
9. Investment properties
Unit: RMB
Opening Closing
carrying Increase in the Decrease in the carrying
Item amount current period current period amount
I. Total original carrying amount 65,028,138 - - 65,028,138
1. Buildings 33,519,173 - - 33,519,173
2. Land use right 31,508,965 - - 31,508,965
II. Total accumulated depreciation and
30,348,909 1,215,753 - 31,564,662
amortization
1. Buildings 16,690,102 601,988 - 17,292,090
2. Land use right 13,658,807 613,765 - 14,272,572
III. Total net book value of investment
property 34,679,229 33,463,476
1. Buildings 16,829,071 16,227,083
2. Land use right 17,850,158 17,236,393
IV. Total accumulated amount of
provision for impairment losses of - - - -
investment property
1. Buildings - - - -
2. Land use right - - - -
V. Total carrying value of investment
property 34,679,229 33,463,476
1. Buildings 16,829,071 16,227,083
2. Land use right 17,850,158 17,236,393
Note 1: Depreciation and amortization for the current period is RMB1, 215,753.
Note 2: For the year ended 31 December 2012, the Group has no investment property used as
mortgage.
Note 3: For the year ended 31 December 2012, the Group had not obtained any ownership
certificates of investment properties. Please see the Note (V) 12 for the reasons and
management countermeasures.
- 54 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
10. Fixed assets
(1) Fixed assets
Unit: RMB
Opening carrying Increase in the Decrease in the Closing carrying
Item amount current period current period amount
I. Total original carrying amount 4,192,498,489 397,212,010 49,771,114 4,539,939,385
Including: Harbor facilities 1,261,933,269 131,338,915 9,100,428 1,384,171,756
Warehouses, container yards
688,139,044 45,176,554 2,901,011 730,414,587
and buildings
Machinery and equipments 1,878,138,911 175,988,629 34,297,794 2,019,829,746
Motor vehicles, cargo ships
258,390,760 41,146,444 2,276,107 297,261,097
and tugboats
Other equipments 105,896,505 3,561,468 1,195,774 108,262,199
II. Total accumulated depreciation 1,649,725,420 166,466,468 38,041,337 1,778,150,551
Including: Harbor facilities 242,143,126 24,559,267 4,549,598 262,152,795
Warehouses, container yards
214,440,116 13,763,124 353,092 227,850,148
and buildings
Machinery and equipments 993,296,485 107,750,035 30,024,698 1,071,021,822
Motor vehicles, cargo ships
130,102,547 12,827,620 2,038,563 140,891,604
and tugboats
Other equipments 69,743,146 7,566,422 1,075,386 76,234,182
III. Total net book value of fixed assets 2,542,773,069 2,761,788,834
Including: Harbor facilities 1,019,790,143 1,122,018,961
Warehouses, container yards
473,698,928 502,564,439
and buildings
Machinery and equipments 884,842,426 948,807,924
Motor vehicles, cargo ships
128,288,213 156,369,493
and tugboats
Other equipments 36,153,359 32,028,017
IV. Total provision for impairment
60,695,381 - - 60,695,381
losses
Including: Harbor facilities - - - -
Warehouses, container yards
60,695,381 - - 60,695,381
and buildings
Machinery and equipments - - - -
Motor vehicles, cargo ships
- - - -
and tugboats
Other equipments - - - -
V. Total carrying value of fixed assets 2,482,077,688 2,701,093,453
Including: Harbor facilities 1,019,790,143 1,122,018,961
Warehouses, container yards
413,003,547 441,869,058
and buildings
Machinery and equipments 884,842,426 948,807,924
Motor vehicles, cargo ships
128,288,213 156,369,493
and tugboats
Other equipments 36,153,359 32,028,017
Note 1: New acquisition of fixed assets during the period amounted to RMB16, 157,308 and
construction in progress transferred to fixed assets during the period was RMB381,
054,702, which composed the total increase in original carrying amount. Disposal of fixed
assets during the period amounted to RMB44, 250,140 and fixed assets transferred to
construction in progress during the period was RMB5,520,974, which composed the total
decrease in original carrying amount.
- 55 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
10. Fixed assets - continued
(1) Fixed assets - continued
Note 2: Of the increase in accumulated depreciation, depreciation of RMB166,466,468 was made
during the period. And decrease in accumulated depreciation during the period was
composed of RMB37, 636,640 and RMB404, 697, respectively, resulted from disposal of
fixed assets and transfer from fixed assets to construction in progress.
Note 3: At 31 December 2012, there are no restrictions on title of fixed assets.
Note 4: At 31 December 2012, ownership certificates for certain buildings of the Group with net
book value of RMB148,744,547 (cost: RMB253,036,165) have not yet been obtained.
Among them, fixed assets with net book value of RMB35,463,482 (cost:
RMB134,020,332) are located within the scope of Chiwan watershed, please refer to Note
(V) 12 for the reasons and management countermeasures; the ownership certificate for the
remainder is under the process.
(2) Other Events
Unit: RMB
Item Amount Note
The original amounts of fixed assets fully depreciated but still
723,860,260
in use at 31 December 2012
Closing original amount of temporary idle fixed assets -
Fixed assets disposed or scrapped in the current year
(1)Original amount of fixed assets disposed or scrapped in
44,250,140
the current year
(2)Net book value of fixed assets disposed or scrapped in
6,613,500
the current year
(3)Gain or loss on disposal or scrap of fixed assets (1,749,511)
11. Construction in progress
(1) Details of construction in progress are as follows:
Unit: RMB
Closing Balance Opening Balance
Carrying Provision for Carrying Provision for
Item amount impairment Book value amount impairment Book value
Berth 4#-5#, Machong Port 383,523,257 - 383,523,257 169,264,280 - 169,264,280
Berth 2#-3#, Machong Port 219,033,381 - 219,033,381 118,802,890 - 118,802,890
Berth Extension - - - 106,442,864 - 106,442,864
Quay-crane Construction - - - 65,250,000 - 65,250,000
Tug Construction - - - 33,384,070 - 33,384,070
Portal Crane and transtainer - - - 16,600,000 - 16,600,000
Others 7,375,971 - 7,375,971 8,074,040 - 8,074,040
Total 609,932,609 - 609,932,609 517,818,144 - 517,818,144
- 56 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
11. Construction in progress - continued
(2) Changes in significant construction in progress
Unit: RMB
Proportion of Amount of Including: Interest
construction accumulated capitalised capitalisation
Budget Increase in the Transfer to fixed Transfer to investment in Construction capitalised interest for the rate for the
Item amount Opening balance current period assets intangible assets budget progress interest period period (%) Capital source Closing balance
Self-Funding
Berth 4#-5#, Machong Port 820,840,000 169,264,280 214,258,977 - - 47% 47% 4,901,070 4,901,070 4.7 383,523,257
and loan
Self-Funding
Berth 2#-3#, Machong Port 280,933,660 118,802,890 151,146,831 50,916,340 - 78% 78% 6,499,508 6,066,512 4.7 219,033,381
and loan
Berth Extension 130,087,244 106,442,864 23,644,380 130,087,244 - 100% 100% - - - Self-Funding -
Quay-crane Construction 130,500,000 65,250,000 65,250,000 130,500,000 - 100% 100% - - - Self-Funding -
Self-Funding
Tug Construction 35,564,030 33,384,070 2,179,960 35,564,030 - 100% 100% 1,185,055 149,402 4.7 -
and loan
CTOS Software 5,463,568 - 5,463,568 296,068 5,167,500 100% 100% - - - Self-Funding -
Portal Crane and transtainer 33,462,022 16,600,000 16,862,022 33,462,022 - 100% 100% - - - Self-Funding -
Others 8,032,526 8,074,040 919,079 228,998 1,388,150 92% 92% - - - Self-Funding 7,375,971
Total 517,818,144 479,724,817 381,054,702 6,555,650 12,585,633 11,116,984 609,932,609
- 57 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
12. Intangible assets
Unit: RMB
Opening carrying Increase in the Decrease in the Closing carrying
Item amount current period current period amount
I. Total original carrying amount 1,534,462,503 7,475,372 - 1,541,937,875
Land use rights - prepaid under
- - 1,296,536,073
lease (Note 2) 1,296,536,073
Land use rights - prepaid under
122,623,476 - - 122,623,476
investment (Note 2)
Land use rights - purchased 19,343,189 - - 19,343,189
Computer software 23,073,628 7,475,372 - 30,549,000
Coastal line use rights 72,886,137 - - 72,886,137
38,868,236
II. Total accumulated amortization 495,535,611 - 534,403,847
(Note 1)
Land use rights - prepaid under
424,425,331 33,309,639 - 457,734,970
lease (Note 2)
Land use rights - prepaid under
47,618,783 2,452,470 - 50,071,253
investment (Note 2)
Land use rights - purchased 1,842,939 386,864 - 2,229,803
Computer software 18,512,742 1,091,263 - 19,604,005
Coastal line use rights 3,135,816 1,628,000 - 4,763,816
III. Total net book value of
1,038,926,892 1,007,534,028
intangible assets
Land use rights - prepaid under
872,110,742 838,801,103
lease (Note 2)
Land use rights - prepaid under
75,004,693 72,552,223
investment (Note 2)
Land use rights - purchased 17,500,250 17,113,386
Computer software 4,560,886 10,944,995
Coastal line use rights 69,750,321 68,122,321
IV. Total provision for impairment - - - -
Land use rights - prepaid under
- - - -
lease
Land use rights - prepaid under
- - - -
investment
Land use rights - purchased - - - -
Computer software - - - -
Coastal line use rights - - - -
V. Total carrying value of
1,038,926,892 1,007,534,028
intangible assets
Land use rights - prepaid under
872,110,742 838,801,103
lease (Note 2)
Land use rights - prepaid under
75,004,693 72,552,223
investment (Note 2)
Land use rights - purchased 17,500,250 17,113,386
Computer software 4,560,886 10,944,995
Coastal line use rights 69,750,321 68,122,321
Note 1: Amortization for the current period is RMB38,868,236.
- 58 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
12. Intangible assets - continued
Note 2: The Group has obtained the land use right from Nanshan Group in connection with
several plots of land with a total area of 1,049,946 square meters within Chiwan port for a
use term ranging between 20 - 50 years with original amount of RMB1,400,288,984. The
lands are located within the scope of Chiwan watershed, comprising of a land of 2.2
square kilometers injected by Shenzhen Investment Holding Corporation, the parent of
Nanshan Group, and a land arising from marine reclamation by Nanshan Group.
An area of 270,692 sq. meters (RMB122,623,476) was injected by Nanshan Group as
capital contribution at the moment of corporate restructuring. The rest land use right was
obtained from Nanshan Group by long-term leasing.
Until now, no official certificates for above lands were obtained by Nanshan Group.
Correspondingly, the buildings located on such lands have not obtained relevant real
estate certificates.
At 20 March 2001, 18 June 2003 and 29 September 2004,Nanshan Group committed on
all the land use right obtained by the group from it: Nanshan Group has no right to
withdraw and will agree in any condition that ,when the group suffer loss ,bear expense
and liability, be claimed to compensation or run into lawsuit, caused by any actually or
potentially illegal and unconductable issues generated by land use right agreements and
their relevant documents, signed or will be signed by Nanshan Group,Nanshan group will
guarantee that the acquiring party and its inheritor of those land use right will be fully
exempted from above issues mentioned. Based on the situations above, directors of the
company believed there is no significant impairment risk will be caused by the absence of
land use right certificate and no significant contingency exist.
The management learned that Nanshan Group is active in process of resolve the historical
problem with relevant government department, however it cannot predict the exact time
of obtaining legal certificates of land and relevant real estate certificates.
13. Goodwill
Unit: RMB
Opening Increase in the Decrease in the Closing
Investee balance current period current period balance
Chiwan Container Terminal
10,858,898 - - 10,858,898
Company Limited
- 59 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
Note: The goodwill arose from the acquisition of the minority interests in Chiwan Container
Terminal Company Limited, being the difference of the additional cost of investment and
the Group's share of the fair value of the identifiable net assets in Chiwan Container
Terminal Company Limited. Based on past years operation relating to these assets groups
and the forecast of the Company, the Management hold the opinion that these is no need to
allocate impairment to goodwill arising from Chiwan Container Terminal Company
Limited investment.
14. Long-term prepaid expenses
Unit: RMB
Residual
Opening Increase in the Amortization Other Closing useful
Item balance period for the period reductions balance Original Cost Period
Construction expenditure of
57,181,711 - 1,844,571 - 55,337,140 64,560,000 30 years
Tonggu sea-route (Note 1)
Foresea packing ground 2,416,368 - 1,208,184 - 1,208,184 5,537,510 1 year
Golf membership 1,896,631 - 228,425 - 1,668,206 2,443,549 1-9 years
Building decoration 343,822 1,698,294 142,978 - 1,899,138 2,208,924 2-5 years
Others 650,000 200,000 - - 850,000 850,000 5years
Total 62,488,532 1,898,294 3,424,158 - 60,962,668 75,599,983
Note 1: 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 remaining 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 RMB64,560,000 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.
