SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
FINANCIAL STATEMENTS AND
REPORT OF THE AUDITORS
FOR THE YEAR ENDED 31 DECEMBER 2011
[English Translation for Reference Only. Should there be any inconsistency
between the Chinese and English versions, the Chinese version shall prevail.]
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
[English translation for reference only]
Contents Page
Financial Statements and Report of the Auditors for the year
ended 31 December 2011
Report of the auditors 1-2
Consolidated and Company’s balance sheets 3-4
Consolidated and Company’s income statements 5
Consolidated and Company’s cash flow statements 6
Consolidated statement of changes in owners’ equity 7
Company’s statement of changes in owners’ equity 8
Notes to financial statements 9 - 122
Supplementary information to financial statements 123- 125
[English translation for reference only]
Report of Auditors
PwC ZT Shen Zi (2012) No.10030
(Page 1 of 2)
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 consolidated and company balance sheets as at 31
December 2011, and the consolidated and company income statements, the consolidated and
company statements of changes in shareholders’ equity and the consolidated and company cash flow
statements for the year then ended, and the notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of Chiwan Wharf is responsible for the preparation and fair presentation of these
financial statements in accordance with the requirements of Accounting Standards for Business
Enterprises, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
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 the China Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
普华永道中天会计师事务所有限公司
PricewaterhouseCoopers Zhong Tian CPAs Limited Company, 11/F PricewaterhouseCoopers Center
2 Corporate Avenue, 202 Hu Bin Road, Luwan District, Shanghai 200021, PRC
T: +86 (21) 2323 8888, F: +86 (21) 2323 8800, www.pwccn.com
[English translation for reference only]
PwC ZT Shen Zi (2012) No. 10030
(Page 2 of 2)
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, the auditor considers internal control relevant to the entity’s
preparation of the financial statements in order to design audit procedures that are appropriate in the
circumstances. 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.
Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated and company’s financial position of Chiwan Wharf as of 31 December 2011, and their
financial performance and cash flows for the year then ended in accordance with the requirements of
Accounting Standards for Business Enterprises.
PricewaterhouseCoopers Zhong Tian CPAs Limited Company
Shanghai, the People’s Republic of China
27 March 2012
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2011
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 31 December 31 December 31 December
2011 2010 2011 2010
ASSETS Note(s) Consolidated Consolidated Company Company
Current assets
Cash at bank and on hand 5(1) 478,788,943 781,720,083 187,090,694 494,364,355
Notes receivable 5(2) - 4,640,000 - 1,700,000
Accounts receivable 5(4), 14(1) 230,797,003 179,772,755 16,623,725 9,336,968
Advances to suppliers 5(6) 3,497,668 31,256,172 1,210,724 316,780
Interest receivable 5(3) 51,667 1,318,202 206,151 91,902
Dividends receivable - - 529,289,881 304,203,089
Other receivables 5(5), 14(2) 11,833,877 52,765,361 243,256,537 365,862,136
Inventories 5(7) 23,500,358 23,888,526 922,921 1,099,168
Other current assets 1,003,913 - - -
Total current assets 749,473,429 1,075,361,099 978,600,633 1,176,974,398
Non-current assets
Available-for-sale financial assets 5(8) 5,690,000 6,640,000 5,690,000 6,640,000
Long-term receivables 7(6) - - 11,004,304 11,004,304
Long-term equity investments 5(9), 14(3) 1,436,856,420 1,149,921,886 2,002,116,574 1,589,644,572
Investment properties 5(11) 34,679,229 29,379,544 26,547,149 20,991,116
Fixed assets 5(12) 2,482,077,688 2,652,957,915 156,481,155 156,903,932
Construction in progress 5(13) 517,818,144 14,593,516 614,894 450,900
Intangible assets 5(14) 1,038,926,892 1,074,247,819 65,552,356 68,371,761
Goodwill 5(15) 10,858,898 10,858,898 - -
Long-term prepaid expenses 5(16) 62,488,532 63,848,189 5,770,046 5,299,666
Deferred tax assets 5(18) 59,250,919 52,083,662 29,709,461 21,221,357
Other non-current assets 5(17) 142,108,284 72,292,214 - -
Total non-current assets 5,790,755,006 5,126,823,643 2,303,485,939 1,880,527,608
TOTAL ASSETS 6,540,228,435 6,202,184,742 3,282,086,572 3,057,502,006
-3-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2011 (Con’d)
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 31 December 31 December 31 December
LIABILITIES AND 2011 2010 2011 2010
OWNERS’ EQUITY Note(s) Consolidated Consolidated Company Company
Current liabilities
Short-term borrowings 5(20) 1,418,830,000 1,225,550,000 584,530,000 478,550,000
Notes payable 5(21) 8,704,900 1,895,750 7,493,900 -
Accounts payable 5(22) 160,112,954 214,723,251 12,225,607 16,221,238
Advances from customers 5(23) 5,045,311 4,769,320 3,907,291 3,643,835
Employee benefits payable 5(24) 55,945,867 36,929,912 31,818,160 15,275,662
Taxes payable 5(25) 121,781,050 100,583,520 1,392,629 605,756
Interests payable 5(26) 1,637,790 2,958,406 2,361,250 1,829,970
Dividends payable 5(27) 365,161,451 213,351,043 - -
Other payables 5(28) 50,809,293 45,027,806 749,075,206 570,336,042
Current portion of non-current liabilities 5(29) 14,951,750 412,951,750 - 212,500,000
Total current liabilities 2,202,980,366 2,258,740,758 1,392,804,043 1,298,962,503
Non-current liabilities
Long-term borrowings 5(30) 90,000,000 - - -
Special payable 5(31) 81,790,541 69,119,645 - -
Deferred tax liabilities 5(18) 1,142,500 1,324,800 1,142,500 1,324,800
Other non-current liabilities 5(32) 58,250,957 65,841,707 - -
Total non-current liabilities 231,183,998 136,286,152 1,142,500 1,324,800
Total liabilities 2,434,164,364 2,395,026,910 1,393,946,543 1,300,287,303
Owners' equity
Share capital 5(33) 644,763,730 644,763,730 644,763,730 644,763,730
Capital surplus 5(34) 166,226,055 144,909,755 153,438,328 154,106,028
Surplus reserves 5(35) 421,692,405 383,570,404 421,692,405 383,570,404
Undistributed profits 5(36) 2,248,722,001 2,079,724,472 668,245,566 574,774,541
Foreign exchange translation differences (13,607,440) (13,419,303) - -
Total equity attributable to equity holders of
the Company 3,467,796,751 3,239,549,058 1,888,140,029 1,757,214,703
Minority interests 5(37) 638,267,320 567,608,774 - -
Total owners' equity 4,106,064,071 3,807,157,832 1,888,140,029 1,757,214,703
TOTAL LIABILITIES AND OWNERS’ EQUITY 6,540,228,435 6,202,184,742 3,282,086,572 3,057,502,006
The accompanying notes form an integral part of these financial statements.
-4-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2011 2010 2011 2010
Items Note(s) Consolidated Consolidated Company Company
Revenue 5(38),14(4) 1,708,136,899 1,740,417,668 189,122,522 159,991,095
Less: Cost of sales 5(38),14(4) (768,040,243) (742,312,284) (136,475,924) (134,094,813)
Tax and levies on operations 5(39) (71,021,926) (63,815,927) (8,055,454) (6,211,103)
General and administrative
expenses 5(40) (158,186,232) (130,781,048) (62,568,055) (45,463,645)
Financial (expenses) /income - net 5(41) (12,370,981) 10,535,505 (28,651,836) (940,246)
Asset impairment reversals/(losses) 5(43) ( 251,074) (119,061) (38,601) (24,478)
Add: Investment income 5(42),14(5) 118,228,183 148,514,648 468,021,351 407,131,078
Including: share of results of
associates 5(42) 113,968,183 148,204,648 34,396,865 42,929,224
Operating profit 816,494,626 962,439,501 421,354,003 380,387,888
Add: Non-operating income 5(44) 1,878,537 5,012,970 1,718,849 833,575
Less: Non-operating expenses 5(45) ( 2,035,862) (3,037,490) (1,442,326) (765,610)
Including: Loss on disposals of non-
current assets (1,960,173 ) (2,834,944) (1,437,106) (687,689)
Total profit 816,337,301 964,414,981 421,630,526 380,455,853
Less: Income tax (expenses)/ income 5(46) (148,561,633) (137,775,617) 8,488,107 764,157
Net profit 667,775,668 826,639,364 430,118,633 381,220,010
Attributable to equity holders of the
Company 505,645,137 596,680,156
Minority interests 162,130,531 229,959,208
Earnings per share
(attributable to equity holders of the
Company)
Basic earnings per share 5(49) 0.784 0.925
Diluted earnings per share 5(49) 0.784 0.925
Other comprehensive income (855,837) (565,642) (667,700) (500,400)
Total comprehensive income 666,919,831 826,073,722 429,450,933 380,719,610
Attributable to equity holders of the
Company 504,789,300 596,114,514
Minority interest 162,130,531 229,959,208
The accompanying notes form an integral part of these financial statements.
-5-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2011 2010 2011 2010
Items Note(s) Consolidated Consolidated Company Company
1. Cash flows from operating activities
Cash received from rendering of services 1,649,531,912 1,747,846,505 181,861,014 157,334,344
Cash received relating to other operating
activities 5(51) 31,724,082 31,299,096 711,446,584 603,753,822
Sub-total of cash inflows 1,681,255,994 1,779,145,601 893,307,598 761,088,166
Cash paid for goods and services (412,465,800) (361,828,341) (98,191,799) (72,539,169)
Cash paid to and on behalf of employees (218,888,671) (204,083,048) (60,366,911) (55,544,227)
Payments of taxes and levies (225,859,493) (212,353,178) (9,322,699) (8,862,658)
Cash paid relating to other operating
activities 5(51) (77,851,434) (74,035,465) (427,548,733) (340,563,057)
Sub-total of cash outflows (935,065,398) (852,300,032) (595,430,142) (477,509,111)
Net cash flows from operating activities 5(52) 746,190,596 926,845,569 297,877,456 283,579,055
2. Cash flows from investing activities
Cash received from disposals of investments 44,879,120 155,574,511 - 94,000,000
Cash received from returns on investments 51,044,863 310,000 210,574,000 316,109,210
Net cash received from disposals of fixed
assets and intangible assets 1,039,749 12,277,696 807,083 1,383,341
Cash received relating to other investing
activities - - - 12,478,235
Sub-total of cash inflows 96,963,732 168,162,207 211,381,083 423,970,786
Cash paid to purchase fixed assets,
intangible assets and other long-term
assets (585,894,854) (199,524,278) (13,063,802) (5,307,600)
Cash paid relating to other investing
activities - (749,655,300) (379,200,000) (779,655,300)
Net cash paid from disposal of subsidiaries
and other business units (220,284,181) - - -
Sub-total of cash outflows (806,179,035) (949,179,578) (392,263,802) (784,962,900)
Net cash flows from investing activities (709,215,303) (781,017,371) (180,882,719) (360,992,114)
3. Cash flows from financing activities
Cash received by investors 91,940,000 - - -
Include: Cash received in subsidiary by
minority shareholders 91,940,000 - - -
Cash received from borrowings 1,449,050,000 1,489,120,000 728,550,000 556,480,000
Sub-total of cash inflows 1,540,990,000 1,489,120,000 728,550,000 556,480,000
Cash repayments of borrowings (1,506,050,000) (1,178,320,000) (818,550,000) (216,480,000)
Cash payments for interest expenses and
distribution of dividends or profits (361,238,309) (408,546,358) (330,952,458) (220,050,769)
Include: Distribution of dividends and
profits to minority
shareholders in subsidiary - (171,889,814) - -
Cash paid relating to other activities (4,448,649) (1,401,288) (2,606,625) (1,101,714)
Sub-total of cash outflows (1,871,736,958) (1,588,267,646) (1,152,109,083) (437,632,483)
Net cash flows from financing activities (330,746,958) (99,147,646) (423,559,083) 118,847,517
4. Effect of foreign exchange rate changes
on cash and cash equivalents (9,159,475) (6,056,736) (709,315) (478,061)
5. Net increase in cash and cash
equivalents (302,931,140) 40,623,816 (307,273,661) 40,956,397
Add: Cash and cash equivalents at
beginning of year 5(52) 781,720,083 741,096,267 494,364,355 453,407,958
6. Cash and cash equivalent at end of year 5(52) 478,788,943 781,720,083 187,090,694 494,364,355
The accompanying notes form an integral part of these financial statements.
-6-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to equity holders of the Company
Share Capital Surplus Undistributed Translation Minority Total owners'
Items Note capital surplus reserves profits difference interest equity
Balance at 1 January 2010 644,763,730 145,410,155 355,134,736 1,721,028,196 (13,354,061) 567,608,774 3,420,591,530
Movement for the year ended 31 December 2010
Net profit - - - 596,680,156 - 229,959,208 826,639,364
Other comprehensive income 5(34) - (500,400) - - (65,242) - (565,642)
Profit appropriation
- appropriation to surplus reserves 5(35) - - 28,435,668 (28,435,668) - - -
- profit distribution to equity owners 5(36) - - - (209,548,212) - (229,959,208) (439,507,420)
Balance at 31 December 2010 644,763,730 144,909,755 383,570,404 2,079,724,472 (13,419,303) 567,608,774 3,807,157,832
Balance at 1 January 2011 644,763,730 144,909,755 383,570,404 2,079,724,472 (13,419,303) 567,608,774 3,807,157,832
Movement for the year ended 31 December 2011
Investment by shareholders 4(1) - 20,774,000 - - - 71,166,000 91,940,000
Net profit - - - 505,645,137 - 162,130,531 667,775,668
Other comprehensive income 5(34) - (667,700) - - (188,137) - (855,837)
Profit appropriation
- appropriation to surplus reserves 5(35) - - 38,122,001 (38,122,001) - - -
- profit distribution to equity owners 5(36) - - - (298,525,607) - (163,627,985) (462,153,592)
Others - 1,210,000 - - - 990,000 2,200,000
Balance at 31 December 2011 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 an integral part of these financial statements.
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SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN OWNERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Items Note Share capital Capital surplus Surplus reserves Undistributed profits Total owners' equity
Balance at 1 January 2010 644,763,730 154,606,428 355,134,736 431,538,411 1,586,043,305
Movement for the year ended 31 December 2010
Net profit - - - 381,220,010 381,220,010
Other comprehensive income 5(34) - (500,400) - - (500,400)
Profit distribution -
- appropriation to surplus reserves 5(35) - - 28,435,668 (28,435,668) -
- profit distribution to equity owners 5(36) - - - (209,548,212) (209,548,212)
Balance at 31 December 2010 644,763,730 154,106,028 383,570,404 574,774,541 1,757,214,703
Balance at 1 January 2011 644,763,730 154,106,028 383,570,404 574,774,541 1,757,214,703
Movement for the year ended 31 December 2011
Net profit - - - 430,118,633 430,118,633
Other comprehensive income 5(34) - (667,700) - - (667,700)
Profit distribution
- appropriation to surplus reserves 5(35) - - 38,122,001 (38,122,001) -
- profit distribution to equity owners 5(36) - - - (298,525,607) (298,525,607)
Balance at 31 December 2011 644,763,730 153,438,328 421,692,405 668,245,566 1,888,140,029
The accompanying notes form an integral part of these financial statements.
-8-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
1 General information
Shenzhen Chiwan Wharf Holdings Limited (the “Company”) was incorporated in September 1982
in Shenzhen, the People’s Republic of China (the “PRC”), by China Nanshan Development (Group)
Ltd (the “Nanshan Group”), and was registered a sino-foreign joint venture enterprise in July 1990.
In January 1993, as approved by the Shenzhen municipal government with document SFBF
(1993)357, the Company was reorganized into a joint stock limited company. In February 1993, the
Company issued, by public offering, the domestic shares (“A shares”) of 46,000,000 shares and
domestically listed foreign shares (“B shares”) of 40,000,000 shares. Both shares were listed in
Shenzhen Stock Exchange in May 1993.
In June 1994, 31,047,000 bonus shares were issued in a proportion of “one bonus share for every
ten shares”. In June, the bonus A shares and bonus B shares held by Nanshan Group were listed
in Shenzhen Stock Exchange. In December 1995, the Company issued additional 40,000,000 B
shares, consequently, the total volume of the Company’s shares rose to 381,517,000.
In June 2004, the directors of the Company resolved to increase the share capital by means of
capitalization of the share premium and capital reserves of the Company to the extent that 3
additional ordinary shares were issued to each shareholder holding 10 shares of the Company. As
the result, the total volume of shares was increased from 381,517,000 to 495,972,100.
In July 2005, again the directors of the Company resolved to increase the share capital by means
of capitalization of the share premium and capital reserves of the Company to the extent that 3
additional ordinary shares were issued to each shareholder holding 10 shares of the Company.
Consequently, the total volume of shares was increased from 495,972,100 to 644,763,700.
The Company and its subsidiaries (collectively the “Group”) are principally engaged in the provision
of cargo packing, cargo handling, container terminal, warehousing, land and sea transportation
services.
These consolidated financial statements have been approved for issue by the Board of Directors
on 27 March 2012. .
-9-
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates
(1) Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and 38 specific
standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance
on 15 February 2006, and the Application Guidance for Accounting Standards for Business
Enterprises, Interpretations of Accounting Standards for Business Enterprises and other relevant
regulations issued thereafter (hereafter collectively referred to as “the Accounting Standards for
Business Enterprises” or “CAS”) and the disclosure requirements in the Preparation Convention of
Information Disclosure by Companies Offering Securities to the Public No.15 – General Rules on
Financial Reporting (2010 revised) issued by the China Securities Regulatory Commission.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2011 are in compliance
with the Accounting Standards for Business Enterprises, and truly and completely present the
financial position of the Consolidated and the Company as of 31 December 2011 and of their
financial performance, cash flows and other information for the year then ended.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (RMB).
(5) Business Combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination
are measured at the carrying amount. The difference between the carrying amount of the net
assets obtained from the combination and the carrying amount of the consideration paid for the
combination is treated as an adjustment to capital surplus (share premium). If the capital surplus
(share premium) is not sufficient to absorb the difference, the remaining balance is adjusted
against retained earnings. Costs directly attributable to the combination are included in profit or
loss in the period in which they are incurred. Transaction costs associated with the issue of equity
or debt securities for the business combination are included in the initially recognised amounts of
the equity or debt securities.
- 10 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(5) Business Combinations(Con’d)
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business
combination are measured at fair value at the acquisition date. Where the cost of the combination
exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is recognised as goodwill; where the cost of combination is lower than the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets, the difference is recognised in
profit or loss for the current period. Costs directly attributable to the combination are included in
profit or loss in the period in which they are incurred. Transaction costs associated with the issue of
equity or debt securities for the business combination are included in the initially recognised
amounts of the equity or debt securities.
(6) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of
its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-
consolidated from the date that such control ceases. For a subsidiary that is acquired in a business
combination involving enterprises under common control, it is included in the consolidated financial
statements from the date when it, together with the Company, comes under common control of the
ultimate controlling party. The portion of the net profits realised before the combination date is
presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the
accounting periods of the Company and subsidiaries are inconsistent, the financial statements of
the subsidiaries are adjusted in accordance with the accounting policies and the accounting period
of the Company. For subsidiaries acquired from business combinations involving enterprises not
under common control, the individual financial statements of the subsidiaries are adjusted based
on the fair value of the identifiable net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in the
consolidated financial statements. The portion of subsidiaries’ equity and the portion of a
subsidiaries’ net profits and losses for the period not attributable to Company are recognised as
minority interests and presented separately in the consolidated financial statements under equity
and net profits respectively.
- 11 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(7) Disposal of minority interest in subsidiary
In preparing the consolidated financial statements, the difference between the minority interest
increased by the disposal and net assets of subsidiary calculated by the shareholding portion from
the date of acquisition (or the date of consolidation) ,is adjusted to owners’ equity(capital surplus).If
the capital surplus is not efficient ,then surplus reserves will be adjusted.
(8) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand,
and short-term and highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
(9) Foreign currency translation
(a) Foreign currency transactions
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the
dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currency are translated into
RMB using the spot exchange rate at the balance sheet date. Exchange differences arising from
these translations are recognised in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition
or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-
monetary items denominated in foreign currency that are measured in terms of historical cost are
translated at the balance sheet date using the spot exchange rate at the date of the transaction.
The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas businesses are translated at the
spot exchange rate on the balance sheet date. Among the owner’s equity items, the items other
than “undistributed profits” are translated at the spot exchange rate of the transaction date. The
income and expense items in the income statements of overseas businesses are translated at the
spot exchange rate of the transaction date. The differences arising from the above translation are
presented separately in the owner’s equities. The cash flows of overseas businesses are translated
at the spot exchange rate on the date of the cash flows. The effect of exchange rate changes on
cash is presented separately in the cash flow statement.
- 12 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(10) Financial instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at
fair value through profit or loss, loans and receivables, available-for-sale financial assets and held-
to-maturity investments. The classification of financial assets depends on the Group’s intention and
ability to hold the financial assets.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of
selling in the short term, which are presented as financial assets held for trading on the balance
sheet.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in
this category or not classified in any of the other categories at initial recognition. Available-for-sale
financial assets are included in other current assets in the balance sheet if management intends to
dispose of them within 12 months of the balance sheet date.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or
determinable payments that management has the positive intention and ability to hold to maturity.
