China International Marine Containers (Group) Co., Ltd.
2010
Annual Report
23 March 2011
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Section I Important Statement and Contents
Important Statement
The Board of Directors, the Board of Supervisor, as well as directors, supervisors and
senior management of China International Marine Containers (Group) Co., Ltd.
(hereinafter referred to as “the Company”) hereby undertake that the information and
data contained in this report are free from false records, misleading statements or
significant omission, and we shall assume individual and joint liabilities for the
authentication, accuracy and integrity of the contents in this report.
No directors, supervisors or senior management have any objection to the authenticity,
accuracy or integrity of the contents of this annual report.
This report has been audited by KPMG which has issued auditor’s report with
unqualified opinion.
Mr. Li Jianhong, the Chairman of the Board, Mr. Mai Boliang, the President of the
Company and Mr. Jin Jianlong, the General Manager of Financial Management Dept.,
hereby undertake that the financial report in this annual report is true and complete.
This report consists of Chinese and English versions and in case of discrepancy
between these two versions, the Chinese version shall prevail.
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Contents
Section I. Important Statement and Contents 1
Section II. General Information 3
Section III. Financial and Business Highlights 5
Section IV. Shareholders and Changing of Share Capital 7
Section V. Directors, Supervisors, Senior Management and Employees 13
Section VI. Corporate Governance Structure 24
Section VII. The Shareholders’ General Meeting 32
Section VIII. Report of the Board of Directors 33
Section IX. Report of Supervisory Council 66
Section X. Significant Issues 69
Section XI. Financial Report 80
Section XII. Documents for Reference 254
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Section Ⅱ General Information
I. Statutory Chinese and English names and abbreviations:
Chinese name: 中国国际海运集装箱（集团）股份有限公司
Chinese abbreviation: 中集集团
English name: CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO.,
LTD
English abbreviation: CIMC
II. Legal representative: Li Jianhong
III. Board secretary: Yu Yuqun
Tel: (86) 755-2669 1130
Fax: (86) 755-2682 6579
Representative for securities affairs: Wang Xinjiu
Tel: (86) 755-2680 2706
Fax: (86) 755-2681 3950
Address: CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan District,
Shenzhen
Zip code: 518067
E-mail: shareholder@cimc.com
IV. Registered address: 8/F, CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan
District, Shenzhen, Guangdong
Office address: CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan District,
Shenzhen, Guangdong
Zip code: 518067
Website: http://www.cimc.com
V. Newspapers designated by the Company for information disclosure: “China
Securities Journal”, ”Securities Times”, “Shanghai Securities News” and ”Ta Kung
Pao”.
Website designated by CSRC for information disclosure: http://www.cninfo.com.cn
Places where annual report is made available: Board secretary’s office and Financial
Management Dept.
VI. Stock exchange on which the Company are listed: Shenzhen Stock Exchange
Stock short form and code: CIMC (000039), CIMC B (200039)
VII. Other relevant information:
1. Date of initial registration: Jan., 1980
2. Place of initial registration: Shenzhen Administration for Industry and Commerce
3. Latest change in registration: 19 Nov. 2008
4. Place of registration after change: Shenzhen Administration for Industry and
Commerce
5. Corporate business license: 440301501119369
Tax registration No.: State Tax 440301618869509; Local Tax 440305618869509
6. Organization code: 61886950-9
7. Name and office address of certified public accountants engaged by the Company:
KPMG
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Office address: 38/F, Yuehai Tianhe Town Plaza, 208 Tianhe Road, Guangzhou
Zip code: 510620
Primary Banks Connected:
China Development Bank
The Export-Import Bank of China
China Construction Bank
Bank of Communications
China Merchants Bank
Bank of China
Citibank,N.A.
The Hongkong and Shanghai Banking Corporation Limited
Standard Chartered Bank
ING Bank
Nanyang Commercial Bank
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Section III Financial and Business Highlights
I. Key accounting data as of year 2010
Unit: RMB’000 Yuan
No. Item Amount
1 Total profit 3,674,607
2 Operating profit 3,438,168
3 Net profit attributable to shareholders of listed company 3,001,851
4 Net profit excluding non-recurring gain/loss (Note) 2,791,507
5 Net cash flow from operating activities 1,482,901
Note: Items of non-recurring gains/losses
Unit: RMB’000 Yuan
Items of non-recurring gains and losses Amount
Gains and losses from non-current asset disposal (164,757)
Governmental subsidy 93,685
Capital occupation fee from non-financial corporate that written into current gains and losses 7,919
Gains and losses from changes in fair value of transaction financial assets and transaction
financial liabilities and investment income from disposal of transaction financial assets,
transaction financial liabilities and financial assets available for sale besides valid hedging
business relating to normal operating business 209,457
Gains and losses from external entrusted loans 84,166
Other non-operating income and expenditure 79,139
Impact on income tax (62,571)
Impact on equity of minority shareholders (36,694)
Total 210,344
II. Impact on net profit and net assets from adjustment in compliance with IAS
Unit: RMB’000 Yuan
Net profit Net assets
Amount of this Amount at the Amount at the
Amount of last period
period period-end period-begin
As per IAS 3,007,463 964,649 16,219,107 14,193,198
As per PRC GAAP 3,001,851 958,967 16,223,057 14,198,208
Items to be adjusted based on IAS
Other 5,612 5,682 (3,950) (5,010)
As per IAS
Mainly of the amortization of the estimated increase of former fixed assets,
Explanation for difference
intangible assets.
III. Key accounting data and financial indicators in the recent 3 years
Unit: RMB’000 Yuan
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Increase/decrease
Items 2010 2009 2008
(%)
Operating revenue 51,768,316 20,475,507 152.83% 47,327,281
Total profit 3,674,607 1,465,385 150.76% 1,927,029
Net profit attributable to
shareholders of parent 3,001,851 958,967 213.03% 1,406,908
company
Net profit excluding
non-recurring gain/loss
2,791,507 -281,787 1090.64% 990,797
attributable to shareholders of
parent company
Net cash flow from operating
1,482,901 969,685 52.93% 3,366,538
activities
Basic EPS (RMB Yuan) 1.13 0.36 213.89% 0.53
Diluted EPS (RMB Yuan) 1.13 0.36 213.89% 0.53
Basic EPS after deducting
non-recurring gain and loss 1.05 -0.11 1054.55% 0.37
(RMB Yuan)
Weighted average return on
20% 7% 13% 10%
equity
Weighted average return on
equity after deducting 18% -2% 20% 7%
non-recurring gain and loss
Net cash flow from operating
activities per share (RMB 0.56 0.36 55.56% 1.26
Yuan)
Increase/decrease
Items 31 Dec. 2010 31 Dec. 2009 31 Dec. 2008
year-on-year (%)
Total assets 54,130,649 37,358,383 44.90% 34,557,863
Shareholders’ equity
attributable to shareholders of 16,223,057 14,198,208 14.26% 13,428,901
parent company
Net assets per share
attributable to shareholders of 6.09 5.33 14.26% 5.04
parent company (RMB Yuan)
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Section IV Shareholders and Changing of Share Capital
I. Changes in share capital
(I) Changes in share capital as at 31 Dec. 2010
1 Statement on changes in share capital
Unit: Share
Before this change Increase/decrease (+/-) After this change
Number of Ratio Issuance of Bonus Number of Ratio
Others Subtotal
shares (%) new share shares shares (%)
I. Shares subject to
620,177 0.02 0 0 0 0 620,177 0.02
trading moratorium
1. Shares held by state 0 0 0 0 0 0 0 0
2. Shares held by
0 0 0 0 0 0 0 0
state-owned corporations
3. Shares held by other
0 0 0 0 0 0 0 0
domestic investors
Including: Shares held by
domestic
0 0 0 0 0 0 0 0
non-state-owned
corporations
Shares held by domestic
0 0 0 0 0 0 0 0
natural person
4. Shares held by
0 0 0 0 0 0 0 0
overseas investors
Including: Shares held by
0 0 0 0 0 0 0 0
overseas corporations
Shares held by overseas
0 0 0 0 0 0 0 0
natural person
5. Shares held by senior
620,177 0.02 0 0 0 0 620,177 0.02
management
II. Shares not subject to
2,661,775,874 99.98 0 0 0 0 2,661,775,874 99.98
trading moratorium
1. RMB ordinary
1,231,297,165 46.25 0 0 0 0 1,231,297,165 46.25
shares (A-share)
2. Domestically listed
1,430,478,709 53.73 0 0 0 0 1,430,478,709 53.73
foreign shares (B-share)
3. Overseas listed foreign
0 0 0 0 0 0 0 0
shares
4. Others 0 0 0 0 0 0 0 0
III. Total number of
2,662,396,051 100.00 0 0 0 0 2,662,396,051 100.00
shares
Note: The total share capital of the Company is 2,662,396,051 shares, including
1,231,915,542 A Renminbi common shares (A shares) and 1,430,480,509 domestically
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listed foreign shares (B shares).
2 Statement on changes in shares subject to trading moratorium
Unit: Share
Number of Number of Number of
Number of
shares shares subject to shares Date of
shares subject
Name of released from trading subject to releasing
to trading Reason
shareholder trading moratorium trading trading
moratorium at
moratorium in increased in moratorium moratorium
year-begin
current year current year at year-end
Mai Boliang 371,026 123,676 123,676 371,026 Shares held by Senior
Li Ruiting 247,351 82,451 82,451 247,351 management was frozen by
China Securities Depository
Naught
and Clearing Limited
Liu Xuebin 1,800 600 600 1,800
Shenzhen Branch according
to relevant regulations
Total 620,177 206,727 206,727 620,177
(II) Share issuing and listing
1 The Company didn’t issue any shares or derivative securities in the past 3 years by
the end of the reporting period.
2 During the reporting period, total number of shares of the Company and its structure
remained unchanged.
3 Up till the end of reporting period, the Company has no inner staff shares.
II. Shareholders and actual controller
(I). Shares held by major shareholders (as at 31 Dec. 2010)
Unit: share
Total number of shareholders 160,312 shareholders, including 132375 ones of A-share， 27937ones of B-share
Shares held by the top ten shareholders
Shares subject to Number of
Shareholding Shareholding at
Name of shareholder Nature trading pledged or
ratio (%) period end
moratorium held frozen shares
Foreign
China Merchants (CIMC) Investment Limited 25.00% 665,599,037 0 0
investor
Foreign
COSCO Container Industries Limited 16.23% 432,171,843 0 0
investor
Foreign
COSCO Container Industries Limited 5.57% 148,320,037 0 0
investor
CMBLSA RE FTIF TEMPLETON ASIAN GRW FD Foreign
3.23% 85,998,058 0 0
GTI 5496 investor
Foreign
LONG HONOUR INVESTMENTS LIMITED 0.95% 25,322,106 0 0
investor
New China Life Insurance Co., Ltd–Dividend Other 0.83% 22,184,495 0 0
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Distribution–Individual Dividend-018L-FH002 Shen
HTHK/CMG FSGUFP-CMG FIRST STATE CHINA Foreign
0.69% 18,373,582 0 0
GROWTH FD investor
INDUSTRIAL & COMMERCIAL BANK OF
CHINA—E FUND VALUE GROWTH MIXED Other 0.68% 18,000,000 0 0
SECURITIES INVESTMENT FUND
GUOTAI JUNAN SECURITIES(HONGKONG) Foreign
0.66% 17,683,993 0 0
LIMITED investor
National Social Security Fund 102 Portfolio Other 0.53% 14,043,592 0 0
China Merchants Bank Co., Ltd-Everbright Pramerica
Other 0.50% 13,312,936 0 0
Advantage Allocation Stock Fund
Shares held by the top ten shareholders holding shares not subject to trading moratorium
Number of shares not subject to
Name of shareholders Type of shares
trading moratorium
China Merchants (CIMC) Investment Limited 665,599,037 Domestically listed foreign share
COSCO CONTAINER INDUSTRIES LIMITED 432,171,843 RMB common share
COSCO Container Industries Limited 148,320,037 Domestically listed foreign share
CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 5496 85,998,058 Domestically listed foreign share
LONG HONOUR INVESTMENTS LIMITED 25,322,106 Domestically listed foreign share
New China Life Insurance Co., Ltd–Dividend
22,184,495 RMB common share
Distribution–Individual Dividend-018L-FH002 Shen
HTHK/CMG FSGUFP-CMG FIRST STATE CHINA GROWTH
18,373,582 Domestically listed foreign share
FD
INDUSTRIAL & COMMERCIAL BANK OF CHINA—E
FUND VALUE GROWTH MIXED SECURITIES 18,000,000 RMB common share
INVESTMENT FUND
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 17,683,993 Domestically listed foreign share
National Social Security Fund 102 Portfolio 14,043,592 RMB common share
China Merchants Bank Co., Ltd-Everbright Pramerica Advantage
13,312,936 RMB common share
Allocation Stock Fund
1. Association relationship and acting-in-concert person relation exist between COSCO Container
Industries Limited and Long Honour Investments Limited, where COSCO Container Industries
Limited is subordinate wholly-owned subsidiary of COSCO Pacific Limited under COSCO Group;
Explanation on associated Long Honour Investments Limited is subordinate wholly-owned subsidiary of COSCO Hong Kong
relationship among the top ten (hereinafter refer to as “COSCO Hong Kong”)under COSCO Group; These two and other
shareholders or shareholders are not acting-in-concert person specified in “Regulatory Provisions on Disclosure of
acting-in-concert Information on Shareholding Change of Shareholders for Listed Companies”.
2. The Company is not aware of whether association relationship exists between other shareholders
and whether they are acting-in-concert person as specified in “Regulatory Provisions on Disclosure
of Information on Shareholding Change of Shareholders for Listed Companies”.
(II) Corporate shareholders with shareholding ratio exceeding 10%
1 None of shareholders with shareholding ratio exceeding 30% (controlling
shareholders)
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Date of
Name of Shareholdin Registere Business
Director incorporati Equity structure
shareholder g ratio d capital scope
on
Wholly-owned by
China Merchants China Merchants
Huang Qianru, Zhang HKD Investment
(CIMC) Investment 25.00% 1995.1.17 Holdings
Rizhong and LinWuliu 10,000 and holdings
Limited (International)
Limited
COSCO Container Chen Keng, Zhang Jie Wholly-owned by Investment
21.80% 2004.4.26 USD 1
Industries Limited and Xu Jian COSCO Pacific and holdings
(1) China Merchants (CIMC) Investment Limited is the wholly-owned subsidiary of
China Merchants Holdings (International) Limited. China Merchants Group Limited
holds 55.50% equity of China Merchants Holdings (International) Limited. China
Merchants (CIMC) Investment Limited holds 25.00% equity of CIMC. Therefore
China Merchants (CIMC) Holdings Limited actually holds 25.00% equity of CIMC.