- 60 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
15. Deferred tax assets/deferred tax
(1) Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
and correspondingly deductible or temporary differences
Unit: RMB
Closing balance Closing balance Opening balance Opening balance
of deferred tax of deductible or of deferred tax of deductible or
assets or deferred taxable temporary assets or deferred taxable temporary
tax liabilities differences after tax liabilities differences after
Item after offsetting offsetting after offsetting offsetting
Deferred tax assets:
Provision for impairment losses
15,155,785 62,012,607 15,130,592 61,677,792
of assets
Depreciation of Fixed assets
and Amortization of Intangible 9,479,406 37,974,765 10,723,333 42,972,006
Assets
Deductible losses 25,606,726 102,426,904 19,205,338 82,041,588
Accrued expenses 13,382,167 58,360,664 10,686,955 45,492,841
Pre-operational expenses 1,390,282 7,077,804 1,390,282 8,088,918
Others 2,954,668 13,009,019 2,114,419 9,444,637
Subtotal 67,969,034 280,861,763 59,250,919 249,717,782
Deferred tax liabilities
Change in fair value of
available for sale equity
1,022,500 4,090,000 1,142,500 4,570,000
financial assets recorded in
capital surplus
Subtotal 1,022,500 4,090,000 1,142,500 4,570,000
(2) Details of offsetting deferred tax assets and deferred tax liabilities
Unit: RMB
Item The amount of offset
Current period:
Depreciation of Fixed assets and Amortization of Intangible Assets 1,794,113
Prior period:
Depreciation of Fixed assets and Amortization of Intangible Assets 1,113,207
(3) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 3,234,372 3,237,751
Deductible losses 12,406,662 8,573,918
Total 15,641,034 11,811,669
Note: Abovementioned deductible temporary differences and deductible losses that are not
recognized as deferred tax assets due to uncertainty on whether sufficient taxable profits
will be available in the future shall be presented.
- 61 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
15. Deferred tax assets/deferred tax - continued
(4) Deductible losses for which no deferred tax assets are recognized and will expire in the
following years
Unit: RMB
Year Closing balance Opening balance Note
2013 83,654 83,654
2014 379,817 379,817
2015 4,707,158 4,707,158
2016 3,403,289 3,403,289
2017 3,832,744 -
Total 12,406,662 8,573,918
16. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Coast Line Use Right (Note) 36,375,000 36,375,000
Land Use Right (Note) 86,934,397 85,463,860
Prepayment of facility - 20,269,424
Total 123,309,397 142,108,284
Note : 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" and its supplements 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 RMB260,000,000, respectively in March
2006, October 2006 and November 2007. Up to 31 December 2012, the Group has paid
the first four installments of the coastline use right and land use right as agreed in the
contracts, respectively RMB36,375,000 and RMB86,934,397. As the Group has not
obtained the land use right certificate, the relevant payments were therefore recognized as
other non-current assets.
- 62 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
17. Details of provision for impairment losses of assets
Unit: RMB
Increase Decreased in the Foreign
Opening in the current period exchange Closing
carrying current translation carrying
Item amount period Reversals Write-off differences amount
I. Bad debts provision 299,744 360,846 29,507 - 97 631,180
Including: Bad debts provision of
49,391 274,470 - - 72 323,933
Account Receivable
Including: Bad debts provision of
250,353 86,376 29,507 - 25 307,247
Other Receivables
II.Provision for decline in value of
792,118 - - - - 792,118
inventories
III.Provision for impairment losses of
- - - - - -
available-for-sale financial assets
IV.Provision for impairment losses of
- - - - - -
held-to-maturity investments
V. Provision for impairment losses of
3,128,300 - - - - 3,128,300
long-term equity investments
VI. Provision for impairment losses of
- - - - - -
investment properties
VII. Provision for impairment losses
60,695,381 - - - - 60,695,381
of fixed assets
Total 64,915,543 360,846 29,507 - 97 65,246,979
18. Short-term borrowings
Unit:RMB
Item Closing balance Opening balance
Credit loans 1,080,929,700(Note 1) 1,418,830,000
Guarantee loans 100,000,000(Note 2) -
Total 1,180,929,700 1,418,830,000
Note 1: The above bank loans consisted of 1,333,000,000 denominated in HKD (equal to
RMB1,080,929,700). Included in short-term borrowings was loan of
HKD130,000,000(RMB105,417,000), which should be due over one year according to
the loan contracts. However it is reclassified as short-term borrowings on the grounds that
the loan contracts contain the clause that the bank can recall the loan before the maturity
at the bank's sole discretion.
Note 2: Dongguan Chiwan Wharf Company Limited, a subsidiary of the Company, holds a bank
loan of RMB100,000,000, the principal outstanding of which is fully guaranteed by the
Company, while 15% of the principal outstanding is counter guaranteed by Yihai Kerry
investment Ltd, a minority shareholder of the Company.
19. Notes payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance notes 826,000 8,704,900
Amounts due in next accounting period is RMB826,000.
- 63 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
20. Accounts payable
(1) Details of accounts payable are as follows:
Unit: RMB
Item Closing balance Opening balance
Construction amounts 83,690,612 117,153,230
Service amounts 29,011,736 21,681,108
Material purchase amounts 20,316,663 17,550,367
Equipment payables 12,288,707 2,096,213
Rental payables 661,119 1,632,036
Machinery procurement amounts 19,104 -
Total 145,987,941 160,112,954
(2) As at 31 December 2012, the Group did not have any accounts payable balances which were
due to parties having 5% or above voting rights in the Company except for the amount due to
Nanshan Group. Payables due to Nanshan Group or other related parties refer to (VI) 6.
(3) Details of significant accounts payable aged more than one year as follows:
Unit: RMB
Closing Reasons for Subsequent
Name of entity balance Aging unpayment Payment
Fujian Hui Dong Construction Remaining
5,128,656 1-2 year -
Engineering Co., Ltd construction costs
China First Metallurgical Group Remaining
3,477,529 1-2 year -
Co., Ltd construction costs
Tonggu sea-route Construction Remaining
2,560,000 Over 3 years -
Office construction costs
Accrued railway
Railage 1,622,650 1-2 year -
freight subsides
Total 12,788,835
21. Advances
(1) Details of advances are as follows:
Unit: RMB
Item Closing balance Opening balance
Service fee receipt in advance 299,453 5,045,311
(2) As at 31 December 2012, the Group did not have any advance from customers' balances which
were due to parties having 5% or above shareholdings in the Company.
- 64 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
22. Employee benefits payable
Unit:RMB
Opening Decrease in Closing
carrying Increase in the the current carrying
Item amount current period period amount
I. Wages and salaries, bonuses, allowances
45,932,651 174,690,066 164,557,533 56,065,184
and subsidies
II. Staff welfare - 12,801,444 12,801,444 -
III. Social security contributions 9,852 27,822,518 27,829,126 3,244
Including: Medical insurance - 5,657,514 5,657,514 -
Basic pension - 13,097,429 13,094,185 3,244
Supplementary pension (Note1 ) - 7,487,010 7,487,010 -
Unemployment insurance - 295,560 295,560 -
Employment injury insurance 9,852 829,647 839,499 -
Generational insurance - 455,358 455,358 -
IV. Housing funds - 12,050,350 12,049,540 810
V. Labor union and employee education
10,003,364 7,406,999 7,943,811 9,466,552
funds
VI. Non-monetary benefits - - - -
VII. Termination benefits - - - -
VIII. Others - 9,460,250 9,460,250 -
Total 55,945,867 244,231,627 234,641,704 65,535,790
Note 1: At 3 June 2008, the Group participated in a group defined contribution plan of Nanshan
Group approved by Shenzhen government. The above supplementary pension
contributions were paid into the plan through Nanshan Group.
Note 2: There are no amounts in arrears under the employee benefits payable.
Note3: Pursuant to the resolution of 2010 general meeting of shareholders on 27 May 2011, the
management team will be granted a performance reward scheme based on the current year
net profit attributable to the parent and yearly net asset return ratio. The Company has
provided RMB10,112,903 of management reward in 2012 (2011: RMB14,917,004).
23. Taxes payable
Unit: RMB
Opening carrying Increase in the Decrease in the Closing carrying
Item amount current period current period amount
Enterprise income tax payable 92,480,983 133,843,163 199,475,045 26,849,101
Withholding tax payable(Note) 20,572,808 - 11,468,250 9,104,558
Business tax 5,266,425 53,812,383 58,852,499 226,309
Value-added-tax payable 141,918 7,588,383 6,810,704 919,597
Others 3,318,916 31,119,504 30,683,124 3,755,296
Total 121,781,050 226,363,433 307,289,622 40,854,861
Note: Withholding tax represents the tax provided by the Group at a rate of 5% or 10% when
paying out dividends to foreign shareholders.
- 65 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
24. Interest payable
Unit: RMB
Item Closing balance Opening balance
Interest of debentures 18,009,863 -
Interest payable of short-term borrowings 531,310 548,834
Interest of long-term borrowings with interest paid in
- 1,088,956
installment and principal to be paid when due
Total 18,541,173 1,637,790
25. Dividends payable
Unit: RMB
Reasons for not
paying dividends for
Name of entity Closing balance Opening balance more than one year
Payable to International Enterprise Co., Ltd. - 207,726,574 N/A
Payable to Hidoney Developments Co., Ltd. - 157,434,877 N/A
Total - 365,161,451
26. Other payables
(1) Details of other payables are as follows:
Unit: RMB
Item Closing balance Opening balance
Temporary receipts 23,025,327 19,065,981
Security expense payable 3,620,546 17,101,361
Deposits received 2,746,130 1,720,908
Professional service fee 1,910,376 2,610,000
Service fees 1,313,873 1,407,531
Due to employees 1,297,015 1,225,285
Insurance indemnity 955,033 955,433
Others 6,706,538 6,722,794
Total 41,574,838 50,809,293
(2) The aging of other payables based on their recording dates is analyzed as follows:
Unit: RMB
Closing balance Opening balance
Proportion Proportion
Aging Amount (%) Amount (%)
Within 1 year 36,254,316 87.20 44,356,691 87.30
More than 1 year
1,353,934 3.26 2,583,466 5.08
but not exceeding 2 years
More than 2 years
1,300,464 3.13 3,067,152 6.04
but not exceeding 3 years
More than 3 years 2,666,124 6.41 801,984 1.58
Total 41,574,838 100.00 50,809,293 100.00
- 66 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
26. Other payables - continued
(3) Significant other payables aged more than one year
Unit: RMB
Name of entity Amount Reason for non-settle
Qingdao Yaran Trading Co., Ltd. 1,026,750 Business in progress
(4) As at 31 December 2012, the Group did not have any other payables which were due to parties
having 5% or above shareholdings in the Company. Payables due to other related parties refer to
(VI) 6.
27. Current portion of non-current liabilities
(1) Details of Current portion of non-current liabilities are as follows:
Unit: RMB
Item Closing balance Opening balance
Current portion of long-term borrowings 35,000,000(Note1) 10,000,000
Current portion of deferred revenue 4,727,207(Note2) 4,951,750
Total 39,727,207 14,951,750
Note1: Please refer to (V) 28(1).
Note 2: Please refer to (V) 31.
(2) Long-term borrowings due within one year
(a) Long-term borrowings due within one year
Unit: RMB
Item Closing balance Opening balance
Guarantee loans 35,000,000 10,000,000
(b) Long-term borrowings due within one year
Unit: RMB
Closing balance Opening Balance
Annual Amount of Amount of Amount of Amount of
interest foreign domestic foreign domestic
Creditor Inception date Maturity date Currency rate (%) currency currency currency currency
Financial institution I 2011.10.21 2013.10.20 RMB 6.4 20,000,000 -
Financial institution II 2012.02.09 2013.08.09 RMB 6.4 15,000,000 -
Total 35,000,000 -
- 67 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
28. Long-term borrowings
(1) Categories of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Guarantee loans( Note) 150,000,000 90,000,000
Note: Dongguan Chiwan Wharf Company Limited, a subsidiary of the Company, holds a bank
loan of RMB185,000,000, the principal outstanding of which is fully guaranteed by the Company,
while 15% of the principal outstanding is counter guaranteed by Yihai Kerry investment Ltd, a
minority shareholder of the Company. Such borrowings include RMB35,000,000 due within one
year.
(2) Details of long-term borrowings are as follows:
Unit: RMB
Closing balance Opening Balance
Amount of Amount of Amount of Amount of
Interest rate foreign domestic foreign domestic
Creditor Inception date Maturity date Currency (%) currency currency currency currency
Financial
2011.10.21 2016.10.20 RMB 6.4 70,000,000 90,000,000
institution I
Financial
2012.02.09 2017.02.09 RMB 6.4 80,000,000 -
institution II
Total 150,000,000 90,000,000
The interest rate of the long-term borrowings mentioned above was 6.4% per annum.