Held-to-maturity investments with maturities over 12 months when the investments were made but
are due within 12 months at the balance sheet date are included in current portion of non-current
assets; held-to maturity investments with maturities no more than 12 months when the investments
were made are included in other current assets.
- 13 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(10) Financial instruments (Con’d)
(a) Financial assets (Con’d)
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a
party to the contractual provisions of the financial instrument. In the case of financial assets at fair
value through profit or loss, the related transaction costs incurred at the time of acquisition are
recognised in profit or loss for the current period. For other financial assets, transaction costs that
are attributable to the acquisition of the financial assets are included in their initially recognised
amounts.
Financial assets at fair value through profit or loss and available-for-sale financial assets are
subsequently measured at fair value. Investments in equity instruments are measured at cost when
they do not have a quoted market price in an active market and whose fair value cannot be reliably
measured. Receivables and held-to-maturity investments are measured at amortised cost using the
effective interest method.
Gains or losses arising from change in the fair value of financial assets at fair value through profit
or loss are recognised in profit or loss. Interests and cash dividends received during the period in
which such financial assets are held, as well as the gains or losses arising from disposal of these
assets are recognised in profit or loss for the current period.
Gains or losses arising from change in fair value of available-for-sale financial assets are
recognised directly in equity, except for impairment losses and foreign exchange gains and losses
arising from translation of monetary financial assets. When such financial assets are derecognised,
the cumulative gains or losses previously recognised directly into equity is recycled into profit or
loss for the current period. Interests on available-for-sale investments in debt instruments
calculated using the effective interest method during the period in which such investments are held
and cash dividends declared by the investee on available-for-sale investments in equity
instruments are recognised as investment income, which is recognised in profit or loss for the
period.
- 14 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(10) Financial instruments (Con’d)
(a) Financial assets (Con’d)
(iii) Impairment of financial assets
The Group assesses the carrying amounts of financial assets other than those at fair value through
profit or loss at each balance sheet date. If there is objective evidence that a financial asset is
impaired, an impairment loss is provided for.
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount
of loss is provided for at the difference between the asset’s carrying amount and the present value
of its estimated future cash flows (excluding future credit losses that have not been incurred). If
there is objective evidence that the value of the financial asset recovered and the recovery is
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed and the amount of reversal is recognised in profit or loss.
If there is objective evidence that an impairment loss on available-for-sale financial assets incurred,
the cumulative losses arising from the decline in fair value that had been recognised directly in
equity are transferred out from equity and into impairment loss. For an investment in debt
instrument classified as available-for-sale on which impairment losses have been recognised, if, in
a subsequent period, its fair value increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the previously
recognised impairment loss is reversed into profit or loss for the current period. For an investment
in an equity instrument classified as available-for-sale on which impairment losses have been
recognised, the increase in its fair value in a subsequent period is recognised directly in equity.
(iv) Derecognition of financial assets
A financial asset is derecognised when any of the below criteria is met: (i) the contractual rights to
receive the cash flows from the financial asset expire; (ii) the financial asset has been transferred
and the Group transfers substantially all the risks and rewards of ownership of the financial asset to
the transferee; or (iii) the financial asset has been transferred and the Group has not retained
control of the financial asset, although the Group neither transfers nor retains substantially all the
risks and rewards of ownership of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the sum of
the consideration received and the cumulative changes in fair value that had been recognised
directly in equity, is recognised in profit or loss.
- 15 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(10) Financial instruments (Con’d)
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilities
at fair value through profit or loss and other financial liabilities. The financial liabilities of the Group
mainly comprise other financial liabilities, including payables, borrowings and debentures payable.
Payables, including accounts payable and other payables, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
Borrowings and debentures payable are recognised initially at fair value, net of transaction costs
incurred, and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities with maturities no more than one year are classified as current liabilities.
Other financial liabilities with maturities over one year but are due within one year at the balance
sheet date are classified as the current portion of non-current liabilities. Others are classified as
non-current liabilities.
A financial liability is derecognised or partly derecognised when the current obligation is discharged
or partly discharged. The difference between the carrying amount of the financial liability or the
derecognised part of the financial liability and the consideration paid is recognised in profit or loss.
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the
quoted price in the active market. The fair value of a financial instrument that is not traded in an
active market is determined by using a valuation technique. Valuation techniques include using
prices of recent market transactions between knowledgeable and willing parties, reference to the
current fair value of another financial asset that is substantially the same with this instrument, and
discounted cash flow analysis, etc. When a valuation technique is used to establish the fair value of
a financial instrument, it makes the maximum use of observable market inputs and relies as little as
possible on entity-specific inputs.
- 16 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(11) Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivable arising from
sale of goods or rendering of services are initially recognised at fair value of the contractual
payments from the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment for
provision for bad debts
Receivables with amounts that are individually significant are subject to assessment for
impairment on the individual basis. If there exists objective evidence that the Group will not be able
to collect the amount under the original terms, a provision for impairment of that receivable is made.
The criterion for determining individually significant amounts is the top five individually significant
amounts.
The method of providing for bad debts for those individually significant amounts is as follows: the
amount of the present value of the future cash flows expected to be derived from the receivable
below its carrying amount.
(b) The receivables that are grouped for providing bad debt provision
Receivables with amounts that are not individually significant and those receivables that have been
individually assessed for impairment and have not been found impaired are classified into certain
groupings based on their credit risk characteristics. The provision for bad debts is determined
based on the historical loss experience for the groupings of receivables with similar credit risk
characteristics, taking into consideration of the current circumstances.
The basis of similar credit risk group: the aging of receivables
Method of determining provision for bad debts by groupings –Ageing analysis method
The provision ratios used under the ageing analysis method for the above groupings are as follows:
Provision ratios used for Provision ratios used for
accounts receivable (%) other receivables (%)
Within 1 year 0 0
1 to 2 years 0-10 0-10
2 to 3 years 0-30 0-30
3 to 4 years 0-60 0-60
4 to 5 years 0-60 0-60
Over 5 years 50-100 50-100
- 17 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(11) Receivables (Con’d)
(c) Receivables with amounts that are not individually significant but subject to separate assessment
for provision for bad debts
The reason for making separate assessment for provision for bad debts is that there exists
objective evidence that the Group will not be able to collect the amount under the original terms of
the receivable.
The provision for bad debts is determined based on the amount of the present value of the future
cash flows expected to be derived from the receivable below its carrying amount.
(d) When the Group transfers the accounts receivable to the financial institutions without recourse, the
difference between the proceeds received from the transaction and their carrying amounts and the
related taxes is recognised in profit or loss for the current period.
(12) Inventories
(a) Classification
Inventories include spare parts, fuel, and low value consumables, and are measured at the lower of
cost and net realisable value.
(b) Costing of inventories
Cost of spare parts and fuel is determined on the weighted average method.
(c) Basis for determining net realisable values of inventories and method for making provision for
decline in the value of inventories
Provision for decline in the value of inventories is determined at the excess amount of the carrying
amounts of the inventories over their net realisable value. Net realisable value is determined based
on the estimated selling price in the ordinary course of business, less the estimated costs to
completion and estimated costs necessary to make the sale and related taxes.
(d) The Group adopts the perpetual inventory system.
(e) Amortisation methods of low value consumables
Low value consumables are amortised into expenses based upon numbers of usage.
- 18 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(13) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its
subsidiaries, the Group’s long-term equity investments in its joint ventures and associates, as well
as the long-term equity investments where the Group does not have control, joint control or
significant influence over the investees and which are not quoted in an active market and whose
fair value cannot be reliably measured.
Subsidiaries are the investees over which the Company is able to exercise control. Joint ventures
are the investees over which the Group is able to exercise joint control together with other
venturers. Associates are the investees that the Group has significant influence on their financial
and operating policies.
Investments in subsidiaries are presented in the Company’s financial statements using the cost
method, and are adjusted to the equity method when preparing the consolidated financial
statements. Investments in joint ventures and associates are accounted for using the equity
method. Other long-term equity investments, where the Group does not have control, joint control
or significant influence over the investees and which are not quoted in an active market and whose
fair value cannot be reliably measured, are accounted for using the cost method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination: for long-term equity
investments acquired through a business combination involving enterprises under common control,
the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of
the party being absorbed at the combination date; for long-term equity investment acquired through
a business combination involving enterprises not under common control, the investment cost shall
be the combination cost.
For long-term equity investments acquired not through a business combination: for long-term equity
investment acquired by payment in cash, the initial investment cost shall be the purchase price
actually paid; for long-term equity investments acquired by issuing equity securities, the initial
investment cost shall be the fair value of the equity securities issued.
- 19 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(13) Long-term equity investments (Con’d)
(b) Subsequent measurement and recognition of related profit and loss
For long-term equity investments accounted for using the cost method, they are measured at the
initial investment costs, and cash dividends or profit distribution declared by the investees are
recognised as investment income in profit or loss.
For long-term equity investments accounted for using 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 acquisition date, the long-term equity investment is
measured at 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 acquisition date, the difference
is included in profit or loss and the cost of the long-term equity investment is adjusted upwards
accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the
investment income according to its share of net profit or loss of the investee. The Group
discontinues recognising its share of net losses of an investee after the carrying amount of the
long-term equity investment together with any long-term interests that, in substance, form part of
the investor’s net investment in the investee are reduced to zero. However, if the Group has
obligations for additional losses and the criteria with respect to recognition of provisions under the
accounting standards on contingencies are satisfied, the Group continues recognising the
investment losses and the provisions. For changes in owners’ equity of the investee other than
those arising from its net profit or loss, the Group records its proportionate share directly into
capital surplus, provided that the Group’s proportion of shareholding in the investee remains
unchanged. The carrying amount of the investment is reduced by the Group’s share of the profit
distribution or cash dividends declared by an investee. The unrealised profits or losses arising from
the intra-group transactions amongst the Group and its investees are eliminated in proportion to the
Group’s equity interest in the investees, and then based on which the investment gains or losses
are recognised. For the loss on the intra-group transaction amongst the Group and its investees
attributable to asset impairment, any unrealised loss is not eliminated.
- 20 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(13) Long-term equity investments (Con’d)
(c) Basis for determing existence of control, jointly control or significant influence over investees
Control is the power to govern the financial and operating policies of the investee so as to obtain
benefits from its operating activities. In determining whether the Company is able to exercise
control over the investee, the effect of potential voting rights over the investee is considered, such
as convertible debts and warrants currently exercisable, etc.
Joint control is the contractually agreed sharing of control over an economic activity, and exists
only when the strategic financial and operating 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.
(d) Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures and associates
are reduced to the recoverable amounts when the recoverable amounts are below their carrying
amounts (Note 2 (19)). For other long-term equity investments which are not quoted in an active
market and whose fair values cannot be reliably measured, the excess of their carrying amounts
over the present values of future cash flows discounted at the prevailing market yield rate for
similar financial assets is recognised as impairment loss and cannot be reversed once recognised.
(14) Investment properties
Investment properties, including land use rights that have already been leased out, buildings that
are held for the purpose of leasing, and buildings that are being constructed or developed for the
purpose of leasing in future, are measured initially at cost. Subsequent expenditures incurred in
relation to an investment property are included in the cost of the investment property when it is
probable that the associated economic benefits will flow to the Group and their costs can be
reliably measured; otherwise, the expenditures are recognised in profit or loss in the period in
which they are incurred.
- 21 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(14) Investment properties (Con’d)
The Group adopts the cost model for subsequent measurement of investment properties. Buildings
and land use rights are depreciated or amortised to their estimated net residual values over their
estimated useful lives. The estimated useful lives, the estimated net residual values that are
expressed as a percentage of cost and the annual depreciation (amortisation) rates of investment
properties are as follows:
Estimated Annual depreciation
Estimated useful lives residual value (amortization) rate
Buildings 25 - 33 years 10% 2.7% to 3.6%
Land use rights 8 - 38 years - 2.6% to 12.5%
When an investment property is transferred to owner-occupied properties, it is reclassified as fixed
asset or intangible asset at the date of the transfer. When an owner-occupied property is
transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is
reclassified as investment properties at its carrying amount at the date of the transfer.
The investment property’s estimated useful life, net residual value and depreciation (amortisation)
method applied are reviewed and adjusted as appropriate at each year-end.
An investment property is derecognised on disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its disposal.
The net amount of proceeds from sale, transfer, retirement or damage of an investment property
after its carrying amount and related taxes and expenses is recognised in profit or loss for the
current period.
The carrying amount of an investment property is reduced to the recoverable amount if the
recoverable amount is below the carrying amount (Note 2 (19)).
- 22 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(15) Fixed assets
(a) Fixed assets recognition and initial measurement
Fixed assets comprise harbor facilities, warehouses, container yards and buildings, machinery and
equipment, motor vehicles, cargo ships and tugboats, and other equipments.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the
Group and the costs can be reliably measured. Fixed assets purchased or constructed by the
Group are initially measured at cost at the acquisition date. The fixed assets contributed by the
State shareholders at the reorganisation of the Company into a corporation entity are recognised
based on the revaluated amounts approved by the state-owned assets administration department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when
it is probable that the associated economic benefits will flow to the Group and the related cost can
be reliably measured. The carrying amount of the replaced part is derecognised. All the other
subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
(b) Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to
their estimated residual values over their estimated useful lives. For the fixed assets that have
been provided for impairment loss, the related depreciation charge is prospectively determined
based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and
the annual depreciation rates of fixed assets are as follows:
Estimated Estimated Annual
useful lives residual value depreciation rate
Harbor facilities 5 - 50 years 10% 1.8%-18%
warehouses, container yards and buildings 5 - 40 years 10% 2.25%-18%
machinery and equipments 5 - 15 years 10% 6%-18%
motor vehicles, cargo ships and tugboats 5 - 20 years 10% 4.5%-18%
other equipments 5 years 10% 18%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation
method applied to the asset are reviewed, and adjusted as appropriate at each year-end.
(c) The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable
amount is below the carrying amount (Note 2(19)).
- 23 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(15) Fixed assets (Con’d)
(d) Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expected from
its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage
of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or
loss for the current period.
(16) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to
bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed
assets when the assets are ready for their intended use, and depreciation begins from the following
month. The carrying amount of construction in progress is reduced to the recoverable amount
when the recoverable amount is below the carrying amount (Note 2(19)).
(17) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset
that needs a substantially long period of time for its intended use commence to be capitalised and
recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have
been incurred, and the activities relating to the acquisition and construction that are necessary to
prepare the asset for its intended use have commenced. The capitalisation of borrowing costs
ceases when the asset under acquisition or construction becomes ready for its intended use and
the borrowing costs incurred thereafter are recognised in profit or loss for the current period.
Capitalisation of borrowing costs is suspended during periods in which the acquisition or
construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3
months, until the acquisition or construction is resumed.
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying
for capitalisation, the amount of borrowing costs eligible for capitalisation is determined by
deducting any interest income earned from depositing the unused specific borrowings in the banks
or any investment income arising on the temporary investment of those borrowings during the
capitalisation period.
- 24 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(17) Borrowing costs
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying
for capitalisation, the amount of borrowing costs eligible for capitalisation is determined by applying
the weighted average effective interest rate of general borrowings, to the weighted average of the
excess amount of cumulative expenditures on the asset over the amount of specific borrowings.
The effective interest rate is the rate at which the estimated future cash flows during the period of
expected duration of the borrowings or applicable shorter period are discounted to the initial
amount of the borrowings.
(18) Intangible assets
Intangible assets including land use rights, coastal line use rights and computer software are
measured at actual cost. Fixed assets contributed by the state-owned shareholders at the
incorporation of a limited company are initially recorded at the valuation amount recognized by the
state-owned assets supervision and administration department.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their estimated useful lives of 20 - 50
years. If the purchase costs of land use rights and attached buildings cannot be reliably allocated
between the land use rights and buildings, for the purchase costs are recognised as fixed assets.
(b) Coastal line use rights
Coastal line use rights are amortised on the straight-line basis over periods of 5 - 50 years.
(c) Computer software
Computer software is amortised on a straight-line basis over periods of 3 - 5 years.
(d) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review and adjustment on useful life and
amortization method are performed at each year-end.
(e) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2 (19)).
- 25 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(19) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under
operating lease and other prepayments incurred but should be borne by the current and
subsequent periods and amortised over more than one year. Long-term prepaid expenses are
amortised on the straight-line basis over the expected beneficial period and are presented at cost
net of accumulated amortisation.
(20) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investment
properties measured using the cost model and long-term equity investments in subsidiaries, joint
ventures and associates are tested for impairment if there is any indication that an asset may be
impaired at the balance date. If the result of the impairment test indicates that the recoverable
amount of the asset is less than its carrying amount, a provision for impairment and an impairment
loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the
present value of the future cash flows expected to be derived from the asset. A provision for asset
Impairment is determined and recognised on an individual asset basis. If it is not possible to
estimate the recoverable amount of an individual asset, the recoverable amount of the group of
assets to which the asset belongs is determined. A group of assets is the smallest group of assets
that is able to generate independent cash inflows.
Separately recognised goodwill is tested at least annually for impairment, irrespective of whether
there is any indication that the asset may be impaired. During the test, the carrying value of
goodwill is allocated to the related asset group or groups of asset group which is expected to
benefit from the synergies of the business combination. If the result of the test indicates that the
recoverable amount of an asset group or groups of asset group including the goodwill allocated is
lower than its carrying amount, the corresponding impairment loss is recognized. The impairment
loss is first deducted from the carrying amount of goodwill allocated to the asset group or groups of
asset group, and then deducted from the carrying amount of the remaining assets of the asset
group or groups of asset group pro rata with goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered
in the subsequent periods.
- 26 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(21) Employee benefits
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff
welfare, social security contributions, housing funds, labour union funds, employee education funds
and other expenditures incurred in exchange for service rendered by employees.
The Group has established a pension scheme for employees which is a defined contribution plan.
The Group pays contributions at 5.5% to 6% of employees’ salary into the plan. The Group has no
further obligations once the contributions have been paid. The contributions are recognised as
employee benefit expense when they are due. The pension assets are hold by a trustee and are
managed separately from the Group’s assets.
(22) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by the
shareholders’ meeting.
(23) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration
received or receivable for the sale of services in the ordinary course of the Group’s activities.
Revenue is shown net of discounts and returns.
Revenue is recognised when the economic benefits associated with the transaction will flow to the
Group, the related revenue can be reliably measured, and the specific revenue recognition criteria
have been met for each type of the Group’s activities as described below:
(a) Rendering of services
The Group provides loading/unloading, transportation, logistic agency and other related harbor
services to external customers. Revenue arising from provision of services is re ognised when
services are completed and the amount of revenue and cost can be reliably measured.
(b) Transfer of asset use rights
Interest income is recognised on a time-proportion basis using the effective interest method.
Lease income from an operating lease is recognised on a straight-line basis over the period of the
lease.
- 27 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(24) Government Grants
Government grants are transfers of monetary or non-monetary assets from the government to the
Group at nil consideration, including refund of taxes and financial subsidies, etc.
A government grant is recognised when the conditions attached to it can be complied with and the
government grant can be received. For a government grant in the form of transfer of monetary
assets, the grant is measured at the amount received or receivable. For a government grant in the
form of transfer of non-monetary assets, it is measured at fair value; if the fair value is not reliably
determinable; the grant is measured at nominal amount.
A government grant related to an asset is recognised as deferred income, and evenly amortised to
profit or loss over the useful life of the related asset. Government grants measured at nominal
amounts are recognised immediately in profit or loss for the current period.
For government grants related to income, where the grant is a compensation for related expenses
or losses to be incurred by the Group in the subsequent periods, the grant is recognised as
deferred income, and included in profit or loss over the periods in which the related costs are
recognised; where the grant is a compensation for related expenses or losses already incurred by
the Group, the grant is recognised immediately in profit or loss for the current period.
(25) Deferred revenue
Deferred revenue is the advance from customers which should be amortised on a straight-line
basis over the expected beneficial period and presented at cost net of accumulated amortisation.
(26) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the
differences arising between the tax bases of assets and liabilities and their carrying amounts
(temporary differences). Deferred tax asset is recognised for the deductible losses that can be
carried forward to subsequent years for deduction of the taxable profit in accordance with the tax
laws. No deferred tax liability is recognised for a temporary difference arising from the initial
recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the
temporary differences resulting from the initial recognition of assets or liabilities due to a
transaction other than a business combination, which affects neither accounting profit nor taxable
profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities
are measured at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled.
- 28 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(26) Deferred tax assets and deferred tax liabilities (Con’d)
Deferred tax assets are only recognised for deductible temporary differences, deductible losses
and tax credits to the extent that it is probable that taxable profit will be available in the future
against which the deductible temporary differences, deductible losses and tax credits can be
utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in
subsidiaries, associates and joint ventures, except where the Group is able to control the timing of
reversal of the temporary difference, and it is probable that the temporary difference will not
reverse in the foreseeable future. When it is probable that the temporary differences arising from
investments in subsidiaries, associates and joint ventures will be reversed in the foreseeable future
and that the taxable profit will be available in the future against which the temporary differences
can be utilised, the corresponding deferred tax assets are recognised.