(2) As a liability limited company incorporated in British Virgin Islands, COSCO
Container Industries Limited is a wholly-owned subsidiary under COSCO Pacific
Limited. COSCO Pacific Investment Holdings Limited holds 42.72% equity of COSCO
Pacific Limited. COSCO Pacific Investment Holdings Limited is a subordinate
wholly-owned subsidiary under China COSCO Holdings Limited and COSCO Group
holds 54.55% equity of China COSCO Holdings Limited. COSCO Container Industries
Limited held 21.80% equity of CIMC through COSCO Containers Industries Limited;
Long Honour Investments Limited is a subordinate wholly-owned subsidiary under
COSCO Hong Kong and holds 0.95% equity of CIMC.
Property and controlling relation between actual controller and CIMC
SASAC
100% 100%
COSCO China Merchants Group Limited
100%
54.55% 55.50%
China COSCO Holdings Co., Ltd. COSCO (Hong Kong) Group Ltd. China Merchants Holdings (International) Limited
100%
100%
COSCO Pacific Investment Holdings Limited
100%
42.72%
Long Honour Investment Limited
COSCO Pacific Limited
100% China Merchants (CIMC) Investment Limited
0.95%
COSCO Container Industries Limited
25%
21.80% CIMC
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2 The Company has no controlling shareholder. In the reporting period, no change
occurred to China Merchants (CIMC) Investment Limited and COSCO Container
Industries Limited
(III) Time for listing and trading of shares subject to trading moratorium
Shares subject to trading Balance of shares not
Balance of shares subject
Time moratorium listed for trade subject to trading
to trading moratorium
due to expiration moratorium
5 Sep. 2007 133,119,802 299,052,041 133,119,802
2 Jul. 2008 133,119,802 165,932,239 266,239,604
15 Jun. 2009 165,932,239 0 432,171,843
Note: On 30 Jun. 2009, 432,171,843 shares subject to trading moratorium of the
Company held by COSCO Container Industries Limited were listed for trading.
Shares subject to trading moratorium held by the top ten shareholders and trading
moratorium
Unit: Share
Quantity of shares Additional shares
Name of Date of list
subject to trading to be listed for Trading moratorium
shareholders for trade
moratorium trade
Mai Boliang 494,702 Shares held by Senior management
Li Ruiting 329,802 — — was frozen by China Securities
Depository and Clearing Limited
Liu Xuebin 2,400 Shenzhen Branch according to
relevant regulations
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Section V Directors, Supervisors, Senior Managements and Employees
I. Directors, supervisors and Managements
Total remuneration/ Whether receive
allowance received remuneration from the
Name Title Gender Age Office term
from the Company shareholders or other
(RMB’0000) organizations
Fu Yuning Chairman Male 54 Apr. 2007-Apr. 2010 - Yes
Li Jianhong chairman Male 55 Apr. 2010-Apr. 2013 - Yes
Director and
Mai Boliang Male 51 Apr. 2010-Apr. 2013 596.22 No
president
Wang Hong Director Male 48 Apr. 2010-Apr. 2013 - Yes
Xu Minjie Director Male 52 Apr. 2010-Apr. 2013 - Yes
Ding Independent Male
48 Apr. 2010-Apr. 2013 8.00 No
Huiping director
Independent
Jin Qingjun Male 53 Apr. 2010-Apr. 2013 12.00 No
director
Independent
Xu Jing’an Male 69 Apr. 2010-Apr. 2013 12.00 No
director
Qin Independent
Male 48 Apr. 2007-Apr. 2010 4.00 No
Rongsheng director
Lv Shijie Chief supervisor Male 46 Apr. 2010-Apr. 2013 - Yes
Huang
Supervisor Female 58 Apr. 2010-Apr. 2013 - Yes
Qianru
Feng
Staff supervisor Male 64 Apr. 2010-Apr. 2013 110.86 No
Wanguang
Zhao
Vice president Male 58 Apr. 2010-Apr. 2013 189.92 No
Qingsheng
Li Ruiting Vice president Male 63 Apr. 2010-Apr. 2013 104.27 No
Wu Fapei Vice president Male 52 Apr. 2010-Apr. 2013 138.38 No
Li Yinhui Vice president Male 43 Apr. 2010-Apr. 2013 134.52 No
Liu Xuebin Vice president Male 52 Apr. 2010-Apr. 2013 208.40 No
Yu Ya Vice president Male 54 Apr. 2010-Apr. 2013 137.24 No
General manager
Jin Jianlong of Financial Male 57 Apr. 2010-Apr. 2013 137.12 No
Management
Zeng Beihua General manager
of Capital Female 56 Apr. 2010-Apr. 2013 128.39 No
Management
Secretary to the
Yu Yuqun Board of Male 45 Apr. 2010-Apr. 2013 137.02 No
Directors
Total — — — — 2058.34 —
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(I) Basic information
Shares of the company held by directors, supervisors and senior managements
Shareholding at the Shareholding at the end of
Name Reason for change in shareholding
beginning of the year the year
Mai Boliang 494,702 494,702 —
Li Ruiting 329,802 329,802 —
Liu Xuebin 2,400 2,400 —
Total 826,904 826,904 —
(II) Main work experience of current directors, supervisors and senior
managements
1. Members of Board of Directors
Mr. Fu Yuning, Chairman of the Board of Directors. He is currently Director and
president of China Merchant Group, President and director as well as General Manager of
China Merchants Holdings (International) Co., Ltd., Chairman of the Board of Directors
of China Merchants Energy Shipping Co., Ltd, non-executive directors of China
Merchants Bank Co., Ltd, independent non-executive director of IDS Group Limited,
non-executive director of Sino Land Company Limited and independent non-executive
director of Capitaland Limited. Mr. Fu was graduated from Dalian University of
Technology in 1982 with bachelor degree in port engineering. He got the doctor’s degree
in offshore engineering mechanics from UK Brunel University in 1986 and worked in the
university as post-doctoral researcher for many years. Mr. Fu ever took the post of
Directing Manager of Chiwan Base and China Nanshan Development (Group)
Incorporation, and of Vice President of China Merchants Group. He acted as Director of
the Company since Apr. 2007, due to work reason, Mr. Fu resigned the job as Director of
the Company, Chairman of the Board on 25 Oct. 2010.
Mr. Li Jianhong, Chairman of the Company, is currently President of COSCO Group.
Mr. Li holds such degrees as MBA from University of East London and master of
economic administration from Jilin University and holds the title of senior technical title
of senior economist. He ever work for COSCO Group and took the post of Factory
Director of COSCO Nantong Shipyard, of General Manager of COSCO Industry
Company, and of Assistant President, Chief Economist and Vice President of COSCO
Group, of Chairman of COSCO Corporation (Singapore) Limited, of Chairman of the
Board of Sino-Ocean Land Holdings Limited, of Chairman of COSCO Shipyard Group
Co., Ltd., as well as of President for China business of Nantong COSCO KHI Ship
Engineering Co., Ltd.. Meanwhile, Mr. Li Mr. also has been director of COSCO Holding
Limited, COSCO Pacific Limited and COSCO International Holdings Limited (all of
which are listed in Hongkong Exchanges and Clearing Limited) Li is also vice director of
China Society of Naval Architecture and Offshore engineering and Vice President of
China Association of National Shipbuilding Industry etc. He has been awarded the 3rd
Session of National Outstanding Young Entrepreneur and Model Worker of National
Transportation System in 1995. He has been Director of the Company since March 1995
and acts as Director of the Company again since 25 October 2010.
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Mr. Mai Boliang, is the director and President of the Company. He graduated from
mechanical engineering of South China University of Technology and served as
technician and Manager and Deputy Manager of Product Technical Dept. since 1982. He
began to serve as president of the Company in 1992 and act as Director of the Company
since March 1994.
Mr. Wang Hong, Director. He is currently General Manager of Strategy Research
Department of China Merchants Group Limited, concurrently Director of China
Merchants Group (Hong Kong) Limited, Director of China Merchants Holdings
(International) Co., Ltd., as well as Director of China Merchants Energy Shipping Co.,
Ltd. Mr. Wang graduated from turbine management in Dalian Maritime University in
1982 and then continued his study in the Graduate School of University of Science and
Technology Beijing and Graduate School of Chinese Academy of Social Sciences and
achieved MBA degree and PHD of management respectively. He ever served as Marine
engineer of COSCO Guangzhou Ocean Shipping Company, General Manager of
CIESCO (China Communications Import & Export Corporation) Ocean Shipping Dept.,
General Manager of CIESCO Financial Dept and CIESCO General Manager, Managing
Director of China Merchants (Hong Kong) Haitong Limited, General Manager of
Performance Appraisal Dept. and HR Dept. in China Merchants Group, and standing
Vice General Manager of China Merchants Holdings (International) Co., Ltd as well as
Vice Chairman in Shanghai International Port (Group) Co., Ltd. He began to act as the
Company’s Director since April 2007.
Mr. Xu Minjie, Director. He is currently Executive Director, Vice Chairman and
Managing Director of COSCO Pacific Limited as well Chairman of Investment &
Strategic Planning Council and member of Executive Board, Nominating Council and
Remuneration Council. Mr. Xu graduated from ship navigation in Qingdao Ocean
Shipping Mariners College and obtained MBA degree from Shanghai Maritime
University and master’s degree in management from Maastricht School of Management
in Netherlands. Mr. Xu joined COSCO Group in 1980. In November 1998, he began to
serve as General Manager of COSCO Shanghai International Ocean Freight &
Forwarding Company. From December 1998 to September 2003, he served as Vice
Chairman of Shanghai International Freight Forwarders Association. In September 2003,
he began to serve as General Manager of Freight Dept. in COSCO Group. He was also
once shipmaster of ocean shipping, Department Manager of Container Freight Dept,
Operation Dept and Ocean Shipping Export Dept in COSCO Shanghai as well as deputy
manager of Shanghai International Ocean Freight Company. From June 2005 to January
2007, he served as Director of China Communications and Transportation Association.
Mr. Xu owns an ocean shipping experience of over 30 years and extensive experience in
enterprise operation and management. His predominant foresight and administrative
capacity are received good reputation in the industry. In January 2007, Mr. Xu began to
serve as Vice Chairman and Managing Director of COSCO Pacific Limited and was in
charge of general management, the development strategy, corporation governance and
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financial management affaires. He has been the Company’s Director since April 2007.
Mr. Qin Rongsheng, Independent Director with PHD in management, is a certified
accountant in China. He is currently CCP Secretary, professor and doctor tutor of Beijing
National Accounting Institute, and Vice President of China Audit Society, Vice President
of China Association of Chief Financial Officers, member of China Certified
Accountants Test Commission under the Ministry of Finance, member of China Auditing
Standards Commission and part-time professor of Tsinghua University and Renmin
University of China. He didn’t act as Company’s Independent Director since April 2010.
Mr. Ding Huiping, Independent Director with PHD in management, professor and
doctor tutor of School of Economics and Management in Beijing Jiaotong University, is
Director of Chinese EnterpriseCompetitive Power Research Center in Beijing Jiaotong
University. He concurrently acts as independent director of CRBC International Co., Ltd.
He graduated from Northeastern University with bachelor of engineering degree in Feb.
1982. He went to Sweden for study in 1987, got licentiate of engineering in 1991, got
economics doctor degree in 1992 and then has been postdoctoral researcher. He returned
to China in 1994, and then has been working in School of Economics and Management of
Northern Jiaotong University (now named Beijing Jiaotong University) till now. Mr.
Ding once concurrently acted as independent director of China Merchants Bank, Huadian
Power International Corporation Limited and Shandong Luneng Taishan Cable Co., Ltd.
His research direction: finance, decision-making of investment & financing and
enterprise evaluation and administration on enterprise economy and innovation. Mr. Ding
has been acted as Independent Director of the Company since April 2010.
Mr. Jin Qingjun, Independent Director, is a master and securities lawyer. He currently
holds such positions as partner of King & Wood Law Firm as well as visiting professor of
China University of Politic Science and Law, arbitrator of Shenzhen Arbitration
Committee, arbitrator of China International Economic and Trade Arbitration
Commission, member of Appeals Review Committee of Shenzhen Stock Exchange, legal
advisor of Washington Court of Appeals in China, legal advisor for many financial
institutions, securities companies and listed companies at home and abroad, legal advisor
of international financial corporations and many listed companies in USA and Hong
Kong, member of China Law Society, China International Law Society, China Maritime
Law Society and Inter-Pacific Bar Association. Mr. Jin once worked as chief legal
advisor of Shenzhen Stock Exchange and director of Listing Regulatory Commission,
lawyer in Johnson Stokes & Master and British Law Firm, full-time lawyer of Zhongxin
Law Firm, executive partner of Shu Jin Law Firm. As one of the first lawyers in China to
obtain accreditation as lawyer, Mr. Jin is mainly engaged in legal affairs in such sectors
as finance, securities, investment, intellectual property, real estate, corporation,
bankruptcy and litigation and has made outstanding contribution in securities, funds,
banking, merger and acquisition. In April 2007, he began to serve as Independent
Director.
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Mr. Xu Jing’an, independent director. He graduated from Fudan University News
Department in 1964 and then worked in Central Marxist-Leninist Research Institute,
Central Policy Research Institute, State Planning Commission, Office of Economic
Policy Reform under State Council and State System Reform Commission. Mr. Xu
served as Vice Director of China Economic System Reform Research Commission in
1985 and Director of Shenzhen Economic Reform Commission and Vice Director of
Shenzhen Stock Exchange in 1987. Currently, he serves as Chairman of Xu Jing An
Investment Consultants, Chairman and research fellow of Shenzhen New Century
Civilization Research Institute. In April 2007, he began to serve as Independent Director.
2. Members of Supervisory Committee
Mr. Lu Shijie, Chief Supervisor. He took the post of Chief Financial Officer in COSCO
Pacific Limited in Jan. 2008. Mr. Lu Shijie is a member of Hong Kong Institute of
Certified Public Accountants, American Institute of Certified Public Accountants, the
Chartered Institute of Management Accountants and Certified Management Accountants
of Canada. Mr. Lu Shijie is MBA of University of Ottawa and holds bachelor degree in
administration in University of York. He once acted as CFO and General Manager in
listed company in Hong Kong and American multinational Company, for example, in
New World TMT, Wang On Group Limited and Hong Kong Plastics Department of
General Electric Company. He has been acting as supervisor of the Company since Jun.
2009.