29. Bonds payable
Unit: RMB
Opening Interest paid Closing
Par Term of interest Accrued interest during the interest Closing
Name of bonds value Issue date the bond Issue amount payable for the period period payable balance
11 ChiWan 01 100 2012.6.1 Five years 500,000,000 - 18,009,863 - 18,009,863 496,545,753
Note: On 25 November 2011, the Company received the Approval from CSRC (filed as Zhen Jian
Xu Ke [2011] No.1889) agreeing the Company to issue corporate bonds with no more than
100 million in par value. On 26 April 2012, the Company's actual insurance amounted to
RMB500,000,000 with the term of five years. The bond interests should be calculated on
simple interest basis at a nominal fixed interest rate of 5.28% on a yearly basis.
According to the bond prospectus, the Company should make an announcement on whether
to exercise the redemption option on the information disclosure media designated by CSRC
at the 30th trading date before the interest payment date in the third interest-bearing year. If
the decision of exercising the redemption option is made, the bond would be regarded as to
be matured in the third year and the payment mode of redemption would be the same as that
- 68 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
29. Bonds payable- continued
of principal and interests of bonds due in the period. If the decision of not exercising the
redemption of option is made, the Company should make an announcement on whether to raise
the interest rate and the extent of variation, which ranges from zero to 100 base points. If the
company chooses to exercise the option of raising the stated interest rate, the stated interest rate of
the portion of non-put-back bond due in two years after the remaining period equals to the stated
interest rate due in three years prior to the remaining period plus the increased base point. And the
stated interest rate of the bond due in two years after the remaining period would be fixed. If the
company chooses not to exercise the option of raising the stated interest rate, the original stated
interest rate remains the same for the portion of non-put-back bond due in two years after the
remaining period.
Investors have the option to sell bonds back to the Company at the interest payment date in the
third interest-bearing year at the par value wholly or in partially, after the Company makes the
announcement on whether to raise the stated interest rate and the extent of variation.
If the Company abandons the redemption option and the bondholder s abandon the put back
option wholly or partially, the rest of the principal would be paid back in advance. Namely, 30%
proportion of the principal should be paid back at the end of the fourth year since the bond issued
and the rest should be paid back at the end of the fifth year.
30. Special Payables
Unit: RMB
Increase in the Decrease in the
Item Opening balance current period current period Closing Balance Note
Refunds of Harbor
81,790,541 5,048,835 6,216,400 80,622,976 Note
Construction Fee
Note: The item is refunds of harbor construction fee to the company and its subsidiary Chiwan
Container Terminal Company Limited from Shenzhen traffic bureau. According to
Measures of harbor construction fee management released by Ministry of Finance, the fund
should be managed in separate account and can be only used on fundamental facilities'
construction of marine transportation.
31. Other non-current liabilities
(1) Details of other non-current liabilities are as follows:
Unit: RMB
Closing carrying Opening carrying
Item amount amount
Deferred revenue
Including: Berth priority right (Note 1) 50,518,693 55,202,707
Including: Government grant related to asset (Note 2) 7,860,870 8,000,000
Total 58,379,563 63,202,707
Less: Non-current liabilities due within one year 4,727,207 4,951,750
Including: Berth priority right 4,560,250 4,951,750
Including: Government grant related to asset 166,957 -
Non-current liabilities due beyond one year 53,652,356 58,250,957
- 69 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
31. Other non-current liabilities- continued
Note 1: Berth priority right represents that agreed in the contract signed in 2003, which amounts
to USD14,000,000. The Group should satisfy the berthing requirement of contracted
customers in priority during the contract period. According to the contract, the berth
priority right should be amortized within twenty years on the straight-line basis.
Note 2: The item is government grants received which is based on the Announcement Released by
National Development and Reform Commission about 2010 Investment Plans within
Budget of Grains and Modern Logistics Program (NDRC[2010] No.1263). The total
received amount is RMB8,000,000. The asset relating to the government grants has
arrived the status for its intended use in March 2012. Therefore, it shall be amortized on
the straight-line basis within the useful life of the related asset.
32. Share capital
Unit: RMB
Changes for the period
Capitalisation
New issue of Bonus of surplus
Opening balance share issue reserve Others Subtotal Closing balance
2012:
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person
- - - - - - -
shares
3. Other domestic shares 790,929 - - - (55,463) (55,463) 735,466
4. Other foreign shares - - - - - - -
Total restricted tradable shares 790,929 - - - (55,463) (55,463) 735,466
II. Tradable shares
1. Ordinary shares
denominated in RMB
464,789,805 - - - - - 464,789,805
2. Foreign capital shares
listed domestically
179,182,996 - - - 55,463 55,463 179,238,459
3. Foreign capital shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total tradable shares 643,972,801 - - - 55,463 55,463 644,028,264
III. Total shares 644,763,730 - - - - - 644,763,730
2011:
I. Restricted tradable shares
1. State-owned shares - - - - - - -
2. State-owned legal person
- - - - - - -
shares
3. Other domestic shares 673,252 - - - 117,677 117,677 790,929
4. Other foreign shares - - - - - - -
Total restricted tradable shares 673,252 - - - 117,677 117,677 790,929
II. Tradable shares
1. Ordinary shares
464,789,805 - - - - - 464,789,805
denominated in RMB
2. Foreign capital shares
179,300,673 - - - (117,677) (117,677) 179,182,996
listed domestically
3. Foreign capital shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total tradable shares 644,090,478 - - - (117,677) (117,677) 643,972,801
III. Total shares 644,763,730 - - - - - 644,763,730
- 70 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
33. Capital reserve
Unit: RMB
Additions for the Reductions for the
Opening balance period period Closing balance
2012:
Capital premium 163,560,083 - - 163,560,083
Including: Capital contributed by investors 163,560,083 - - 163,560,083
Conversion option of convertible corporate
- - - -
bonds is exercised
Debt converted into capital - - - -
Differences arising from business combination
- - - -
involving enterprises under common control
Equity acquisition towards minority
- - - -
shareholders of subsidiaries
Capital reserve converted into capital - - - -
Other comprehensive income 3,527,500 - 360,000 3,167,500
Other capital reserve (861,528) - - (861,528)
Including: Equity component split from convertible
- - - -
corporate bonds
Fair value of equity-settled share-based equity
- - - -
instrument
Surplus of compensation granted by
- - - -
government for relocation in the public interests
Transfer from capital reserve under the previous
(2,781,133) - - (2,781,133)
accounting system
Others 1,919,605 - - 1,919,605
Total 166,226,055 - 360,000 165,866,055
2011:
Capital premium 142,786,083 20,774,000(Note) - 163,560,083
Including: Capital contributed by investors 142,786,083 20,774,000(Note) - 163,560,083
Conversion option of convertible corporate
- - - -
bonds is exercised
Debt converted into capital - - - -
Differences arising from business combination
- - - -
involving enterprises under common control
Equity acquisition towards minority
- - - -
shareholders of subsidiaries
Capital reserve converted into capital - - - -
Other comprehensive income 4,195,200 - 667,700 3,527,500
Other capital reserve (2,071,528) 1,210,000 (861,528)
Including: Equity component split from convertible
- - - -
corporate bonds
Fair value of equity-settled share-based equity
- - - -
instrument
Surplus of compensation granted by government
- - - -
for relocation in the public interests
Transfer from capital reserve under the previous
(2,781,133) - - (2,781,133)
accounting system
Others 709,605 1,210,000 - 1,919,605
Total 144,909,755 21,984,000 667,700 166,226,055
- 71 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
33. Capital reserve - continued
Note : The group previously owned 100% shareholding of Dongguan Chiwan Wharf Company
Limited. At 16 August 2010, the group signed an agreement with Yihai Kerry investment
Ltd on injecting RMB121, 200,000 and RMB91,940,000 respectively to Dongguan Wharf
Ltd, after the capital increment date (9 June 2011), the groups' share of respectively was
decreased from 100% to 85%. The increase of RMB20,774,000 in net assets of
Dongguan Chiwan Wharf Company, attributable to the Group based on its shareholding,
was recognized in "capital reserve-equity premium".
34. Special reserve
Unit: RMB
Opening Increase for Decrease for Closing
Item balance the period the period balance
2012:
Production safety fee - 10,853,324 9,458,492 1,394,832
2011:
Production safety fee - - - -
35. Surplus reserve
Unit: RMB
Opening Increase for Decrease for
Item balance the period the period Closing balance
2012:
Statutory surplus reserve 421,692,405 43,011,863 - 464,704,268
2011:
Statutory surplus reserve 383,570,404 38,122,001 - 421,692,405
Note: 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.
- 72 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
36. Unappropriated profit
Unit: RMB
Proportion of
appropriation or
Item Amount allocation
2012：
Before adjustment: Unappropriated profit at the end of prior year 2,248,722,001
Adjustment: Total unappropriated profit at beginning of year -
After adjustment: Unappropriated profit at beginning of year 2,248,722,001
Add: Net profit attributable to shareholders of the parent company for
467,103,270
the period
Less: Appropriation to statutory surplus reserve 43,011,863 Note 1
Appropriation to discretionary surplus reserve -
Appropriation to general risk reserve -
Ordinary shares' dividends payable 257,905,492 Note 2
Ordinary shares' dividends converted into share capital -
Unappropriated profit at the end of the period 2,414,907,916
2011:
Before adjustment: Unappropriated profit at the end of prior year 2,079,724,472
Adjustment: Total unappropriated profit at beginning of year -
After adjustment: Unappropriated profit at beginning of year 2,079,724,472
Add: Net profit attributable to shareholders of the parent company for
the period 505,645,137
Less: Appropriation to statutory surplus reserve 38,122,001
Appropriation to discretionary surplus reserve -
Appropriation to general risk reserve -
Ordinary shares' dividends payable 298,525,607
Ordinary shares' dividends converted into share capital -
Unappropriated profit at the end of the period 2,248,722,001
Note 1: Withdraw statutory surplus reserve
According to the Articles of Association, the Company is required to transfer 10% of its
net profit to the statutory surplus reserve.
Note 2: Cash dividends approved by shareholders' meeting during the year
Pursuant to the board resolution at 28 May 2012, on the basis of 644,763,730 issued
shares for the year ended by 31 December 2011, dividend of RMB4 for every 10 shares
were distributed to all the shareholders, which amounted to RMB257,905,492.
Note 3: Profit distribution decided after the balance sheet date
According to a proposal made at the fifth session of the seventh Board of Directors held
at 25 March 2013, on the basis of 644,763,730 issued shares at 31 December 2012, cash
dividends of RMB234,049,234 will be distributed to all the shareholders. The above
proposal regarding dividends distribution is yet to be approved by a shareholders' meeting.
- 73 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
36. Unappropriated profit - continued
Note 4: Appropriation to surplus reserve that has been made by subsidiaries
As at 31 December 2012, the balance of the Group's unappropriated profit included
appropriation to surplus reserve that has been made by subsidiaries amounting to
RMB497,496,804 (31 December 2011: RMB480,610,213).
37. Operating income and operating costs
(1) Operating income and operating cost
Unit: RMB
Amount incurred Amount incurred
in the current in the prior
Item period period
Principal operating income 1,710,327,275 1,643,676,918
Other operating income 73,518,860 64,459,981
Total 1,783,846,135 1,708,136,899
Principal operating cost 834,345,296 755,262,540
Other operating cost 10,256,123 12,777,703
Total 844,601,419 768,040,243
(2) Principal operating activities (classified by business)
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Item Operating income Operating cost Operating income Operating cost
Load and unload services 1,600,968,080 743,507,148 1,533,687,860 667,441,343
Port ancillary services 97,455,820 90,838,148 99,154,626 87,821,197
Agency and others services 11,903,375 - 10,834,432 -
Total 1,710,327,275 834,345,296 1,643,676,918 755,262,540
(3) Principal operating activities (classified by geographical areas)
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Item Operating income Operating cost Operating income Operating cost
Mainland China 1,703,981,350 834,345,296 1,638,111,180 755,262,540
Hong Kong 6,345,925 - 5,565,738 -
Total 1,710,327,275 834,345,296 1,643,676,918 755,262,540
- 74 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
37. Operating income and operating costs - continued
(4) Other services
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Other operating Other operating Other operating Other operating
Item income cost income cost
Lease income 29,801,819 3,271,519 26,452,734 3,654,601
Security fee 10,456,055 - 10,611,941 -
Port ancillary services 17,308,127 5,045,888 13,921,382 5,801,214
Agency fee 3,555,772 1,938,716 5,180,097 3,177,303
Sales of material 2,908,705 - 2,683,075 144,585
Documentation fee 938,488 - 824,376 -
Others 8,549,894 - 4,786,376 -
Total 73,518,860 10,256,123 64,459,981 12,777,703
(5) Operating income from the Company's top five customers
Unit: RMB
Proportion to total
operating income of the
Name of customer Operating income Company (%)
Customer A 494,980,243 27.76
Customer B 336,082,313 18.84
Customer C 113,000,648 6.33
Customer F 46,462,206 2.60
Customer G 41,294,602 2.31
Total 1,031,820,012 57.84
38. Business taxes and levies
Unit: RMB
Amount incurred
in the current Amount incurred Basis of
Item period in the prior period calculation
Business tax 53,812,383 62,892,685 Note
Urban maintenance and construction
3,996,559 4,436,377 Note
tax
Education surcharges 2,866,407 3,161,517 Note
Others 475,897 531,347
Total 61,151,246 71,021,926
Note: Please refer to Note (III).