Deferred tax assets and liabilities are offset when:
the deferred taxes are related to the same tax payer within the Group and the same taxation
authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax assets
against current tax liabilities.
(27) Leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to
ownership of an asset. An operating lease is a lease other than a finance lease.
Lease payments under an operating lease are recognised on a straight-line basis over the period of
the lease, and are either capitalized as part of the cost of related assets, or charged as an expense
for the current period.
- 29 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
2 Significant accounting policies and accounting estimates (Con’d)
(28) Held for sale and discontinuing operations
A non-current asset or a component of the Group satisfying the following conditions is classified as
held for sale: (1) the Group has made a resolution for disposal of the non-current asset or the
component;(2) an irrevocable contract with the transferee has been signed and;(3) the transfer will
be completed within one year.
Non-current assets, except for financial assets and deferred tax assets, that meet the recognition
criteria for held for sale are included in other current assets at the amount equal to the lower of the
fair value less costs to sell and the carrying amount. Any excess of the original carrying amount
over the fair value less costs to sell is recognised as an asset impairment loss.
Discontinued operation is a component of the Group that either has been disposed of or is
classified as held for sale, and can be distinguished from other components within the Group in the
business operations and in the preparation of financial statements.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure,
management requirements and internal reporting system, and discloses segment information of
reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1)
the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose
operating results are regularly reviewed by the Group’s management to make decisions about
resources to be allocated to the segment and to assess its performance, and (3) for which the
information on financial position, operating results and cash flows is available to the Group. If two
or more operating segments have similar economic characteristics and satisfy certain conditions,
they are aggregated into one single operating segment.
(30) Critical accounting estimates and key assumptions
The Group continually evaluates the critical accounting estimates and key judgements applied
based on historical experience and other factors.
There are no critical accounting estimates or key judgments of the Group in current year that will
cause significant adjustments to the book value of assets and liabilities in next year.
- 30 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
3 Taxation
The types and rates of taxes applicable to the Group are set out below.
Type Taxable basis Tax rate
Enterprise income tax Taxable income 16.5%, 24% and 25%
Value added tax (“VAT”) Taxable income from vehicle maintenance and utilities supplies on 17%
ships in shore (tax payable represents output VAT calculated using
the taxable sales amount multiplied by the effective tax rate less
deductible input VAT)
Taxable income from sales of scraps 3%
Taxable income from transfer of fixed asset (tax inclusive) 4% (levied by half)
Business tax Taxable loading/unloading and transportation income 3%
Taxable warehousing, logistic agency and rental income 5%
Urban maintenance and VAT and Business tax paid 5% and 7%
construction tax
Education surplus VAT and Business tax paid 3%
Regional education surplus VAT and Business tax paid 2%
The applicable enterprise income tax rate for the Company and the subsidiaries located in
Shenzhen Special Economic Zone had been 15%. Under the new CIT Law, the CIT income tax
rate applicable to the Company and these subsidiaries will increase gradually to 25% within 5 years
from 2009 to 2012. The applicable income tax rate for 2011 is 24%. (2010: 22%)
The applicable enterprise income tax rate for the subsidiaries located in Dongguan city is 25%.
(2010: 25%)
Chiwan Wharf Holdings (H.K.) Limited (hereinafter “WHK”) and Chiwan Shipping (H.K.) Company
Limited are subject to Hong Kong CIT income tax rate at 16.5% (2010: 16.5%).
For the year ended 31 December 2011, several subsidiaries of the Company are still in the tax
holiday of “5 year exemption and 5 year half reduction”. The details are set out below.
(a) The profit derived from berth #12 of Chiwan Container Terminal Company Limited
(hereinafter “CCT”) is entitled to full exemption from income tax for five years commencing
from its first profit making year and a 50% exemption for the following five years. 2011 is
the eighth profit-making year of berth #12, CIT has been provided at a rate of 12% (2010:
11%).
- 31 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
3 Taxation (Con’d)
(b) The profit derived from berth #13 of CCT is entitled to full exemption from income tax for five years
commencing from its first profit making year and a 50% exemption for the following five years when
certain requirement met. 2011 is the senventh profit-making year of berth #13, CIT has been
provided at a rate of 12% (2010: 11%).
- 32 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements
(1) Information of subsidiaries
(a) Subsidiaries obtained through incorporation or investment
Registered capital
(in ten thousand
Type of Nature of Yuan unless Legal Organization Type of
Full name of investees subsidiaries Place of registration business otherwise stated) Principal activities Type of enterprise representatives code audit opion Hierarchy
Shenzhen Chiwan International Freight Domestically-funded
Agency Company Limited Direct Shenzhen, PRC Logistics 550 Shipping agency service enterprise Qu Jiandong 61885111-4 standard 1
Shenzhen Chiwan Terminal Company Direct and Shenzhen, PRC Logistics 5,000 Port services Domestically-funded Zhao Qiang 19231989-1
Limited indirect enterprise standard 1
Shenzhen Chiwan Trains-Grains Terminal Direct and Shenzhen, PRC Logistics 4,500 Warehousing of grains Chinese-Foreign Zhang Jianguo 61893398-8
Company Limited indirect equity joint venture standard 1
Chiwan Wharf Holdings (H.K.) Limited Direct Hong Kong SAR, PRC Investments HKD 1,000,000 Shipping agency service Overseas enterprise NA NA standard 1
Dongguan Chiwan Wharf Company Direct and Dongguan, PRC Logistics 45,000 Port services, Chinese-Foreign Wang Fen 79123972-X
Limited indirect warehousing and other equity joint venture
logistic services standard 1
Dongguan Chiwan Terminal Company Direct and Dongguan, PRC Logistics 30,000 Port services, Chinese-Foreign Wang Fen 67307267-4
Limited indirect warehousing and other equity joint venture
logistic services standard 2
Grossalan Investments Limited Direct British Virgin Islands Investments USD 1 Investment holding Overseas enterprise NA NA standard 2
Hinwin Development Company Limited Indirect Hong Kong SAR, PRC Investments HKD 10,000 Investment holding Overseas enterprise NA NA standard 2
- 33 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements (Con’d)
(1) Information of subsidiaries (Con’d)
(a) Subsidiaries obtained through incorporation or investment (Con’d)
Substantial net investment on the Amount of loss attributed
subsidiaries recorded in other Consolidate Minority to the minority
Name of subsidiaries Year end actual investment items Share holding Voting right or not interests shareholders
Shenzhen Chiwan International Freight Agency Company Limited 5,500,000 - 100% 100% Y - -
Shenzhen Chiwan Terminal Company Limited 50,000,000 - 100% 100% Y - -
Shenzhen Chiwan Trains-Grains Terminal Company Limited 45,000,000 - 100% 100% Y - -
Chiwan Wharf Holdings (H.K.) Limited 1,070,000 11,004,285 100% 100% Y - -
Dongguan Chiwan Wharf Company Limited(i) 382,500,000 - 85% 85% Y 69,668,546 1,497,454
Dongguan Chiwan Terminal Company Limited 300,000,000 - 100% 100% V - -
Grossalan Investments Limited 8 100% 100% Y - -
Hinwin Development Company Limited(Note5(9)) 6,278,500 94,014,181 100% 100% Y - -
790,348,508 105,018,466 69,668,546 1,497,454
- 34 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements (Con’d)
(1) Information of subsidiaries (Con’d)
(a) Subsidiaries obtained through incorporation or investment (Con’d)
(i) The group previously owned 100% equity interest of Dongguan Chiwan Wharf Company Limited (hereinafter”DGW”). On 16 August 2011, the group
signed an agreement with Yihai Kerry investment Ltd, the Group and Yihai Kerry agreed to inject RMB121,200,000 and RMB 91,940,000
respectively ,to Dongguan Wharf Ltd . After the capital injection, the Group and Yihai Kerry hold 85% and 15% equity of DGW, respectively. On 9
June 2011, the capital injection has been completed and the equity interest owned by the group decreased and was treated as a deemed disposal of
subsidiary‘s equity to minority interests. Of the investment of RMB 91,940,000 by Yihai Kerry, RMB 67,500,000 was recorded as paid in capital, while
RMB 24,440,000 was credited to the capital surplus of DGW. The corresponding portion of the net assets attributable to the group, RMB 20,774,000
is credited to capital surplus – share premium.
- 35 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements (Con’d)
(1) Information of subsidiaries (Con’d)
(b) Subsidiaries obtained through business combinations involving enterprises under common control
Full name of investees Type of Place of Nature of Registered capital Principal activities Type of enterprise Legal Organization Minority Amount of loss
subsidiaries registration business (in ten thousand Yuan representatives code interests attributed to the
unless otherwise stated) minority
shareholders
Shenzhen Chiwan Harbour Direct and Shenzhen, Logistics 28,820 Container handling and other Chinese-Foreign Zhang Ning 61881729-0 standard 1
Container Company Limited indirect PRC port services Equity joint venture
Shenzhen Chiwan Transportation Direct and Shenzhen, Logistics 1,500 container transportation, Chinese-Foreign Zhang Ning 61883349-3 standard 1
Company Limited indirect PRC vehicle and port machinery Equity joint venture
maintenance
Chiwan Container Terminal Direct and Shenzhen, Logistics USD 95,300,000 Container handling and other Chinese-Foreign Zheng 61881700-4 standard 1
Company Limited indirect PRC port services Equity joint venture Shaoping
Shenzhen Chiwan Shipping and Direct and Shenzhen, Logistics 2,400 Cargo shipping Chinese-Foreign Zhang Ning 61881638-6 standard 1
Transportation Company Limited indirect PRC Equity joint venture
Chiwan Shipping (H.K.) Company Indirect Hong Kong, Logistics HKD 800,000 Shipping agency service Foreign company NA NA standard 2
Limited PRC
- 36 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements (Con’d)
(1) Information of subsidiaries (Con’d)
(b) Subsidiaries obtained through business combinations involving enterprises under common control (Con’d)
Substantial net
investment on the Voting Amount of loss
Year end actual subsidiaries recorded Interest right held Consolidate attributed to the
Name of subsidiaries investment in other items held (%) (%) d Minority interests minority shareholders
Shenzhen Chiwan Harbour Container Company Limited 250,920,000 - 100% 100% Yes - -
Shenzhen Chiwan Transportation Company Limited 7,000,000 19 100% 100% Yes - -
Chiwan Container Terminal Company Limited 485,990,004 - 55% 55% Yes 568,598,774 -
Shenzhen Chiwan Shipping and Transportation Company
Limited 24,000,000 - 100% 100% Yes - -
Chiwan Shipping (H.K.) Company Limited 856,000 - 100% 100% Yes - -
768,766,004 19 568,598,774 -
All above subsidiaries and the Company had been under common control by Nanshan Group before and after the acquisition.
- 37 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
4 Business combination and the consolidated financial statements (Con’d)
a) Entities newly included in or excluded from the consolidation scope in the current year
Hinwin Development Co.,Ltd is newly included in the consolidation scope in the current
year.(Note5(9)(b))
b) There is no loss of subsidiary due to disposal of shares and loss of control during the year.
c) Exchange rates applied to major financial statement items of the overseas operating entities
Balance Sheet Item Revenue, expense
31 December 2011 31 December 2010 and cash flow item
Chiwan Shipping (H.K.) Company Limited 1HKD = 0.81RMB 1HKD = 0.85RMB Current exchange rate of the
transaction
Grossalan Investments Limited 1HKD = 0.81RMB 1HKD = 0.85RMB Current exchange rate of the
transaction
5 Notes to the consolidated financial statements
(1) Cash at bank and on hand
31 December 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
Cash on hand-
RMB - - 9,914 - - 8,829
HKD 71 6.30 447 71 6.62 470
USD 4,535 0.81 3,674 2,557 0.85 2,174
14,035 11,473
Cash at bank-
RMB - - 292,000,350 - - 605,086,621
USD 3,992,510 6.30 25,152,810 1,336,616 6.62 8,848,399
HKD 197,714,953 0.81 160,149,112 196,006,858 0.85 166,605,829
477,302,272 780,540,849
Other cash balances-
RMB - - 1,458,828 - - 1,066,932
USD - 6.30 - 228 6.62 1,509
HKD 17,047 0.81 13,808 116,847 0.85 99,320
1,472,636 1,167,761
478,788,943 781,720,083
- 38 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(2) Notes receivable
31 December 2011 31 December 2010
Bank acceptance notes - 4,640,000
(3) Interest receivable
31 December Current year Current year 31 December
2010 additions decreases 2011
Interest receivables 1,318,202 756,667 (2,023,202) 51,667
There was no interest overdue as at 31 December 2011 and 2010.
(4) Accounts receivable
31 December 2011 31 December 2010
Accounts receivable 230,846,394 179,822,749
Less: provision for bad debts (49,391) (49,994)
230,797,003 179,772,755
(a) The ageing of accounts receivable is analysed below:
31 December 2011 31 December 2010
Within 1 year 230,011,499 179,739,426
1 to 2 years 757,905 -
2 to 3 years - -
Over 3 years 76,990 83,323
230,846,394 179,822,749
- 39 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(4) Accounts receivable (Con’d)
(b) Accounts receivable are analysed by categories as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
With amounts that are 180,326,499 78% - - 135,313,207 75% - -
individually significant and
that the related provision for
bad debts is provided on the
individual basis
Others 50,519,895 22% (49,391) 0.1% 44,509,542 25% (49,994) 0.1%
230,846,394 100% (49,391) 0.02% 179,822,749 100% (49,994) 0.03%
The management classified the five largest accounts receivable as “with amounts that are
individually significant”.
(c) As at 31 December 2011, receivables that are individually significant and impaired are analysed as
follows:
Provision for % of the balance and
Amount bad debt reason of impairment
Customer A 113,368,915 - Not applicable
Customer B 34,286,640 - Not applicable
Customer C 12,679,079 - Not applicable
Customer D 12,621,655 - Not applicable
Customer E 7,370,210 - Not applicable
180,326,499 -
- 40 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(4) Accounts receivable (Con’d)
(d) The aging analysis of the receivables that are grouped and impaired is as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of
% of total Provision for % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Within 1 year 49,685,000 21.52% - - 44,426,219 24.71% - -
1 to 2 years 757,905 0.33% - - - - - -
Over 3 years 76,990 0.03% (49,391) 64% 83,323 0.05% (49,994) 60%
50,519,895 21.88% (49,391) 0.1% 44,509,542 24.76% (49,994) 0.1%
(e) As at 31 December 2011, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% voting rights (31 December 2010: Nil).
(f) As at 31 December 2011, the Group’s five largest accounts receivable balances are analysed as
follows:
Relationship % of total accounts
with the Group Amount Duration receivable balance
Customer A Third party 113,368,915 Within 1 year 49.11%
Customer B Third party 34,286,640 Within 1 year 14.85%
Customer C Third party 12,679,079 Within 1 year 5.49%
Customer D Third party 12,621,655 Within 1 year 5.47%
Customer E Third party 7,370,210 Within 1 year 3.19%
180,326,499 78.11%
- 41 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(4) Accounts receivable (Con’d)
(g) Accounts receivable due from related parties are analysed as follows:
31 December 2011 31 December 2010
Provision Provision
Relationship with the % of total for bad % of total for bad
Group Amount balance debts Amount balance debts
Shenzhen Southsea Grains Notes 7(4) 1,368,092 0.59% - 110,521 0.06% -
Industries Limited (“Southsea
Grains”)
Shenzhen Mawan Port Co., Ltd. Notes 7(4) 682,266 0.30% - 998,942 0.56% -
(“SMP”)
China Overseas Harbor Affairs Notes 7(4) 539,724 0.23% - - - -
(Laizhou) Co.Ltd
China Merchant Bonded Notes 7(4) 378,384 0.16% - 344,900 0.19% -
Logistics )Co.,Ltd(“CMBL”)
Shenzhen Mawan Wharf Co, Notes 7(4) 335,669 0.15% - 397,090 0.22% -
Ltd.(“SMW”)
Shekou Container Terminals Notes 7(4) 6,500 0.00% - 907,600 0.50%
Limited(“SCT”)
Shenzhen Nantian Oil Dregs Notes 7(4) - - - 562,957 0.31% -
Industry Co., Ltd.
3,310,635 1.43% - 3,322,010 1.84% -
(h) The following accounts receivable are denominated in foreign currencies:
31 December 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
USD 4,882,828 6.30 30,761,816 4,025,498 6.62 26,648,794
HKD 936,003 0.81 758,163 1,551,068 0.85 1,318,408
31,519,979 27,967,202
- 42 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(5) Other receivables
31 December 2011 31 December 2010
Current accounts with counterparties 7,100,207 49,746,197
Deposits 2,940,003 2,427,356
Staff advances 1,554,108 1,066,432
Others 489,912 736,021
12,084,230 53,976,006
Less: Provision for bad debts (250,353) (1,210,645)
11,833,877 52,765,361
(a) The ageing of other receivables is analysed below:
31 December 2011 31 December 2010
Within 1 year 11,127,183 52,147,049
1 to 2 years 455,276 158,164
2 to 3 years 9,603 418,316
3 to 4 years 279,544 475,805
4 to 5 years 88,996 130,563
Over 5 years 123,628 646,109
12,084,230 53,976,006
(b) Other receivables are analysed by categories as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
With amounts that are
individually significant
and that the related
provision for bad
debts is provided on
the individual basis 5,707,787 47.23% - - 47,492,149 87.99% (520,000) 1.09%
Receivables that are
grouped and provided for
bad debt 6,376,443 52.77% (250,353) 3.93% 6,483,857 12.01% (690,645) 10.65%
12,084,230 100% (250,353) 2.07% 53,976,006 100% (1,210,645) 2.24%
- 43 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(5) Other receivables (Con’d)
(c) As at 31 December 2011, other receivables with amounts that are individually significant and that
the related provision for bad debts is provided on the individual basis are analysed as follows:
Provision for
Book amount bad debts % of balance Reason
CMBL 2,622,178 - - N/A
SMW 898,479 - - N/A
Finacial Secretary of Transport Ministry 800,000 - - N/A
Deposits of non-vessel carrier 797,040 - - N/A
Maxtop 590,090 - - N/A
5,707,787 -
(d) Other receivables that the related provision for bad debts is provided on grouping basis using the
ageing analysis method are analysed as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of % of
total Provision for % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Within 1 year 5,419,396 44.85% - - 4,778,114 8.85% - -
1 to 2 years 455,276 3.77% (45,528) 10.00% 158,164 0.29% (15,816) 10.00%
2 to 3 years 9,603 0.08% (2,881) 30.00% 418,316 0.78% (83,663) 20.00%
Over 3 years 492,168 4.07% (201,944) 41.03% 1,129,263 2.09% (591,166) 52.35%
6,376,443 52.77% (250,353) 3.93% 6,483,857 12.01% (690,645) 10.65%
(e) As at 31 December 2011, no balances in other receivables from shareholders holding more than
5% (including 5%) of the voting rights of the Company (31 December 2010: Nil).
- 44 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(5) Other receivables (Con’d)
(f) As at 31 December 2011, the five largest other receivables are analysed as follows:
Relationship with the % of total accounts
Group Amount Duration receivable balance
CMBL Associate of the Group 2,622,178 Within 1 year 21.70%
SMW Associate of the Group 898,479 Within 1 year 7.44%
Finacial Secretary of Transport Ministry Third party 800,000 Within 1 year 6.62%
Deposits of non-vessel carrier Third party 797,040 Within 1 year 6.60%
Maxtop Third party 590,090 Within 1 year 4.87%
5,707,787 47.23%
(g) Other receivables due from related parties are analysed as follows:
31 December 2011 31 December 2010
% of total % of total
Relationship accounts Provision for accounts Provision for
with the Group Amount receivables bad debt Amount receivables bad debt
CMBL Notes 7(4) 2,622,178 21.70% - 57,821 0.11% -
SMW Notes 7(4) 898,479 7.44% - 79,083 0.15% -
Shenzhen Xuqin Industrial
Development Co., Ltd.(“Xuqin”) Notes 7(4) 320,000 2.65% (192,000) 320,000 0.59% (192,000)
SMP Notes 7(4) 308,451 2.55% - 20,961 0.04% -
China Petroleum Supply Base Co.,
Ltd. (“CPSB”) Notes 7(4) 135,622 1.12% - 135,622 0.25% -
SCT Notes 7(4) 187,102 1.55% - - -
China Merchants International Cold Notes 7(4)
Chain (Shenzhen) Company
Limited(“CMICL”) 48,645 0.40% - - -
Media Port Investment Limited Notes 7(4) - - - 44,879,120 83.15% -
4,520,477 37.41% (192,000) 45,492,607 84.29% (192,000)
- 45 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(5) Other receivables (Con’d)
(h) The following other receivables are denominated in foreign currencies:
31 December 2011 31 December 2010
Original Exchange RMB Original Exchang RMB
Foreign currency currency rate equivalent currency e rate equivalent
USD 102,836 6.30 647,867 125,650 6.62 831,801
HKD 378,355 0.81 306,468 196,519 0.85 167,041
954,335 998,842
(6) Advance to suppliers
(a) The ageing of advance to suppliers is analysed below;
31 December 2011 31 December 2010
% of total % of total
Amount balance Amount balance
Within 1 year 3,497,668 100% 31,256,172 100%
(b) Advances to suppliers are analysed by categories as follows:
Category 31 December 2011 31 December 2010
Insurance Fee 1,631,823 2,307,558
Decoration Fee 1,210,724 -
Software Maintenance Expense 496,389 853,833
Prepayment for Equipment 142,232 539,245
Consultancy and Advisory Fee 16,500 -
Prepayment for materials - 75,536
Prepayment for facility - 27,480,000
3,497,668 31,256,172
- 46 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(6) Advance to suppliers(Con’d)
(c) As at 31 December 2011, the Group’s five largest advance to suppliers balances are analysed as
follows:
% of total
Relationship advance to Time of
with the Group Amount suppliers prepayment Unsettled reason
The People’s Insurance Company (Group) Third party 1,387,879 39.68% Year 2011 Relevant goods or services
of China Limited were not provided
Shenzhen Zhong Zhuang Design and Third party 1,070,724 30.61% Year 2011 Relevant goods or services
Decoration Engineering CO.,Ltd were not provided
Ruechengda Information and Technology Third party 496,389 14.19% Year 2011 Relevant goods or services
Co., Ltd were not provided
China Continent Property & Casualty Third party 243,945 6.97% Year 2011 Relevant goods or services
Insurance Co., Ltd. Shenzhen Branch were not provided
Mettler Toledo (Changzhou) Weighting Third party 119,833 3.43% Year 2011 Relevant goods or services
Equipment System Co.,Ltd were not provided
3,318,770 94.88%
(d) As at 31 December 2011, no balances of advance to shareholders holding more than 5% (including
5%) of the voting rights of the Company (31 December 2010: Nil).