Ms. Huang Qianru, supervisor. She now serves as Vice General Manager of China
Merchants Holdings (International) Co., Ltd., taking charge of the company’s financial
affairs. She also serves as Independent Non-executive Director in China Gas Holdings
Ltd. In 2004, she joined China Merchants Holdings (International) Co., Ltd. Mr. Huang
has had an over-15-year experience of working as a top executive in many globally
famous investment banks such as Societe Generale, Deutsche Morgan Grenfell, Samuel
Montague and Bear Stearns Asia, providing financial consulting and financing services
for not less than 50 companies in the Greater China Region and Asia. And Ms. Huang has
an MBA degree granted by University of Asia Oriental, Macau. She has been supervisor
of the Company since Jun. 2009.
Mr. Feng Wanguang, staff supervisor. Mr. Feng graduated from foundry major in
Mechanical Engineering Department of South China University of Technology. Mr. Feng
began to work in Shekou Huamei Steelworks in January 1982. Mr. Feng worked in
Shekou Industrial District Organization Dept from January 1983 to September 1986. Mr.
Feng worked in Hongda Glasses Co., Ltd. as General Manager from September 1986 to
January 1987. Mr. Feng worked in China Merchants (Hong Kong) HR Dept and Board
Office as Vice General Manager from January 1987 to September 1996. Mr. Feng
worked in China Merchants Zhangzhou Development Zone as Vice General Manager and
Vice CPC Secretary from September 1996 to April 1999; Vice CPC Secretary in CIMC
from April 1999 till now. Mr. Feng began to serve as supervisor in May 2002.
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3. Senior managements
Mr. Mai Boliang, director and President, please referred to the above introduction on
directors.
Mr. Zhao Qingsheng, Vice President. Mr. Zhao Graduated from Wuhan University of
Water Transportation Engineering (Wuhan University of Technology), majoring in marine
engineer. He is currently Vice President of the Company. Mr. Zhao joined China
Merchant Group in 1983 and served as General Manager of the Enterprise Dept. in China
Merchant Group from 1991 to 1995, Deputy General Manager of China Merchants
Holdings (International) Co., Ltd. from 1995 to 1999, and Vice Chairman of the
Company from 1997 to 1999. He has been Vice President of the Company since 1999.
Mr. Li Ruiting, Vice President. Mr. Li graduated from South China University of
Technology with bachelor degree in mechanical manufacturing. He is a senior engineer
and is currently the Company’s Vice President. Mr. Li began to serve the Company in
1987, and ever took the post of Manager of the Company’s Technology Dept. and QC
Dept., of Deputy General Manager and General Manager of Shenzhen Southern CIMC
Containers Manufacture Co., Ltd. and of General Manager of Shanghai CIMC Reefer
Containers Co., Ltd. Mr. Li has been the Company’s Vice President since 1995.
Mr. Wu Fapei, Vice President. Mr. Wu graduated from South China University of
Technology with bachelor degree in mechanical manufacturing and master degree in
engineering. He used to be teacher and associate professor of School of Business
Administration in South China University of Technology and Deputy General Manager of
Nanhua Bicycle Ronghui Co., Ltd. in Zhaoqing Guangdong. He joined the Company in
1996 and began to serve as Manager of Information Management Dept in December
1996, Assistant President of CIMC in December 1998 and Secretary to the Board of
CIMC in December 1999. He began to serve as Vice President of CIMC in March 2004.
Mr. Li Yinhui, Vice President. Mr. Li obtained bachelor’s degree in history from Jilin
University, MBA degree from School of Business in Nanjing University, and PHD in
economics from Jilin University. He worked in Central Committee of Chinese
Communist Youth League in 1991; worked in State Commission of Foreign Trade and
Economic Cooperation from May 1993 to March 2003; and in Ministry of Commerce in
March 2003. He served as Vice President of CIMC (part-time) from October 2002 to
October 2003 and began to his work as Vice President of CIMC in March 2004.
Mr. Liu Xuebin, Vice President. Mr. Liu graduated from Shenzhen University with a
bachelor’s degree in management. He joined the Company in 1982, and ever worked as
Deputy Manager of the Company’s Purchasing Dept., Deputy General Manager of
Nantong CIMC-SMOOTH SAIL Container Co., Ltd., Deputy General Manager of
Container Branch of CIMC Group, and General Manager of Xinhui CIMC Container Co.,
Ltd. In 1997, he began to serve as General Manager of Shenzhen Southern CIMC
Containers Manufacture Co., Ltd., and in December 1998, he also took post of the
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Assistant President of the CIMC and Chairman of Xinhui CIMC Container Co., Ltd. at
the same time. In March 2004, he began to serve as Vice President of CIMC.
Mr. Yu Ya, Vice President of the Company ,Vice Secretary of the Party and General
Manager of Public affairs Dept. Mr. Yu graduated from Mechanical Engineering
Department of Tianjin Light Industry Vocational Technical College, MBA of Nanjing
University. He used to serve as Secretary of Minister、Vice-Director of office department
in the Light Industry Dept (later it was China Light Industry Association). Then he served
as Deputy General Manager and General Manager of China National Food Industry
(Group) Corp., Vice-president of Sinolight Corporation, and Executive Director 、
Vice-Executive President. Mr. Yu joined the company in August.2007, and served as the
Vice secretary of the Party and General Manager of Public affairs Dept. He began to
serve as Vice President of CIMC since March 2010.
Mr. Jin Jianlong, General Manager of Financial Dept., a certified accountant. He
graduated from
Maanshan Institute of Iron and Steel Technology in July 1985, majoring in accounting.
From August 1975 to April 1989, he worked in Hangzhou Iron & Steel Works as Section
Chief of the Financial Dept. He joined the Company in 1989, and first worked as
Manager of the Financial Management Dept. of CIMC, and then of the Financial
Management Dept. of Shenzhen Southern CIMC Containers Manufacture Co., Ltd.. He
has been the Company’s General Manager of Financial Management since October 2001.
Ms. Zeng Beihua, General Manager of Cash management Dept. Ms. Zhen graduated
from Wuhan University, majoring in accounting. Ms. Zhen joined the company in 1989,
and ever took the post of the General Manager of Financial Dept.、Deputy General
Manager of CIMC Vehicle (Group) Corp., while General Manager of CIMC Vehicle
finance lease Corp.、General Manager of CIMC Finance Corp. She served as the General
Manager of Cash Dept. of the company since December 2009.
Mr. Yu Yuqun, Secretary to the Board. Mr. Yu obtained bachelor and master’s degrees in
economics from Beijing University. He once worked in the State Price Control Bureau.
He joined the Company in 1992 and first worked as Deputy Manager and then Manager
of Financial Affaires Dept., responsible for securities affaires and fund management. He
has been Secretary to the Board of the Company since March 2004.
(III) Concurrent positions held by Directors, Supervisors and Senior Managements
in organizations other than shareholder’s company
Relations with the
Name and title Organizations for concurrent positions Company (controlling Title
related/non- related)
Li Jianhong/Chairman China Merchants Group Limited Non-related Director and president
Chairman of China Merchants Energy
Naught Chairman
Shipping Co., Ltd.
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Managing Director
China Merchants Holdings (International) Co.,
Related and Vice Chairman of
Ltd
the Board
Concurrent positions in 33 controlling
Mai
subsidiaries such as CIMC Vehicle Group and Controlling subsidiary Chairman/Director
Boliang/Director/President
Shenzhen South CIMC Limited
General Manager of
Wang Hong/Director China Merchants Group Limited Non-related Strategy Research
Department
China Merchants Group (Hong Kong) Limited Non-related Director
China Merchants Holdings (International)
Related Director
Limited
China Merchants Energy Shipping Co., Ltd. Non-related Director
Vice Chairman of the
Xu Minjie/Director COSCO Pacific Holding Limited Related Board and General
Manager to the Board
COSCO(Hong Kong) Investment Co., Ltd. Non-related Director
Taicang International Containers Co., Ltd. Non- related Director
Concurrent positions in 34 companies
Non-related Chairman
subsidiary to COSCO Pacific Limited
Concurrent positions in 9 joint controlling and
joint operation companies of COSCO Pacific Non-related Director/Chairman
Limited
Director/Vice
COSCO Pacific Holding Limited Non-related
Chairman /Chairman
Professor and doctor
tutor of School of
Economics and
Director of Chinese
Ding Huiping/Independent Enterprise
Beijing Jiaotong University Non-related
Director Competitive Power
Research Center in
Beijing Jiaotong
University. He
concurrently acts as
CRBC International Co., Ltd Non-related Independent Director
Jin Qingjun/Independent
King & Wood Law Firm Non-related Senior partner
Director
Invesco Great Wall Fund Management
Non-related Independent Director
Company Limited
Shenzhen Syscan Technology Co., Ltd. Non-related Independent Director
China United Travel Co., Ltd. Non-related Independent Director
China University of Politic Science and Law Non-related Part-time professor
School of Law of Tsinghua University Non-related Part-time professor
Shenzhen Arbitration Committee Non-related Arbitrator
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China International Economic and Trade
Non-related Arbitrator
Arbitration Commission
Xu Jing’an/Independent
Xu Jing An Investment Consultants and Non-related Chairman
Director
Shenzhen New Century Civilization Research Chairman, research
Non-related
Institute fellow
Shenzhen Nanshan Power Station Co., Ltd. Non-related Independent Director
Lv Shijie/Chief Supervisor COSCO Pacific Limited Related CFO
Concurrent positions in 8 subsidiary
Non-related Director/Chairman
companies of COSCO Pacific Limited
Concurrent positions in two joint control
entities and affiliated companies under Non-related Director
COSCO Pacific Limited
China Merchants Holdings (International) Co., Director, Deputy
Huang Qianru/Supervisor Related
Ltd General Manager
Feng
CIMC Holdinigs (B.V.I.) Limited Controlling subsidiary Director
Wanguang/Supervisor
Concurrent positions in 48 companies such as
Zhao Qingsheng/Vice
Shenzhen South CIMC Limited and Enric Controlling subsidiary Chairman/Director
President
Energy Equipment Holdings Limited
Concurrent positions in 6 controlling
Li Ruiting/Vice President subsidiaries such as Shanghai CIMC Reefer Controlling subsidiary Chairman/Director
Containers Co., Ltd.
Concurrent positions in 40 controlling
subsidiaries such as Shenzhen South CIMC
Wu Fapei/Vice President Controlling subsidiary Chairman/Director
Limited and CIMC Logistic Equipment
(Chongqing) Co., Ltd.
Concurrent positions in 6 controlling
subsidiaries such as Shenzhen South CIMC
Liu Xuebin/Vice President Controlling subsidiary Chairman/Director
Limited and CIMC Logistic Equipment
(Chongqing) Co., Ltd.
Concurrent positions in 10 controlling
subsidiaries such as CIMC Shenzhen Special
Li Yinhui/Vice President Controlling subsidiary Chairman/Director
Vehicle Co., Ltd. and Dalian CIMC Railway
Equipment Co., Ltd.
Concurrent positions in 9 controlling
Yu Ya/ Vice President subsidiaries such as CIMC Raffles Ocean Controlling subsidiary Chairman/Director
Engineering (Singapore)Co., Ltd.
Concurrent positions in 70 controlling
Jin Jianlong/General
subsidiaries such as Shenzhen South CIMC
Manager of Financial Controlling subsidiary Director
Limited and Enric Energy Equipment
Management
Holdings Limited
Zeng Beihua/ Manager of Concurrent positions in 29 controlling
Controlling subsidiary Director
Capital Management subsidiaries such as Yangzhou CIMC Tonghua
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Department Special Vehicle Co., Ltd.
Concurrent positions in 17 controlling
subsidaries such as CIMC Raffles Ocean
Yu Yuqun /Secretary to the Engineering (Singapore)Co., Ltd., CIMC
Controlling subsidiary Director
Board Enric Energy Equipment Holdings Limiteand
Shenzhen CIMC-Tianda Airport Support Co.,
Ltd.
(IV) Remuneration for directors, supervisors and senior management
Procedures and basis to determine remuneration for directors, supervisors and senior
management:
As stipulated in the Articles of Association, the remuneration for directors and
supervisors is determined by shareholders meetings and that for senior management is
determined by the Board of Directors. In the reporting period, CIMC senior management
get paid in CIMC or subsidiaries.
CIMC has established a complete remuneration system and incentive mechanism. First,
we implement annual-salary system for directors, supervisors and senior management
who work for and get paid from CIMC. Secondly, CIMC board of directors formulates
“CIMC Leading Group Measurement and Management Regulations” at the beginning of
each year to implement performance measurement for relevant personnel and determine
performance-based incentive amount at the end of each year. Shareholders’ meeting
authorizes the board of directors to determine the remuneration of chairman and President
Mai Boliang in compliance with “CIMC Leading Group Measurement and Management
Regulations” and president formulates proposals for performance-based bonus for other
senior management subject to approval by Remuneration Council under the board of
directors.
Of the 8 directors, Mr. Mai Boliang holds the position as president and gets paid in CIMC
and CIMC paid no remuneration to any other directors in the reporting period. Based on
approval by the shareholders meeting and board of directors, independent directors Jin
Qingjun and Xu Jing’an received RMB 120,000 as subsidy for independent directors in
reporting period, Qin Rongsheng and Ding Huiping received RMB 40,000 and RMB
80,000 respectively. Except for this, no other remuneration was paid to directors in the
reporting period. As staff supervisor, Mr. Feng Wanguang gets paid in CIMC and no
remuneration was paid to other supervisors in the reporting period.
Details on remuneration (before tax) of current directors, supervisors and senior
management please see basic information above about the directors, supervisors and
senior management.
(V) Changes Directors, Supervisors and Senior Management
Of Independent Directors of the 5th Board of Directors, Qin Rongsheng, Jin Qingjun and
Xu Jing’an came to expire on April 2010 that the Board nominated Mr. Ding Huiping,
Mr. Jin Qingjun and Mr. Xu Jinag’an as candidates of independent directors for the 6th
Board of Directors. As the Shareholders’ General Meeting 2009 was convened on 26 Apr.
2010, of which proposal on electing Mr. Ding Huiping, Mr. Jin Qingjun and Mr. Xu
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Jinag’an as independent directors of the 6th Board of Directors was approved.
II. About the employees of the Company
(I) Number of employees
By December 31, 2010, the number of employees of the Company is 63,354.
(II) Composition
Post composition Education status
Manageme Production Junior
Technology Doctor Master Bachelor Others
nt workers college
Number 7083 4844 51427 23 497 5064 6281 51489
Proportion
(%) 11.2 7.6 81.2 0.0 0.8 8.0 9.9 81.3
The Company does not need to bear expense for retired employees.