- 75 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
39. Financial expenses
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Interest expense 84,667,523 64,084,834
Less: Capitalized interest expenses 11,116,984 1,434,870
Less: Interest income 6,906,511 7,893,831
Exchange differences 1,430,738 (47,009,755)
Less: Capitalized exchange differences - -
Others 2,688,398 4,624,603
Total 70,763,164 12,370,981
40. Impairment losses of assets
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
I. Bad debt losses 331,339 (437,532)
II. Written-down of inventories - 688,606
III. Impairment on available-for-sale financial assets - -
IV. Impairment on held-to-maturity investments - -
V. Impairment on long-term equity investments - -
VI. Impairment on investment properties - -
VII. Impairment on fixed assets - -
VIII. Impairment on construction materials - -
IX. Impairment on construction in progress - -
X. Impairment on bearer biological assets - -
XI. Impairment on oil and gas assets - -
XII. Impairment on intangible assets - -
XIII. Impairment on goodwill - -
XIV. Others - -
Total 331,339 251,074
41. Investment income
(1) Details of investment income
Unit: RMB
Amount incurred in the Amount incurred in the
current period prior period
Long-term equity investments income under cost method - 3,900,000
Long-term equity investments income under equity method 83,158,913 113,968,183
Investment income on disposal of long-term equity
- -
investment
Investment income on available-for-sale financial assets, etc. 360,000 360,000
Total 83,518,913 118,228,183
- 76 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
41. Investment income - continued
(2) Long-term equity investments income under cost method
Unit: RMB
Reasons for increases or
Amount incurred in Amount incurred in decreases in the current period
Investee the current period the prior period compared to the prior period
China Ocean Shipping Agency The investee distributed profit to
- 3,900,000
(Shenzhen) Company Limited shareholders last year
(3) Long-term equity investments income under equity method
Unit: RMB
Amount Amount
incurred in the incurred in the Reasons for increases or decreases in the
Investee current period prior period current compared to the prior period
MPIL 50,656,654 77,299,676 Net profit of investee fluctuates.
China Overseas Harbor Affairs
(Laizhou) Co.,Ltd 24,286,065 32,665,056 Net profit of investee fluctuates.
CMBL 6,197,941 3,983,566 Net profit of investee fluctuates.
China Merchants Holdings
(international ) Information 2,018,253 19,885 Net profit of investee fluctuates.
Technology Co.,Ltd
Total 83,158,913 113,968,183
42. Non-operating income
(1) Details of non-operating income are as follows:
Unit: RMB
Amount recognized
as non-recurring
Amount incurred in Amount incurred in gain and loss in the
Item the current period the prior period current period
Total gains on disposal of non-current assets 1,190,772 70,951 1,190,772
Including: Gains on disposal of intangible assets - - -
Gains on disposal of fixed assets 1,190,772 70,951 1,190,772
Government grants 494,730 - 494,730
Insurance compensation income 1,800,200 - 1,800,200
Income derived from settlement of the payables
2,288,283 - 2,288,283
that cannot be paid
Others 1,864,403 1,807,586 1,864,403
Total 7,638,388 1,878,537 7,638,388
- 77 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
42. Non-operating income - continued
(2) Details of government grants are as follows:
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Circulation business development project funds 355,600 -
Others 139,130 -
Total 494,730 -
43. Non-operating expenses
Unit: RMB
Amount recognized
as non-recurring
Amount incurred in Amount incurred in gain and loss in the
Item the current period the prior period current period
Total losses on disposal of non-current assets 2,940,283 1,960,173 2,940,283
Including: Losses on disposal of fixed assets 2,940,283 1,960,173 2,940,283
Donations contributed 20,000 52,603 20,000
Amercement outlay 933 6,311 933
Others 867,520 16,775 867,520
Total 3,828,736 2,035,862 3,828,736
44. Income tax expenses
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Current tax expense calculated according to tax laws and relevant
133,843,163 155,728,890
requirements
Deferred income tax (8,718,115) (7,167,257)
Total 125,125,048 148,561,633
Reconciliation of income tax expenses to the accounting profit is as follows:
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Accounting profit 740,894,558 816,337,301
Income tax expenses calculated at 25% (the prior year: 24 %) 185,223,640 195,920,952
Effect of expenses that are not deductible for tax purposes 3,715,114 2,746,526
Effect of tax-free income (20,879,728) (28,374,764)
Effect of unrecognized deductible losses and deductible temporary
957,342 1,003,459
differences for tax purposes
Changes in opening balances of deferred tax assets/liabilities due to
- 2,290,517
the adjustment in tax rate
Effect of different tax rates of subsidiaries operating in other
(302,040) (244,303)
jurisdictions
Effect of tax preference policy (50,664,660) (30,256,021)
Withholding tax (Note) 7,075,380 5,475,267
Income tax expense 125,125,048 148,561,633
- 78 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
44. Income tax expense - continued
Note: Withholding income tax was accrued at the rate of 5% or 10% for dividend payable to
Chiwan Wharf Holdings (H.K.) Limited for the year ended 31 December 2012, declared by
those Group's PRC subsidiaries of which Chiwan Wharf Holdings (H.K.) Limited is a
shareholder.
45. Government grants
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Government grants related to income:
Circulation business development project funds 355,600 -
Total 355,600 -
Less: government grants credited in deferred income - -
Add: Government grants in current year profit debited deferred
income 139,130 -
Government grants credited in current year profit 494,730 -
46. Borrowing cost
Unit: RMB
Amount of borrowing
costs capitalised during Capitalisation
Name of Project the year rate
Construction in progress 11,116,984 4.7%
Sub-total of borrowing costs capitalised during the year 11,116,984 4.7%
Borrowing costs recognised in profit or loss during the year 73,550,539
Total of borrowing costs during the year 84,667,523
47. Earnings per share
For the purpose of calculating earnings per share, net profit for the current period
attributable to ordinary shareholders is:
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Net profit for the current period attributable to ordinary shareholders 467,103,270 505,645,137
Including: Net profit from continued operations 467,103,270 505,645,137
Net profit from discontinued operations - -
- 79 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
47. Earnings per share - continued
For the purpose of calculating basic earnings per share, the denominator is the weighted average
number of outstanding ordinary shares and its calculation process is as follows:
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Number of ordinary shares outstanding at the beginning of year 644,763,730 644,763,730
Add: Weighted average number of ordinary shares issued during the
- -
period
Less: Weighted average number of ordinary shares repurchased
- -
during the period
Number of ordinary shares outstanding at the end of year 644,763,730 644,763,730
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Calculated based on net profit attributable to shareholders of the
parent:
Basic earnings per share 0.724 0.784
Diluted earnings per share 0.724 0.784
Calculated based on net profit from continued operations attributable
to shareholders of the parent:
Basic earnings per share 0.724 0.784
Diluted earnings per share 0.724 0.784
Calculated based on net profit from discontinued operations
attributable to shareholders of the parent:
Basic earnings per share - -
Diluted earnings per share - -
Since there are no dilutive potential ordinary shares, the diluted earnings per share equals to the
basic earnings per share.
- 80 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
48. Other comprehensive income
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
1. Gains (losses) arising from available-for-sale financial assets (480,000) (950,000)
Less: Tax effects arising from available-for-sale financial assets (120,000) (182,300)
Net amounts included in other comprehensive income in the prior
- -
period that are transferred to profit or loss for the period
Subtotal (360,000) (767,700)
2. Share of other comprehensive income of the investee accounted
- 100,000
for using the equity method
Less: Tax effects arising from the share of other comprehensive
- -
income of the investee accounted for using the equity method
Net amounts included in other comprehensive income in the prior
- -
period that are transferred to profit or loss for the period
Subtotal - 100,000
3. Gains (losses) arising from cash flow hedging instruments - -
Less: Tax effects arising from cash flow hedging instruments - -
Net amounts included in other comprehensive income in the prior
- -
period that are transferred to profit or loss for the period
Adjustments to the initial recognition amount of hedged items - -
Subtotal - -
4. Translation differences of financial statements denominated in
2,722 (188,137)
foreign currencies
Less: Net amounts transferred to profit or loss for the period on
- -
disposal of foreign operations
Subtotal 2,722 (188,137)
5. Others - -
Less: Tax effects arising from other items recognized in other
- -
comprehensive income
Net amounts included in other comprehensive income in the prior
- -
period that are transferred to profit or loss for the period
Subtotal - -
Total (357,278) (855,837)
49. Notes to items in the cash flow statement
(1) Other cash receipts relating to operating activities
Unit: RMB
Amount incurred in Amount incurred
Item the current period in the prior period
Interest income 6,906,511 10,471,718
Refunds of Harbor Construction Fee received 5,048,835 16,945,741
Government grant 355,600 -
Others 1,131,730 4,306,623
Total 13,442,676 31,724,082
- 81 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
49. Notes to items in the cash flow statement - continued
(2) Other cash payments relating to operating activities
Unit: RMB
Amount incurred in Amount incurred
Item the current period in the prior period
Office expenses & utilities 8,748,558 5,929,709
Port expenses 7,699,963 8,502,729
Entertainment expenses 7,575,397 7,133,610
Car expenses 5,294,285 7,186,027
Asset insurance fee 4,480,078 4,930,868
Consulting & auditing fee 4,423,779 5,916,908
Travel & accommodation 2,559,818 2,606,213
Advertisements & exhibition expense 189,179 199,798
Others 25,806,219 35,445,572
Total 66,777,276 77,851,434
(3) Other cash payments relating to financing activities
Unit: RMB
Amount incurred in Amount incurred
Item the current period in the prior period
Debt insurance costs 400,000 650,000
Handling charges - 3,798,649
Total 400,000 4,448,649
- 82 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENT - continued
50. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Amount incurred in the Amount incurred in the
Supplementary current period prior period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit 615,769,510 667,775,668
Add: Provision for impairment losses of assets 331,339 251,074
Depreciation of fixed assets 166,466,468 159,529,959
Depreciation and Amortization of investment property 1,215,753 1,333,629
Amortization of intangible assets 38,868,236 38,525,927
Amortization of long-term prepaid expenses 3,424,158 3,389,657
Losses on disposal of fixed assets , intangible assets and
1,749,511 1,889,222
other long-term assets
Financial expenses 74,942,296 24,358,158
Gains arising from investments (83,518,913) (118,228,183)
Decrease(Increase) in deferred tax assets (8,718,115) (7,167,257)
Decrease in inventories 2,174,787 388,168
Decrease(Increase) in operating receivables (32,480,512) (44,983,485)
Increase(Decrease) in operating payables (81,752,066) 19,128,059
Net cash flow from operating activities 698,472,452 746,190,596
2. Significant investing and financing activities that do not involve
cash receipts and payments:
Conversion of debt into capital - -
Convertible bonds due within one year - -
Fixed assets acquired under finance leases - -
3. Net changes in cash and cash equivalents:
Closing balance of cash 314,855,568 478,788,943
Less: Opening balance of cash 478,788,943 781,720,083
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase(Decrease) in cash and cash equivalents (163,933,375) (302,931,140)
(2) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 314,855,568 478,788,943
Including: Cash on hand 14,390 14,035
Bank deposits 313,139,193 477,302,272
Other monetary funds 1,701,985 1,472,636
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 314,855,568 478,788,943
- 83 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the entity
Unit: RMB
Proportion of
the entity's Proportion of
ownership the entity's Ultimate
interests held voting power controllin
Name of the Related party Type of the Place of Legal by the parent held by the g party of Organization
parent relationship entity incorporation representative Nature of business Registered capital (%) parent (%) the entity code
Land development, port
Sino-foreign
Nanshan Controlling service and transportation,
invested Shenzhen Fu Yuning RMB900,000,000 57.52% 57,52%(Note) CMG 61883297-6
Group shareholders industry and commerce,
enterprise
tour, real estate and others
Controlling Listed in Hong
CMHI Hong Kong Fu Yuning Port shipping HKD5,000,000,000 - 66.10(Note) CMG N/A
shareholders Kong
The ultimate controller of the Group is CMG, whose financial statements are not required to be made public.