(e) As at 31 December 2011, no balances of advance to suppliers were with related parties (31
December 2010: Nil).
(7) Inventories
(a) Inventories by categories are analysed as follows:
31 December 2011 31 December 2010
Provision for Provision for
declines in the declines in
value of Net book the value of Net book
Cost inventories value Cost inventories value
Spare parts 23,198,355 (792,118) 22,406,237 26,001,106 (3,396,128) 22,604,978
Fuel 1,062,721 - 1,062,721 1,281,346 - 1,281,346
Low value consumables 31,400 - 31,400 2,202 - 2,202
24,292,476 (792,118) 23,500,358 27,284,654 (3,396,128) 23,888,526
- 47 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(7) Inventories(Con’d)
(b) Movement of inventories is analysed as follows:
31 December 31 December
2010 Additions Less 2011
Spare parts 26,001,106 42,244,566 (45,047,317) 23,198,355
Fuel 1,281,346 50,228,677 (50,447,302) 1,062,721
Low value consumables 2,202 29,198 - 31,400
27,284,654 92,502,441 (95,494,619) 24,292,476
(c) Book value of inventories by age are analysed as follows:
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total
Spare parts 20,442,307 264,406 52,561 1,646,963 22,406,237
Fuel 1,062,721 - - - 1,062,721
Low value consumables 31,400 - - - 31,400
21,536,428 264,406 52,561 1,646,963 23,500,358
(d) Provision for declines in the value of inventories is analysed as follows:
31 December Current year 31 December
2010 provisions Current year decreases 2011
Reversals Written-off
Spare parts (3,396,128) (792,118) 103,512 3,292,616 (792,118)
(e) Details about provision for declines in the value of inventories is as follows:
% of current year reversals to
Basis of provision Reason of current year reversals stock yearend balance
Spare parts Net realizable value lower than the
book value of spare parts Net realizable value increased 14%
- 48 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(8) Available-for-sale financial assets
31 December 2011 31 December 2010
Available-for-sale equity investments 5,690,000 6,640,000
Available-for-sale financial asset represented 1,000,000 PRC legal person shares of Jiangsu
Expressway (the “Jiangsu Expressway”) held by the Company. As at 31 December 2011 the
market value of the stocks in Shanghai Stock Exchange per the closing market price of the last
trading day of year 2011 was RMB 5,690,000. Fair value change of RMB 767,700 has been
debited d to capital surplus.
(9) Long-term equity investments
31 December 2011 31 December 2010
Joint ventures (a) 795,776,215 763,011,159
Associates (b)
- Without quoted price 627,171,005 373,001,527
Other long-term equity investment 17,037,500 17,037,500
1,439,984,720 1,153,050,186
Less: Provision for impairment of long-term equity
investments (c) (3,128,300) (3,128,300)
1,436,856,420 1,149,921,886
As at 31 December 2011, the long-term equity investments of the Group were not subject to
restriction on disposal or remittance of return on investments.
- 49 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated and the Company’s financial statements (Con’d)
(9) Long-term equity investments (Con’d)
(a) Joint venture
Current year additions / decreases
Explanation of Provision
Share of net disparity between for
Initial Increase/ profit using Cash Other Share Voting percentages of Provision impairment
Accounting investment 31 December Decrease in the equity dividend changes in 31 holding rights share holding and for made in
method cos 2010 investment method declared equity December 2011 (%) (%) voting rights impairment current year
China Overseas Harbour Equity
Affairs (Laizhou) Co., Ltd method 749,655,300 763,011,159 - 32,665,056 - 100,000 795,776,215 40.00% 40.00% Not applicable
* According to the investment agreement with shareholders of China Overseas Harbour 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.
- 50 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated and the Company’s financial statements (Con’d)
(9) Long-term equity investments (Con’d)
(b) Associates
Current year additions / decreases
Share of net Cash Reason of Provision Provision
Initial profit or loss dividends Other 31 inconsistent for for impairment
Accounting investmen 31 December Additional of announced equity December Interest Voting interest % and impairment made in current
method t cost 2010 investment associates by associates changes 2011 % right % voting right balance year
Shenzhen Cyber-
harbour Network Co.,
Ltd.(“Cyber Equity
Network”) method 1,875,000 12,869,241 - 19,885 (1,224,863) - 11,664,263 23.16% 23.16% Not applicable - -
Equity
CMBL method 280,000,000 66,766,772 220,284,181 3,983,566 - 1,764,925 292,799,444 40.00% 40.00% Not applicable - -
Equity
MPIL* method 139,932 293,365,514 - 77,299,676 (47,957,892) - 322,707,298 50.00% 50.00% Not applicable - -
373,001,527 220,284,181 81,303,127 (49,182,755) 1,764,925 627,171,005 - -
* On 29 January 2010, the company signed agreement on transfer of shareholding to sell 20% shareholding of CMBL at a price of RMB94,000,000.The
relevant income on disposal had been recorded in the income statement of year 2010.
In 2011,in consideration of the good development prospects of CMBL brought by develop plan of Qianhai,Shenzhen,the company decided to increase the
shareholding of CMBL and later, further increase the investment in it.. As at 28 April 2011, Excel Steps Limited, WHK, a wholly owned subsidiary of the
Company and the company signed an agreement of transfer in shareholding. WHK paid to Excel Steps Limited around RMB 6.27 million to obtain 100%
shareholdings of Hinwin Development Co.,Ltd,and undertook advances from shareholder of Excel Steps Limited amounting around 94million.Hinwin has
no other business except holding 20% shares of CMBL, and the company deemed this substance of the transaction is to buy in 20% shareholding of CMBL,
so that the transaction is dealt as purchase of 20% shareholding of CMBL. After above transaction, the company has 40% equity interest of CMBL directly
and indirectly.
- 51 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated and the Company’s financial statements (Con’d)
(9) Long-term equity investments (Con’d)
(b) Associates(Con’d)
In May 2011, all shareholdings of CMBL agreed add 300 million in its registered capital to RMB 700 million. The investment of the company reached 120
million by shareholding portion.
** The company has 50% equity of MPIL ,but no control power on it,so it is treated as joint –venture.
On 30 September 2002, China Merchants Holdings (International) Company Limited (the “CMHI”, a listed company in Hong Kong) and Shenzhen South Oil
(Group) Company Limited (the “SSOG”) entered into an agreement called the “Agreement on Cooperation and Development of Mawan Port” (the
“Development Agreement”) to incorporate three joint ventures, namely SMW, SMP and Shenzhen Mawan Terminals Co., Ltd. (“SMT”) (together referred to
as “Mawan Companies”), to construct and operate the berth 0#, 5#, 6#, 7# and 8# in Mawan Port.
According to the Development Agreement, CMHI and the Group will incorporate an associated corporation (Note 5 (10)) Media Port Investments Limited
(the “MPIL”) first with equal percentage of equity held respectively. MPIL then incorporates the abovementioned three joint ventures together with SSOG,
at 60% and 40% equity interest therein respectively. So the actual shareholdings held by the group is 30%.
- 52 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(9) Long-term equity investments (Con’d)
(c) Other long-term equity investment
Reason of Provision
Initial Current year inconsistent Provision for impairment Current year
Accounting investment 31 December additions / 31 December Interest Voting interest % and for impairment made in declared cash
method cost 2010 decreases 2011 % right % voting right balance current year dividend
China Ocean Shipping Agency Cost
(Shenzhen) Company Limited method 13,510,000 13,510,000 - 13,510,000 15% 15% Not applicable - - 3,900,000
Shenzhen Petro-chemical Industry Cost
(Group) Company Limited. method 3,500,000 3,500,000 - 3,500,000 0.26% 0.26% Not applicable (3,117,800) - -
Guangdong Guang Jian Group Cost
Company Limited method 27,500 27,500 - 27,500 0.02% 0.02% Not applicable (10,500) - -
17,037,500 - 17,037,500 (3,128,300) - 3,900,000
(d) Provision for impairment of long-term equity investments
Current year Current year
31 December 2010 additions decreases 31 December 2011
Other long-term equity investment
-Shenzhen Petro-chemical Industry (Group) Company Limited 3,117,800 - - 3,117,800
-Guangdong Guang Jian Group Company Limited 10,500 - - 10,500
3,128,300 - - 3,128,300
- 53 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(10) Investment in joint ventures and associates
The particular of the associates are set out as below.
Voting right
Interest held held 31 December 2011 2011
Total assets Total liabilities Net assets Operating revenue Net profit / (loss)
Joint venture –
China Overseas Harbour Affairs
(Laizhou) Co., Ltd 40% 40% 2,021,464,420 222,811,236 1,798,653,184 295,054,110 81,662,641
Associates –
China Merchants Holdings (international)
information technology company Ltd 23.16% 23.16% 67,154,387 14,432,954 52,721,433 49,463,049 85,857
CMBL 40% 40% 1,463,544,741 821,152,514 642,392,227 155,265,661 8,558,366
HKD HKD HKD HKD HKD
MPIL 50% 50% 2,864,082,877 2,051,524,901 812,557,976 740,675,739 294,159,648
All above summary financial information of the joint venture and associates are extracted from their statutory financial statements or management accounts.
The Group has applied the accounting policy of the Group to the results of the joint venture and associates in equity accounting of the share of results of
the joint venture and associates.
- 54 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(11) Investment properties
31 December Current year Current year 31 December
2010 additions decreases 2011
Cost totals 50,658,833 20,013,200 (5,643,895) 65,028,138
Buildings / properties 19,149,868 20,013,200 (5,643,895) 33,519,173
Land use right 31,508,965 - - 31,508,965
Accumulated depreciation / amortization
totals 21,279,289 13,450,693 (4,381,073) 30,348,909
Buildings / properties 8,234,247 12,836,928 (4,381,073) 16,690,102
Land use right 13,045,042 613,765 - 13,658,807
Book value totals 29,379,544 34,679,229
Buildings / properties 10,915,621 - - 16,829,071
Land use right 18,463,923 - - 17,850,158
In 2011, investment properties depreciation / amortization was RMB 1,333,628 (2010:
RMB907,104).
In 2011, the previously self-occupied properties with net book value RMB7,896,135 (Cost of RMB
20,013,200) was leased out in current year, and therefore, such assets were transferred from fixed
assets and intangible assets to investment properties at the dates of transfers.
As at 31 December 2011 and 2010, none of the investment properties have obtained Building and
Land Ownership Certificate. Please refer to Note 5(14) for the reason and measures taken by
management.
- 55 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(12) Fixed assets
31 December Current year Current year 31 December
2010 additions decreases 2011
Cost totals 4,236,465,750 55,779,529 (99,746,790) 4,192,498,489
Harbor facilities 1,315,344,468 - (53,411,199) 1,261,933,269
Warehouses, container yards and
buildings 700,915,560 6,052,460 (18,828,976) 688,139,044
Machinery and equipments 1,874,315,547 23,659,364 (19,836,000) 1,878,138,911
Motor vehicles, cargo ships and
tugboats 254,367,036 7,766,065 (3,742,341) 258,390,760
Other equipments 91,523,139 18,301,640 (3,928,274) 105,896,505
Accumulated depreciation totals 1,522,787,834 163,911,032 (36,973,446) 1,649,725,420
Harbor facilities 227,871,832 23,808,959 (9,537,665) 242,143,126
Warehouses, container yards and
buildings 199,385,996 17,880,342 (2,826,222) 214,440,116
Machinery and equipments 907,292,082 103,727,083 (17,722,680) 993,296,485
Motor vehicles, cargo ships and
tugboats 120,599,575 12,841,279 (3,338,307) 130,102,547
Other equipments 67,638,349 5,653,369 (3,548,572) 69,743,146
Net book amount totals 2,713,677,916 - - 2,542,773,069
Harbor facilities 1,087,472,636 - - 1,019,790,143
Warehouses, container yards and
buildings 501,529,564 - - 473,698,928
Machinery and equipments 967,023,465 - - 884,842,426
Motor vehicles, cargo ships and
tugboats 133,767,461 - - 128,288,213
Other equipments 23,884,790 - - 36,153,359
Provision for impairment loss totals 60,720,001 - (24,620) 60,695,381
Harbor facilities - - - -
Warehouses, container yards and
buildings 60,695,381 - - 60,695,381
Machinery and equipments - - - -
Motor vehicles, cargo ships and
tugboats 24,620 - (24,620) -
Other equipments - - - -
Net book value totals 2,652,957,915 - - 2,482,077,688
Harbor facilities 1,087,472,636 - - 1,019,790,143
Warehouses, container yards and
buildings 440,834,183 - - 413,003,547
Machinery and equipments 967,023,465 - - 884,842,426
Motor vehicles, cargo ships and
tugboats 133,742,841 - - 128,288,213
Other equipments 23,884,790 - - 36,153,359
- 56 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(12) Fixed assets (Con’d)
(*) In 2007, the Group planned to relocate part of the general cargo business and facilities to
Dongguan Machong Port, and made certain impairment provision of certain demolition for related
warehouses, container yards and buildings accordingly. As at 31 December 2011, the management
of the Group considered that impairment provision against the fixed assets were sufficient.
Depreciation charge in 2011 amounted to RMB159,529,959 (2010: RMB176,972,348). In 2011,
depreciation expenses of RMB152,093,367 (2010: RMB169,300,333) and RMB7,436,592 (2010:
RMB7,672,015) were charged to cost of revenue and general and administrative expenses,
respectively.
Fixed assets amounted to RMB28,732,683(2010: RMB618,336,145) were transferred from
construction in progress in current year.
The cost of property,plant and equipment decreases 45,442,208 in the final accounts of the
completed project (2010:Nil).
(a) Temporary idle fixed assets
As at 31 December 2011, buildings, machinery and equipment with a net book amount of
approximately RMB880,313 (cost: RMB32,206,668) were temporary idle (31 December 2010: net
book amount: RMB1,994,990 (cost: RMB28,738,184)), due to that management has not
designated their usage. Details are as follows:
Accumulated Net book
Cost depreciation Impairment amount
Warehouses, container yards and buildings 32,206,668 (28,050,442) (3,275,912) 880,314
Management is of the view that such idle fixed assets are expected to put into use in the future, or
the recoverable amount is larger than the net book value, thus no impairment provision is needed.
(b) Fixed assets with ownership certificates to be obtained
As at 31 December 2011, ownership certificates of buildings (“Buildings and Land Ownership
Certificates”) for certain buildings of the Group with net book value of approximately
RMB128,884,046 (cost: RMB199,086,043) had not yet been obtained (31 December 2010:
carrying amount: RMB62,095,750 (cost: RMB128,793,948). For fixed assets with which book value
of RMB32,361,834 (cost: RMB94,487,309), please refer to Note 5(14) for the reason and response
from management and the rest is on the process of getting ownership certificates.
- 57 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(13) Construction in progress
31 December 2011 31 December 2010
Provision for Net Provision for Net
Book value impairment book value Book value impairment book value
Berth 4#-5#, Machong Port 169,264,280 - 169,264,280 7,222,455 - 7,222,455
Berth 2#-3#, Machong Port 118,802,890 - 118,802,890 - - -
Berth Extension 106,442,864 - 106,442,864 1,380,600 - 1,380,600
Quay-crane Construction 65,250,000 - 65,250,000 - - -
Tug Construction 33,384,070 - 33,384,070 5,060,834 - 5,037,371
Cantry Crane 16,600,000 - 16,600,000 - - -
Others 8,074,040 - 8,074,040 929,627 - 953,090
517,818,144 - 517,818,144 14,593,516 - 14,593,516
- 58 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(13) Construction in progress (Con’d)
(a) Movement of significant construction in progress
Transfer to % of Percent Accumulated Borrowing
fixed assets actual age of capitalised cost Weighted
Budget 31 December Current year during the Other 31 December cost to completi borrowing capitalised average
Name of projects 2010 additions current year reduction 2011 budget on cost In 2011 interest rate Sources of fund
Berth 4#-5#, Machong Self Funding
Port 816,975,300 7,222,455 162,041,825 - - 169,264,280 20.72% 20.72% - - -
Berth 2#-3#, Machong Self Funding and loan
Port 331,850,000 - 118,802,890 - - 118,802,890 35.80% 35.80% 432,996 432,996 5.90%
Berth Extension Project 140,930,000 1,380,600 105,062,264 - - 106,442,864 75.53% 75.53% - - - Self Funding
Quay-crane Construction 130,500,000 - 65,250,000 - - 65,250,000 50% 50% - - - Self Funding
Tug Construction 38,000,000 5,060,834 28,323,236 - - 33,384,070 87.85% 87.85% 1,035,653 1,001,874 5.90% Self Funding and loan
CTOS System 19,049,993 - 19,049,993 16,164,993 2,885,000 - 100.00% 100.00% - - - Self Funding
Cantry Crane 135,200,000 - 24,050,000 7,450,000 - 16,600,000 12.28% 12.28% - - - Self Funding
Others 13,215,192 929,627 12,262,103 5,117,690 - 8,074,040 61.10% 61.10% - - - Self Funding
14,593,516 534,842,311 28,732,683 2,885,000 517,818,144 1,468,649 1,434,870
- 59 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(13) Construction in progress (Con’d)
(b) As at 31 December 2011, the progresses for significant constructions are analysed as below:
Progress Notes
Berth 4# - 5#, Machong Port 20.72% Progress is estimated based on actual percentage completion
Berth 2# - 3#, Machong Port 35.80% Progress is estimated based on actual percentage completion
Berth Extension Project 75.53% Progress is estimated based on actual percentage completion
- 60 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(14) Intangible assets
31 December Current year Current year 31 December
2010 additions reductions 2011
Original cost totals 1,531,257,503 3,205,000 - 1,534,462,503
Land use rights – prepaid under lease (a) 1,419,159,549 - - 1,419,159,549
Land use rights– purchased 19,343,189 - - 19,343,189
Computer software 19,868,628 3,205,000 - 23,073,628
Coastal line use rights 72,886,137 - - 72,886,137
Accumulated amortization totals 457,009,684 38,525,927 - 495,535,611
Land use rights – prepaid under lease (a) 436,282,005 35,762,109 - 472,044,114
Land use rights– purchased 1,456,075 386,864 - 1,842,939
Computer software 17,763,788 748,954 - 18,512,742
Coastal line use rights 1,507,816 1,628,000 - 3,135,816
Net book value totals 1,074,247,819 - - 1,038,926,892
Land use rights – prepaid under lease (a) 982,877,544 - - 947,115,435
Land use rights– purchased 17,887,114 - - 17,500,250
Computer software 2,104,840 - - 4,560,886
Coastal line use rights 71,378,321 - - 69,750,321
In 2011, the amortisation of intangible assets amounted to RMB38,525,927(2010: RMB37,797,684).
(a) Group has leased from Nanshan Group several plots of land with a total area of 779,254 sq.
meters within Chiwan port for a lease term of 20 - 50 years with up-front payments of RMB
684,453,783 made. The lands were injected by Shenzhen Investment Holding Corporation in 1982
as part of the consideration in acquiring the equity interests of Nanshan Group. As the PRC laws
prevailing at that time did not provide for a mechanism for the issuance of official certificates of the
land use rights, Nanshan Group has not obtained the land use right certificates of the leased land
so far.
In June 2003 and September 2004, CCT entered into a land use agreement with Nanshan Group
and leased two plots of land, one with an area of 117,827.2 square meters for 40.5 years and the
other with an area of 171,089.478 square meters for 39 years, at the consideration of RMB
271,002,558 and RMB 444,832,643 respectively. Also no official certificates for such lands were
obtained by Nanshan Group. Correspondingly, the buildings located on such lands have not
obtained relevant real estate certificates.