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Section VI Corporate Governance Structure
I. Corporate governance
In the reporting period, the Company constantly perfected corporate governance and
standardized the operation of the Company strictly in accordance with the provisions in
such laws and regulations as the Company Law, Code of Corporate Governance for
Listed Companies in China, Guideline for Establishing Independent Director System in
Listed Companies, Rules for the General Meeting of Shareholders of Listed Companies
and Guidelines for the Articles of Association of Listed Companies. Corporate
governance was based on the regulators in the rules of procedure of shareholders’ general
meeting, the Board’s meeting and Supervisors’ meeting, as well as work rules for
president, and through the roles of special committee of the Board, thus assuring the
duties performance and responsibility fulfillment of the meetings held by the
shareholders, directors and supervisors. Interests of the shareholders and the Company
were protected and corporate governance which complied with the requirements of
modern enterprise management was initially established.
In accordance with regulations and requirements on corporate governance of listed
companies stipulated by CSRC, CSRC Shenzhen Bureau and Shenzhen Stock Exchange,
the Company positively and timely completed issues as rectifying and improving of
corporate governance, specific check, implement of system required by supervision
department. Meanwhile, the Company implemented and revised basic working rules for
financial accounting such as Rules on Accounting Management of CIMC, Rules on
Management of Internal Incomings and Outgoings of CIMC, Management System for
Financing etc..
The Company actively participated in trainings for directors and supervisors of listed
companies organized by regulatory ministry. The Company organized all directors,
supervisors and senior managements as well as shareholder holding over 5% shares of the
Company, strictly obey relevant laws, statutes, regulations and cases to purchase and sell
shares of the Company without violating, improved self-discipline and restraint
consciousness on relevant action of the above personnel.
As for implement of administrative system on inner information and insider，the Board of
the Company and secretary to the Board are in charge of administrative work of inner
information, and secretary office of the Board is in charge of daily procedure of
registration and record of inner information. The Company strictly in line with
regulations and requirements stipulated in system, so as to conduct efficient supervision
for inner carry-over and disclosure of inner information. Upon self-examination, there
were no particulars about insider took advantages of inner information to purchase and
sell shares of the Company before the disclosure of major sensitive information that shall
have an impact on the share price of the Company.
In 2010, the Company actively cooperated with the CSRC Shenzhen Bureau to complete
the routine inspection work to the Company which maintained a smooth and good
communication with supervision department and secretary to the Board has received
praise from CSRC Shenzhen Bureau for the Company has done a good job in actively
promoting regular development of listed companies. In accordance with the assemble
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disposition and requirement of CSRC Shenzhen Bureau, the Company accomplished
summary and report of documents on investigation of basic work of financial accounting
standard in accordance with general allocation and requirement of CSRC Shenzhen
Bureau and submission of inspection documents on basic financial accounting work of
listed companies which further improvement and standardization of basic financial
accounting work.
II. Performance of the Independent Directors
(I) Particulars about the independent directors attending the Board meetings:
Name of Independent Presence in person Entrusted presence Absence
Due presence (times)
Directors (times) (times) (times)
Qin Rongsheng 5 5 0 None
Ding Huiping 8 8 0 None
Jin Qingjun 13 13 0 None
Xu Jing’an 13 11 2 None
(II) Duty performance
In compliance with requirements of regulatory documents as Guideline for Establishing
Independent Director System in Listed Companies, the Articles of Association and Work
Details for Independent Directors, the Independent Director, being reasonably cautious,
diligently performed their duty to protect the overall interests of the Company, especially
legal interests of the minority shareholders. They attended the Board’s meetings on time,
reviewed carefully documents of the meetings and actively carried out investigation and
inspected subsidiaries of the Company to gather information needed for the
decision-making and gave clear opinions on the affairs discussed. They also paid special
attention to the auditor’s report and reports of the Company by public media, kept
themselves informed of the Company’s operation and management status, and significant
events happened or contingent and their influence. They reported to the Board the
problems existing in the operation of the Company and submitted annual duty report to
the Shareholders’ General Meeting of the Company.
In the reporting period, the Independent Directors carefully deliberated the significant
events which required their independent opinions and submitted opinion letters in
writing.
The significant events included:
1 Specific statement and independent opinion on external guarantee in 2009;
2 Special opinion on particulars of derivatives investment and risk control in 2009;
3 Independent opinion on re-electing of Board of Directors and engagement of senior
management;
4 Independent opinion on remuneration of directors and senior management of the
Company;
5 Independent opinion on Self-appraisal Report on Internal Control of CIMC 2009;
6 Independent opinion on engagement of senior management;
7 Specific statement and independent opinion from independent directors on relevant
events of the first half of 2010;
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8 Independent opinion on Stock Option Incentive Plan (Draft) of CIMC (Revised);
9 Independent opinion on relevant events concerning granting stock option in stock
option incentive plan.
(III) Independent role of Independent Directors in the Annual Report
Strictly in accordance with the requirements stipulated in Public Notice on Preparation of
Annual Report 2010 and Relevant Work by CSRC, the Independent Directors diligently
perform their duties as independent directors when preparing the Annual Report 2010.
1 Independent Directors heard the report on the operational condition 2010 by the
management staff in ways such as meeting of the Board. Independent Directors inspected
subsidiaries Shenzhen Southern CIMC Eastern Logistics Equipment Manufacturing Co.,
Ltd. and CIMC Shenzhen Special Vehicle Co., Ltd., and listened to report on annual
operational condition 2010 by the General Manager respectively.
2 Independent Directors communicated thoroughly with Klynveld Peat Marwick
Goerdeler Co., Ltd. (hereinafter refer to as “KPMG”) on personnel of auditing team, the
auditing plan, risk evaluation, test of fraud and its evaluation method as well as the
important point of the auditing work 2010, and the two parties reached agreement on
these items. Independent Directors examined and approved the Arrangement of the
Company’s Auditing Work 2010.
3 Independent Directors heard the report on the concluding stage in the period-end by
KPMG;
4 Independent Directors communicated with KPMG on the preliminary examination
opinions on the Auditor’s Report, and agreed on the preliminary examination opinions
that KPMG had issued audit report without reservations.
5 Independent Directors carefully deliberated the holding procedure and the documents
required for the 3rd Session of the 6th Board of Directs held on March 21, 2010 for
deliberating the annual report. They believed that the notice on the convening and
procedures of the Board’s meeting for deliberating the annual report were in compliance
with requirements of relevant rules and regulations; and that the annual report, auditor’s
report, financial statement and other documents on the resolutions to be discussed
were complete and in compliance with the requirements of relevant rules and regulations.
III. The Company was separated from the controlling shareholder in business,
personnel, assets, organization and financing
Majority shareholders for CIMC include China Merchants (CIMC) Investment Limited
and COSCO Container Industries Limited. CIMC was separated from the controlling
shareholder in business, personnel, assets, organization and financing as well as
independent accounting and independent bearing of liabilities and risks.
(I) In aspect of personnel: The Company was independent and complete in labor,
personnel and salary management and absolutely independent from the majority
shareholders. All senior managements received remuneration in the listed Company and
none of them holds a double position in the controlling shareholders entities.
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(II) In aspect of assets: The Company’s assets were complete, and there was the clear
property right relationship between the Company and the controlling shareholder. The
Company owns an independent management of the assets and there exist no such things
as the majority shareholders possessed or controlled the assets or intervened in the
operation management of the asset of the listed company.
(III) In aspect of financing: The Company owned independent financial department,
established independent accounting system and financial management system, opened
independent bank account, paid tax in line with laws independently.
(IV) In aspect of organization: The Company’s Board of Directors, Supervisory
Committee and other internal organizations are complete and operate independently.
Shareholders exercised their rights according to the law and bear relevant liabilities and
did not intervene in the operation activities of the Company directly or indirectly beyond
the shareholders’ general meeting.
(V) In aspect of business: The Company’s systems of production, purchase, auxiliary
production and sales are completely independent. Intangible assets as industrial property
right, trademarks and other non-patent technology were independently owned by the
Company. There existed no such thing as the Company and the subsidiaries produced and
sell the same product and there was no direct or indirect competition in business between
the two.
IV. Establishment and improvement of the internal control system
(I) General situation
CIMC has established a series of procedures and systems for the Shareholders’ General
Meeting, the Board of Directors and the Supervisory Committee to exercise their
decision-making power, executing power and supervisory power. In addition, the Board
of Directors has established three special committees for audit, remuneration &
measurement and strategy respectively. These special committees perform their roles to
discuss and decide on significant affairs of the Company in compliance with relevant
working rules.
The Board of Directors supervises the establishment, improvement and implementation
of the internal control system via the Audit Committee. The Audit Committee assists in
formulating and reviewing the internal control system and reviews and supervises
significant affiliated transactions. The Supervisory Committee reviews internal control
status and provides audit proposals.
In terms of corporate governance and internal control, the Audit & Supervision
Department assists the Board of Directors to recognize and evaluate material risks and
assists the group the to improve its risk management and internal control system; assists
the effective internal control system through evaluating the efficiency and effect of
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internal control and promoting its constant improvement; Implement duties of
examination and evaluation, consultation and service and report the auditing work of
internal control periodically to the Board’s audit committee, supervisory committee and
operation staff of the group.
In strict compliance with the Company Law, the Code of Corporate Governance for
Listed Companies, the Guiding Opinion on Establishing Independent Director System in
Listed Companies, the Stock Listing Rules of Shenzhen Stock Exchange, the Guidelines
for Fair Information Disclosure of Listed Companies, the Guidelines of Shenzhen Stock
Exchange for Internal Control of Listed Companies, the Several Provisions on
Strengthening Protection of Rights and Interests of Public Shareholders, the Decisions on
Amending Some Provisions on Cash Dividends by Listed Companies, the Regulations on
Takeover of Listed Companies, the Guidelines of Shenzhen Stock Exchange for
Management over Listed Company’s Shares Held by Its Directors, Supervisors and
Senior Executives and Changes thereof, and other relevant laws and regulations by the
central government, CSRC and other authorities, the Company continued to improve its
corporate governance and standardized its operation. The Company has established and
exercised effective internal control in all material respects. Meanwhile, through
continuous improvement, the Company has formed a sound and effective internal control
system, covering rules and methods for production and operation, purchase, selling and
distribution, investment, financial affairs and information disclosure. These rules and
methods have composed the Company’s internal control system.
After two years of efforts, the Company has set up internal control systems for its 65
wholly-owned or controlling subsidiaries, of which 28 have received an internal control
re-examination from the Company. By carrying forward the comprehensive budget
management and the accountability and authorization mechanism, as well as formulating
preventive methods in the Group’s level concerning significant purchases and takeovers
and other processes and mechanisms, the overall governance environment of the Group
has been greatly improved. In addition, the various rules have become more systematic
and more new rules have been formulated. All relevant departments including the audit
and information departments, the purchase department and the HR department have been
working closely together to strengthen control of various risks and follow up problems
found in the internal examination of internal control until they are addressed.
In 2010, the Company put further efforts in integrating its rules into a consistent system
and relevant management. It held special meetings and appointed specialized functional
organs to prescribe the establishing, improving and issuing processes for rules, as well as
to examine, revise and terminate the Company’s internal operation rules and basic
management rules. By continuously improving various management rules, the Company
tried to standardize its internal business processes and management so as to control risks
arising from the course of its operation. Upon its efforts in integrating its rules into a
consistent system, the Company also proactively upgraded its internal control to meet
requirements of the Implementation Guidelines for Enterprise Internal Control issued by
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the Ministry of Finance and other four government authorities in Apr. 2010. As a result,
the Company has not been recognized by CSRC as one of the first 26 key pilot
enterprises on the main board of the Shenzhen Stock Exchange for the implementation of
the Implementation Guidelines for Enterprise Internal Control.
(II) Pending issues concerning corporate governance and rectification plan
From Oct. to Dec. 2010, the Shenzhen CSRC Bureau carried out an on-site examination
in the Company and stated their concerns, which mainly related to some operation details
of the Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee,
the formulation and execution of some internal control rules, some details of information
disclosure, and the operation and execution of financial management and accounting.
The Company has given its explanations to the Shenzhen CSRC Bureau concerning the
aforesaid issues. At the same time, it has formulated some preliminary rectification
measures. It will further disclose and adopt rectification measures when the Bureau issues
its formal conclusion opinion.
(III) Establishment and execution of the Company’s internal control rules for financial
reports
The financial management system of the Company is sound and effectively executed. The
system is divided into four grades, i.e. rules, provisions, methods and specific rules
(signed and issued by the President) and guidelines (signed and issued by department
chiefs), covering management over accounting, funds, budgets, payments, internal
transactions and events, etc..
The Company has established unified accounting policies for the Group. As for
subsidiaries abroad which adopt IFRS for accounting, they are brought under the Group’s
unified accounting policies in the consolidation. In this way, it can be ensured that all
entities consolidated are accounted for under the same accounting policies. If a change of
key accounting policies is required or needed, approval from the Board of Directors must
be obtained. And change of ordinary accounting policies must be approved by the top
management.
Any change of the accounting estimates must be approved by the management. Despite
the fact that there are no specific rules for fair value, the recognition methods for fair
value must be approved by the Board of Directors.
Correction of material accounting errors shall be approved by the management. And there
have been no such events in the past three years.
As for asset impairment tests, the Company has explicit stipulations for the process and
approval of asset impairment recognition, which the Company has been strictly abided by.
Besides, checks and re-checks are carried out on a frequent basis.
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In Mar. 2010, pursuant to the requirements of the Shenzhen CSRC Bureau, the Company
established the Accountability Mechanism of CIMC for Material Errors in Annual Report
Preparation and Disclosure and the Financial Principal Mechanism of CIMC, which were
reviewed and approved at the Eighth Session of the Sixth Board of Directors for 2010
held on 1 Dec. 2010.
No material defects had been found concerning the Company’s internal control on
financial reports by the end of 2010.
(IV) Self-examination and rectification for the special campaign for basic accounting
activities
In Apr. 2010, the Shenzhen CSRC Bureau issued the Notice on Special Campaign for
thoroughly Regulating Basic Accounting Activities in Shenzhen. In accordance with the
Notice, the Company carried out a special campaign for standardizing basic accounting
activities within the Group, on which the Audit Committee gave its instructions and
carried out necessary examinations. A special task team for the special campaign was set
up, with President Mr. Mai Boliang as the team leader and Financial GM Mr. Jin Jianlong
as the executive deputy leader, including financial principals and other financial
personnel from all subsidiaries. The special campaign was divided into two phases—the
self-examination phase and the rectification phase, stretching over six months and
covering the over 100 subsidiaries registered in China Mainland.