Note: As mentioned in Note (I), Nanshan Group had 57.52% equity in the Company before
1 Novermber 2012. Since 1 November 2012, CMHI obtained 8.58% equity via its
subsidiary Jing Feng Company, and obtained another 57.52% equity by entrustment
of Nanshan Group's stock, accordingly holding totally 66.10% of the voting shares.
Please refer to Note (I) for details.
2. Subsidiaries of the entity
The general background and other related information of the subsidiaries is set out in Note
(IV).
3. Associates and joint ventures of the entity
The general background and other related information of the Associates and joint ventures is
set out in Note (V) 7.
4. Other related parties of the entity
Relationships between other related
Name of other related parties parties and the Company Organization code
Nanshan Group Ex-controlling shareholder 61883297-6
China Petroleum Supply Base Co., Ltd. ("CPSB") The subsidiary of ex-controlling shareholder 61883389-9
Shenzhen Xuqin Industrial Development Co., Ltd.(“Xuqin”) The subsidiary of ex-controlling shareholder 70845749-5
Shenzhen Nanshan Real Estate development Ltd.(Nanshan
The subsidiary of ex-controlling shareholder 75046859-3
Development)
Shenzhen Chixiao Construction Technology Co., Ltd. (Chixiao
The subsidiary of ex-controlling shareholder 61881595-7
Construction)
Shenzhen Baowan Holding Co., Ltd. The subsidiary of ex-controlling shareholder 61885906-0
Shenzhen Chiwan Property Management Co., Ltd. The subsidiary of ex-controlling shareholder 70846415-0
COCL The subsidiary of ex-controlling shareholder 72616516-2
Haiqin Engineering Controlled by the same controlling shareholder 61888000-1
Shenzhen Mawan Port Co., Ltd. ("SMP") Controlled by the same controlling shareholder 74322579-6
SMW Controlled by the same controlling shareholder 74322582-5
China Merchants Port Services (Shenzhen) Co., Ltd ("CMPS") Controlled by the same controlling shareholder 19244179-0
Shekou Container Terminals Limited ("SCT") Controlled by the same controlling shareholder 61883279-X
An Xunjie Container Terminals Limited Controlled by the same controlling shareholder 75048172-0
Shenzhen Lian Yunjie Container Terminals Limited Controlled by the same controlling shareholder 71093674-3
China Merchants International Cold Chain (Shenzhen) Company
Controlled by the same controlling shareholder 61889222-3
Limited ("CMCCL")
Shenzhen Haixing Harbor Development Co.,Ltd("Haixing") Controlled by the same controlling shareholder 61884362-4
Shenzhen Huxing Tug Service Co., Ltd. Controlled by the same controlling shareholder 19233962-2
Shenzhen Lianda Tug Service Co., Ltd. Controlled by the same controlling shareholder 61880378-8
China Ocean Shipping Agency (Shenzhen) Company Limited Controlled by the same controlling shareholder 19244404-3
Shenzhen China Merchants Shangzhi Investment Co., Ltd. Controlled by the same ultimate controlling shareholder 57637705-4
Shenzhen China Merchants Qianhaiwan Property Co., Ltd. Controlled by the same ultimate controlling shareholder 79386851-1
Shenzhen China Merchants International Shipping Agency Co., Ltd. Controlled by the same ultimate controlling shareholder 70840200-5
Nantian Oilmills Common key connected person with the Company 61881614-0
Shenzhen Southsea Grains Industries Limited ("Southsea Grains") Common key connected person with the Company 61883769-7
Associated company controlled by the same ultimate
China Merchant Bank Co., Ltd.("CMB") 10001686-X
controlling shareholder
Associated company controlled by the same ultimate
Shenzhen Pingnan Railway Co., Ltd. 61883248-2
controlling shareholder
- 84 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Sales and purchase of goods, provision and receipt of services
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Proportion of the Proportion of the
Pricing and amount of related amount of related
decision-making party transactions to party transactions to
procedures of that of similar that of similar
Type of related party Content of related related party transactions transactions
Related parties transaction party transaction transactions Amount (%) Amount (%)
Purchase of goods and receiving of services:
An Xunjie Container Terminals Load and unload
Service received Negotiation 13,691,729 1.62 - -
Limited service
China Merchants Holdings
Technical service
(international) information Service received Negotiation 13,471,886 1.60 1,406,245 0.18
fee
technology company Ltd
Project
Haiqin Engineering Service received Negotiation 9,111,950 1.08 1,701,180 0.22
management
Shenzhen Lian Yunjie Container Load and unload
Service received 4,586,447 0.54 - -
Terminals Limited service
Load and unload
SCT Service received Negotiation 4,259,649 0.50 468,862 0.06
service
Load and unload
Haixing Service received Negotiation 3,997,020 0.47 2,609,695 0.34
service
Xuqin Service received Construction Negotiation 2,197,526 0.26 1,647,178 0.21
Shenzhen Chiwan Property Property
Service received Negotiation 2,094,793 0.25 1,742,666 0.23
Management Co., Ltd management fee
Load and unload
Nantian Oilmills Service received Negotiation 519,864 0.06 457,830 0.06
service
Load and unload
SMW Service received Negotiation 153,327 0.02 269,973 0.04
service
Total 54,084,191 10,303,629
Rendering of services:
Load and unload
Nantian Oilmills Service provided Negotiation 14,695,584 0.88 14,116,894 0.77
service
SMP Service provided Trailer service etc. Negotiation 9,384,718 16.25 12,477,379 21.12
CMBL Service provided Trailer service etc. Negotiation 7,792,337 13.49 3,280,154 5.55
China Ocean Shipping Agency
Service provided Tugboat service Negotiation 7,272,911 9.02 10,396,823 10.55
(Shenzhen) Company Limited
SMW Service provided Trailer service etc. Negotiation 3,159,123 5.47 4,391,167 7.43
China Overseas Harbour Affairs
Service provided Dispatch income Negotiation 2,930,997 0.18 1,187,960 0.07
(Laizhou) Co., Ltd
Shenzhen China Merchants
International Shipping Agency Co., Service provided Tugboat service Negotiation 2,700,256 3.35 2,977,257 3.02
Ltd.
SCT Service provided Trailer service etc. Negotiation 2,387,496 4.13 858,000 3.34
Shenzhen Lianda Tug Service Co.,
Service provided Tugboat service Negotiation 2,034,717 2.52 3,292,194 1.45
Ltd.
Load and unload
Southsea Grains Service provided Negotiation 909,167 0.05 1,257,023 0.07
service
Load and unload
CMCCL Service provided Negotiation 526,056 0.03 774,665 0.05
service
Shenzhen Huxing Tug Service Co.,
168,368 0.21 548,284 0.56
Ltd. Service provided Tugboat service Negotiation
Load and unload
CPSB Service provided Negotiation - - 1,310,041 0.07
service
Total 53,961,730 56,867,841
- 85 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties
The Group as the lessee:
Unit: RMB
Basis of Lease income
Type of leased Inception date Expiration date determining the recognised in the
Name of lessor Name of lessee assets of leases of leases lease income current year
Coastal line,
The Company CPSB packing yards and January 2012 December 2012 Negotiation 11,748,764
road lighting
Chiwan Container
Terminal Company Southsea Grains Land January 2012 December 2012 Negotiation 4,265,380
Limited
Chiwan Container
Automatically
Terminal Company CMBL Crane May 2006 Negotiation 1,910,680
renewal
Limited
Total 7,924,824
The Group as the lessor:
Unit: RMB
Basis of Lease payment
Type of Inception Expiration determining the recognised in the
Name of lessor Name of lessee leased assets date of leases date of leases lease payment current year
Land, Office
Companies within Automatic
Nanshan Group and packing January 2012 Negotiation 40,208,181
the Group renewal
yard
Chiwan Container
Former Bay December
CMPS Terminal January 2012 Negotiation 2,400,000
port lands 2012
Company Limited
Land use
Chiwan Container right of
Shenzhen Pingnan
Terminal Mawan July 2012 June 2013 Negotiation 1,975,200
Railway Co., Ltd.
Company Limited railway
station
Packing yard December
CPSB The company January 2012 Negotiation 1,647,625
and crane 2012
Shenzhen Chiwan
Trains-Grains Packing December
Nantian Oilmills January 2012 Negotiation 1,614,480
Terminal yards 2012
Company Limited
Shenzhen China Chiwan Container Block 18# in
December
Merchants Shangzhi Terminal Shipping January 2012 Negotiation 954,732
2012
Investment Co., Ltd. Company Limited Centre
SCT The company Crane May 2012 April 2013 Negotiation 540,000
Shenzhen Chiwan
Shenzhen Baowan Shipping and December
Warehouse January 2012 Negotiation 117,660
Holding Co., Ltd. Transportation 2012
Company Limited
Total 49,457,878
- 86 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Assets transfer with related parties
Unit: RMB
Pricing principle of Pricing principle
related party transactions of related party transactions
Proportion of
the amount of Proportion of
related party the amount of
transactions to related party
Type of Content of Pricing principle that of similar transactions to
related party related party of related party transactions that of similar
Related parties transactions transactions transactions Amount (%) Amount transactions (%)
COCL Sales Assets transfer Negotiation 631,320 53.02 - -
(4) Compensation for key management personnel
Unit: RMB
Amount incurred Amount incurred in
Item in the current period the prior period
Compensation for key management personnel 8,630,000 9,389,000
- 87 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VI) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from related parties - continued
Unit: RMB
Item Related parties Closing balance Opening balance
Cash and bank China Merchants Bank 50,688,701 58,812,732
Accounts Nantian Oilmills 1,616,308 -
receivable Southsea Grains 1,285,841 1,368,092
SCT 665,100 6,500
SMP 649,861 682,266
CMBL 432,460 378,384
SMW 193,575 335,669
China Overseas Harbor Affairs (Laizhou)
- 539,724
Co., Ltd.
Others 11,103 -
Total 4,854,248 3,310,635
Advances Xuqin 93,006 -
Other receivables CMBL 1,427,200 2,622,178
SMW 1,327,947 898,479
Shenzhen CM Qianhaiwan Property Co.,
435,884 -
Ltd.
Xuqin 320,000 320,000
Shenzhen China Merchants Shangzhi
198,008 166,846
Investment Co., Ltd.
SCT 187,102 187,102
CPSB 135,622 135,622
CMCCL 108,040 48,645
SMP 38,610 308,451
Others 119,625 75,526
Total 4,298,038 4,762,849
Short term
CMB - 137,700,000
borrowings
Accounts payable Haiqin Engineering 4,355,107 5,062,227
Nanshan Group 4,256,803 5,002,068
China Merchants Holdings (international)
802,290 1,302,441
information technology company Ltd
Nantian Oilmills 291,764 163,201
Xuqin 239,977 319,058
Chixiao Construction 113,000 -
Others 126,398 -
Total 10,185,339 11,848,995
Other Payable SCT 2,801,555 -
China Merchants Holdings (international)
163,300 -
information technology company Ltd
SMW 44,703 945,521
CMBL. 12,000 2,001,792
Others 108,028 119,298
Total 3,129,586 3,066,611
- 88 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(VII) COMMITMENTS
1. Capital commitments
Unit: RMB
Item Closing balance Opening balance
Capital commitments that have been entered into
but have not been recognised in the financial
statements:
Commitment for acquisition of long-term assets
2. Operating lease commitments
As of the balance sheet date, the Group had the following commitments in respect of non-
cancellable operating leases:
Unit: RMB
Item Closing balance Opening balance
Minimum lease payments under non-cancellable
operating leases:
1st year subsequent to the balance sheet date 7,966,481
2nd year subsequent to the balance sheet date 8,718,378 830,341
3rd year subsequent to the balance sheet date 8,340,011 830,341
Subsequent periods 1,588,601 2,281,452
Total 28,783,014 11,908,615
(VIII) EVENTS AFTER THE BALANCE SHEET
1. Profit appropriation after the balance sheet date
Unit: RMB
Item Amount
Distributions of profits or dividends proposed(Note) 234,049,234
To be approved by
Distributions of profits or dividends authorized and declared General meeting of
shareholders
Note: Please refer to Note (V) 36.
- 89 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(IX) OTHER SIGNIFICANT EVENTS
On 6 March 2013, the Company received the Reply on Certain Issues Regarding Agreed Transfer
of State-owned Shares of Shenzhen Chiwan Wharf Holdings Ltd. released by the State-owned
Assets Supervision and Administration Commission (filed as Guo Zi Chan Quan [2013] No. 94),
which approved Nanshan Group to transfer 161,190,933 A-shares of the Company to Shenzhen
Malai Warehouse Co., Ltd.