- 61 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(14) Intangible assets(Con’d)
In March 2001,June 2003 and 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 company 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
relevant legal certificates.
(15) Goodwill
31 December Current year Current year 31 December
2010 additions decreases 2011
CCT 10,858,898 - - 10,858,898
The goodwill arose from the acquisition of the minority interests in CCT, being the difference of the
additional cost of investment and the Group’s share of the fair value of the identifiable net assets in
CCT.
(a) Impairment
Goodwill allocated to the asset groups or compositions of asset groups of the Group at impairment
tests are summarized by operating segments as follows:
31 December 2011 31 December 2010
Loading and unloading business -
Mainland China 10,858,898 10,858,898
The recoverable amount of the asset groups and compositions of asset groups was determined
according to the 5-year budget approved by the management, and calculated per cash flow
forecasts. Estimated growth rate in cash flow above this 5-year was calculated as follows.
- 62 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(15) Goodwill (Con’d)
Major assumptions applied in the future cash flow forecast method:
Loading and unloading
business – Mainland China
Growth rate 0%
Gross margin 48%
Discount rate 13.2%
The weighted average growth rate that management adopted is consistent with forecasts in
relevant industry analysis reports, and did not exceed the long-term average growth rate of various
services. Management developed a budgeted gross profit margin according to experience and
forecast in market development, as well as the pre-tax interest rate that can reflect the specific risk
of relevant asset group or combination of asset group, as discount rate. Such assumptions are
applied to analyse the asset group or combination of asset group within relevant operating segment.
(16) Long-term prepaid expenses
Residual
31 December Current year Current year Other 31 December useful
2010 additions amortisations decreases 2011 Original Cost Period
Construction expenditure
of Tonggu sea-route (a) 59,026,284 - (1,844,573) - 57,181,711 64,560,000 31 years
Foresea packing ground 3,624,552 - (1,208,184) - 2,416,368 5,537,510 2 years
Golf membership 710,553 1,380,000 (193,922) - 1,896,631 2,443,549 1-10 year
Building decoration 486,800 - (142,978) - 343,822 510,630 3-5 years
Others - 650,000 - 650,000 650,000 5 years
63,848,189 2,030,000 (3,389,657) - 62,488,532 73,701,689
(a) In 2007, the Shenzhen municipal government commenced the construction work of the public
sea route connecting Tonggu sea route, Shekou port area, Chiwan port area, Mawan port area,
Qianhaiwan port area and Dachanwan port area (“Tonggu Sea Route”). As required by a
decision by the government, 60% of construction expenditure would be allocated to the port
operators while the 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 RMB 64,560,000 were allocated
to the Group and accounted for as Long term prepaid expenses, being amortized on a straight
line basis over 35 years which is the expected useful live of Tonggu Sea Route starting from
2008 when the Tonggu Sea Route was ready for use.
- 63 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(17) Other non-current assets
31 December 2011 31 December 2010
Coast Line Use Right(a) 36,375,000 33,000,000
Land use right(a) 85,463,860 39,292,214
Prepayment of facility 20,269,424 -
142,108,284 72,292,214
(a) In March 2006, the Company entered into the agreement of “Frame contract for cooperation
on usage of quay and land for berth 2# & 5# at Machong Port in Dongguan” and its
supplement with Dongguan Humen Port Administration Commission to purchase a land with
an area of 800,000 square meters and area of water with depth of 700 meters from the front of
terminal, together with the use right of 1,200 meters coast line, for berth 2# to berth 5# in
Dongguan Machong Port at a consideration of RMB 260,000,000. Up to 31 December 2011,
the Company has paid the first four installments of the consideration. As the Group has not
obtain the land use right certificate, the relevant payments were therefore recognized as other
non-current assets.
(18) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
31 December 2011 31 December 2010
Deductible Deductible
temporary temporary
Deferred tax difference Deferred tax difference
assets and losses assets and losses
Provision for asset impairment 15,130,592 61,677,792 15,485,248 65,587,348
Depreciation of fixed assets and amortization of
intangible assets 11,836,540 47,424,834 12,495,066 50,145,172
Deductible losses 19,205,338 82,041,588 14,580,112 67,326,990
Accrued expenses 10,686,955 45,492,841 6,162,977 28,134,252
Pre-operational expenses 1,390,282 8,088,918 1,390,282 9,100,033
Others 2,114,419 9,444,637 1,969,977 8,757,878
60,364,126 254,170,610 52,083,662 229,051,673
- 64 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(18) Deferred tax assets and deferred tax liabilities(Con’d)
(b) Deferred tax liabilities before offsetting
31 December 2011 31 December 2010
Deferred tax Taxable temporary Deferred tax Taxable temporary
liabilities difference liabilities difference
Depreciation of property plant
and equipment and amortization
of intangible assets 1,113,207 4,452,828 - -
Change in fair value of available
for sale equity financial assets
recorded in capital surplus 1,142,500 4,570,000 1,324,800 5,520,000
2,255,707 9,022,828 1,324,800 5,520,000
(c) Deferred tax assets and deferred tax liabilities after offsetting
31 December 2011 31 December 2010
Deductible Deductible
Deferred tax temporary difference Deferred tax temporary difference
assets and losses assets and losses
Provision for impairmen 15,130,592 61,677,792 15,485,248 65,587,348
Depreciation of property plant
and equipment and amortization
of intangible assets 10,723,333 42,972,006 12,495,066 50,145,172
Deductible loss 19,205,338 82,041,588 14,580,112 67,326,990
Accrual Expense 10,686,955 45,492,841 6,162,977 28,134,252
Preliminary organization costs 1,390,282 8,088,918 1,390,282 9,100,033
Others 2,114,419 9,444,637 1,969,977 8,757,878
59,250,919 249,717,782 52,083,662 229,051,673
31 December 2011 2010 年 12 月 31 日
Deductible Deductible
Deferred tax temporary difference Deferred tax temporary difference
liabilities and losses liabilities and losses
Change in fair value of available
for sale financial asset credited
in capital surplus 1,142,500 4,570,000 1,324,800 5,520,000
- 65 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(18) Deferred tax assets and deferred tax liabilities(Con’d)
(d) Analysis about deductible temporary differences and losses that the Group did not recognise
deferred tax assets for is as follows:
31 December 2011 31 December 2010
Deductible losses 8,573,918 5,170,629
Deductible temporary differences - -
8,573,918 5,170,629
(e) The above deductible losses that no deferred tax assets have been provided for will expire in the
following years:
31 December 2011 31 December 2010
2013 83,654 83,654
2014 379,817 379,817
2015 4,707,158 4,707,158
2016 3,403,289 -
8,573,918 5,170,629
(19) Provision for impairment of assets
31 December Current year 31 December
2010 addition Current year reduction 2011
Reverse Utilized Foreign
exchange
translation
differences
Bad debt provisions 1,260,639 43,949 (481,481) (520,000) (3,363) 299,744
Bad debt provision for accounts
receivable 49,994 1,794 - - (2,397) 49,391
Bad debt provision for other receivable 1,210,645 42,155 (481,481) (520,000) (966) 250,353
Provision for declines in the value of
inventories(Note 5(7)) 3,396,128 792,118 (103,512) (3,292,616) - 792,118
Include: Spare parts 3,396,128 792,118 (103,512) (3,292,616) - 792,118
Provision for impairment of long-term
equity investments (Note 5(9)) 3,128,300 - - - - 3,128,300
Provision for impairment of fixed assets
(Note 5(12)) 60,720,001 - - (24,620) - 60,695,381
Include: Harbor facilities - - - - - -
Warehouses, container yards and
buildings 60,695,381 - - - - 60,695,381
Machinery and equipments - - - - - -
Motor vehicles, cargo ships and
tugboats 24,620 - - (24,620) - -
Other equipments - - - - - -
68,505,068 836,067 (584,993) (3,837,236) (3,363) 64,915,543
- 66 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(20) Short-term borrowings
31 December 2011 31 December 2010
Bank loans - unsecured 1,418,830,000 1,225,550,000
The above bank loans consisted of 250,000,000 denominated in RMB (31 December 2010:
390,000,000) and1,443,000,000 denominated in HKD (31 December 2010: 983,000,000), the latter
is equivalent to RMB1,168,830,000 (31 December 2010: 835,550,000).
Included in short-term borrowings was loan of HKD160,000,000(RMB:129,000,000), which should
be due over one year according to the loan contract, 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.
As at 31 December 2011, the weighted average interest rate of the short-term borrowings was
4.62% per annum (2010: 3.68%).
Outstanding borrowings in maturity: Nil
(21) Notes payable
31 December 2011 31 December 2010
Bank acceptance notes 8,704,900 1,895,750
As at 31 December 2011, RMB8,704,900 had an expected maturity within 1 year (31 December
2010: RMB1,895,750).
(22) Accounts payable
31 December 2011 31 December 2010
Construction amounts payable 117,153,230 160,673,611
Service amounts payable 21,681,108 20,810,343
Material purchase amounts payable 17,550,367 23,131,022
Rental payables 1,632,036 5,238,273
Machinery procurement amounts payable 2,096,213 4,870,002
160,112,954 214,723,251
(a) As at 31 December 2011, 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 below. (31 December 2010: nil).
- 67 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(22) Accounts payable (Con’d)
(b) Accounts payable due to related parties:
31 December 2011 31 December 2010
Shenzhen Haiqin Engineering Supervision Co. Ltd.
(“Haiqin Engineering”) 5,062,227 9,972,227
Nanshan Group 5,002,068 8,583,552
China Merchant Information Technology 1,302,441 -
Xuqin 319,058 1,760,479
Nantian Youpo 163,201 202,361
11,848,995 20,518,619
(c) As at 31 December 2011, accounts payable with aging over 1 year amounting to RMB 32,535,258
(31 December 2010: RMB148,390,794) were mainly payable for construction and project
management services. As the related construction projects have not been completed yet, the
accounts have not been settled. Up to the approval date of these financial statements,
RMB18,713,587 was paid.
(d) The following accounts payable balances are denominated in foreign currency:
31 December 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
USD 8,072 6.30 50,854 7,433 6.62 49,208
HKD 1,536,872 0.81 1,244,866 1,359,449 0.85 1,155,532
1,295,720 1,204,740
- 68 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(23) Advances from customers
31 December 2011 31 December 2010
Service fee receipt in advance 5,045,311 4,769,320
(a) The ageing of accounts payable based on their recording dates is analysed as follows:
31 December 2011 31 December 2010
Amount Ratio Amount Ratio
Within 1 year 5,029,561 100% 3,668,636 77%
1-2 year - 0% 1,068,996 22%
2-3 year - 0% - 0%
Over 3 years 15,750 0% 31,688 1%
5,045,311 100% 4,769,320 100%
(b) As at 31 December 2011, the Group did not have any advance from customers balances which
were due to parties having 5% or above shareholdings in the Company (31 December 2010: Nil).
(c) As at 31 December 2011, no balances of advance from customers were from related parties (31
December 2010: Nil).
(d) As at 31 December 2011, advance from customers with ageing over 1 year amounting to RMB
15,750 is advances for sale of cars (31 December 2010:Service fee 1,100,684).
- 69 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(24) Employee benefits payable
31 December Current year Current year 31 December
2010 additions reductions 2011
Wages and salaries, bonuses, allowances and
subsidies 27,253,030 184,667,138 (165,987,517) 45,932,651
Staff welfare - 13,177,167 (13,177,167)
Social security contributions 10,256 17,209,398 (17,209,802) 9,852
Including: Medical insurance - 4,291,869 (4,291,869) -
Basic pension - 11,816,176 (11,816,176) -
Unemployment insurance - 275,826 (275,826) -
Employment injury insurance 10,256 421,126 (421,530) 9,852
Generational insurance - 404,401 (404,401) -
Defined contribution plan * 125,952 6,633,738 (6,759,690) -
Housing funds 11,810 12,292,617 (12,304,427) -
Labor union and employee education funds 9,528,864 7,033,389 (6,558,889) 10,003,364
Others - 174,065 (174,065) -
36,929,912 241,187,512 (222,171,557) 55,945,867
* On 3 June 2008, the Group participated in a group defined contribution plan of Nanshan Group
approved by Shenzhen government. The above pension contributions were paid into the plan
through Nanshan Group.
As at 31 December 2011, employee benefits payable balance did not include default items (31
December 2010: Nil).
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 and yearly net asset return ratio. The Company has provided RMB14,917,004 of
management reward in 2011 (2010: RMB4,674,654), which was debited to general and
administrative expenses.
- 70 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(25) Taxes payable
Item 31 December 2010 Provided in current year Paid in current year 31 December 2011
Enterprise income tax
payable 69,788,458 147,855,729 (125,163,204) 92,480,983
Withholding tax payable 23,736,008 15,489,047 (18,652,247) 20,572,808
Business tax payable 4,834,815 62,892,685 (62,461,075) 5,266,425
Value-added-tax payable 95,738 3,579,446 (3,533,266) 141,918
Others 2,128,501 34,792,349 (33,601,934) 3,318,916
100,583,520 264,609,256 (243,411,726) 121,781,050
(26) Interest payable
31 December 2011 31 December 2010
Interest payable for long-term borrowings that
interests are payable by installment and principal
at maturity 1,088,956 769,567
Interest payable for short-term borrowings 548,834 2,188,839
1,637,790 2,958,406
(27) Dividends payable
31 December 2011 31 December 2010
Payable to International Enterprise Co., Ltd. 207,726,574 121,367,360
Payable to Hidoney Developments Co., Ltd. 157,434,877 91,983,683
365,161,451 213,351,043
As at 31 December 2011, the balances were payable to the minority shareholders of CCT, one of
the subsidiaries of the Company, being dividends declared for 2011.
- 71 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(28) Other payables
31 December 2011 31 December 2010
Temporary receipts 19,065,981 14,143,124
Security expense payable 17,101,361 16,713,645
Audit fee payable 2,610,000 1,680,000
Deposits received 1,720,908 1,944,902
Service fees 1,407,531 951,137
Due to employees 1,225,285 819,218
Insurance indemnity 955,433 1,386,919
Due to Nanshan Group - 28,278
Others 6,722,794 7,360,583
50,809,293 45,027,806
(a) The ageing of accounts payable based on their recording dates is analysed as follows:
31 December 2011 31 December 2010
Amout Ratio Amout Ratio
Within 1 year 44,356,691 87.30% 36,592,085 81.27%
1-2 year 2,583,466 5.08% 4,959,509 11.01%
2-3 year 3,067,152 6.04% 653,201 1.45%
Over 3 years 801,984 1.58% 2,823,011 6.27%
50,809,293 100% 45,027,806 100%
(b) The largest balance in other payables aging over 3 years:
Creditor Amout Reason for non-settle
China National Agricultural means of Production
Co., (Shenzhen) Ltd 62,334 Business deposit
Shenzhen West Lake Huayu transportation Ltd. 40,482 Business deposit
Rongtai (Hongkong) Ltd 36,825 Business deposit
139,641
- 72 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(28) Other payables(Con’d)
(c) The large amount of balance in other payables:
Creditor Amount Reason for non-settle
Yaran Business Trade Co.,Ltd 3,047,323 Deposit
CMBL 2,001,792 Receipts under custody
SMW 945,521 Receipts under custody
Beijing Yongshengfeng AMP Co.,Ltd 782,645 Receipts under custody
PICC Property and Casualty Co.,Ltd 675,075 Temporary receipts
7,452,356
(d) As at 31 December 2011, the Group did not have any other payables which were due to parties
having 5% or above shareholdings in the Company.
(e) Other payables due to related parties:
31 December 2011 31 December 2010
CMBL 2,001,792 49,540
SMW 945,521 2,961,451
China Merchants International Cold Chain
(Shenzhen)Co.,Ltd(“CMICCL”) 64,200 253,800
SMP 31,963 20,894
COCL - 110,881
Nanshan Group - 48,304
3,043,476 3,444,870
- 73 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(28) Other payables (Con’d)
(f) As at 31 December 2011, other payables with aging over 1 year amounting to RMB6,452,602 (31
December 2010: RMB8,435,721) are mainly deposits. As the relevant business keeps running, the
amounts have not been settled. Up to the approval date of these financial statements, RMB
147,075 was paid.
(g) The following other payable balances are dominated in foreign currency:
31 December 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
USD 210,606 6.30 1,326,818 533,500 6.62 3,531,770
HKD 720,320 0.81 583,459 327,518 0.85 278,390
1,910,277 3,810,160
(29) Current portion of non-current liabilities
31 December 2011 31 December 2010
Current portion of long-term borrowings (a) 10,000,000 408,000,000
Current portion of deferred revenue(Note 5(32)) 4,951,750 4,951,750
14,951,750 412,951,750
(a) Current portion of long-term borrowings
31 December 2011 31 December 2010
Bank borrowings - unsecured 10,000,000 408,000,000
As at 31 December 2011, the balance of current portion of long- term borrowings represented the
borrowing of 100,000,000 by the DGW.
- 74 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(29) Current portion of non-current liabilities(Con’d)
Top five current portion of long-term borrowings:
Borrowing
beginning Borrowing ending Currency Interest rate (%) 31 December 2011 31 December 2010
Original RMB Original RMB
currency equivalent currency equivalent
Nanyang Commercial Bank 21 October 2011 21 April 2012 RMB 7.2450% - 5,000,000 - -
Nanyang Commercial Bank 21 October 2011 21 October 2012 RMB 7.2450% - 5,000,000 - -
10,000,000 -
(30) Long-term borrowings
31 December 2011 31 December 2010
Bank borrowings - unsecured(a) 90,000,000 -
(a) Top five long-term borrowing
Borrowing beginning Borrowing ending Currency Annual interest rate 31 December 2011
Original currency RMB equivalent
Nanyang
Commercial Bank 21 October 2011 21 October 2016 RMB 7.2450% - 90,000,000
(b) Long-term borrowings are repayable as follows:
31 December 2011 31 December 2010
1 to 2 years 20,000,000 -
2 to 3 years 20,000,000 -
3 to 4 years 25,000,000 -
Over 4 years 25,000,000 -
90,000,000 -
The weighted average interest rate of the long-term borrowings in 2011 was 7.2450% per annum.
- 75 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(30) Long-term borrowings(Con’d)
(c) Undrawn committed borrowing facilities
The Group has the following undrawn committed borrowing facilities as at 31 December 2011:
Expiring within 1 year 2,777,520,100
Expiring in 1 to 2 years 413,700,000
Expiring in 2 to 3 years 100,000,000
Over 3 years 100,000,000
3,391,220,100
The undrawn committed borrowing facilities mentioned above would be used for the commitment
capital expenditure (Note 9).
(31) Special Payables
31 December 2011 31 December 2010
Refunds of Harbor Construction Fee 81,790,541 69,119,645
The item is refunds of harbor construction fee to the company and its subsidiary CCT from
Shenzhen traffic bureau. According to
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.
(32) Other non-current liabilities
31 December 2011 31 December 2010
Deferred revenue
- Business Contract (a) 50,250,957 57,841,707
- Government grant related to asset (b) 8,000,000 8,000,000
58,250,957 65,841,707
- 76 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(32) Other non-current liabilities(Con’d)
(a) Business Contract
31 December 2010
- the portion of current liabilities 4,951,750
- the portion of non-current liabilities 57,841,707
62,793,457
Current year reduction (7,590,750)
Less: the portion of current liabilities (4,951,750)
31 December 2011 50,250,957
Residual useful years 12-13 years
Deferred revenue is amortised on a straight-line basis over the expected beneficial period of 20
years and is presented at cost net of accumulated amortisation.
(b) Government grant related to asset
The item is government subsidies received which based on (NDRC[2010] No.1263). The total received amount is 8
million yuan. As at 31 December 2011, the assets under government grant have not reached its
intended condition for use, therefore the grant has not been credit to income statement.
- 77 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(33) Share capital
31 December 2010 Current year additions / decreases 31 December 2011
Shares converted
Issuance of Presented from accumulation
new shares shares fund Others Sub-total
Shares with restriction on disposal -
State shares -
PRC legal person shares -
Other domestic shares 673,252 - - - 117,677 117,677 790,929
Including: Domestic shares of legal person
other than the State -
Natural person shares 673,252 - - - 117,677 117,677 790,929
Foreign shares -
Including: Foreign legal person shares -
Natural person shares -
673,252 - - - 117,677 117,677 790,929
Shares without restriction on disposal -
Common shares in RMB 464,789,805 - - - - - 464,789,805
Domestically listed foreign shares 179,300,673 - - - (117,677) (117,677) 179,182,996
644,090,478 - - - (117,677) (117,677) 643,972,801
644,763,730 - - - - - 644,763,730
Up to 31 December 2011, all the shares held by Nanshan Group have become tradable.