The special campaign was carried out at three steps, i.e. self-examination, rectification
and re-check. The Financial Management Department of the Group appointed specialized
personnel to collect self-examination reports from subsidiaries and followed up their
examination progress as a way to ensure that the self-examination was complete and
timely. In addition, specialized personnel were also appointed to summarize the
self-examination activities and produce a general report on the self-examination results of
the Group. All subsidiaries were required to produce a rectification report on problems
found in the course of the special campaign, addressed the problems in a timely manner.
As for pending rectification matters, they were assigned to specific personnel. And the
subsidiaries were required to formulate relevant rectification measures and finish the
required rectifications in a given period. On 30 Jun. 2010, the Rectification Report on
Special Campaign for Standardizing Basic Accounting Activities was reviewed and
approved at the Second Session of the Sixth Board of Directors of the Company for 2010.
(V) Horizontal competition and related-party transactions
Horizontal competition arises between the Company and the subsidiary of China
Merchants Group (the controlling shareholder of the Company’s first majority
shareholder). One of the Group’s four core businesses—the offshore engineering
business—is partially the same with or similar to the business of the said subsidiary of
China Merchants Group, and horizontal competition to some degree has thus formed. The
said subsidiary of China Merchants Group commenced and developed its offshore
engineering equipment business earlier than the Company. Later, the Company also
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gained the opportunity to acquire an offshore engineering enterprise—Yantai Raffles. As
a result, the horizontal competition was unavoidable due to objective circumstances.
Despite the fact that China Merchants Group does not hold shares of the Company
directly, the Company will still communicate with its first majority shareholder in terms
of the emphasis points and target markets of the Company’s offshore engineering
business, so as to avoid direct competition.
Product selling and purchasing activities in the container business arise between the
Company and a subsidiary of China Ocean Shipping (Group) Company—the Company’s
majority shareholder. For more details, see the part of related-party transactions in the
notes to the financial statements for the year.
V. Senior management performance evaluation, motivating and restraining
mechanism
CIMC has established a set of performance measurement, motivating and restraining
mechanism under which the remuneration for senior management is connected with
corporate performance and personal performance.
To ensure standard, healthy and sustainable development for CIMC, attract talented
people, maintain the stability of the senior management team and safeguard the interests
of all shareholders, CIMC formulated “CIMC Leading Group Measurement and
Management Regulations” based on medium and long-term strategic targets. Based on
this, CIMC formulates measurement targets at year beginning and determines total
remuneration at year end according to the accomplishment of various targets. The
shareholders’ meeting authorizes the board of directors to determine the remuneration for
director and President Mr. Mai Boliang in compliance with “CIMC Leading Group
Measurement and Management Regulations”. For remuneration of other senior
management personnel, president formulates proposals and submits them to
Remuneration Council under the board of directors for approval.
In Sept. 2010, the Stock Incentive Drafted Plan of China International Marine Containers
(Group) Co., Ltd. (Revised) was reviewed and approved at the First Special
Shareholders’ General Meeting for 2010. Implementation of stock incentive plan will be
good for: establishment share and restraining system on interest among shareholders,
management team and backbone; management team will balance short-term goal and
long-term goal better; attract and keep excellent administrative talent and backbone of
business; durative creation of incentive value will assure long-term stable healthy
development and strengthen competitive power of the Company.
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Section VII The Shareholders’ General Meeting
Ⅰ. Annual shareholders’ general meeting
The Company convened the 2009 Annual Shareholders’ General Meeting in Shenzhen on
26 Apr. 2010.
The public notice on the resolutions made at the meeting was published on Securities
Times, Shanghai Securities News, China Securities Journal and Ta Kung Pao (HK) dated
27 Apr. 2010.
Ⅱ. Special shareholders’ general meetings
The First Special Shareholders’ General Meeting for 2010 was convened in Shenzhen on
17 Sept. 2010.
The public notice on the resolutions made at the meeting was published on Securities
Times, Shanghai Securities News, China Securities Journal and Ta Kung Pao (HK) dated
18 Sept. 2010.
The Second Special Shareholders’ General Meeting for 2010 was convened in Shenzhen
on 15 Nov. 2010.
The public notice on the resolutions made at the meeting was published on Securities
Times, Shanghai Securities News, China Securities Journal and Ta Kung Pao (HK) dated
16 Nov. 2010.
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Section VIII Report of the Board of Directors
I. Management discussion and analysis
(I)Environment change of industry and influence thereof
After a heavy slump, the global economy recovered gradually in 2010. Consumer
confidence for all major markets resumed to some degree. As a result, the global
economy and trade picked up rapidly and main economies around the world were ready
to grow again. Emerging economies served as the main driving force for the global
economic growth and main developed economies were also in the recovery.
In 2010, China’s export volume increased significantly by 31.30% on a year-on-year
basis, with the container throughput in ports reaching 145 million TEUs, an increase of
18.85% as compared to 2009. Also, market demand for inland logistic service and energy
and chemicals rebounded greatly. According to statistics from the US Energy Information
Administration, in 2010, the global oil demand per day grew 1.3%. The rising oil demand
from developing countries pushed up the global oil demand in 2010. In the year, due to
combined effects from growing demand, better economic data, the depreciation of US
dollars and other factors, oil prices were on the rise with fluctuations.
The container sector: In 2010, the V-shape rebound of the global economy boosted the
rapid recovery of the container trade and shipping. As a result, demand for containers was
strong. Shipping companies’ continuous increases of their capacity to meet the strong
demand, together with the container renewal demand accumulated over the past more
than one year, resulted in a considerable increase in container purchases. Meanwhile, in
order to cushion the cost pressure caused by the financial crisis, most shipping companies
lowered speeds of their ships, which reduced the turnover efficiency of containers. In the
first six months of the year, container makers could not give full play to their production
capacity in a timely way due to the labor force shortage. In addition, shipping companies
and container leasing companies encountered an inadequate stock of containers. All those
factors exacerbated the container shortage and beefed up demand for containers at the
same time. In the first half of 2010, all major container makers gradually put into use
their idle capacity, but the capacity resumption speed for the sector as a whole was still
slow for such reasons as shortage in labor force, a limited supply of raw materials and the
scheduling problem. In the second half of the year, supply and demand in the container
market basically achieved a balance. It was estimated that, in 2010, over 2.8 million
TEUs of containers were produced, of which the dry-cargo containers were over 2.5
million TEUs, representing a sharp increase of 250% year on year; the reefer containers
were about 0.184 million TEUs, up 93.68% as compared to 2009; and the special
containers (including those for particular regions) were 0.116 million TEUs, also
representing a significant year-on-year growth.
The strong and rapid rebound of demand pushed up prices for dry-cargo containers and
the profitability in the sector. For the first half, the price for a TEU was between USD
1,800 to 2,300 and rose to a range between USD 2,400 to 2,700 in the second half.
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Spurred by the active container trading, the storage, repair, lease and forwarding services
for containers also maintained strong growth. Meanwhile, as a new business model, the
modulized building and container house business was more and more welcomed in
markets.
The road transportation vehicle sector: In 2010, China’s special vehicle markets grew
enormously. Combined demand for seven types of special vehicles reached 0.7 million
units, up significantly by 56%. In the year, the government continued to carry out a
positive fiscal policy and increase its input for infrastructure. As such, real estate
investments were greatly encouraged, which resulted in a strong demand for vehicles for
infrastructure. In 2010, China’s new commercial houses increased 41% in construction
area as compared to 2009. A wild surge appeared in domestic demand for concrete
vehicles, with the relevant sales up 123% on a year-on-year basis. At the same time,
China’s automobile policies also contributed to the demand growth of special vehicles.
The fuel tax and the reform to transform administrative fees into taxes reduced the idle
cost of vehicles. The policy “to charge by weight” accelerated vehicle renewal. And with
laxer lending standards for special vehicle purchases, individual consumers with limited
funds were more interested in buying vehicles.
2010 witnessed a strong growth of 35% in China’s import and export, which directly
boosted recovery of demand for container transportation in ports. As a result, domestic
demand for semi-trailers for container transportation in 2010 rose significantly by 82% as
compared to 2009.
Thanks to China’s launch of many large infrastructure projects, economy revitalizing
plans by many local governments, and favorable policies such as “new cars for old”,
heavy truck markets also showed an explosive surge in 2010. In the year, a total of 1.017
million units of heavy trucks were sold in Chinese markets, representing a considerable
increase of 59.9% over 2009. In 2010, the government continued to raise emission
standards for commercial vehicles. As compulsorily required by the government, the
National Emission Standard Ⅳ will commence the pilot and then the full implementation
phase after 2010. Since 1 Jan. 2010, the pattern check for heavy trucks made under the
National Emission Standard Ⅲ has been stopped. And sale and registration of those
trucks have also been stopped since 1 Jan. 2011. Meanwhile, in 2010, the Ministry of
Transport promulgated the Fuel Consumption Limits and Measuring Methods for
Operating Vehicles for Passengers and Cargoes; the Ministry of Industry and Information
Technology promulgated an exposure draft for the Measuring Methods for Fuel
Consumption of Medium and Heavy Commercial Vehicles; and opinions are now being
solicited from relevant ministries and departments of the central government on the Plan
for Developing Energy-Saving and New Energy Vehicles (2011 to 2020). These new
policies and the National Emission Standard Ⅳ, through competition and reshuffle in the
sector, will wash out vehicles with high oil consumption and poor economic efficiency
and guide the sector towards low carbon and environmental protection.
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The equipments and services for energy, chemicals and food: Natural gas markets are
expected to enjoy a bright future. According to estimates from BP, natural gas will
become the fossil fuel with the fastest growth in consumption by 2030. And China will
take up half of the consumption growth in the Asia-Pacific region, with its growth rate
estimated at 7.6% per year.
China plans to increase the weight of natural gas in its energy utilization mix from the
present 4% to 9% by 2015 and 15% by 2020. According to the government’s
development plan for the new energy sector, natural gas consumption is set to triple to
260 billion cubic meters by 2015, equal to a compound annual growth rate of 18.8%. And
natural gas investments for the period from 2011 to 2020 are expected to reach 1 trillion
in RMB, most of which will go to the natural gas infrastructure including tubes, LNG
receiving stations and LNG plants. Along with the implementation of the West-East
Natural Gas Transmission Project, the Sea-Land Natural Gas Transmission Project, the
Sichuan-East China Natural Gas Transmission Project, the Russia-China Natural Gas
Transmission Project and other projects in the coming years, the growth in consumption
of natural gas will be faster than that of coal and oil. Quite a few LNG receiving stations
and plants are currently in the stage of planning or construction. Thanks to the increasing
supply of natural gas, as well as the huge investments in natural gas infrastructure, huge
demand for natural gas storage and transport equipments is created. Various storage and
transport equipments are needed along the supply chain of natural gas, for example, LNG
satellite storage stations, LNG steaming stations, LNG trailers, tank trucks, tanks and
CNG high-pressure cylinders. In the coming years, application of natural gas in the
downstream will also speed up, i.e. to develop transport vehicles using natural gas,
particularly taxies and buses. For the period from 2003 to 2009, vehicles using natural
gas in China quintupled to nearly 450,000 units and were expected to rise to 1,500,000
units by 2015 and 3,000,000 units by 2020. By the end of 2010, China had nearly 1,000
gas stations, which showed the rapid increase of vehicles using natural gas in China and
the urgent needs for gas station equipments.
In 2010, the global economy walked out of the slump, with the global chemical
production index rising by 23.5% at the end of the year as compared to that in Mar. 2009
when the global economy started to bottom out. Chemical and relevant companies around
the world proactively expanded their bases and business in emerging markets,
particularly China. The average annual growth for 2011 and 2012 is expected to reach
about 8% in the chemical sectors of emerging countries. In addition, in view of the plan
promulgated in 2009 by the Chinese government for stimulating domestic consumption
and revitalizing various sectors, huge investments will go to chemical infrastructure in
the next few years. Therefore, the chemical sector of China is expected to maintain a high
growth rate.
Hit by the global financial crisis and market saturation, growth of the liquefied food
sectors in developed countries has slowed down in recent years. However, the liquefied
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food sectors in such developing counties as China and India is growing rapidly due to
their strong economic growth, rising consumption and accelerated urbanization. It is
expected that in the coming five years, the total output of liquefied food in China will
grow by 12% to 15% per year. And development of the liquefied food sector will surely
boost development of the sector of transport, storage and processing equipments for
liquefied food.
The offshore engineering equipment sector: Along with recovery of the global
economy, crude oil prices rose significantly and global offshore engineering markets
were also picking up. New inquiries and orders appeared in the fourth quarter of 2010.
The rise of oil prices significantly boosted offshore engineering investments. Meanwhile,
in the long run, the International Energy Agency has increased its estimate of the global
energy demand to rise at an average annual rate of 1.5% for the period from 2009 to 2030.
It is expected that by 2030, oil will still be the dominant energy for consumption. Oil
fields onshore and in the shallow sea which are easy to be exploited are drying and it
becomes more and more difficult to exploit oil fields onshore, which means that the
actual exploitable oil is decreasing. As such, the gap in the future oil demand can only be
filled by oil and gas resources offshore, particularly those in deep sea. In view of energy
safety and building up more energy reserves, it has become an important energy strategy
for sovereign countries around the world to enhance exploitation of offshore and deep-sea
oil and gas fields. Recovery of the global energy demand, together with stable and high
oil prices, contribute to investment growth in the global sector of offshore engineering
equipments. Due to the fact that it usually takes a comparatively long time to produce a
drilling platform, the delivery peak of drilling platforms often appear one or two years
after an oil price peak.
The annual investments about USD 30 million in offshore oil and gas exploitation from
global markets, as well as the investments above RMB 30 million in that from China
during the period of the Twelfth Five-Year Plan for National Economic and Social
Development, create huge growth space for the global offshore engineering markets. To
develop the offshore engineering sector is a move with rising importance, which can
ensure a country’s energy safety and boost its economy significantly. The offshore
engineering industry has been labeled as a strategic emerging industry in China’s Twelfth
Five-Year Plan for National Economic and Social Development. And the Chinese
government will promulgate a series of relevant policies to support the rapid and healthy
development of its offshore engineering industry.
A brief analysis to the influence of changes in macro-policies and the sector on the
Company’s finance is set out below:
In 2010, the global economy gradually recovered. All businesses of the Group,
particularly the container business, showed significant growth. The Company adjusted its
operation strategies in a timely manner and adopted proactive and effective measures so
as to maintain a healthy status on its financial position, investments and acquisitions,
capital management and other activities. Capital turnover and the cash collection ability
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of the Company both improved as compared to 2009. Thanks to production recovery, sale
acceleration and operating scale expansion, as at 31 Dec. 2010, the total assets of the
Company stood at RMB 54.131 billion, up 44.90% as compared to 2009; total liabilities
at RMB 34.924 billion, up 62.20% on a year-on-year basis; and net cash flows from
operating activities at RMB 1.483 billion, representing a significant increase over 2009.