(X) SEGMENT REPORTING
Subject to the Group's in-house infrastructure, management requirements and internal reporting
system, the operation businesses of the Group are classified into three reporting segments. They
are determined based on the nature of business. The Group's management periodically evaluates
the operating results of these reporting segments to make decisions about resources to be allocated
to the segments and assess their performance. Major products and services delivered or provided
by each of the reporting segments are load and unload services, trailer and tugboat business,
agency services and other segments.
Segment information is disclosed in accordance with the accounting policies and measurement
standards adopted by each segment when reporting to management. The measurement basis is
consistent with the accounting and measurement basis in the preparation of the financial
statements.
- 90 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(X) SEGMENT REPORTING - continued
(1) Segment information
Unit: RMB
load and unload services trailer and tugboat business Agency services Unappropriated items Inter-segment deduction Total
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Operating income
Revenue arising from external transactions 1,664,268,714 1,593,390,668 100,205,820 98,569,821 19,371,601 16,176,410 - - - - 1,783,846,135 1,708,136,899
Revenue arising from inter-segment
- - 40,915,356 43,813,978 - - - - (40,915,356) (43,813,978) - -
transactions
Total operating income 1,664,268,714 1,593,390,668 141,121,176 142,383,799 19,371,601 16,176,410 - - (40,915,356) (43,813,978) 1,783,846,135 1,708,136,899
Reconciling items:
Operating Income in the financial statements 1,783,846,135 1,708,136,899
Operating cost 792,177,702 722,754,928 91,504,974 87,965,782 1,834,099 1,133,511 - - (40,915,356) (43,813,978) 844,601,419 768,040,243
Segment operating profits 872,091,012 870,635,740 49,616,202 54,418,017 17,537,502 15,042,899 - - - - 939,244,716 940,096,656
Reconciling items:
Business taxes and levies 55,297,994 64,859,996 4,315,273 4,832,422 1,537,979 1,329,508 - - - - 61,151,246 71,021,926
Administrative expenses 106,539,705 107,409,383 8,684,710 8,081,840 6,663,054 6,207,568 31,545,505 36,487,441 - - 153,432,974 158,186,232
Financial expenses 25,905,413 (1,475,923) (130,254) (560,603) (530,954) (668,151) 45,518,959 15,075,658 - - 70,763,164 12,370,981
Impairment losses of assets 230,239 311,118 - (103,511) 21,323 4,866 79,777 38,601 - - 331,339 251,074
Investment Income - - - - - - 616,036,204 673,932,497 (532,517,291) (555,704,314) 83,518,913 118,228,183
Operating profit 684,117,661 699,531,166 36,746,473 42,167,869 9,846,100 8,169,108 538,891,963 622,330,797 (532,517,291) (555,704,314) 737,084,906 816,494,626
Non-operating income 6,638,506 1,877,637 26,019 900 973,863 - - - - - 7,638,388 1,878,537
Non-operating expenses 1,395,073 1,885,453 116,521 109,675 2,317,142 40,734 - - - - 3,828,736 2,035,862
Total profit 689,361,094 699,523,350 36,655,971 42,059,094 8,502,821 8,128,374 538,891,963 622,330,797 (532,517,291) (555,704,314) 740,894,558 816,337,301
Income tax expenses 122,545,872 141,911,350 9,155,956 10,234,500 1,141,827 1,042,067 (7,718,607) (4,626,284) - - 125,125,048 148,561,633
Net profit 566,815,222 557,612,000 27,500,015 31,824,594 7,360,994 7,086,307 546,610,570 626,957,081 (532,517,291) (555,704,314) 615,769,510 667,775,668
- 91 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(X) SEGMENT REPORTING - continued
(1) Segment information - continued
Unit: RMB
load and unload services trailer and tugboat business Agency services Unappropriated items Inter-segment deduction Total
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Total segment assets 5,132,632,283 5,319,521,173 223,004,419 226,338,908 47,280,807 29,247,787 6,955,570,183 6,107,590,408 (5,577,357,242) (5,142,469,841) 6,781,130,450 6,540,228,435
Total assets in the financial
5,132,632,283 5,319,521,173 223,004,419 226,338,908 47,280,807 29,247,787 6,955,570,183 6,107,590,408 (5,577,357,242) (5,142,469,841) 6,781,130,450 6,540,228,435
statements
Total segment liabilities 2,066,069,371 2,446,214,870 138,347,617 141,682,106 34,985,426 20,103,242 2,121,151,607 3,142,121,298 (2,044,433,473) (3,315,957,152) 2,316,120,548 2,434,164,364
Total liabilities in the financial
2,066,069,371 2,446,214,870 138,347,617 141,682,106 34,985,426 20,103,242 2,121,151,607 3,142,121,298 (2,044,433,473) (3,315,957,152) 2,316,120,548 2,434,164,364
statements
Supplementary information
Depreciation 155,682,380 148,555,553 10,842,547 10,654,321 750,022 808,982 407,272 844,733 - - 167,682,221 160,863,588
Amortization 41,900,773 41,505,070 122,913 132,497 - - 268,708 278,017 - - 42,292,394 41,915,584
Interest income 2,439,078 2,022,624 4,020 9,659 7,783 8,483 4,455,630 5,853,065 - - 6,906,511 7,893,831
Interest expense 37,520,347 27,647,058 - - - - 36,030,192 35,002,906 - - 73,550,539 62,649,964
Investment income from long-
term equity investment under - - - - - - 83,158,913 113,968,183 - - 83,158,913 113,968,183
equity method
Long-term equity investment - - - - - - 1,531,041,908 1,422,947,220 - - 1,531,041,908 1,422,947,220
Non-current assets other than
4,393,365,740 4,131,236,957 147,881,497 151,993,706 18,760,311 19,396,787 218,235,583 209,180,723 (157,909,568) (157,909,587) 4,620,333,563 4,353,898,586
long-term equity investment
- 92 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(X) SEGMENT REPORTING - continued
(2) Segment revenue from external transactions by source and non-current assets by geographical
location
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Revenue from external transactions with local
1,777,315,428 1,702,381,921
customers
Revenue from external transactions with Hong Kong
6,530,707 5,754,978
customers
Sub-total 1,783,846,135 1,708,136,899
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Non-current assets located in local country 4,547,110,307 4,288,912,235
Non-current assets located in Hong Kong 44,222 45,432
Sub-total 4,547,154,529 4,288,957,667
(3) Degree of reliance on major customers
The revenue derived from the top two clients of the Group in load and unload services is
RMB831,062,556, occupying 46.60% of the Group's total revenue.
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's major financial instruments include equity and debt investments, borrowings,
account receivables, account payables etc. Details of these financial instruments are disclosed in
Note (V). The risks associated with these financial instruments and the policies on how to
mitigate these risks are set out below. Management manages and monitors these exposures to
ensure the risks are monitored at a certain level.
1. Risk management objectives and policies
The Group's risk management objectives are to achieve proper balance between risks and yield,
minimize the adverse impacts of risks on the Group's operation performance, and maximize the
benefits of the shareholders and other equity investors. Based on these risk management
objectives, the Group's basic risk management strategy is to identify and analyze the industry's
exposure to various risks, establish appropriate bottom line for risk tolerance, implement risk
management, and monitors these exposures to ensure the risks are monitored at a certain level.
- 93 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1.1 Market risk
1.1.1. Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with USD and HKD. Several of the
Group's subsidiaries have purchases and sales denominated in HKD while the Group's other
principal activities are denominated and settled in RMB. As at 31 December 2012, the balance of
the Group's assets and liabilities are both denominated in RMB, except that balance of assets set
out below is in HKD and USD. Currency risk arising from the foreign currency balance of assets
and liabilities may have impact on the Group's performance.
Unit: RMB
Item Closing balance Opening balance
Cash and cash equivalents 130,367,072 185,319,851
Accounts receivable 37,259,520 32,474,314
Short-term borrowings 1,080,929,700 1,168,830,000
Accounts payable 2,230,235 4,843,787
The Group closely monitors the effects of changes in the foreign exchange rates on the Group's
currency risk exposures, to minimize the company's currency risk. According to the current risk
exposure and judgment of the exchange rate movements, management considers the probable loss
resulted from foreign exchange rate fluctuation to be fairly low.
1.1.2. Interest rate risk
The Group's interest rate risk arises from debt with interests, such as bank loan. The floating
interest rate of financial liability makes the Group confronted with interest rate risk of cash flows.
And the fixed interest rate of financial liability makes the Group confronted with interest rate risk
of fair value. The Group determines the relative proportion of fixed interest rate and floating
interest rate in accordance with the circumstances.
The financial department of the Group has been responsible for monitoring the interest rate. The
increase of interest rate could enhance the cost of new interest-bearing debts and that of
outstanding floating interest-bearing debts, which has material adverse effect on the financial
performance of the Group. The management would make prompt response towards latest market
condition, including obtain fixed rate loan or adjust financial leverage ratio, etc.
1.2. Credit risk
As at 31 December 2012, the Group's maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties and
financial guarantees issued by the Group is arising from the carrying amount of the respective
recognized financial assets as stated in the consolidated balance sheet. For financial instruments
measured at fair value, the carrying amount reflects the exposure to risks but not the maximum
exposure to risks; the maximum exposure to risks would vary according to the future changes in
fair value.
- 94 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1.2. Credit risk - continued
In order to minimize the credit risk, the Group has delegated a team responsible for determination
of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action
is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each
individual trade debt at each balance sheet date to ensure that adequate impairment losses are
made for irrecoverable amounts. In this regard, the management of the Group considers that the
Group's credit risk is significantly reduced.
The credit risk on liquid funds is limited because the counterparties are banks with high credit
ratings.
The Company adopted necessary policies to make sure that all clients and customers are attributed
with merit credit records.
1.3. Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilization of
bank borrowings and ensures compliance with loan covenants.
Most of the Group's bank borrowings are short-term borrowings. As at 31 December 2012, the
Group has net current liabilities of RMB918,431,184 (2011: RMB1,453,506,937). The Group's
management is confident that short-term borrowings will be rolled over or replaced by a new
financing channel when due. In addition, the Group has available unutilized bank loan facilities of
approximately RMB3,999,925,800 (2011: RMB3,391,220,100). Consequently, the management
believes that the Group is not exposed to significant liquidity risks". In addition, other factors that
have been taken into account in the disclosure of how to mitigate liquidity risk should also be
disclosed.
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Unit: RMB
More than 5
Item Book value Total amount Within one year 1-5 years years
Cash at bank and on hand 314,855,568 314,855,568 314,855,568 - -
Notes receivable 1,680,000 1,680,000 1,680,000 - -
Accounts receivable 251,420,961 251,420,961 251,420,961 - -
Other receivable 15,984,053 15,984,053 15,984,053 - -
Short-term borrowings 1,180,929,700 1,207,062,358 1,207,062,358 - -
Notes payable 826,000 826,000 826,000 - -
Accounts payable 145,987,941 145,987,941 145,987,941 - -
Interest payable 18,541,173 18,541,173 18,541,173 - -
Other payable 41,574,838 41,574,838 41,574,838 - -
Long-term borrowing due with
35,000,000 36,126,575 36,126,575 - -
one year
Long-term borrowing 150,000,000 177,815,452 9,600,000 168,215,452 -
Bonds payable 496,545,753 611,976,090 26,217,616 585,758,474 -
- 95 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
2. Fair value
Fair values of the financial assets and financial liabilities are determined as follows:
The fair value of financial assets and financial liabilities with standard terms and conditions
and traded on active markets are determined with reference to quoted market bid prices and
ask prices respectively;
The fair value of other financial assets and financial liabilities (excluding derivative
instruments) are determined in accordance with generally accepted pricing models based on
discounted cash flow analysis or using prices from observable current market transactions;
The fair value of derivative instruments are determined with reference to quoted market
prices.
The management considers that the book value of financial assets and liabilities measured at
amortized cost is approximately equal to the fair value of financial assets and liabilities.
Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to
initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair
value is observable.
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 - inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Unit: RMB
Closing Balance
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial assets:
- Derivative financial assets - - - -
Available-for-sale financial assets:
- Equity instruments 5,210,000 - - 5,210,000
Total 5,210,000 - - 5,210,000
Held-for-trading financial liabilities:
- Derivative financial liabilities - - - -
Total - - - -
- 96 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
2. Fair value - continued
Unit: RMB
Opening Balance
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial assets:
－ Derivative financial assets - - - -
Available-for-sale financial assets:
－ Equity instruments 5,690,000 - - 5,690,000
Total 5,690,000 - - 5,690,000
Held-for-trading financial liabilities:
－ Derivative financial liabilities - - - -
Total - - - -
There are no transfers between Level 1 and Level 2 for the fair value measurements of the
Group's financial assets and financial liabilities in the current year and in the prior year.
3. Sensitivity analysis
The Group adopts sensitivity analysis techniques to analyze how the entity's profit and loss for the
period and shareholders 'equity would have been affected by changes in the relevant risk variables
that were reasonably possible. As it is unlikely that risk variables will change in an isolated
manner, and the interdependence between risk variables will have significant effect on the amount
ultimately influenced by the changes in a single risk variable, the following items are based on the
assumption that each risk variable has changes on a stand-alone basis.