- 78 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(33) Share capital (Con’d)
31 December 2009 Current year additions / decreases 31 December 2010
Shares converted
Issuance of Presented from accumulation
new shares shares fund Others Sub-total
Shares with restriction on disposal -
State shares - - - - - - -
PRC legal person shares - - - - - - -
Other domestic shares 361,942 - - - 311,310 311,310 673,252
Including: Domestic shares of legal person
other than the State - - - - - - -
Natural person shares 361,942 - - - 311,310 311,310 673,252
Foreign shares - - - - - - -
Including: Foreign legal person shares - - - - - - -
Natural person shares - - - - - - -
361,942 - - - 311,310 311,310 673,252
Shares without restriction on disposal -
Common shares in RMB 464,789,805 - - - - - 464,789,805
Domestically listed foreign shares 179,611,983 - - - (311,310) (311,310) 179,300,673
644,401,788 - - - (311,310) (311,310) 644,090,478
644,763,730 - - - - - 644,763,730
- 79 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(34) Capital surplus
31 December Current year Current year 31 December
2010 additions reductions 2011
Share premium 142,786,083 20,774,000 - 163,560,083
Other capital surplus—
Change in fair value of available-for-sale
financial assets
- Total (Note 5(8)) 5,520,000 (950,000) - 4,570,000
- Deferred tax liabilities (Note 5(18)) (1,324,800) 182,300 - (1,142,500)
Transfer from the balance of capital surplus -
recognised under previous accounting
system (a) (2,781,133) (2,781,133)
Others 709,605 1,310,000 - 2,019,605
144,909,755 21,316,300 - 166,226,055
31 December Current year Current year 31 December
2009 additions reductions 2010
Share premium 142,786,083 - - 142,786,083
Other capital surplus—
Change in fair value of available-for-sale
financial assets
- Total 6,020,000 (500,000) - 5,520,000
- Deferred tax liabilities (1,324,400) (400) - (1,324,800)
Transfer from the balance of capital surplus -
recognised under previous accounting
system (a) (2,781,133) - (2,781,133)
Others 709,605 - - 709,605
145,410,155 (500,400) - 144,909,755
(a) Balances of capital surplus recognized under previous accounting system mainly include:
- During 2003 to 2005, the Group provided shareholder’s loan of RMB 100,000,000 to Mawan
companies. According to related circular CK(2001)64 regarding accounting treatment of
sales of assets between related parties issued by the Ministry of Finance, that part of interest
received that exceeded the market interest rate of RMB 7,124,745 was recorded in capital
surplus.
- On 1 January 2006, CCT changed its recording currency from Hong Kong dollar to Renminbi
yuan. According to the relevant PRC regulations, the exchange differences arising from
translation of foreign capital and other equity accounts are recorded in capital surplus. The
Group debited the portion of CCT’s capital and other equity accounts of RMB 10,086,842,
calculated based on the proportion of equity interest the Group held in CCT, to capital
surplus.
- 80 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(35) Surplus reserve
31 December Current year Current year 31 December
2010 additions reductions 2011
Statutory surplus reserve 383,570,404 38,122,001 - 421,692,405
31 December Current year Current year 31 December
2009 additions reductions 2010
Statutory surplus reserve 355,134,736 28,435,668 - 383,570,404
In accordance with the Company Law and the Company’s Articles of Association, the Company
should appropriate 10% of net profit for the year to the statutory surplus reserve, the Company can
cease appropriation when the statutory surplus reserve accumulated to more than 50% of the paid
in capital. The statutory surplus reserve can be used to make up for the loss or increase the paid in
capital after approval.
The Company appropriates discretionary surplus reserve after shareholders’ meeting approves the
Board of Director’s proposal. The discretionary surplus reserve can be used to make up for the loss
or increase the paid in capital after approval.
Pursuant to the board resolution, the Company appropriates 10% of net profit to statutory surplus
reserve, namely RMB38,122,001 (2010: RMB28,435,668), no appropriation to discretionary
reserve is provided.
(36) Retained earnings
2011 2010
Amount Appropriate or Amount Appropriate or
distribution % distribution %
Opening retained earnings 2,079,724,472 1,721,028,196 -
Add: Current year net profit attributable to the
equity owners of the parent company 505,645,137 596,680,156 -
Less: Appropriation of statutory reserves (38,122,001) 10% (28,435,668) 10%
Common share dividends payable (298,525,607) 50% (209,548,212) 52%
Closing retained earnings 2,248,722,001 2,079,724,472
As at 31 December 2011, included in the undistributed profits, the amount of RMB480,610,213 is
subsidiaries’ surplus reserve attributable to the Company (31 December 2010: RMB466,088,790),
among which RMB14,521,423 is appropriated for the current year (2010: RMB3,770,941).
- 81 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(36) Retained earnings (Con’d)
In accordance with a resolution at the Board of Directors meeting dated 27 May 2011, the Board of
Directors proposed dividend of RMB 4.63 for each 10 shares of the issued shares of 644,763,730
in total, with an aggregated amount of RMB 298,525,607 (2010 proposed: RMB209,548,212).
In accordance with a resolution at the Board of Directors meeting dated 27 March 2012, the Board
of Directors proposed dividend of RMB 4.00 for each 10 shares of the issued shares of
644,763,730 in total, with an aggregated amount of RMB257,905,492 (Notes10 (2)).
(37) Minority interests
31 December 2011 31 December 2010
DGW (a) 69,668,546 -
CCT 568,598,774 567,608,774
638,267,320 567,608,774
(a) Disposal of minority interests in subsidiary：
The group previously owed 100% share holding of Dongguan Chiwan Wharf Company Limited
(hereinafter”DGW”). On 16 August 2011, the group signed an agreement with Yihai Kerry
investment Ltd on injecting RMB121,200,000 and RMB 91,940,000 respectively to Dongguan
Wharf Ltd , after the capital increment ,the two companies hold 85% and 15% shares of
respectively.
The adjustment of minority interest caused by the transaction:
Amount
Sale Price for disposal 91,940,000
minus：Definable Net Assets of subsidiary at date of sale in disposed
shareholding portion 71,166,000
(20,774,000)
- 82 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(38) Revenue and cost of sales
2011 2010
Revenue from main operations 1,643,676,918 1,689,239,347
Revenue from other operations 64,459,981 51,178,321
1,708,136,899 1,740,417,668
2011 2010
Cost of main operations 755,262,540 733,036,517
Cost of other operations 12,777,703 9,275,767
768,040,243 742,312,284
(a) Revenue and cost from main operations
Analysis by business is as follows:
2011 2010
Revenue from Cost from main Revenue from Cost from main
main operations main operations
operations operations
Loading and unloading services 1,533,687,860 711,255,321 1,575,316,865 693,184,030
Transportation service 142,968,604 87,821,197 149,785,299 84,433,056
Agency and others services 10,834,432 - 8,717,752 -
Elimination (43,813,978) (43,813,978) (44,580,569) (44,580,569)
1,643,676,918 755,262,540 1,689,239,347 733,036,517
Analysis by geographic area is as follows:
2011 2010
Revenue from Revenue from
main Cost from main main Cost from main
operations operations operations operations
Mainland China 1,638,111,180 755,262,540 1,685,000,221 733,036,517
Hong Kong 5,565,738 - 4,239,126 -
1,643,676,918 755,262,540 1,689,239,347 733,036,517
- 83 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(38) Revenue and cost of sales (Con’d)
(b) Other revenue and cost
2011 2010
Revenue from Cost from other Revenue from Cost from other
other operations other operations operations
operations
Lease income 26,452,734 3,654,601 15,654,965 2,673,804
Security fee 10,611,941 - 11,856,003 -
Other logistic services in port 13,921,382 5,801,214 10,140,896 3,555,939
Agency fee 5,180,097 3,177,303 4,960,494 3,046,024
Sales of material 2,683,075 144,585 2,730,088 -
Documentation fee 824,376 - 842,875 -
Others 4,786,376 - 4,993,000 -
64,459,981 12,777,703 51,178,321 9,275,767
(c) Particulars of revenue from the top five customers of the Group
Revenue from the top 5 customers with aggregate amount of RMB913,272,542 (2010:
RMB1,090,436,082) accounted for 53% (2010: 63%) of the Group’s total revenue in 2011. Details
are as follows:
% of total revenue
Revenue of the Group
Customer A 446,537,825 26%
Customer B 285,008,042 17%
Customer E 73,176,762 4%
Customer D 62,447,925 4%
Customer C 46,101,988 2%
913,272,542 53%
- 84 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(39) Tax and surcharges
2011 2010 Accrual basis
Business tax 62,892,685 62,374,157 See Note 3
City maintenance and construction tax 4,436,377 731,586 See Note 3
Educational surcharge 3,161,517 149,706 See Note 3
Others 531,347 560,478
71,021,926 63,815,927
(40) General and administration expenses
2011 2010
Staff cost 91,079,683 66,594,327
Utilities and property management 9,417,395 8,599,865
Depreciation and amortisation 9,643,838 8,521,716
Transportation 7,508,789 7,598,288
Rental 7,193,101 7,555,060
Entertainment 7,186,572 6,091,931
Professional service 5,702,284 4,737,435
Communication 3,527,336 3,313,128
Insurance 3,496,523 3,213,913
Decoration and maintenance 4,348,328 3,119,985
Others 9,082,383 11,435,400
158,186,232 130,781,048
(41) Financial (income)/expenses - net
2011 2010
Interest expenses - Interests on borrowings 64,084,834 30,028,539
Less:borrowing costs capitalised (1,434,870) (630,105)
Less: interest income (7,893,831) (6,185,020)
Exchange gains or losses (47,009,755) (36,000,167)
Others 4,624,603 2,251,248
12,370,981 (10,535,505)
Exchange gains are mainly caused by borrowings in HKD.
- 85 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(42) Investment income
2011 2010
Investment income from investments under cost
method accounting 3,900,000 -
Investment income from investments under equity
method accounting (Note 5 (9)) 113,968,183 118,437,391
Loss from disposal of long-term investment (Note 5
(10)) - 29,767,257
Income from available-for-sale financial assets 360,000 310,000
118,228,183 148,514,648
There is no significant restriction in receipt in remittance for investment income.
(a) Investment income from long-term equity investments under cost method accounting
Investment income from top five investees or individually accounted to over 5% of total profit are
analysed as below:
2011 2010 Reason of fluctuation
China Ocean Shipping Agency The investee did not distribute profit to
(Shenzhen) Company Limited 3,900,000 - shareholders in last year
(b) Investment income from long-term equity investments under equity method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are
analysed as below:
2011 2010 Reason of fluctuation
Investee affected by economic crisis and
MPIL 77,299,676 105,275,424 shrunk in performance
Newly joint venture last year and investment
COHA(Laizhou) 32,665,056 13,355,859 income is the portion of net profit
Investee decline in performance and the
Cyber Network 19,885 379,477 Group decreased the interest
Investee run into operation and its
CMBL 3,983,566 (573,369) circumstance turns better
113,968,183 118,437,391
- 86 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(43) Impairment (reversals) / losses
2011 2010
Impairment losses for bad debts (437,532) 119,061
Impairment losses on inventories 688,606 -
251,074 119,061
(44) Non-operating income
2011 2010
Gain on disposal of non-current assets 70,951 2,161,989
Including: disposal of intangible assets - -
disposal of fixed assets 70,951 2,161,989
Government grant (a) - 1,200,000
Others 1,807,586 1,650,981
1,878,537 5,012,970
(a) Details of government grants
2011 2010
Subsidy in environmental conservancy project - 1,200,000
(45) Non-operating expenses
2011 2010
Losses on disposal of non-current assets 1,960,173 2,834,944
Including: disposal of fixed assets 1,960,173 2,834,944
Donation 52,603 41,025
Penalty 6,311 50,239
Others 16,775 111,282
2,035,862 3,037,490
- 87 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(46) Income tax expenses
2011 2010
Current income tax 155,728,890 145,570,999
Deferred income tax (7,167,257) (7,795,382)
148,561,633 137,775,617
The reconciliation from income tax calculated based on applicable tax rate and total profit
presented in the consolidated financial statements to the income tax expenses is as follows:
2011 2010
Profit before income tax 816,337,301 964,414,981
Income tax calculated at the applicable tax rate of
24% (2010: 22%) 195,920,952 212,171,296
Effect of tax holidays (27,965,504) (54,492,896)
Income not subject to tax (28,374,764) (26,124,426)
Effect of different tax rate in other tax jurisdictions (244,303) (98,472)
Tax losses for which no deferred income tax asset
was recognised 1,003,459 1,021,650
Withholding tax (a) 5,475,267 3,186,747
Costs and expenses not deductible for tax purposes 2,746,526 2,111,718
Income tax expenses 148,561,633 137,775,617
(a) Withholding income tax was accrued at the rate of 5% or 10% for dividend payable to WHK for the
year ended 31 December 2011, declared by those Group’s PRC subsidiaries of which WHK is a
shareholder (2010: 5% or 10%).
- 88 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(47) Government grants
Year 2011 Year 2010
Government grants related to assets
Grants subject to projects - 8,000,000
Government grants related to income - -
others - 1,200,000
Total - 9,200,000
Less：government grants credited in deferred income - (8,000,000)
Government grants credited in current year profit - 1,200,000
(48) Borrowing cost
Name of Project Capitalisation rate Capitalisation amount
Berth 2#-3#, Machong Port 5.90% 432,996
Tug Construction 5.90% 1,001,874
(49) Earning per share
(a) Earnings per share - basic
Basic earning’s per share is calculated by dividing the profit attributable to shareholders of the
Company by the weighted average number of ordinary shares in issue during the year.
2011 2010
Consolidated profit attributable to shareholders of
the Company 505,645,137 596,680,156
Weighted average number of ordinary shares in
issue 644,763,730 644,763,730
Basic earnings per share 0.784 0.925
Includes:
- Basic earnings per share from continuing 0.784 0.925
operations:
(b) Earnings per share - diluted
The Company had not potential dilutive outstanding equity instruments issued as at 31 December
2011 and 2010, accordingly the diluted earnings per share are the same as the basic ones.
- 89 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(50) Other comprehensive income
2011 2010
Gain/(loss) arising from available-for-sale financial
assets (950,000) (500,000)
Less: Income tax relating to available-for-sale financial
assets 182,300 (400)
Subtotal (767,700) (500,400)
Other movement of investee ‘s equity 100,000 -
Exchange differences arising from translating foreign
operations (188,137) (65,242)
(855,837) (565,642)
(51) Notes to consolidated cash flow statements
(a) Cash received relating to other operating activities
2011 2010
Refunds of Harbour Construction Fee received 16,945,741 14,118,115
Intrest income 10,471,718 7,980,981
Government grant - 9,200,000
Others 4,306,623 -
31,724,082 31,299,096
(b) Cash paid relating to other operating activities
2011 2010
Port expenses 8,502,729 7,677,052
Asset insurance fee 4,930,868 4,069,361
Car expenses 7,186,027 4,357,001
Office expenses & utilities 5,929,709 4,291,630
Entertainment expenses 7,133,610 3,210,974
Consulting & auditing fee 5,916,908 2,111,299
Travel & accommodation 2,606,213 1,978,316
Advertisements & exhibition expense 199,798 1,073,401
Others 35,445,572 45,266,431
77,851,434 74,035,465
- 90 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
5 Notes to the consolidated financial statements (Con’d)
(52) Notes to consolidated cash flow statements
(c) Reconciliation from the net profit to the cash flows from operating activities
2011 2010
Net profit 667,775,668 826,639,364
Add: (Provisions for)/reversal of assets impairment 251,074 119,061
Depreciation of fixed assets 159,529,959 176,972,348
Depreciation/amortisation of investment property 1,333,629 907,104
Amortisation of intangible assets 38,525,927 37,797,684
Amortisation of long-term prepaid expenses 3,389,657 5,670,179
Gains on disposal of fixed assets and intangible
assets 1,889,222 672,955
Finance expenses 24,358,158 35,455,170
Investment income (118,228,183) (148,514,648)
Increase in deferred tax assets (7,167,257) (7,795,382)
Decrease in inventories 388,168 1,727,780
Increase in operating receivables (44,983,485) (44,539,627)
Increase in operating payables 19,128,059 41,733,581
Net cash flows from operating activities 746,190,596 926,845,569
Net increase/(decrease) in cash and cash equivalents
2011 2010
Cash at end of year 478,788,943 781,720,083
Less: cash at beginning of year (781,720,083) (741,096,267)
Net increase/(decrease) in cash (302,931,140) 40,623,816
(d) Cash and cash equivalents
31 December 2011 31 December 2010
Cash
Including: Cash on hand 14,035 11,473
Cash at bank without restriction 477,302,272 780,540,849
Other cash balance without restriction 1,472,636 1,167,761
Cash and cash equivalents at end of year 478,788,943 781,720,083
- 91 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
6 Segment information
The reportable segments of the Group are the business units that provide different products or
service, or operate in the different areas. Different businesses or areas require different
technologies and marketing strategies, the Group, therefore, separately manages the production
and operation of each reportable segment and evaluates their operating results respectively, in
order to make decisions about resources to be allocated to these segments and to assess their
performance.
The Group identified 3 reportable segments namely loaded and unloaded operation, transportation
and agency service and other services respectively.
The management of the Company identifies reviews the group internal reports regularly in order to
assess their performance and make decisions of resources being allocated to the segment, which
is the foundation of the Group identifying operation segments.
Inter-segment transfers are measured by reference to sales to third parties.
The assets are allocated based on the operations of the segment and the physical location of the
asset. The liabilities are allocated based on the operations of the segment. Expenses indirectly
attributable to each segment are allocated to the segments based on the proportion of each
segment’s revenue.
- 92 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
6 Segment information (Con’d)
(a) Segment information as at and for the year ended 31 December 2011 is as follows:
Load and unload Agency service
operation Transportation and others Unallocated Elimination Total
Revenue from external customers 1,593,390,668 98,569,821 16,176,410 - - 1,708,136,899
Inter-segment revenue 43,813,978 (43,813,978) -
Interest income 2,022,624 9,659 8,483 5,853,065 7,893,831
Interest expenses (27,647,058) - - (35,002,906) (62,649,964)
Share of profit of associates and joint venture 109,964,732 - 4,003,451 - - 113,968,183
Asset impairment loss (311,118) 103,511 (4,866) (38,601) (251,074)
Depreciation and amortisation (190,060,623) (10,786,817) (1,931,732) - - (202,779,172)
Total profit 809,488,083 42,059,094 14,305,472 (49,515,348) - 816,337,301
Income tax expenses (141,911,349) (10,234,500) (1,042,067) 4,626,283 - (148,561,633)
Net profit 667,576,734 31,824,594 13,263,405 (44,889,065) - 667,775,668
Total assets 5,914,266,259 169,470,410 318,072,314 159,002,508 (20,583,056) 6,540,228,435
Total liabilities 810,813,884 141,682,106 20,103,242 1,482,148,188 (20,583,056) 2,434,164,364
Long-term equity investments in associates and
joint ventures 1,118,483,513 - 304,463,707 - - 1,422,947,220
Additions to non-current assets other than long-
term equity investments 527,608,220 30,148,735 125,170 736,600 - 558,618,725
- 93 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
6 Segment information (Con’d)
(b) Segment information as at and for the year ended 31 December 2010 is as follows:
Load and unload Agency service
operation Transportation and others Unallocated Elimination Total
Revenue from external customers 1,622,708,221 105,204,730 12,504,717 - - 1,740,417,668
Inter-segment revenue - 44,580,569 - - (44,580,569) -
Interest income 639,364 16,371 5,079 5,524,206 - 6,185,020
Interest expenses (16,294,750) - - (13,103,684) - (29,398,434)
Share of profit of associates and joint venture 118,631,283 - 29,573,365 - - 148,204,648
Asset impairment loss (121,014) 26,074 357 (24,478) - (119,061)
Depreciation and amortisation (205,179,714) (13,884,683) (2,282,918) - - (221,347,315)
Total profit 887,726,998 54,012,318 36,876,265 (14,200,600) - 964,414,981
Income tax expenses (129,288,292) (11,670,014) 152,243 3,030,446 - (137,775,617)
Net profit 758,438,706 42,342,304 37,028,508 (11,170,154) - 826,639,364
Total assets 5,910,654,715 209,352,779 100,523,714 16,112,144 (34,458,610) 6,202,184,742
Total liabilities 855,227,841 57,401,450 9,504,879 1,507,351,350 (34,458,610) 2,395,026,910
Non-cash expenses other than depreciation
and amortisation - - - - - -
Long-term equity investments in associates
and joint ventures 1,056,376,673 - 79,636,013 - - 1,136,012,686
Additions to non-current assets other than
long-term equity investments 109,674,428 5,689,454 258,032 91,791 - 115,713,705
- 94 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
6 Segment information (Con’d)
The Group’s revenue from external customers of Mainland China and other countries or
geographical areas for the year 2011, and the total non-current assets other than financial assets
and deferred tax assets located in the Mainland China and other countries or geographical areas
as at 31 December 2011 are as follows:
Revenue from external customers 2011 2010
Mainland PRC 1,702,381,921 1,735,981,253
Hong Kong 5,754,978 4,436,415
1,708,136,899 1,740,417,668
Total non-current assets other than financial assets
and deferred tax assets 31 December 2011 31 December 2010
Mainland PRC 5,725,768,655 5,068,071,718
Hong Kong 45,432 28,263
5,725,814,087 5,068,099,981
The revenue from Load and unload operation segment of RMB 731,545,867 is derived from a
single customer, accounting for 43% of the Group’s total revenue.