Raw materials such as steel purchased in 2008 as reserves was fully utilized in 2010 and
the corresponding inventory falling price reserves withdrawn was written back in the first
quarter of 2010.
With good liquidity at home and abroad in 2010, the Company maintained a rational
liability structure and strengthened its efforts in preventing financial risks. Among the
liability structure, short and long-term borrowings from external parties took up a smaller
proportion in the total liabilities. Short-term liabilities were increased moderately, which
led to an increase of the percentage of short-term loans on interest. Maintaining
communication and cooperation with major banks, the Group contained to gain support
from those banks. In Feb. 2010, CIMC Finance Co., Ltd. officially commenced business,
which would help the Group plan and manage its capital and increase the operating
capital efficiency and risk control.
In 2010, the global financial market encountered a liquidity glut, as well as uncertainties
from inflation and the foreign exchange market. China’s monetary policy was shifted
from being moderately loose to being prudent. In view of the circumstances above, the
Company carried out a prudent strategy on risk control, which effectively controlled risks
and safeguarded capital safety. At the same time, based on its business development, the
Company also used the leasing business, financial products and foreign exchange
instruments in a rational and flexibly way.
(Ⅱ) Business Review
1. General Performance
For 2010, the Company achieved revenue of RMB 51.768 billion (RMB 20.476 billion
for 2009), representing a sharp increase of 152.82% over 2009; net profits attributable to
the Company’s shareholders reaching RMB 3.002 billion (RMB 959 million for 2009), a
surge of 213.03% on a year-on-year basis. Both of the revenue and profits represented the
best records in the history of the Group.
Movements in Financial Highlights
Unit: RMB’000
Items 2010 2009 Change（％）
Revenue 51,768,316 20,475,507 152.82%
Total profits 3,674,607 1,465,385 150.76%
Net profits attributable to the
3,001,851 958,967 213.03%
Company’s shareholders
Notes:
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In 2009, affected by the global financial crisis, the dry cargo container business of the
Company was basically in a halt, which led to a great loss. Starting from the fourth
quarter of 2009, the demand for dry cargo containers grew again and the production
resumed in plants due to recovery of the global economy and the shipping sector. In 2010,
sales of dry cargo containers jumped significantly with sufficient orders and rising prices
and profitability from the second quarter of the year.
As a result, revenue, total profits and net profits attributable to the Company’s
shareholders all experienced a huge surge.
2. Business bases, products, services and capacities
The Company, together with its subsidiaries (jointly referred to as the Group hereinafter)
was mainly engaged in manufacture and services in relation of modern traffic
transportation equipments, energy, food, chemical and offshore engineering equipments.
In particular, these equipments were mainly involved in design, manufacture and service
for dry cargo containers meeting international standards, refrigeration containers, regional
special containers, tank containers, container wood floor, modulized housing containers,
road tank transportation autos, gas equipments and static storage tank, road transportation
vehicles as well as offshore engineering equipments. Other than the above, the Group was
also engaged in manufacture and service of logistic equipments, manufacture of airport
equipments and oceanic engineering and freight train, and properties development. The
Group has been trying to make each of its businesses to cover the whole life cycles of
products and provide best-quality and safe products and services for its clients.
Container business: The Group remained No.1 in the world by its quantity of production
and sales, and was able to produce the entire series of container products with self-owned
intellectual property. Included in its products and services were ISO dry cargo containers,
special refrigeration containers, other various special containers, pallet containers and
modulized housing containers, as well as container wood floor and container service. It
has already equipped with annual production capacity of over 2.0 million TEU; 18
industrial parks for container manufacturing in South China, East China, North China,
Chongqing and other regions of China, including over 10 dry-cargo container bases
located in the coastal region and Chongqing in China; refrigeration container
manufacture bases located in Shanghai, Yangzhou and Qingdao; special container
manufacture bases located in Nantong, Yangzhou, Xinhui and Qingdao. As for container
wood floor business, certain domestic production bases were respectively located in
Shenzhen, Jiangmen, Xuzhou and Jiashan; as for container demurrage business, the
Group has already owned many container service enterprises, forming a service network
covering the main line ports of the coast of China.
The Group works deeply on the container business, which covers the whole life cycle of
container products.
Road transportation vehicles business: capable to provide a product range covering 11
series and more than 1,000 varieties, including container skeleton semi trailer, platform
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car, rack wagon, tank truck, self-discharging wagon, refrigeration van, normal cabin
vehicle, curtain-side vehicle, mixer, pump vehicle, car carrier, fire fighting truck and
rubbish disposal vehicle, etc. The annual capacity exceeded 200,000 units, ranking the
No. 1 position both in the world and China. The Group now has 22 production bases and
24 companies for selling and distribution services, covering North America, Thailand,
Central China, East China, South China, North China, Northwest China, Northeast China
and other regions, as well as more than 400 service stations. As such, a business layout
featuring interactions between China and the US and between China and the Europe,
rationality and mutual support has taken shape, with the Group’s products sold to
mainstream markets such as the US and Japan.
Energy, chemical, food equipment and service business: major products and services
included: static storage tank, tank transportation equipment, craftwork procedure
equipment, engineering undertaking technology service.
Specific products include:
(1) Static storage tank: low-temperature fixed storage tank for LNG and industrial gas,
stainless storage tank for liquid food and chemical storage tank, etc;
(2) Tank transportation equipment: international standard/special liquid tank container
and gas tank container; LPG tank transportation vehicle, low temperature tank
transportation vehicle for LNG and industrial gas; CNG wrecker, and CNG pressure
container in high-pressured bottle;
(3) Craftwork procedure equipment: ferment tank for food and beverage, bright beer tank;
chemical reactor, tower facility, heat exchanger, and air vaporizer, etc;
(4)Engineering contract technology service: overall contract engineering regarding to
processing and allocation of liquid foods (bear and juices), LNG city peak-regulation
satellite station, LNG gasification station, LNG filling station, bottles of LNG supply
station, and LNG car system reform and various LNG and industrial gas application
projects; CNG and LNG filling systems, natural gas compressor and special compressors;
provision of EP+CS (design, purchase, construct and supervision) technology
engineering services in fields of storage and disposal regarding to LNG receivers, LPG
and other petroleum chemical gas.
At present, in terms of the energy, chemical and food equipment business, the Group
owns 15 manufacturing bases and R&D centers in China, Europe and other regions,
giving rise to a business layout featuring interactions between China and Europe,
rationality and mutual support.
Major enterprises of which CIMC was the controlling shareholder consisted of CIMC
Enric Holdings Limited and TGE GAS ENGINEERING GmbH. TGE GAS
ENGINEERING GmbH was a German independent contractor which had 25 years
engineering contract experiences regarding to low-temperature liquefied gas reserve station.
Business bases of Enric were mainly distributed in Langfang, Shijiazhuang, Bangbu, Jingmen, Beijing,
Nantong, and Zhangjiagang in China, and Holland, Belgium and Denmark in Europe. Nantong
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CIMC Tank Equipment Co., Ltd. has already become the tank container manufacturer of
the world with the largest scale and the most diversified products.
Offshore engineering equipment business: Manufacturing bases of the Group for
offshore engineering equipments are located in Yantai, Haiyang and Longkou, Shandong
province. In January 2010, the Company realized shareholding in CIMC Raffles Offshore
(Singapore) Limited which was incorporated in Singapore in 1994 with principal
business of constructing various ships for offshore petroleum and natural gas market,
which equipped the company with accumulated professional knowledge and construction
experiences in respect of diversified oceanic and offshore projects. Its main products
included jack-up drilling platform, semi-submersible drilling platform, crane ship,
pipe-laying vessel, floating production storage and offloading (FPSO), floating storage
and offloading (FSO), offshore supply vessel, offshore steel structure, shuttle propelled
tugboat and luxury pleasure-boat, etc.. In 2010, the Group established Shanghai CIMC
Offshore Engineering Research Center, Yantai Offshore Engineering Research Institute
and the National R&D Center for Offshore Oil Drilling Platforms, which improved the
Group’s research and design capacity in terms of high-end manufacturing and made the
Group a key member in the offshore engineering sector.
The manufacture base of airport equipments was located in Shenzhen, with main
businesses in respect of development, design, manufacture, installment and repair
services for passenger boarding bridge, boarding bridge for liner, guiding system for
aircraft parking, flight special vehicles, flight goods disposal system, automatic storage
and logistic system, as well as automatic parking system. Shenzhen CIMC-TianDa
Airport Support Co., Ltd. (hereinafter referred to as “CIMC Tianda”), a subsidiary of the
Group, was one of the major airport ground equipments suppliers of the world.
Other business: the manufacture bases of logistics equipments were located in Dalian
and Tianjin; the manufacture base of railway equipments was located in Dalian; the
financial leasing business was mainly in Shenzhen; and business of property development
was mainly in Shanghai, Yangzhou and Jiangmen, Guangdong province.
3. Operation of principal businesses of the Company
Products whose contribution to principal business income or principal business profit of
the Group exceeded 10% mainly referred to containers and road transportation vehicles.
Breakdown and Movements of Revenue and Operating Profits
Unit: RMB 0’000
Increase or
Increase or Increase or
Classified decrease of
Operating decrease of decrease of
according to operating
Revenue Operating cost profit revenue operating
industries or profit
margin (%) over last cost over last
products margin over
year（%） year（%）
last year
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（%）
Containers 2,543,997 2,048,549 19.48 356.44 330.15 4.93
Road
transportation 1,663,155 1,425,306 14.30 51.02 49.50 0.87
vehicles
Energy, chemicals
and liquefied food 535,080 441,050 17.57 48.62 48.16 0.25
equipments
Offshore
244,403 324,641 -32.83 - -
engineering
Airport
34,261 24,295 29.09 -35.51 -29.74 -5.82
equipments
Others 205,827 118,790 42.06 428.68 296.47 19.25
Offset due to
-49,892 -22,849
consolidation
Total 5,176,831 4,359,782 15.78 152.83 150.54 0.77
Proportion taken in YoY movements in
Classified according to regions Operating income
total incomes (%) income (%)
China 1,923,466 37.16 60.86
Asia 421,706 8.15 160.63
America 1,580,208 30.52 573.68
Europe 1,161,646 22.44 245.98
Others 89,805 1.73 -5.01
Total 5,176,831 100.00 155.98
Income breakdown according to businesses
1%
4%
Container
5% Road transportation vehicles
10%
Energy, chemicals and
food equipment
48%
Offshore engineering
32% Airport equipment business
Others
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——Business of container manufacturing and service
Being the matured principal business of the Group, container business witnessed strong
recovery in the market in 2010 after gonging through the global financial crisis and
historic industrial downturn. By timely adjusting operating strategies, quickly responding
to and overcoming numerous difficulties, such as labor shortage and higher labor mobility,
the Company successfully seized market opportunities in the industry and created
record-breaking business performance. In 2010, a sales income of RMB 25.440 billion
from container business was realized, with 356.40% up on a year-on-year comparison,
among which, sale income of RMB 19.552 billion was realized by dry cargo container,
with a sharp increase on a year-on-year comparison; sale income of RMB 3.658 billion
was realized by refrigeration container company, with 137.38% up on a year-on-year
comparison; and sale income of RMB 3.514 billion was realized by special purpose
container, with 52.19% up on a year-on-year comparison. The sales quantity contributed
by standard dry cargo container business reached at 1,296,000 TEU in 2010, with a big
increase compared to that of last year. 85,800 and 61,900 sets of refrigeration containers
and special purpose containers were respectively sold out, respectively increasing by
182.23% and 43.29%.
Based on accumulated capability for years, container business constantly kept its
horizontal and vertical development through service extension, technology upgrade, and
commercial model innovation, providing positive exploration for new space of business
growth.
While proposing ideas about developing a new generation of containers, namely, SGIL
(S-Secure, G-Green, I-Intelligent, L-Light), transforming itself from a product
manufacturer to a solution provider, and balancing production between orders of slack
season and peak season by applying thorough standardization, the Group constantly put
efforts on container industry in directions of standardization and individuation. In respect
of production and manufacturing, having experienced financial crisis, the Group
rediscovered directions and restraining factors of industry development. In an
environment where resource restrictions existed and environmentally friendly economy
of low-carbon was promoted, the Group continually explored its production way, sought
for a development path leading to refine manufacturing, and so far has set up the upgrade
in manufacturing patterns in compliance with new plans and design perception. In respect
of transportation and storage, the Group provided various solutions to transportation and
storage for clients by taking advantage of its national network of container yards in major
ports. In respect of recycling operation, the Group provided container businesses such as
new-for-old service, re-design for old containers, maintenance, and rent of second-hand
containers. The creative technology and business of using second-hand containers as
modular constructions especially extended service lives and applied fields of container to
a large degree.
By now, the Group is the only container manufacturing and service enterprise to provide
whole series of containers, including dry cargo containers, refrigeration containers, tank
containers, as well as other kinds of special purpose containers, and own complete
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independent intellectual property. Meanwhile, the 18 container manufacturing industrial
parks of the Group established and expanded in coastal areas and areas along rivers could
not only quickly provide containers for each container quay and yard in China, but also,
in fast speed, globally provide containers for major ports and clients by its integrated
advantages in cost and quality. Besides, CIMC Group had established container service
sites in major costal port cities and inland container logistic centers in China, which
formed perfect container service system and provided container service and application
system covering the whole product cycle for clients.
——Road transport vehicle manufacturing and service business
CIMC Vehicle Group has been accessed to the road transport vehicle industry since 2002
and became the largest manufacturer of road transport vehicles in China in 2004 with
annual capacity exceeding 200,000 units.
In 2010, beyond the expectation, the Vehicle Group achieved great business performance,
together with soaring profitability and capability by adjusting operating strategies and
seizing market opportunities in line with strategic targets. As for vehicle business, during
the year, sales revenue recorded to RMB 16.632 billion, and net profit amounted to RMB
587 million, respectively up 51.02% and 102.41% compared with last year. Gross margin
rate reached 14.30%, with a year-on-year increase of 0.87%. Sales volume of 155,300
units registered a year-on-year increase of 59.45%. The domestic leading products of the
vehicle business, such as tank vehicles, cement mixers and dump trucks, saw their
markets further expand and their market shares significantly rise in the Chinese market.
CIMC’s business of road transport vehicle had set its strategic vision as providing
top-ranking logistics equipment and service in land routes for global customers by
replying on China’s advantage. CIMC Vehicle Group focused on a complete value chain
process of product design and development, product manufacturing and delivery, sales
and service, as well as customer follow-up and feedback. CIMC Vehicle Group
constantly insisted on creating sustainable value for customers, keeping improving
customer satisfaction, and leading sustainable and healthy development in the industry.