3.1. Currency risk
3.1.1 The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges
and hedges of a net investment in a foreign operation are highly effective.
3.1.2 On the basis of the above assumption, where all other variables are held constant, the
reasonably possible changes in the foreign exchange rate may have the following pre-tax effect on
the profit or loss for the period or equity:
Unit: RMB
2012 2011
Effect on Effect on
Changes in shareholders' shareholders'
Item exchange rate Effect on profits equity Effect on profits equity
All foreign 5% increase
(45,776,667) (45,776,667) (37,914,933) (37,914,933)
currencies against RMB
All foreign 5% decrease
45,776,667 45,776,667 37,914,933 37,914,933
currencies against RMB
- 97 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XI) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
3. Sensitivity analysis - continued
3.2. Sensitivity analysis on interest rate risk:
3.2.1 The sensitivity analysis on interest rate risk is based on the following assumptions:
For fixed rate financial instruments measured at fair value, changes in the market interest rate
may influence the interest income or expense of the variable rate financial instruments;
For derivative financial instruments designated as hedging instruments, changes in the
market interest rate influence their fair values, and all the hedges of interest rate risk are
expected to be highly effective;
Changes in the fair value of derivative financial instruments and other financial assets and
liabilities are calculated at the market interest rate as at the balance sheet date, using the
method of discounted cash flow analysis.
3.2.2 On the basis of the above assumptions, where all other variables are held constant, the
reasonably possible changes in the interest rate may have the following pre-tax effect on the profit
or loss for the period or equity:
Unit: RMB
2012 2011
Effect on Effect on
Changes in interest Effect on shareholders' Effect on shareholders'
Item rate profits equity profits equity
Floating rate 1% increase against
(223,643) (223,643) (577,218) (577,218)
loan RMB
Floating rate 1% decrease against
223,643 223,643 577,218 577,218
loan RMB
(XII) NOTES TO THE FINANCIAL STATEMENTS
1. Accounts receivable
(1) Disclosure of accounts receivable by categories:
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportion Proportion Proportion Proportion
Item Amount (%) Amount (%) Amount (%) Amount (%)
Accounts receivable that are
individually significant and for which
- - - - - - - -
bad debt provision has been assessed
individually(Note)
Accounts receivable for which bad debt provision has been assessed by portfolios
Portfolio 1 75,000 0.42 - - 6,500 0.04 - -
Portfolio 2 17,679,009 99.58 - - 16,617,225 99.96 - -
Subtotal of portfolios 17,754,009 100.00 - - 16,623,725 100.00 - -
Total 17,754,009 100.00 - - 16,623,725 100.00 - -
- 98 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
1. Accounts receivable - continued
(1) Disclosure of accounts receivable by categories - continued:
Note: Top five balances of accounts receivable are deemed as individually significant accounts
receivable by the Group.
Aging analysis of accounts receivable is as follows:
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book Value amount (%) provision Book Value
Within 1 year 17,754,009 100.00 - 17,754,009 16,623,725 100.00 - 16,623,725
Accounts receivable portfolios for which bad debt provision has been assessed using the aging
analysis approach:
Unit: RMB
Closing balance Opening balance
Carrying Proportion Bad debt Carrying Proportion Bad debt
Aging amount (%) provision Book Value amount (%) provision Book Value
Within 1 year 17,679,009 100.00 - 17,679,009 16,617,225 100.00 - 16,617,225
(2) Top five companies with the largest balances of accounts receivable:
Unit: RMB
Proportion of
the amount to
the total
Relationship with accounts
Name of entity the Company Amount Aging receivable (%)
Customer H Customer 2,870,223 Within 1 year 16.17
Customer I Customer 1,514,992 Within 1 year 8.53
Customer J Customer 1,464,922 Within 1 year 8.25
Customer K Customer 1,358,438 Within 1 year 7.65
Customer L Customer 1,056,028 Within 1 year 5.95
Total 8,264,603 46.55
(3) As at 31 December 2012, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% voting right. Please refer to Note (XII) 6(2) for
receivables due from related parties.
- 99 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
2. Other receivables
(1) Disclosure of other receivables by categories:
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportion Proportion Proportion Proportion
Category Amount (%) Amount (%) Amount (%) Amount (%)
Other receivables that are individually
significant and for which bad debt provision - - - - - - - -
has been assessed individually
Other receivables for which bad debt provision has been assessed by portfolios
Portfolio 1 358,333,720 99.87 29,779 0.01 242,985,216 99.83 - -
Portfolio 2 476,691 0.13 191,728 40.22 413,049 0.17 141,728 34.31
Subtotal of portfolios 358,810,411 100.00 221,507 0.06 243,398,265 100.00 141,728 0.06
Total 358,810,411 100.00 221,507 0.06 243,398,265 100.00 141,728 0.06
Note: Top five balances of other receivables are deemed as individually significant other
receivables by the Group.
Aging analysis of other receivables is as follows:
Unit: RMB
Closing balance Opening balance
Proportion Bad debt Proportion Bad debt
Aging Carrying amount (%) provision Book value Carrying amount (%) provision Book value
Within 1 year 355,219,375 99.00 - 355,219,375 240,942,350 98.99 - 240,942,350
More than 1 year 1,311,074 0.36 - 1,311,074 1,662,153 0.68 141,728 1,520,425
More than 2 years but not
1,641,200 0.46 191,728 1,449,472 225,155 0.09 - 225,155
exceeding 3 years
More than 3 years 638,762 0.18 29,779 608,983 568,607 0.24 - 568,607
Total 358,810,411 100.00 221,507 358,588,904 243,398,265 100.00 141,728 243,256,537
Other receivables portfolios for which bad debt provision has been assessed using the aging
analysis:
Unit: RMB
Closing balance Opening balance
Proportion Bad debt Proportion Bad debt
Aging Carrying amount (%) provision Book value Carrying amount (%) provision Book value
Within 1 year 19.56 - 93,234 29,592 7.16 -
More than 1 year - - - - 383,457 92.84 141,728
More than 2 years but not
80.44 191,728 191,729 - - - -
exceeding 3 years
More than 3 years - - - - - - - -
Total 100.00 191,728 284,963 413,049 100.00 141,728 271,321
- 100 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
2. Other receivables - continued
(2) Top five companies with the largest balances of other receivables:
Unit: RMB
Proportion of the
amount to the
Relationship with the total accounts
Name of entity Company Amount Aging receivable (%)
Dongguan Chiwan Terminal Subsidiary of the
186,200,000 Within one year 51.89
Company Limited company
Subsidiary of the
Dongguan Chiwan Wharf Co., Ltd. 145,400,000 Within one year 40.52
company
Shenzhen Chiwan Shipping and Subsidiary of the
22,000,000 Within one year 6.13
Transportation Company Limited company
Chiwan Wharf Holdings (H.K.) Subsidiary of the More than 1 year not
2,640,282 0.74
Limited company exceeding 3 year
Enterprise income tax payable for Shareholder of the More than 2 year not
383,457 0.11
dividend of B share in 2008 Group exceeding 3 year
Total 356,623,739 99.39
(3) As at 31 December 2012, no balances included in above other receivables are due from the
shareholders of the Company who hold over 5% voting right. Please refer to Note (XII) 6(2) for
receivables due from related parties.
3. Long-term equity investments
(1) Categories of Long-term equity investment
Unit: RMB
Increase in the Decreased in the
Item Opening Balance current period current period Closing Balance
Investment in subsidiaries 1,052,288,200 - - 1,052,288,200
Investment in joint ventures 795,776,215 24,286,065 - 820,062,280
Investment in associates 140,142,959 105,117,223 - 245,260,182
Other long-term equity investment 17,037,500 - - 17,037,500
Subtotal 2,005,244,874 129,403,288 2,134,648,162
Less: Provision for impairment of
long-term equity investments 3,128,300 - - 3,128,300
Net amount 2,002,116,574 129,403,288 - 2,131,519,862
As at 31 December 2012, the long-term equity investments of the Company were not subject to
restriction on disposal or remittance of return on investments.
- 101 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
3. Long-term equity investments - continued
(2) Details of long-term equity investments are as follows:
Unit: RMB
Explanation of the
Proportion proportion of ownership
Proportion of of voting interests being not Provision for
ownership power in the consistent with the Provision for impairment
Changes interests in the investee proportion of voting impairment losses for the Cash dividends
Investee Accounting method Investment cost Opening balance (increase/decrease) Closing balance investee (%) (%) power losses period for the period
Shenzhen Chiwan Terminal Company
Cost method 47,500,000 47,500,000 - 47,500,000 95 95 N/A - - 45,605,009
Limited
Shenzhen Chiwan International
Cost method 5,500,000 5,500,000 - 5,500,000 100 100 N/A - - 1,386,594
Freight Agency Company Limited
Shenzhen Chiwan Harbor Container
Cost method 250,920,000 250,920,000 - 250,920,000 84.98 84.98 N/A - - 102,428,276
Company Limited
Shenzhen Chiwan Transportation
Cost method 7,000,000 7,000,000 - 7,000,000 75 75 N/A - - 4,957,031
Company Limited
Chiwan Wharf Holdings (H.K.)
Cost method 1,070,000 1,070,000 - 1,070,000 100 100 N/A - - -
Limited
Shenzhen Chiwan Shipping and
Cost method 24,000,000 24,000,000 - 24,000,000 90 90 N/A - - 18,801,576
Transportation Company Limited
Shenzhen Chiwan Trains-Grains
Cost method 33,750,000 33,750,000 - 33,750,000 75 75 N/A - - 22,545,382
Terminal Company Limited
Chiwan Container Terminal Company
Cost method 421,023,200 421,023,200 - 421,023,200 51 51 N/A - - -
Limited
Dongguan Chiwan Wharf Company
Cost method 186,525,000 186,525,000 - 186,525,000 41.45 41.45 N/A - - -
Limited
Dongguan Chiwan Terminal
Cost method 75,000,000 75,000,000 - 75,000,000 25 25 N/A - - -
Company Limited
China Ocean Shipping Agency
Cost method 13,510,000 13,510,000 - 13,510,000 15 15 N/A - - -
(Shenzhen) Company Limited
Shenzhen Petro-chemical Industry
Cost method 3,500,000 3,500,000 - 3,500,000 0.26 0.26 N/A 3,117,800 - -
(Group) Company Limited.
Guangdong Guang Jian Group
Cost method 27,500 27,500 - 27,500 0.02 0.02 N/A 10,500 - -
Company Limited
China Merchants Holdings
(international) information technology Equity method 1,875,000 11,664,263 2,018,253 13,682,516 23.16 23.16 N/A - - -
company Ltd
CMBL Equity method 140,000,000 128,478,696 3,098,970 131,577,666 20 20 N/A - - -
China Development Finance Co., Ltd. Equity method 100,000,000 - 100,000,000 100,000,000 20 20 N/A - - -
China Overseas Harbor Affairs
Equity method 749,655,300 795,776,215 24,286,065 820,062,280 40 40 N/A - - -
(Laizhou) Co., Ltd.
Total 2,005,244,874 129,403,288 2,134,648,162 3,128,300 - 195,723,868
- 102 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
3. Long-term equity investments - continued
(3) Investments in joint ventures and associates
Unit: RMB
Proportion of Proportion of
ownership voting power in Investee's total Investee's total Total net assets at Total operating
interests in the the investee assets at the end of liabilities at the end the end of the income for the Net profit for the
Investee investee (%) (%) the period of the period period period period
I. Joint ventures
China Overseas Harbor
40 40 2,181,632,582 310,908,531 1,870,724,051 267,050,832 61,444,116
Affairs (Laizhou) Co., Ltd.
II. Associates
China Merchants Holdings
(international) information 23.16 23.16 80,888,144 19,452,319 61,435,825 55,017,244 8,714,391
technology company Ltd
CMBL 20 20 1,571,992,558 913,671,716 658,320,842 176,515,276 15,494,851
China Development Finance
20 20 N/A N/A N/A N/A N/A
Co., Ltd.