7 Related parties and related party transactions
(1) The parent company
(a) General information of the parent company
Entity type Place of Legal Nature of business Organisation
registration representative code
Nanshan Group Sino-foreign Shenzhen Fu Yuning Land development, port service and 61883297-6
invested enterprise transportation, industry and commerce,
tour, real estate and others
China Merchants (Nanshan) Holdings Ltd (an indirect subsidy of China Merchants Group Co.,
Ltd)，Shenzhen Investment Holdings Co.ltd and Guangdong Guangye Investment Holdings Ltd
holds 36.52%，26.1% and 23.49% share of Nanshan Group respectively, there is no other
shareholders’ share over 10%.
- 95 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(1) The parent company (Con’d)
(b) Registered capital and changes in registered capital of the parent company
31 December Current year Current year 31 December
2010 additions decreases 2011
Nanshan Group 500,000,000 400,000,000 - 900,000,000
(c) The proportion of interests and voting rights in the Company held by the parent company
31 December 2011 31 December 2010
% interest held % voting rights % interest held % voting rights
Nanshan Group 57.52% 57.52% 57.51% 57.51%
(2) Subsidiaries
The general background and other related information of the subsidiaries is set out in Note 4.
(3) Associates
Legal Voting
Place of representat Nature of Registered Interest right Organisation
Entity type incorporation ive business capital held held code
Joint venture –
China Overseas Harbour Affairs Sino-foreign Shandong, Li Chuan Harbour USD176,407.7 40% 40% 61344937-X
(Laizhou)Co.,Ltd invested China service thousand
enterprise
Associates –
China Merchants Holdings Sino-foreign Shenzhen, Luo Huilai Network 50 million 23.16% 23.16% 73207614-X
(international ) Information invested China service
Technology Co.,Ltd(Previous enterprise
name：Shenzhen Cyber-Harbour
Network Co Ltd)
CMML Sino-foreign Shenzhen, Hu Jianhua Warehousi 700 million 40% 40% 75045115-0
invested China ng service
enterprise
MPIL Overseas British Not Investment USD10 50% 50% Not applicable
enterprise Virgin Islands applicable
- 96 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(4) Other related parties
Relationship with the Group Organisation
code
CPSB Controlled by the same parent company 61883389-9
Xuqin Controlled by the same parent company 70845749-5
COCL Controlled by the same parent company 72616516-2
Shenzhen Nanshan Real Estate development Controlled by the same parent company
Ltd.(Nanshan Development) 75046859-3
Haiqin Engineering Common key connected person with the Company 61888000-1
Shenzhen Mawan Port Co., Ltd. (“SMP”) Indirect associates of the Company, and common 74322579-6
key management personnel with the Company
Shenzhen Mawan Wharf Co, Ltd.(“SMW”) Indirect associates of the Company, and common 74322582-5
key management personnel with the Company
Shenzhen Mawan Wharf Holdings Ltd Indirect associates of the Company, and common
key management personnel with the Company 74322581-7
MPIL Indirect associate of the Company Not applicable
Nantian Oilmills Common key connected person with the Company 61881614-0
CMML Associate of the Company 75045115-0
Shenzhen Southsea Grains Industries Limited Common key connected person with the Company
(“Southsea Grains”) 61883769-7
China Merchants Port Services (Shenzhen) Co Ltd
(“CMPS”) Note 19244179-0
Shekou Container Terminals Limited (“SCT”) Note 61883279X
China Merchants International Cold Chain Note
(Shenzhen) Company Limited (“CMCCL”) 61889222-3
Shenzhen Haixing Harbor Development Note
Co.,Ltd(“Haixing”)
China Merchant Bank Ltd(CMB) Note 10001686-X
COHA(Laizhou) Joint venture of the company 61344937-X
Excel Steps Limited Note Not applicable
Note: As at 30 June 2011, one of the Company’s parent company Nanshan Group’s indirect share
holder China Merchants Group Co., Ltd(which belongs to State-owned Assets Supervision and
Administration Commission of the State Council) via the arrangement of another share holder
Guangdong Guangye Investment Holdings ltd, obtained 23.49% share of Nanshan Group it holds
under trust, brought the Nanshan Group into the scope of the consolidation. These companies are
all subsidiaries of China Merchants Group Co., Ltd except China Merchants Bank which is an
associate of it.
- 97 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(5) Related party transactions
Saved for disclosed in above, other major related party transactions are as follows:
(a) Sale and purchase of goods, and rendering and receiving of services
Purchase of goods and receiving of services
Pricing Policies 2011 2010
and Amount % of same Amount % of same
determination transaction transaction
Related party Type of transaction Nature of transaction procedures
Haixing Service received Load and unload service Negotiation 2,609,695 0.27% - -
Haiqin Engineering Service received Project management Negotiation 1,701,180 13.31% - -
SCT Service received Load and unload service Negotiation 1,647,178 0.29% 637,445 0.10%
Nantian Oilmills Service received Load and unload service Negotiation 468,862 0.05% 2,883,502 0.33%
Xuqin Service received Construction Negotiation 457,830 0.05% 485,795 0.06%
Sale of goods and rendering of services
Pricing Policies 2011 2010
and Amount % of same Amount % of same
determination transaction transaction
Related party Type of transaction Nature of transaction procedures
Nantian Oilmills Service provided Load and unload service Negotiation 14,116,894 0.77% 11,517,735 0.64%
SMP Service provided Land Transportation and Negotiation 12,477,379 21.12% 13,461,672 20.12%
others
SMW Service provided Land Transportation and Negotiation 4,391,167 7.43% 5,650,795 8.44%
others
CMML Service provided Land Transportation and Negotiation 3,280,154 5.55% 2,086,335 3.12%
others
CPSB Service provided Load and unload service Negotiation 1,310,041 0.07% 720,457 0.04%
Southsea grains Service provided Load and unload service Negotiation 1,257,023 0.07% 1,965,821 0.11%
SCT Service provided Land Transportation and Negotiation 858,000 1.45% 911,920 1.36%
others
- 98 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(5) Related party transactions (Con’d)
(b) Lease
The Group as the leaser:
Lease income Lease
Lessor Lessee Leased assets Start date Ending date recognition basis income
CCT Southsea Grains Office land January 2011 December 2011 Negotiation 4,265,380
CCT CMML Crane May 2006 Not applicable Negotiation 2,240,000
The Company CPSB Land and packing January 2011 December 2011 Negotiation 9,474,036
yards
The Company Haiqin Engineering Building January 2011 December 2010 Negotiation 203,280
16,182,696
The Group as the lessee:
Leased assets Lease expenses Lease
Lessor Lessee Start date Ending date recognition basis expenses
Nanshan Entities of the Land, Office and Various N Various Negotiation 36,631,359
Development Group others
Nanshan Group Entities of the Land, buildings Various Respective Negotiation 5,284,157
Group and packing yards expiry of
operation of the
group
companies
Nantian Oilmills CGCL Packing yards January 2011 December 2011 Negotiation 2,155,137
CMPS CCT Packing yards January 2011 December 2011 Negotiation 2,400,000
CPSB The Company Land and buildings January 2011 December 2011 Negotiation 1,708,026
48,178,679
(c) Purchase of equity in an associate
As at 28 April 2011, Excel Steps Limited, WHK, a wholly owned subsidiary of the Company and the
company signed an agreement of transfer in shareholding. WHK paid to Excel Steps Limited RMB
6,270,000 to obtain 100% shareholdings of Hiwin Development Co.,Ltd,and undertook advances
from shareholder of Excel Steps Limited amounting RMB94,000,000.
- 99 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(5) Related party transactions (Con’d)
(d) Emoluments of key management
2011 2010
Emoluments of key management 9,389,000 5,338,436
(6) Receivables from and payables to related parties
Receivables from related parties：
31 December 2011 31 December 2010
Book amount Provision for Book amount Provision for
bad debt bad debt
Cash and bank China Merchants Bank 58,812,732 - 123,853,303 -
Accounts receivable Southsea Grains 1,368,092 - 110,521 -
SMP 682,266 - 998,942 -
COHA(Laizhou) 539,724 - - -
CMML 378,384 - 344,900 -
SMW 335,669 - 397,090 -
SCT 6,500 - 907,600 -
Nantian Oilmill - - 562,957 -
3,310,635 - 3,322,010 -
Other receivables
CMML 2,622,178 - 57,821 -
SMW 898,479 - 79,083 -
Xuqin 320,000 (192,000) 320,000 (192,000)
SMP 308,451 - 20,961 -
SCT 187,102 - -
CPSB 135,622 - 135,622 -
COCL(a) 48,645 - -
MPIL - - 44,879,120 -
4,520,477 (192,000) 45,492,607 (192,000)
- 100 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(6) Receivables from and payables to related parties (Con’d)
Payables to related parties：
31 December 2011 31 December 2010
Short tem borrowings China Merchants Bank 137,700,000 50,000,000
Accounts payable Haiqin Engineering 5,062,227 9,972,227
Nanshan Group (a) 5,002,068 8,583,552
Xuqin 319,058 1,760,479
Nantian Oilmill 163,201 202,361
CMIT 1,302,441 -
11,848,995 20,518,619
Other payables SMW(b) 945,521 2,961,451
CMCCCL 64,200 253,800
COCL(c) - 110,881
SMP(b) 31,963 20,894
Nanshan Group - 48,304
CMBL 2,001,792 49,540
3,043,476 3,444,870
(a) This item mainly includes the balance which Nanshan group collects electricity fees from the group
and pays to power supply bureau at almost the same price. In 2010,Nanshan Group also paid the
emolument of key management on behalf of the company, and charged the company for it.
(b) The Company cooperates with Mawan companies in marketing promotion activities. Some
common expenses incurred in the cooperation are allocated to both parties based on certain
reasonable criteria. For those payments and receipts made on behalf, the Company and Mawan
companies recorded the amounts in other receivables or other payables.
(c) COCL was a subsidiary of the Company and sold to Nanshan Group in 2009, after which it became
a related party of the Company. The current account balances represented those unsettled amount
relating to relevant business at the disposal of COCL at 31 December 2010.
- 101 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Con’d)
(7) Commitments in relation to the related parties
31 December 2011 31 December 2010
Rental
- Rental expense CPSB 1,812,018 1,713,566
CMPS 2,400,000 -
Nanshan Group 2,765,466 3,083,751
6,977,484 4,797,317
- Rental income
CPSB 11,740,000 10,819,640
Southsea Grains 4,265,380 4,265,856
Haiqin engineering - 348,480
16,005,380 15,433,976
8 Contingencies
As at 31 December 2011, the management of the group has assessed all pending lawsuits or
claims and believes that none of them will cause significant outflow of economic benefits of the
group.
9 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but not yet necessary
to be recognised on the balance sheet are as follows:
31 December 2011 31 December 2010
Land and coastal line use rights 109,874,895 168,291,373
Machinery and equipments 83,887,000 33,050,780
Harbour facilities 250,404,509 159,405,361
444,166,404 360,747,514
The Group’s share of the joint ventures’ own commitments for capital expenditure at the balance
sheet date are RMB 176,966,411.
- 102 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
9 Commitments (Con’d)
(2) Operating lease commitments
The future aggregate minimum lease payments due under the signed irrevocable operating leases
contracts are summarized as follows:
31 December 2011 31 December 2010
Within one year 7,966,481 5,614,470
Between 1 and 2 years 830,341 1,607,499
Between 2 and 3 years 830,341 830,341
More than 3 years 2,281,452 3,111,783
11,908,615 11,164,093
(3) Fulfillment of prior period commitments
The Group has fulfilled the capital and operating lease commitments as of 31 December 2010
according to the relevant contracts.
10 Events after the balance sheet date
(1) Significant events after balance sheet date
Impact to the financial
position and the financial Reason of the impact
Item Nature performance could not be estimated
Repayment of the accounts payable Repayment of the Decreased both asset and
(Note5(23)(c)) significant accounts liabilities of
payable with the RMB18,713,587
aging over 1 year -
(2) Dividend distribution after the balance sheet date
Amount
Proposed dividends 257,905,492
Pursuant to the resolution of Board at the Board of Directors’ meeting on 27 March 2012, cash
dividends in respect of 2011 of RMB 257,905,492. The proposed dividend is not recognised as
liability in balance sheet.
- 103 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
10 Events after the balance sheet date (Con’d)
(3) Illustration on the issue of bonds after the balance date
As set out in the announcement of resolution in the seventh board of directors’ third special
meeting in year 2011, the board of directors adopted Report about the proposal on the issue of
corporate bond, the total amount of corporate bond will not exceed RMB 120millons (including 120
millions),with no more than 10 years(including 10 years) expiration period. At 28 November
2011,the company received the Rescriptum on the approval of public issue of corporate bond of
Shenzhen Chiwan Wharf Limited Co.,Ltd, and is approved to issue corporate bond publicly with no
more than 100 million in par value. The issue of the corporate bond will be issued in several times
and the par value at the first issue should be no less than 50% of the total par value and it will be
accomplished within 6 months after approval. The issues in other times should be completed within
24 months after approval. The rescriptum is effective in 24 months after the date of approval(24
November 2011).
11 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk
and interest rate risk), credit risk and liquidity risk. The Group's overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group's financial performance.
(1) Market risk
(a) Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of the
transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from
the recognized assets and liabilities, and future transactions denominated in foreign currencies
(recognized assets and liabilities are primarily with respect to Hong Kong dollars, foreign currency
transaction is mainly with respect of HK and US dollars). The Group’s finance department at its
headquarters is responsible for monitoring the amount of assets and liabilities, and transactions
denominated in foreign currencies.
According to current risk exposure and the trend of exchange rate fluctuation, management
believed that the risk caused by the fluctuation of foreign currency exchange rate is low in the
coming year.
- 104 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(1) Market risk (Con’d)
(a) Foreign exchange risk (Con’d)
As at 31 December 2011 and 2010, the carrying amounts in RMB equivalent of the Group’s assets
and liabilities denominated in foreign currencies are summarized below:
31 December 2011
HKD USD Total
Financial assets denominated in foreign currency -
Cash at bank and on hand 160,166,594 25,153,257 185,319,851
Receivables 1,064,631 31,409,683 32,474,314
161,231,225 56,562,940 217,794,165
Financial liabilities denominated in foreign currency -
Short-term borrowings 1,168,830,000 - 1,168,830,000
Payables 3,466,115 1,377,672 4,843,787
1,172,296,115 1,377,672 1,173,673,787
- 105 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(1) Market risk (Con’d)
(a) Foreign exchange risk (Con’d)
31 December 2010
HKD USD Total
Financial assets denominated in foreign currency -
Cash at bank and on hand 166,707,323 8,850,378 175,557,701
Receivables 2,803,651 27,480,595 30,284,246
169,510,974 36,330,973 205,841,947
Financial liabilities denominated in foreign currency -
Short-term borrowings 835,550,000 - 835,550,000
Payables 4,392,328 3,580,977 7,973,305
Long-term borrowings 408,000,000 - 408,000,000
1,247,942,328 3,580,977 1,251,523,305
As at 31 December 2011, if the currency had strengthened by 5 % against the HKD while all other
variables had been held constant, the Group’s net profit for the year would have been
approximately RMB37,914,933 (2010,10%: RMB87,034,038).
(b) Interest rate risk
The Group's interest rate risk arises from bank borrowings including long-term borrowings and
debentures payable. Financial liabilities issued at floating rates expose the Group to cash flow
interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interest
rate risk. The Group determines the relative proportions of its fixed rate and floating rate contracts
depending on the prevailing market conditions. As at 31 December 2011, all the Group’s interest
bearing borrowings were with floating rates.
Increases in interest rates will increase the cost of new borrowing and the interest expenses with
respect to the Group’s outstanding floating rate borrowings, and therefore could have a material
adverse effect on the Group’s financial position. The Group’s finance department at its
headquarters continuously monitors the interest rate position of the Group and makes decisions
with reference to the latest market conditions including turning to fixed interest financial liabilities or
adjusting the ratio of financial leverage.
For the year ended 31 December 2011, if interest rates on the floating rate borrowings had been
5% higher/lower while all other variables had been held constant, the Group’s net profit would have
decreased/increased by approximately RMB 288,609 (2010: approximately RMB2,683,386).
- 106 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(4) Credit risk
Credit risk is managed on a Group basis. Credit risk mainly arises from cash at bank and on hand,
accounts receivable, other receivables, notes receivable etc.
The Group expects that there is no significant credit risk associated with cash at bank since they
are deposited at state-owned banks and other medium or large size listed banks. Management
does not expect that there will be any significant losses from non-performance by these
counterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other
receivables and notes receivable. The Group assesses the credit quality of and sets credit limits on
its customers by taking into account their financial position, the availability of guarantee from third
parties, their credit history and other factors such as current market conditions. The credit history of
the customers is regularly monitored by the Group. In respect of customers with a poor credit
history, the Group will use written payment reminders, or shorten or cancel credit periods, to
ensure the overall credit risk of the Group is limited to a controllable extent.
(5) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s
finance department in its headquarters. The Group’s finance department at its headquarters
monitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it
has sufficient cash and securities that are readily convertible to cash to meet operational needs,
while maintaining sufficient headroom on its undrawn committed borrowing facilities from major
financial institution so that the Group does not breach borrowing limits or covenants on any of its
borrowing facilities to meet the short-term and long-term liquidity requirements.
The financial assets and liabilities of the Group at the balance sheet date are analysed by their
maturity date below at their undiscounted contractual cash flows :
- 107 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(3) Liquidity risk (Con’d)
31 December 2011
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets denominated in
foreign currency -
Cash at bank and on hand 478,788,943 - - - 478,788,943
Receivables 242,930,624 - - - 242,930,624
Available-for-sale financial assets 5,690,000 - - - 5,690,000
727,409,567 - - - 727,409,567
Financial liabilities denominated in
foreign currency -
Short-term borrowings 1,418,830,000 - - - 1,418,830,000
Payables 581,353,690 - - - 581,353,690
Long-term borrowings 90,000,000 4,084,989 4,376,774 - 98,461,763
2,090,183,690 4,084,989 4,376,774 - 2,098,645,453
31 December 2010
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets denominated in
foreign currency -
Cash at bank and on hand 781,720,083 - - - 781,720,083
Receivables 238,496,318 - - - 238,496,318
Available-for-sale financial assets 6,640,000 - - - 6,640,000
1,026,856,401 - - - 1,026,856,401
Financial liabilities denominated in
foreign currency -
Short-term borrowings 1,225,550,000 - - - 1,225,550,000
Payables 507,567,419 - - - 507,567,419
Long-term borrowings 408,000,000 - - - 408,000,000
2,141,117,419 - - - 2,141,117,419
- 108 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(3) Liquidity risk (Con’d)
The borrowings of the group are mainly short term bank loans and therefore the net current liability
of the group was RMB 1,453,506,937 at 31 December 2011.
As at 31 December 2011, the internal undrawn bank facilities of the group are listed as below :
Within a year 2,777,520,100
1 to 2 years 413,700,000
2 to 3 years 100,000,000
Over 3 years 100,000,000
3,391,220,100
Undrawn facilities above can be used on the committed capital payment in the future (Notes 9).
Directors of the company confirmed that the group is able to extend the time limits of short term
borrowings and adequate facilities including facilities over a year and other financing resources to
refund existed short term borrowings, and adequate working capital for the need of operation.
Therefore the 2011 financial statements have been prepared on going concern basis by directors.
(4) Fair value
(a) Financial instruments not measured at fair value
Financial assets and liabilities not measured at fair value mainly represent receivables, short-term
borrowings, payables and Long-term borrowings.
The difference between the book value and fair value of the financial assets and liabilities not
measured at fair value is immaterial.
The fair value of long-term borrowings not quoted in an active market is the present value of the
contractually determined stream of future cash flows discounted at the rate of interest applied at
that time by the market to instruments of comparable credit status and providing substantially the
same cash flows on the same terms.
- 109 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Con’d)
(b) Financial instruments measured at fair value
Based on the lowest level input that is significant to the fair value measurement in its entirety, the
fair value hierarchy has the following levels:
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 (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs)
As at 31 December 2011 and 31 December 2010, the financial assets of the Group are all
measured at Level 1.
31 December 2011 31 December 2010
Financial assets -
Available- for- sale financial assets 5,690,000 6,640,000
12 Financial assets and liabilities denominated in foreign currency
Impairment
Current year fair Current year fair provision
31 December value changes in value changes in made during the 31 December
2010 profit or loss equity year 2011
Financial assets -
Available-for-sale financial assets 6,640,000 - (950,000) - 5,690,000
13 Financial assets and liabilities denominated in foreign currency
Impairment
provided
31 December 2010 during the year 31 December 2011
Financial assets -
Loans and receivables 205,841,947 - 217,794,165
Financial liabilities 1,251,523,305 Not applicable 1,173,673,787
- 110 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements
(1) Accounts receivable
31 December 2011 31 December 2010
Accounts receivable 16,623,725 9,336,968
(a) The ageing of accounts receivable is analysed below:
31 December 2011 31 December 2010
Within 1 year 16,623,725 9,336,968
(b) Accounts receivable are analysed by categories as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Receivables that are individually
significant and individually
provided for bad debt 12,930,685 78% - - 6,608,924 70.8% - -
Receivables that are grouped
and provided for bad debt 3,693,040 22% - - 2,728,044 29.2% - -
16,623,725 100% - - 9,336,968 100% - -
The management classified the five largest accounts receivable as “receivables that are
individually significant”. They are all aged within one year and the management considered no
provision for bad debts is needed.