Having been specializing in extensive expansion for years, in 2010, vehicle business of
the Group started its strategic transformation. The Vehicle Group established its value
orientation with the core of profitability improvement, took marketing system as the
starting point, implementing internal optimization in organization and process, adopted
operating and management measures, such as management improvement of investment
and capital, resources integration, improvement of management mode and incentive
mechanism of marketing system, refining division of end-sales channels, along with
reinforcement of strategic plans, strengthened internal management, and improved
operating efficiency. The Vehicle Group seized external market opportunities, worked
hard to meet customers’ requirements, and stably expanded its market shares in refined
industry in domestic and overseas markets.
On the other hand, the Vehicle Group extended its business structure through vigorous
innovation in business mode. It appropriately invested on industry on front-end parts,
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enlarged product sales scope by using current channel resources, and helped to promote
heavy truck business.
Heavy truck business hit the record in 2010. As a blowout growth emerged in domestic
market of heavy trucks, domestic heavy trucks became the mainstream products. Under
such circumstance, with 3 years of serous preparation, the first batch of heavy truck
products produced by C&C Trucks in thorough processes was launched to the market in
Dec. 2010, marking an initially acquired basis for heavy truck development involved by
the Group.
C&C Trucks Co., Ltd, of which 45% equity was held by CIMC Vehicle Group, took
domestic middle and high-end heavy truck market as the starting point, regarded its
product development strategy as “leading the domestic technology while following the
overseas advanced technology”, and implemented its strategies of “holding appropriately
advanced technology advantages and obtaining more markets shares in domestic
high-end heavy truck market”. C&C Trucks Co., Ltd. orientated itself in overseas middle
and high-end heavy truck market, as well as domestic high-end heavy truck market. Road
vehicles, for example, tractors, were targeted for markets of city-to-city logistics
transportation and port-to-port container transportation; construction vehicles, such as
dump trucks and mixers, were targeted for markets of city construction and infrastructure
construction. Leading products, including tractors, dump trucks, uploading and special
vehicles, as well as mixers, were targeted for creating a platform for C&C UE technology.
As at Feb. 2011, the Ministry of Industry and Information Technology promulgated
No.224 Public Notice on Vehicle Production Enterprises and Products, and the company
had declared 79 public notices for 442 vehicle types, totally sufficient for future market
demand.
Engines of Yuchai 6K series adopted by Y&C Engine were brand-new developed vehicle
types of Y&C Engine with strong competitiveness in fuel consumption. Y&C Engine had
been based on Euro Emission Standard IV and holding the upgrade potential of Euro
Emission Standard IV since it started to design. China Emission Standard IV public
notices has been included in declared public notices of C&C Trucks by now. As a result,
implementation of emission standards of China Emission Standard IV of the country
would bring positive effect on both design and sales of C&C Trucks products. C&C
Trucks is also actively developing CNG/LNG heavy trucks using natural gas, which are
expected to be launched in 2010, fully in compliance with state policies of energy-saving,
emission-reducing, and new energy development.
——Energy, chemicals, food equipment and service business
The Group’s energy, chemicals, liquid food equipment business was spurred by the
economic recovery and the rising market demand, thus its operating income and net profit
soared up over the last year. In 2010, the operating income was RMB 5.351 billion, up
48.64% over the same period of last year. The net profit amounted to RMB 190 million,
up 80.95% over the same period of last year.
2010 was the first year to witness the Group’s operation after business restructure in
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energy, chemicals and equipment, along with the Group’s effective integration. The
Group clearly defined business development directions, enhanced internal control and
system establishment, and strengthened internal coordination by making strategic
development plans and conducting all kinds of special research. The Group achieved
striking progress in overseas business expansion, stably advanced business performance,
initially established its role as the main supplier of equipment and service in energy
(mainly is natural gas) industrial chain, actively progressed in modular products and
skid-mounted products, and stably propelled business of engineering contracts and
solutions.
Energy (LNG, CNG and LPG) equipments: In 2010, the Company recorded aggregate
sales income of RMB 3.335 billion from energy equipments, up 59.47% over the same
period of last year.
By means of sustainable R&D and innovation, the Group active promoted continual
and stable development for products such as CNG and low-temperature equipment and
provided high-pressure and low-temperature equipment for secure transportation and
storage of energy. Enric Gas Equipment Co., Ltd. independently researched and
developed high-volume steel seamless gas cylinders, filling the correspondent in
domestic market and achieving international advanced level. In low-temperature field,
Zhangjiagang Sanctum Co., Ltd. led the industrial development of low-temperature
products by constant development of new products. Products and businesses of CIMC
in the field of natural gas effectively solved the “last kilometer” problem beyond
natural gas lines, significantly propelled promotion and usage of natural gas, the clean
energy, in China, and fully reflected its brand development philosophy of promoting
environmental protection and realizing sustainable development.
At present, the Group provides the most various natural gas products (CNG/LNG) and
liquid petroleum gas products (LPG) for customers. After the acquisition of TGE GAS
TGE Gas Engineering GmbH (or TGE GAS for short), a world leading engineering
turnkey contracting company, the Group sharply enhanced its capability in system
integration and engineering in the whole industrial chain of natural gas, realized
coordinate development between current LNG downstream applications, namely the
supply of equipment and service, and LNG upstream developing projects by TGE GAS,
obtained the ability to provide one-stop system solutions for customers in the field of
natural gas development and application, and formed the coordinative value chain
between technology service and equipment manufacturing.
In 2010, TGE GAS, of which 60% equity was held by the Group, realized its operating
income of RMB 904 million, up 69.03% compared with last year. At the same year,
turnkey contract projects undertaken by TGE GAS, including EPC contract project of
storage tanks for CNOOC liquid natural gas item in Zhejiang and the 2nd phase contract
project of storage tanks for LNG receiving station item in Portugal, all progressed
smoothly.
Chemical equipments: In 2010, the chemical equipment business recorded operating
income of RMB 1.279 billion, up 61.96% over the same period of last year. The major
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production bases of chemical equipments include Nantong CIMC Tank Equipment Co.,
Ltd. and Dalian CIMC Heavy Chemical Equipment Co., Ltd.
A tank container is a stainless steel pressure vessel with an external framework of the
international standard of 20-foot container. It can be used for shipping toxic and harmful,
inflammable and explosive, corrosive, and non-hazardous liquid, gaseous and solid bulk
granular powder. Tank containers are featured by advantages of being safe,
environmentally friendly, economical, flexible and efficient with multiple united transport
and “door to door” delivery etc.
Nantong CIMC Tank Equipment Co., Ltd. (Nantong Tank) is mainly engaged in the
business of manufacturing international standard tank containers. Due to the effect of the
economic recession, the demand and orders of the chemical logistics equipment market
closely associated with chemical raw materials and refined chemicals increased sharply..
The 1st phase project of Dalian CIMC Heavy Chemical Equipment Co., Ltd. (Dalian
Heavy Chemical) was completed and formed annual production capacity of 9,000 tons.
Its main products include gasifier in the coal gasification equipment, ethylene cracking
furnace in the ethylene equipment, large-scale synthetic ammonia, high-pressure
equipment in the chemical fertilizer equipment, oil refining hydrogenation,
hydrocracking, key equipments in the methanol device and evaporator in the sea water
desalination device etc.
Liquid Food Equipments: In 2010, the liquid food equipment business recorded
operating income of RMB 0.561 billion, down 21.94% over the same period of last year.
Netherlands-based Holvrieka Holding B.V. is one of the leading suppliers of exclusive
stainless steel static storage tanks and tank terminal equipments in Europe, under which,
there are four production bases, namely Netherlands-based Emmen, Netherlands-Sneek,
Denmark-based Danmark and Belgium-based NV. It offers a wide range of services to the
liquid, gas and powder bulk tank transport sector in Europe including petrochemicals,
beer, juice, milk and other food and beverage industries, such as all tank equipments and
bulk water tank ships involved by orange juice from the juice, road transport to orange
juice docks. HOLVRIEKA accounted for 100% of the market share in Europe.
Holvrieka (China) Co., Ltd. is the production base of Holvrieka of the Group in China,
mainly engaged in manufacturing of stainless steel static storage tanks and crafts tanks
used to store beer, fruit juice and other food and chemical products. In 2010, it formed a
capacity of producing 1,000 units of large storage tanks annually.
——Offshore engineering business
CIMC Raffles Offshore (Singapore) Co., Ltd. (SCRO), the subsidiary of the Group, and
its subsidiary, Yantai CIMC Raffles Offshore Co., Ltd. (YCRO) rank top offshore
engineering equipment manufacturers in the world, and have been involved in global
competitions in international market of offshore engineering. Its main products include
jack up, semi-submersible and auxiliaries to offshore engineering. As a new core business
of the Group, offshore engineering business will become important future profit growth
point of the Group.
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In Jan. 2010, CIMC Raffles Offshore (Singapore) Co., Ltd. (SCRO) has been included
into consolidated statements of the Company since the completion of the unconditional
voluntary cash tender offer conducted by the Group over SCRO. As at the year-end,
proportion of equity held by the Company over SCRO reached 50.98%. In 2010, offshore
engineering business of the Group recorded a sales income of RMB 2.444 billion, with a
deficit of RMB 1.109 billion.
In 2010, project delivery in offshore engineering business made a breakthrough. YCRO
delivered a jebsen and three semi-submersibles, namely COSL Pioneer 1#, SS Pantanal,
Scarabeo 9. The successful delivery of a dump jebsen of 30,000 tons in Jan. 2010 and
successive deliveries of three deep-water semi- submersibles in the 4th quarter of 2010
marked that China had broken the monopoly of Singaporean and South Korean
enterprises in high-end offshore engineering products, and the Group was the first one to
possess large-scale and industrial capability of manufacturing high-end offshore
engineering products. In Oct. 2010, the first deep-water semi- submersible in China,
COSL Pioneer 1#, established for COSL was successfully delivered; in Nov. 2010, the
SchahinII established for Petrobras, the terminal user, was successfully delivered. In Oct.
2010, with 90% work had been done, project D90 was uncompleted and thus delivered by
negotiation In Feb. 2011, the globally largest pipelay vessel (PLV) established for
SAIPEM in Italy was uncompleted and thus delivered, and it is still under construction at
present.
COSL pioneer was the first deep-water semi-submersible in China. Compared with
similar products, COSL pioneer was featured by high automation degree, simple
manipulation, comfortable work environment, and high security. The platform of COSL
Pioneer 1# was 104.5 meters long, 65 meters wide in body type, and 36.85 meters deep in
body type. It could go down within 750 meters during operation, and depth of the drilling
reached 7,500 meters. Cosl pioneer was one of the most advanced semi-submersibles
established so far in China. SS Pantanal was the first one between the two
semi-submersibles established for Schahin in Brazil by CIMC Raffles, which
independently finished the detailed design, production design, construction and
debugging.
Main reasons for losses on offshore engineering business: because of the outsourcing
strategy adopted since 2007, and also because all in-hand orders for deep-water drill
platforms were the first manufactured ship, which meant lack of experience in technology,
construction and project management, almost all projects went through delayed delivery
for one to two years. As such, contract prices were reduced because customers took
products in advance, and the Company had to compensate for losses on delay with higher
extra cost expenses. What’s worse, losses on such projects also diminished the
Company’s reputation.
The semi-submersible, D90, established for SAIPEM in Italy wasn’t delivered by 100%
completion. As a result, project gross margins recognized in precious fiscal years had to
be reversed, cost expenses of COSL series were large and in the red, and other deliveries
of delayed projects all directly effected on profits of the current period.
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Up to 31 Dec. 2010, except that the COSL 2# project under construction had completed
by 82%, the COSL 3# project had completed by 63%, and the super M2 H195 project had
completed by 48%, other projects had all completed by over 90% and are under focused
debugging at present.
Offshore engineering business of the Group basically defined its development directions
in three main product lines, namely semi-submersibles, jack ups, and special offshore
engineering vessels. The strategic layout of “one center and three bases” made up by
Yantai, Haiyang, Longkou and Offshore engineering Research Center was completed and
being developed.
In terms of construction of production bases, Yantai Base was mainly applied for
concentrated supply, approximation, and debugging. Haiyang Base and Longkou Base
respectively acted as semi-submersible construction base and jack up construction base.
Yantai Base was equipped with bridge-type portal crane of 20,000 tons and large
shipyards for approximation of semi-submersibles. An 18 meters deep port had been
completed for installment and debugging of equipment. After the completion of the 1st
phase and the 2nd phase of deep-water port project, 9 drill platforms could call at the port
at the same time. Series of innovative construction techniques of semi-submersibles, such
as thorough land construction, launching of large barges, inner-shipyard approximation of
cranes of 20,000 tons, and underwater installment of a propeller at 18 meters beneath the
port, were created.
Haiyang Raffles was registered in 2008 with registered capital of RMB 200 million. The
total investment amounts to RMB 700 million at present. Its annual capacity of steelwork
totaled to 40,000 tons per year, and it was targeted for annual production of 2
semi-submersibles. Its main capacity plan had been realized.
In Apr. 2010, the acquisition of Longkou Sanlian Co., Ltd. was completed. After the
completion of infrastructure construction of Longkou Raffles Project, the capacity of
annual production of 4 jack ups will be formulated in 2011.
In terms of in-hand orders and enlargement of new orders, in-hand orders of CIMC
Yantai Raffles in 2010 included 6 semi-submersibles, 4 jack ups, 1 life supporting
platform, and 4 special offshore engineering ships. Order contracts on projects under
construction of Raffles amounted to USD 1.588 billion. In 2011, Raffles has obtained a
5-year charter party totally amounting to USD 172 million. 3 jack ups and 1 life
supporting platform under construction are due for realization in sales and delivery in
2011.
In the field of R&D and design, CIMC raffles had established a R&D and design team of
800 people by structuring Yantai CIMC Offshore engineering Research Institute and
Shanghai CIMC Marine and Engineering Research Center, constructed a R&D and
design platform integrated with R&D and design, which operated through the whole
process of basic design, detailed design and production design, and independently
completed analysis and design for several DP2 and DP3 products, which won high
evaluation from ship owners and classification societies. In Jul. 2010, National Bureau of
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Energy named and branded for the second batch of national energy R&D (experiment)
centers. National Energy Marine Petroleum Drill Platform R&D (Experiment) Center
settled down in the Group, which meant that the Group gained its national industrial
status in several respects of scientific research offshore engineering, and thus acquired
the qualification to undertake R&D, experiments, and manufacturing in important
national offshore engineering equipment. As such, the leading advantage of the Group in
domestic offshore engineering was strengthened, which enlarged the space for in-depth
anticipation of the Group in future national energy development.