(4)Provision of long-term equity investment
Unit: RMB
Opening Increase in the Decrease in the Closing
Investee balance current period current period balance
Shenzhen Petro-chemical Industry (Group)
3,117,800 - - 3,117,800
Company Limited
Guangdong Guang Jian Group Company
10,500 - - 10,500
Limited
Total 3,128,300 - - 3,128,300
4. Operating income and operating costs
(1) Operating income and operating costs
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Principal operating income 177,348,589 165,422,103
Other operating income 27,071,318 23,700,419
Total 204,419,907 189,122,522
Principal operating cost 142,687,626 134,885,611
Other operating cost 2,091,220 1,590,313
Total 144,778,846 136,475,924
(2) Principal operating activities (classified by business)
Unit: RMB
Amount incurred Amount incurred
in the current period in the prior period
Item Operating income Operating cost Operating income Operating cost
Load and unload services 177,348,589 142,687,626 165,422,103 134,885,611
- 103 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
4. Operating income and operating costs - continued
(3) Other activities
Unit: RMB
Amount incurred in the current period Amount incurred in the prior period
Other operating Other operating Other operating Other operating
Item income cost income cost
Port ancillary services 9,296,353 - 7,367,988 -
Lease 16,908,610 2,091,220 14,733,909 1,590,313
Documentation fee 578,442 - 611,802 -
Sales of material 215,544 - 929,306 -
Security fee 72,369 - 57,414 -
Total 27,071,318 2,091,220 23,700,419 1,590,313
(4) Operating income from the Company's top five customers
Unit: RMB
Proportion to total
operating income of
Name of customer Operating income the Company (%)
Customer M 28,001,213 13.70
Customer N 22,531,412 11.02
Customer H 14,027,010 6.86
Customer O 10,912,524 5.34
Customer P 9,021,901 4.41
Total 84,494,060 41.33
5. Investment income
(1) Details of investment income
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Income of long-term equity investments under cost
195,723,868 418,582,699
method
Income of long-term equity investments under
29,403,288 34,396,865
equity method
Income from disposal of long-term equity
- -
investment
Investment income on available-for-sale financial
360,000 360,000
assets, etc.
Total 225,487,156 453,339,564
- 104 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
5. Investment income - continued
(2) Income of long-term equity investments under cost method
Reasons for increases or
Amount incurred in Amount incurred in decreases in the current
Investee the current period the prior period compared to the prior period
Shenzhen Chiwan Harbour Container The dividends distributed by
102,428,276 140,826,505
Company Limited investee fluctuate.
Shenzhen Chiwan Terminal Company The dividends distributed by
45,605,009 39,338,688
Limited investee fluctuate.
Shenzhen Chiwan Trains-Grains Terminal The dividends distributed by
22,545,382 20,616,286
Company Limited investee fluctuate.
Shenzhen Chiwan Shipping and The dividends distributed by
18,801,576 20,533,063
Transportation Company Limited investee fluctuate.
Shenzhen Chiwan Transportation The dividends distributed by
4,957,031 6,757,560
Company Limited investee fluctuate.
Shenzhen Chiwan International Freight The dividends distributed by
1,386,594 1,165,548
Agency Company Limited investee fluctuate.
Chiwan Container Terminal Company The dividends distributed by
- 185,445,049
Limited investee fluctuate.
Total 195,723,868 414,682,699
(3) Income of long-term equity investments under equity method
Reasons for increases or
Amount incurred in Amount incurred in decreases in the current
Investee the current period the prior period compared to the prior period
China Overseas Harbour Affairs (Laizhou) Net income of investee
24,286,065 32,665,056
Co., Ltd fluctuates.
Net income of investee
CMBL 3,098,970 1,711,924
fluctuates.
China Merchants Holdings (international) Net income of investee
2,018,253 19,885
information technology company Ltd fluctuates.
Total 29,403,288 34,396,865
6. Related party transactions
(1) Guarantee with related parties
Unit: RMB
Inception date of Expiration date of Whether guarantee
The guarantor The principal Guaranteed amount guarantee guarantee has been fulfilled
Dongguan Chiwan Wharf Company
100,000,000 2012.12.06 2013.06.06 No
Limited(Note 1)
Dongguan Chiwan Wharf Company
80,000,000 2012.02.09 2017.02.08 No
Limited(Note 2)
Dongguan Chiwan Wharf Company
The Company 70,000,000 2011.10.21 2016.10.20 No
Limited(Note 2)
Dongguan Chiwan Wharf Company
20,000,000 2011.10.21 2013.10.20 No
Limited(Note 2)
Dongguan Chiwan Wharf Company
15,000,000 2012.02.09 2013.08.09 No
Limited(Note 2)
Total 285,000,000
- 105 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
6. Related party transactions – continued
(1) Guarantee with related parties - continued
Note 1: Please see Note (V) 18.
Note 2: Please see Note (V) 28.
(2) Amounts due to/due from related parties
Unit: RMB
Item Related parties Closing balance Opening balance
Interests receivable Shenzhen Chiwan International Freight Agency Company Limited 218,084 154,484
Accounts receivable Shekou Container Terminals Limited 75,000 6,500
Other receivables Dongguan Chiwan Terminal Company Limited 186,200,000 -
Dongguan Chiwan Wharf Company Limited 145,400,000 206,000,000
Shenzhen Chiwan Shipping and Transportation Company Limited 22,000,000 32,210,156
Chiwan Wharf Holdings (H.K.) Limited 2,640,283 2,269,702
CPSB 135,622 135,622
Hinwin Development Company Limited 15,907 -
Shenzhen Chiwan International Freight Agency Company Limited - 1,060,000
Total 356,391,812 241,675,480
Long-term
Chiwan Wharf Holdings (H.K.) Limited 11,004,285 11,004,285
receivables
Advances Xuqin 93,006 -
Accounts payable Xuqin 772,544 118,050
Nanshan Group 628,077 1,929,173
Shenzhen Chiwan Transportation Company Limited 381,119 370,481
Shekou Container Terminals Limited 60,000 -
Total 1,841,740 2,417,704
Other payables Chiwan Container Terminal Company Limited 159,102,834 465,919,827
Shenzhen Chiwan Trains-Grains Terminal Company Limited 71,634,252 62,654,313
Shenzhen Chiwan Transportation Company Limited 48,126,286 48,400,234
Shenzhen Chiwan Harbor Container Company Limited 37,322,399 90,222,033
Shenzhen Chiwan Terminal Company Limited 30,344,683 34,334,709
Dongguan Chiwan Wharf Company Limited 10,579,342 10,222,128
Shenzhen Chiwan International Freight Agency Company Limited 2,564,560 3,948,226
Shenzhen Chiwan Shipping and Transportation Company Limited 1,527,693 8,263,263
Dongguan Chiwan Terminal Company Limited 600,130 12,665,035
Chiwan Wharf Holdings (H.K.) Limited 470,423 1,281,711
Total 362,272,602 737,911,479
Interests payable Shenzhen Chiwan Trains-Grains Terminal Company Limited 1,425,625 419,375
Shenzhen Chiwan Shipping and Transportation Company Limited 1,247,375 239,292
Shenzhen Chiwan Terminal Company Limited 307,917 100,917
Chiwan Container Terminal Company Limited 213,750 1,601,667
Total 3,194,667 2,361,251
Note: The Company collectively manages and coordinates the use of the capital within the Group.
Various subsidiaries save their money with the Company, or apply for fund when needed.
The Company collects fund usage expenses based on the actual financing costs incurred.
- 106 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
(XII) NOTES TO THE FINANCIAL STATEMENTS - continued
7. Supplementary information to the cash flow statement
Unit: RMB
Supplementary information Current period Prior period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit 189,814,396 430,118,633
Add: Provision for impairment losses of assets 79,779 38,601
Depreciation of fixed assets 13,388,346 12,283,329
Depreciation and Amortization of investment property 959,406 1,077,281
Amortization of intangible assets 3,175,445 3,139,405
Amortization of long-term prepaid expenses 587,328 179,620
Losses on disposal of fixed assets, intangible assets and
other long-term assets 2,416,755 1,394,937
Financial expenses 58,517,939 17,883,502
Loss(Gains) arising from investments (225,487,156) (453,339,564)
Decrease (Increase) in deferred tax assets (10,351,391) (8,488,104)
Decrease in inventories 62,219 176,247
Decrease (Increase) in operating receivables (127,708,553) 115,970,883
Increase (Decrease) in operating payables (378,090,475) 192,124,473
Net cash flow from operating activities (472,635,962) 312,559,243
2. Net changes in cash and cash equivalents:
Closing balance of cash 149,792,425 187,090,694
Less: Opening balance of cash 187,090,694 494,364,355
Net increase in cash and cash equivalents (37,298,269) (307,273,661)
- 107 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2012
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Unit: RMB
Item Amounts Description
Profit or loss on disposal of non-current assets (1,749,511)
Tax refunds or reductions with ultra vires approval or without official approval
-
documents
Government grants recognized in profit or loss (except for grants which have closely
related to the Company's business and are in amount and quantities fixed in 494,730
accordance with the national standard)
Money lending income earned from non-financial institutions in profit or loss -
The excess of attributable fair value of identifiable net assets over the consideration
-
paid for subsidiaries, associates and joint ventures
Profit or loss on exchange of non-monetary assets -
Profit or loss on entrusted investments or assets management -
Impairment losses provided for each asset due to force majeure, e.g. acts of God -
Profit or loss on debt restructuring -
Business restructuring expenses, e.g., expenditure for layoff of employees, integration
-
expenses, etc.
Profit or loss relating to the unfair portion in transactions with unfair transaction price -
Net profit or loss of subsidiaries recognized as a result of business combination of
enterprises under common control from the beginning of the period up to the business -
combination date
Profit or loss arising from contingencies other than those related to normal operating
-
business
Profit or loss on changes in the fair value of financial assets and financial liabilities
held for trading and investment income on disposal of held-for-trading financial
-
assets, held-for-trading financial liabilities and available-for-sale financial assets,
other than the effective hedging activities relating to normal operating business
Reversal of provision for accounts receivable that are tested for impairment losses
-
individually
Profit or loss on entrusted loans -
Profit or loss on changes in the fair value of investment properties that are
-
subsequently measured using the fair value model
Effects on profit or loss of one-off adjustment to profit or loss for the period according
-
to the requirements by tax laws and accounting laws and regulations
Custodian fees earned from entrusted operation -
Other non-operating income or expenses other than above 5,064,433
Other profit or loss that meets the definition of non-recurring profit or loss -
Tax effects (251,327)
Effects of minority interest (after tax) (1,047,378)
Total 2,510,947
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS has been prepared by Shenzhen Chiwan Wharf Co.,Ltd ( hereinafter
"the Company") in accordance with Information Disclosure and Presentation Rules for Companies
Making Public Offering No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per
Share (Revised 2010) issued by China Securities Regulatory Commission.
Unit: RMB
EPS
Weighted average return on net
Profits incurred in the current period assets (%) Basic EPS Diluted EPS
Net profit for the current period attributable to
13.15 0.724 0.724
ordinary shareholders
Net profit attributable to ordinary shareholders
13.08 0.721 0.721
after extraordinary gains and losses
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2012
3. ABNORMAL FINANCIAL STATEMENTS ITEMS ("F/S ITEMS") AND EXPLANATION OF
REASONS
Unit: RMB
F/S items 2012 2011 Change by Cause for the changes
1 Currency funds 314,855,568 478,788,943 (34%) Resulted from additional progress payments
Prepaid expenses transferred to long-term prepayments
2 Prepaid expenses 1,623,037 3,497,668 (54%)
upon completion of decoration
3 Other receivables 15,984,053 11,833,877 35% Owing to increase in business activities
4 Other current assets 8,956,589 1,003,913 792% Due to increase in input VAT pending for verification
5 Long-term equity investments 1,544,951,108 1,436,856,420 8% Due to new investment
Due to the completion of construction in progress, such as
6 Fixed assets 2,701,093,453 2,482,077,688 9%
berth extension
Due to the increasing engineering expenditure related to
7 Construction in progress 609,932,609 517,818,144 18%
construction in progress
Adjustments made to the structure of loans according to
8 Short-term borrowings 1,180,929,700 1,418,830,000 (17%)
the changes in financial market
9 Notes payable 826,000 8,704,900 (91%) Due to acceptance of bills expiring in the period
10 Advances 299,453 5,045,311 (94%) Carrying forward advances for providing services
11 Taxes payable 40,854,861 121,781,050 (66%) Due to increasing tax payments in the period
12 Interest payable 18,541,173 1,637,790 1032% Due to accrued debts interest expenses
13 Dividends payable - 365,161,451 (100%) Due to decreasing dividends payments
Non-current liabilities due Resulted from increased amounts of borrowings due
14 39,727,207 14,951,750 166%
within one year within one year
Due to increasing borrowings arising from business
15 Long-term borrowings 150,000,000 90,000,000 67%
expansion
16 Bonds payable 496,545,753 - - Resulted from issuance of debts
Operating income increased with the increasing volume of
17 Operating income 1,783,846,135 1,708,136,899 4%
bulk businesses
18 Operating costs 844,601,419 768,040,243 10% Due to the rising fuel cost
19 Financial expenses 70,763,164 12,370,981 472% Due to the decreasing exchange gains
20 Impairment losses of assets 331,339 251,074 32% Due to new provisions for assets impairment
Due to the receipts of insurance compensation and
21 Non-operating income 7,638,388 1,878,537 307%
settlement of payables that cannot be paid
22 Non-operating expenses 3,828,736 2,035,862 88% Resulted from loss on disposal of fixed assets