(c) As at 31 December 2011, no bad debt provision has been made for accounts receivable that are
individually significant or individually insignificant but subject to separate impairment assessment.
(d) The aging analysis of the receivables that are grouped and impaired is as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Within 1 year 3,693,040 22.2% 2,728,044 29.2% - -
- 111 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(1) Accounts receivable (Con’d)
(e) There are no receivables which are fully provided for bad debt or with significant impairment but
fully received or recoverable or with significant portion of received or recoverable during the year.
(f) No accounts receivable have been written off during the year.
(g) As at 31 December 2011, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% shares with voting rights (31 December 2010: Nil).
(h) As at 31 December 2011, the Group’s five largest accounts receivable balances are analysed as
follows:
Relationship % of total accounts
with the Group Amount Duration receivable balance
Customer F Third party 3,569,319 Within 1 year 21.47%
Customer G Third party 3,398,212 Within 1 year 20.44%
Customer H Third party 3,324,392 Within 1 year 20.00%
Customer I Third party 1,398,412 Within 1 year 8.41%
Customer J Third party 1,240,350 Within 1 year 7.46%
12,930,685 77.78%
(i) As at 31 December 2011, there were no balances due from related parties (31 December 2010:
Nil).
- 112 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(2) Other receivables
31 December 2011 31 December 2010
Loans to subsidiaries 239,270,156 364,704,313
Others 4,128,109 1,780,950
243,398,265 366,485,263
Less: Provision for bad debts (141,728) (623,127)
243,256,537 365,862,136
(a) The ageing of other receivables is analysed below:
31 December 2011 31 December 2010
Within 1 year 242,395,966 364,164,485
1 to 2 years 486,070 150
2 to 3 years 150 108,221
Over 3 years 516,079 2,212,407
243,398,265 366,485,263
(b) Other receivables are analysed by categories as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Receivables that are individually
significant and individually
provided for bad debt 241,923,908 99.39% - - 365,224,313 99.66% (520,000) 0.14%
Receivables that are grouped and
provided for bad debt 1,474,357 0.61% (141,728) 9.61% 1,260,950 0.34% (103,127) 8.18%
243,398,265 100% (141,728) 0.06% 366,485,263 100% (623,127) 0.17%
The management classified the five largest accounts receivable as “receivables that are
individually significant”.
- 113 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(2) Other receivables (Con’d)
(c) The aging analysis for other receivables that are grouped and provided for bad debt is as follows:
31 December 2011 31 December 2010
Book amount Provision for bad debts Book amount Provision for bad debts
% of total Provision for % of % of total Provision for % of
Amount balance bad debts balance Amount balance bad debts balance
Within 1 year 855,515 0.35% - - - - - -
1 to 2 years 486,070 0.20% (762) 0.16% 150 0.00% (15) 10.0%
2 to 3 years 150 0.00% (30) 20.00% 108,221 0.03% (21,644) 20.0%
Over 3 years 132,622 0.05% (102,590) 77.36% 1,152,579 0.31% (81,468) 7.1%
1,474,357 0.60% (103,382) 7.01% 1,260,950 0.34% (103,127) 8.2%
(d) There are no receivables which are fully provided for bad debt or with significant impairment but
fully received or recoverable or with significant portion of received or recoverable during the year.
(e) Other receivables were written off during the year:
At 31 December 2010, Receivables that are individually significant and individually provided for bad
debt are analysed below:
Book value Bad debt Provision rate
Beijing Tonggang Co 520,000 (520,000) 100%
Reason for written-off: at 31 December 2011, the other receivable is over 3 years and this
company has bankrupted, so this other receivable was written off.
(f) As at 31 December 2011, the Company did not have any balances which were due to parties
having 5% or above shareholdings in the Company (31 December 2010: Nil).
- 114 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(2) Other receivables (Con’d)
(g) At 31 December 2011, the Company’s five largest other receivable balances are analysed below:
% of total other
Relationship with the Group Amount Duration receivables balance
DGW Subsidiary of the Group 206,000,000 Within 1 year 84.6%
CSTC Subsidiary of the Company 32,210,156 Within 1 year 13.2%
WHK Subsidiary of the Company 2,270,295 Within 1 year 0.9%
CIFA Subsidiary of the Company 1,060,000 Within 1 year 0.4%
Enterprise income tax payable for
dividend of B share in 2008 Shareholders of the group 383,457 1 to 2 years 0.2%
241,923,908 99.4%
(h) Other receivables due from related parties are analysed as follows:
31 December 2011 31 December 2010
% of total Provision % of total Provision
Relationship accounts for bad accounts for bad
with the Group Amount receivables debt Amount receivables debt
DGW Subsidiary of the Group 206,000,000 84.63% - 325,800,000 88.90% -
CSTC Subsidiary of the Company 32,210,156 13.23% - 36,363,777 9.92% -
WHK Subsidiary of the Company 2,270,295 0.93% - 1,480,536 0.40% -
CIFA Subsidiary of the Company 1,060,000 0.44% - 1,060,000 0.29% -
Controlled by the same parent
CPSB company 135,622 0.06% - 135,622 0.04% -
241,676,073 99.29% - 364,839,935 99.55% -
(3) Long-term equity investments
31 December 2011 31 December 2010
Subsidiaries (a) 1,052,288,200 733,088,200
Joint venture(b) 795,776,215 763,011,159
Associates (c)- without quoted price 140,142,959 79,636,013
Other long-term equity investments (d) 17,037,500 17,037,500
2,005,244,874 1,592,772,872
Less: provision for impairment loss (e) (3,128,300) (3,128,300)
2,002,116,574 1,589,644,572
The long-term equity investments of the Company are not subject to restriction on conversion into
cash.
- 115 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(3) Long-term equity investments (Con’d)
(a) Subsidiaries
Provision
Reason of Provision for
31 inconsistent for impairment
Accounting Investment December Current year 31 December Interest Voting interest % and impairment made in Current year
method costs 2010 changes 2011 % right % voting right balance current year declared cash dividend
Shenzhen Chiwan Terminal Company Limited Cost method 47,500,000 47,500,000 - 47,500,000 95% 95% Not applicable - - 39,338,688
Shenzhen Chiwan International Freight
Agency Company Limited Cost method 5,500,000 5,500,000 - 5,500,000 100% 100% Not applicable - - 1,165,548
Shenzhen Chiwan Harbour Container
Company Limited Cost method 250,920,000 70,920,000 180,000,000 250,920,000 84.98% 84.98% Not applicable - - 140,826,505
Shenzhen Chiwan Transportation Company
Limited Cost method 7,000,000 7,000,000 - 7,000,000 75% 75% Not applicable - - 6,757,560
Chiwan Wharf Holdings (H.K.) Limited Cost method 1,070,000 1,070,000 - 1,070,000 100% 100% Not applicable - - -
Shenzhen Chiwan Shipping and
Transportation Company Limited Cost method 24,000,000 6,000,000 18,000,000 24,000,000 90% 90% Not applicable - - 20,533,063
Shenzhen Chiwan Trains-Grains Terminal
Company Limited Cost method 33,750,000 33,750,000 - 33,750,000 75% 75% Not applicable - - 20,616,286
Chiwan Container Terminal Company Limited Cost method 421,023,200 421,023,200 - 421,023,200 51% 51% Not applicable - - 185,445,049
Dongguan Chiwan Wharf Company Limited Cost method 186,525,000 65,325,000 121,200,000 186,525,000 41.45% 41.45% Not applicable - - -
Dongguan Chiwan Terminal Company Limited Cost method 75,000,000 75,000,000 - 75,000,000 25% 25% Not applicable - - -
733,088,200 319,200,000 1,052,288,200 - - 414,682,699
- 116 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(3) Long-term equity investments (Con’d)
(b) Joint venture
Current year additions / decreases
Reason of Provision Provision
Initial Share of net Cash dividends Other inconsistent for for impairment
Accounting investment 31 December Additional profit or loss of announced by equity 31 December Interest Voting interest % and impairment made in
method cos 2010 investment associates associates changes 2011 % right % voting right balance current year
China Overseas Harbour
Affairs(Laizhou)Co.,Ltd Equity method 749,655,300 763,011,159 - 32,665,056 - 100,000 795,776,215 40.00% 40.00% Not applicable - -
(c) Associates
Current year additions / decreases
Cash Reason of Provision Provision
Initial 31 Share of net dividends Other inconsistent for for impairment
Accounting investment December Additional profit or loss announced by equity 31 December Interest Voting interest % and impairment made in
method cost 2010 investment of associates associates changes 2011 % right % voting right balance current year
Cyber Network Equity method 1,875,000 12,869,241 - 19,885 (1,224,863) - 11,664,263 23.16% 23.16% Not applicable - -
CMML Equity method 140,000,000 66,766,772 60,000,000 1,711,924 - - 128,478,696 20.00% 20.00% Not applicable - -
79,636,013 60,000,000 1,731,809 (1,224,863) - 140,142,959 - -
- 117 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(d) Other long-term equity investment
Reason of Provision for
Initial Current year inconsistent Provision for impairment Current year
Accounting investment 31 December additions / 31 December Interest Voting interest % and impairment made in declared cash
method cost 2010 decreases 2011 % right % voting right balance current year dividend
China Ocean Shipping Agency
(Shenzhen) Company Limited Cost method 13,510,000 13,510,000 - 13,510,000 15% 15% Not applicable - - 3,900,000
Shenzhen Petro-chemical Industry -
(Group) Company Limited. Cost method 3,500,000 3,500,000 - 3,500,000 0.26% 0.26% Not applicable (3,117,800) -
Guangdong Guang Jian Group - -
Company Limited Cost method 27,500 27,500 27,500 0.02% 0.02% Not applicable (10,500) -
17,037,500 - 17,037,500 (3,128,300) - 3,900,000
(e) Provision for impairment of long-term equity investments
31 December 2010 Current year additions Current year decreases 31 December 2011
Other long-term equity investment
-Shenzhen Petro-chemical Industry (Group) Company Limited 3,117,800 - - 3,117,800
-Guangdong Guang Jian Group Company Limited 10,500 - - 10,500
3,128,300 - - 3,128,300
- 118 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(4) Operating income and operating cost
2011 2010
Revenue from main operations 165,422,103 149,806,838
Revenue from other operations 23,700,419 10,184,257
189,122,522 159,991,095
2011 2010
Cost from main operations 134,885,611 133,144,267
Cost from other operations 1,590,313 950,546
136,475,924 134,094,813
(a) Revenue and cost from main operations
2011 2010
Revenue from Cost from main Revenue from Cost from main
main operations operations main operations operations
Load and unload operation 165,422,103 134,885,611 149,806,838 133,144,267
The mainly operation are in mainland of PRC.
(b) Other revenue and cost
2011 2010
Revenue from Cost from Revenue from Cost from
other operations other operations other operations other operations
Other logistic services in port 7,367,988 - 4,558,967 99,430
Lease income 14,733,909 1,590,313 4,213,916 851,116
Documentation fee 611,802 - 802,864 -
Sales of materials 929,306 - 479,583 -
Security fee 57,414 - 87,677 -
Containers management fee - - 41,250 -
23,700,419 1,590,313 10,184,257 950,546
- 119 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(4) Operating income and operating cost (Con’d)
(c) Particulars of the top five customers in revenue
Revenue from top five customers of the Company totaled RMB87,317,723 (2010: RMB73,600,944),
which accounted for 46% (2010: 46%) of the total revenue from main operations. Details are
showed as below:
% of total revenue
from main operations
Revenue of the Company
Customer K 37,649,494 20%
Customer F 27,025,168 14%
Customer L 10,084,805 5%
Customer G 6,855,726 4%
Customer H 5,702,530 3%
87,317,723 46%
(5) Investment income
2011 2010
Income from long-term equity investment under
cost method(a) 418,582,699 351,413,618
Income from long-term equity investment under
equity method (b) 34,396,865 13,161,967
Income from disposal of long-term equity
investment - 29,767,257
Income earned during the holding period of
available-for-sale financial assets 360,000 310,000
Interest income for short-term loans to subsidiaries 14,681,787 12,478,236
468,021,351 407,131,078
There is no restriction on recovery of investment income.
- 120 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(5) Investment income (Con’d)
(a) Investment income from long-term investment under cost method
Investment income from top five investees or individually accounted to over 5% of total profit are
analysed as below:
2011 2010 Reason of fluctuation
CCT 185,445,049 260,620,436 Performance of investee declined
CHCC 140,826,505 - Investee distributes profit of last two years and shareholding
increased.
CTC 39,338,688 37,886,083 Performance of investee turns better slightly
CGTC 20,616,286 24,479,423 Performance of investee declined
CSTC 20,533,063 16,748,145 Shareholding increased.
CTC 6,757,560 10,380,293 Performance of investee declined
413,517,151 350,114,380
(b) Investment income from long-term investment under equity method of accounting
Investment income from top five investees or individually accounted to over 5% of total profit are
analysed as below:
2011 2010 Reason of fluctuation
COHA(Laizhou) 32,665,056 13,355,859 Investee is the newly joint venture last year and investment
income is the portion of net profit
Cyber Network 19,885 379,477 Investee decline in performance and the Group
decreased the interest
CMBL 1,711,924 (573,369) Investee run into operation and its circumstance turns
better
34,396,865 13,161,967
- 121 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Con’d)
(6) Supplementary information to cash flow statements
(a) Reconciliation from the net profit to the cash flows from operating activities
2011 2010
Net profit 430,118,631 381,220,010
Add: Provisions for assets impairment 38,601 24,478
Depreciation of fixed assets 12,283,329 15,396,195
Depreciation/amortisation of investment
property 1,077,281 650,756
Amortisation of intangible assets 3,139,405 3,038,583
Amortisation of long-term prepaid expenses 179,620 247,891
Gains on disposal of fixed assets and
intangible assets 1,394,937 233,184
Finance expenses 17,883,502 11,929,443
Investment income (468,021,352) (407,131,078)
Increase in deferred tax assets (8,488,104) (764,157)
(Increase)/decrease in inventories 176,247 (4,287)
(Increase)/decrease in operating receivables 115,970,883 (6,070,788)
Increase in operating payables 191,891,312 284,808,825
Net cash flows from operating activities 297,644,292 283,579,055
(b) Net changes in cash and cash equivalents
2011 2010
Cash at end of year 187,090,694 494,364,355
Less: cash at beginning of year (494,364,355) (453,407,958)
Net (decrease)/increase in cash (307,273,661) 40,956,397
- 122 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
1 Breakdown of extraordinary gains and losses
2011 2010
Net gain on disposal of non-current assets (1,889,222) (672,955)
Government grants in current year profit - 1,200,000
Receivables impairment reversal by individual
assessment - -
Other non-operating (expenses)/income, net 1,731,897 1,448,435
(157,325) 1,975,480
cts 33,863 (350,605)
Minority interests effects (after tax) 138,789 (255,118)
15,327 1,369,757
The basis of preparation of net profit before extraordinary gains and losses reconciliation
According to the Interpretation Bulletin on Information Disclosure by Public Companies No [2008] 1
– Extraordinary gains and losses, extraordinary gain and losses are the gain and losses resulted
from the transactions/events which are not incurred by the operation of the entity, or, though
incurred by the operation, the nature, amounts or the frequency of such transactions/events will
lead to a misleading presentation of the normal performance and profitability of the operation of the
entity.
2 Return on equity and earnings per share
Weighted average return Earnings per share
on equity (%) Basic earnings per share Diluted earnings per share
2011 2010 2011 2010 2011 2010
Consolidated net profit attributable to
shareholders of the Company 15.19% 19.70% 0.784 0.925 0.784 0.925
Consolidated net profit excluding non-
routine items attributable to
shareholders of the Company 15.19% 19.65% 0.784 0.923 0.784 0.923
- 123 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
3 Notes for significant fluctuation of major accounts in financial statements
The following represents analysis to financial statements line items with a fluctuation above 30%
(inclusive), or take up 5% of total assets as at balance sheet date (inclusive) or 10% of net profit for
the reported period (inclusive):
31 December 31 December Increase /
2011 2010 (decrease)(%)
Cash at bank and on hand 1 478,788,943 781,720,083 -39%
Notes receivable 2 - 4,640,000 -100%
Advances to suppliers 3 3,497,668 31,256,172 -89%
Interest receivable 4 51,667 1,318,202 -96%
Other receivables 5 11,833,877 52,765,361 -78%
Other current assets 6 1,003,913 -
Long-term equity investments 7 1,436,856,420 1,149,921,886 25%
Fixed assets 8 2,482,077,688 2,652,957,915 -6%
Construction in progress 9 517,818,144 14,593,516 3448%
Intangible assets 10 1,038,926,892 1,074,247,819 -3%
Other non-current assets 11 142,108,284 72,292,214 97%
Short-term borrowings 12 1,418,830,000 1,225,550,000 16%
Notes payable 13 8,704,900 1,895,750 359%
Employee benefits payable 14 55,945,867 36,929,912 51%
Interests payable 15 1,637,790 2,958,406 -45%
Dividends payable 16 365,161,451 213,351,043 71%
Current portion of non-current
17 -96%
liabilities 14,951,750 412,951,750
Long-term borrowings 18 90,000,000 -
Year 2011 Year 2010
Revenue 19 1,708,136,899 1,740,417,668 -2%
Cost of sales 20 (768,040,243) (742,312,284) 3%
General and administrative
21%
expenses 21 (158,186,232) (130,781,048)
Financial (expenses)/income 22 (12,370,981) 10,535,505 -217%
Asset impairment
111%
reversals/(losses) 23 (251,074) (119,061)
Investment income 24 118,228,183 148,514,648 -20%
Non-operating income 25 1,878,537 5,012,970 -63%
Non-operating expenses 26 (2,035,862) (3,037,490) -33%
Income tax (expenses)/ income 27 (148,561,633) (137,775,617) 8%
- 124 -
SHENZHEN CHIWAN WHARF HOLDINGS LIMITED
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
(All amounts in RMB unless otherwise stated)
[English translation for reference only]
3 Notes for significant fluctuation of major accounts in financial statements(Con’d)
(1) Increased investments and payment for project leads to the decrease in balance of cash at
bank and on hand.
(2) As at 31 December 2011, no balance on notes receivable.
(3) Berth 4#-5#, Machong Port project of DGW started in 2011, and prepayment for projects
converts into construction in progress, which results in the decline of advance to suppliers.
(4) A great fixed deposit in 31 December 2011 turns into current deposit in 2011 to pay for land
and project and this generated the drop in interest receivable.
(5) It is mainly due to the withdrawal of investment in joint venture,MPIL(Note 5(9)).
(6) This item is the premium of prepayment for income tax by quarter over annual tax payable,
and in accordance with stipulation, it should be shown in other current assets.(2010:Nil)
(7) The group indirectly bought in 20% shareholding of CMBL, by buying 100% shareholdings of
Hinwin,and increased investment in CMBL.Meanwhile, movement of investee’s net assets
under equity method also leads to the balance of long-term equity investment.
(8) The fall in net value of property, plant and equipment is mainly due to depreciation
accrual ,turning into investment properties and the adjustment after final settlement in
subsidiary etc.
(9) Extension of berth in subsidiary, tug construction and projects in Marchong port are
unfinished,which caused the remarkable increase in construction in progress.
(10) Intangible assets are mainly land and shore use right. Ordinary amortization contributes to the
decline in balance.
(11) Other non-current assets are mainly prepayment for land with no certificates in Machong
port ,advances for shore and prepayment for projects which are not yet commenced
(12) The slightly increase in short-tern loan is mainly due to the repayment of lots of long-term
borrowings,and the financing structure decreased.
(13) Notes payable is bank acceptance notes issued for settlement in daily operation.
(14) Year–end bonus and emoluments accrued in end of 2011 is higher than the same time of
2010.
(15) It is mainly due to the decrease of average financing structure.
(16) The balance is dividend payable to minority interest of CCT. At 31 December 2011, the
dividends of 2011 and 2010 are declared but not paid yet.
(17) The long-term borrowing is classified into current portion non-current liabilities according to
the contract and collection plan of bank
(18) It is mainly the long-term borrowing of DGW,and the group increase long-term borrowing to
optimize the financing structure.
(19) Macro- economic situation led to the shrink of import and export business and throughput of
port and the revenue declined accordingly.
(20) It is mainly due to the rise of employee cost and outsourced labor cost
(21) It is mainly due to the increase of employee cost, including the long-term incentive package.
(22) It is mainly due to the output of interest of borrowing in bank
(23) The accrual of provision for inventories with long age led to the increase in asset impairment
losses
(24) The decline in investment income is mainly due to the disposal of long-term equity investment
in 2010 and no such transaction in 2011.
(25) It is mainly due to the decline of income from disposal of non-current assets and no
government grants obtained in 2011.
(26) It is in line with the loss in disposal of non-current assets.
(27) Tax rates of almost subsidiaries arose from 22% to 24% and tax holiday of some berths
expired, which led to the increase of income tax expense.
- 125 -