The Company will continually strengthen construction of CIMC Offshore engineering
Research Institute, further attract high-end talent, and build an international advanced
design and R&D platform for offshore engineering equipment. YCRO has succeeded in
applying for the research topic of “Offshore engineering Equipment Assembly
Construction Technology Research” set up by the Ministry of Industry and Information
Technology and the Ministry of Finance.
——Other businesses
Airport equipment business: In 2010, CIMC Tianda Airport Equipment Co., Ltd.,
where the Company held 70% equity interests, recorded sales of RMB 343 million, down
35.40% than the last year (RMB 531 million) and achieved net profit of RMB 27 million,
down 55% over the last year (RMB 60 million). There were 118 units of boarding bridges
and 7 sets of dimensional parking garages sold in the year.
Compared with other industries, influence of the global financial crisis on airport industry
was lagged behind. The income level was decreased than last year because of delayed
deliveries of many projects due to customers. There were few substantial threats from
entrants and substitutes due to specialty of the industry. However, competition in the
industry is fierce because of the relatively small market space. The network of CIMC
boarding bridge business was globally expanding step bay step, with a domestic market
share rate over 90%, and a global market share rate of 20%. Connected by boarding
bridges, the extension forwarding to airport service value chain entered into a substantive
stage. After acquiring the contract of all 30 boarding bridges, including 7 A380 airplane
seats, of project S4 of Charles De Gaulle Airport in France, the Group signed long-term
framework agreements of passenger boarding bridges for 5+5 years with Paris Airports
Management Co., Ltd. in France and Schiphol Airports Group in Netherlands. The
bid-winning enterprise that acquired such project would, in the coming 5 to 10 years, be
the only supplier of current passenger boarding bridges and new bridges for Charles de
Gaulle International Airport in France, Orly Airport in Paris, and Amsterdam Airport in
Netherlands. The number of such bridges was estimated as 100 units.
Logistics equipment and service business: CIMC is committed to providing special
logistic equipment and comprehensive logistic solutions for customer from different
trades. Our logistic equipment products mainly include pallet containers for automobiles,
logistic, foods, chemical, and agriculture, stainless steel IBC （ Intermediate Bulk
Container) applicable in chemical and foods fields, and various special logistic equipment,
such as wind power product logistic, and commercial car assembly logistic equipment.
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In 2010, CIMC has achieved an operating income of RMB1.144 billion, an increase of
110.68% over the same period last year, with the net profit of RMB 92 million.
The Group has been involved in manufacturing of steel tray containers since 1999, and
has started to produce IBC (Intermediate Bulk Container) since 2002. By now, the Group
can produce tray containers for industries of vehicles, synthetic rubbers, glass, home
appliances, chemical, logistics, storage, fruits and vegetables, petroleum chemical, and
military logistic equipment, including steel IBC and pressure vessels, all categories of
which totaled to more than 500. Being the largest supplier of steel tray containers and
IBC in China and one of the leading tray container suppliers in the world, the Group
currently owns 2 manufacturing bases, Tianjin and Dalian, with an annual capacity of
1,300,000 units.
The rapid development of refined logistics industries, such as industries of auto parts,
chemical, and liquid food, pushed the demand for unit-packaged products. At present,
wood tray containers are still mostly widely used in China. However, disadvantages of
wood materials, such as requirements for health and quarantine / fumigation, forest
resources consumption and short service life, as well as restriction of uprising cost,
resulted in more and more demand for metal tray containers, for example, steel tray
containers. Based on the usage condition in developed countries, steel tray containers
were increasingly broadly used due to their reusable features, and gradually became a
new development direction for containerization-unit equipment.
Financing service business: The Group owns CIMC Financial Leasing Co., Ltd., which
provides sales and other service supports to businesses of the Group, and has achieved
rapidly expanding business scale and net profits while strongly supporting business
development and developing customers for recent 3 years. On 18 Jun. 2009, CIMC
Finance Co., Ltd. was established through the approval of China Banking Regulatory
Commission, and officially started its business in Feb. 2010, which marked the initial
formulation of CIMC financing business. Operation of CIMC Finance Co., Ltd. enlarged
space for structural optimization of the Group’s assets, business operating efficiency, and
benefit improvement, reflecting strategy upgrade of the Group in business combination.
Dalian CIMC Railway Equipment Co., Ltd. under the Group concentrates on business
enlargement of railway equipment. In 2010, it realized an operating income of RMB 20
million with a striking year-on-year increase. As for its real estates business, except for
holding 40% equity of Zhendi Project of Shanghai Merchants Property Development Co.,
Ltd., the Group progressed smoothly in two lands in Yangzhou City. In 2010, sales
income of the Company totaled to RMB 350 million, and the total after-tax profits
amounted to RMB 76 million.
4. R&D
The CIMC technology center became a state-level enterprise technology center in 2001.
In 2010, National Energy Marine Petroleum Drill Platform R&D Center settled down in
CIMC Group. At present, under the CIMC technology center, there are 5 research
institutes, 15 technology branch centers, 5 state post-doctoral research stations, 1
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post-doctoral innovation base, and more than 20 laboratories including engineering
laboratories and material laboratories. Therein, 7 technology branch centers are
provincial and municipal technology centers, and 2 laboratories are CNAL certified
laboratories.
In 2010, a total of 856 categories of new products were developed in all industries under
the Group. Sales volume of new products and significantly improved products accounted
for more than 20%. The Group presided and anticipated in the preparation of more than
20 provisions of international, domestic and industrial technology standards, and declared
more than 280 patents, of which 90 patents were for inventions.
5. Suppliers and customers
In the reporting period, the total amount of purchase by the Group from top five suppliers
was RMB 7 billion, accounting for 33% of the total annual purchase. The total amount of
sales income achieved by the Group from top five customers was RMB 12.872 billion in
the year, accounting for 24.86% of the total sales income of the Group.
6. Analysis on Financial Status of the Company
(1) Analysis on Changes of Assets and Liabilities
Unit: (RMB) Thousand
Amount as at Amount as at 31 Variation
Item Main influential factors
31 Dec. 2010 Dec. 2009 (%)
Balance of transactional equity
Transactional financial
525,661 113,337 363.80% instrument investment and
assets
derivative financial assets
Recognition of bank acceptance
bills, which was of little risk and had
Notes receivable 508,585 1,690,845 -69.92%
been endorsed and discounted, was
terminated in the current year.
Accounts receivable 8,129,836 3,862,604 110.48% Expansion of sales scale.
Expansion of purchase of raw
Prepayments 2,433,447 1,073,559 126.67%
materials.
Increase of receivables of related
parties and borrowings from
Other receivables 2,236,272 1,123,489 99.05%
shareholders of associated
companies.
1. Increase of production scale
resulted in the increase of raw
Inventories 13,423,747 6,753,566 98.77% materials in stock and goods in
process. 2. Raffles was firstly
included into consolidation.
Non-current assets due Big increase of receivable financing
1,185,502 394,036 200.86%
within 1 year leases and sales paid by instalments.
Other current assets 688,030 254,677 170.16% Big increase of taxes to be deducted
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or taxes prepaid.
Raffles was firstly included into
Construction in progress 1,697,664 573,269 196.14%
consolidation.
Scale expansion of current capital
Short-term in borrowing 8,309,309 4,157,477 99.86%
borrowings.
Notes payable 2,538,623 1,226,091 107.05% Expansion of purchase scale.
Accounts payable 9,117,500 4,462,255 104.32% Expansion of purchase scale.
Accounts received in Raffles was included into
1,935,731 1,270,602 52.35%
advance consolidation.
Expansion of production scale and
Employee compensation
1,365,532 813,425 67.87% improvement of treatment of
payable
workers.
Expansion of business scale and
correspondent increase of freights,
Other payables 2,388,367 1,476,903 61.71%
pledges, and quality guarantee
deposits.
Non-current liabilities due Big increase of long-term
2,844,521 455,472 524.52%
within 1 year borrowings due within 1 year.
—Accounting measure for major assets of the Company:
When preparing financial statements, the Company usually adopts historical cost
accounting except for the following assets and liabilities which are measured by fair
value:
① Financial assets and liabilities (including transactional ones) measured by fair value,
whose variations are recorded in profits and losses of the current period
Unit: (RMB) Thousand
Gain/loss Accumulative
from fair fair value Impairment
Opening Closing
Item value changes changes provision for
amount amount
in report recorded into report period
period equity
Financial assets:
Including:
1. Financial assets measured by
fair value, whose changes are 91,772 252,109 - - 512,560
recorded into profits and losses
of current period
Of which: Derivative financial
5,050 94,032 - - 119,069
assets
2. Financial assets available for
1,175,785 - 727,466 - 768,467
sale
3.Hedging instrument 21,565 - 14,070 - 13,101
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Subtotal of financial assets 1,289,122 252,109 741,536 - 1,294,128
Financial liabilities -17,191 -
Investing real estate - - - - -
Production biological assets - - - - -
Others - - - - -
Total 1,134,086 234,918 741,536 - 1,136,026
② For financial assets available for sale, please refer to Note 5 (10) to the financial
statements
—Analysis on changes and influence of main assets measured by fair value:
Unit: (RMB) Thousand
Effect on Direct
Balance as Balance as
Item in Recognition gain/loss effect
Contents at 31 Dec. at 31 Dec. Notes
statements of fair value for current on net
2010 2009
year assets
Transactional
Stock investment
equity Market
393,491 86,722 173,897 in secondary
instrument price
market
Transactional investment
financial Financial
Quotation
assets Derivative derivative
from
financial 119,069 5,050 94,032 products relating
financial
instrument to exchange rate
institution
and interest rate
Financial
Quotation
Derivative Derivative derivative
from
financial financial 13,101 21,565 14,070 products relating
financial
liabilities instrument to exchange rate
institution
and interest rate
Quotation
Other current Cash flow from Exchange rate
158,102 155,036 -17,191
assets hedging financial hedging product
institution
Equities of China
Financial Market
Merchants Bank,
assets Strategic equity price and
768,467 1,175,785 727,466 etc. held by the
available for investment assessed
Company for
sale value
strategic purposes
For more details, please refer to “3. Risk Analysis, Sensitivity Analysis and Fair Value
Recognition Methods for Financial Instruments” under “Note 11 Other Significant
Events” to the financial statements.
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(2) Analysis on changes in expense and income tax:
Unit: (RMB) Thousand
Increase/decreas
Item 2010 2009 Main influential factors
e (%)
Production scale expanded; labor
Administrative cost for administration increased;
2,734,364 1,976,074 138.37%
expenses Raffles was firstly included into
consolidation.
Financial
669,783 131,037 511.14% Interest expenses increased.
expenses
Profits increased, and income tax
Income tax 823,748 384,674 214.14% expenses of the current period
correspondently increased.
(3) Analysis on changes of cash flows
Unit: (RMB) Thousand
Increase/de
Item 2010 2009 Main influential factors
crease (%)
Cash flows from operating activities 1,482,901 969,685 52.93% Sales scale expands.
Cash flows from financing activities 477,409 520,840 -8.34% Cash to pay off debts increased.
7. Business Performance of Major Holding Subsidiaries and Joint Ventures
(1) Major holding subsidiaries
Major holding subsidiaries of CIMC include about 40 controlling subsidiaries for
container business, over 80 controlling subsidiaries for road transportation vehicle
business, 25 subsidiaries for energy, chemical and food equipments, 1 subsidiary for
airport equipment, 1 subsidiary for railway freight transportation equipments, 10
subsidiaries for logistics equipments and service, 3 subsidiaries for offshore engineering,
13 subsidiaries for real estates, and 5 subsidiaries for other industries. For business
performance of the said subsidiaries, please refer to “3. Status of Main Operations” of the
previous section of this report.
(2) Major joint ventures
As at 31 Dec. 2010, CIMC holds 10% equity of China Railway International United
Container Co., Ltd. With a registered capital of RMB 4.2 billion, China Railway
International United Container specializes in building and operating railway container
centers, as well as relevant services.
CIMC holds 5% equity of Communications Schroder Fund Management Co., Ltd., with
its registered capital standing at RMB 200 million. For the year 2010, the Company
achieved an investment income of RMB 7.46 million from this joint venture.
8. Entities controlled by the Company for special purposes
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The Company does not control any entity for special purposes.
(III) Outlook of the Company’s Future Development
1. Economic Environment and Policies
Having suffered the rough downturn, global economy returned to growth in 2010.
However, the unbalanced recovery structure of main economies is evident and will
further differentiate in 2011. As for growth prospects in developed economies, American
economy will still face challenges from unemployment, real estates market and
government deficits; polarization in European economy will be sharpened – while core
countries such as Germany and France are expected to drive economic growth in Europe,
other non-core countries, with debt crisis remain existing, will still struggle and pull
down the whole economic performance in Europe; Japanese economy will keep slow
growth.
Headed by China, emerging economies and developing economies will grow rapidly with
dual supports from recoveries in domestic and overseas market, but they also face
tremendous inflation pressure in the global environment of excess mobility. As compared
with 2010, China will suffer a much more complicated environment, in which, there will
internally exist long-term challenges such as inflation pressure, adjustment and upgrade
of industrial structure, energy saving and emission reduction, as well as improvement of
revenue distribution pattern, and there will externally exist various challenges such as
downward overseas demand, RMB depreciation, as well as more complicated
international and regional political games. The economic growth speed will fluctuate,
currency policy will turn from appropriately loose to stable, and at the same time
financial policies will keep loose.
As for CIMC Group, being placed in global economic environment and businesses, as
well as global market structure, the year 2011, on one hand, means that there will be
continual stable growth of market demand in its businesses, but there will also be obvious
differences between market demands in different regions, on the other hand, means that
the Group should adopt more flexible operating strategies in its businesses to adapt to the
increasing market demand in total and differentiating market demands in different regions.
Chinese manufacturing is undergoing profound changes while facing brand-new
challenges currently. Firstly, it has to upgrade to high-end manufacturing, develop toward
high technical complexity technology incentive type, and keep up with high-end
technology represented by Japanese technology and German technology. Secondly,
traditional industries have to develop toward refined production, make breakthroughs in
environment and resources, so as to improve its competitiveness by higher efficiency,
better quality and more effective cost control. As an enterprise group with the core of
manufacturing, the Group has to try hard on innovation on core technologies and
transform in manufacturing technologies and management styles, etc.
2. Development trends in the industry and market
In 2011, we believe that recovery of global economic and trade will be continued,
International Monetary Fund (abbreviation as IMF) predicted that the actual increase of
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global economic would reach 3.3% in 2011, while Organization of Economic
Cooperation & Development (abbreviation as OECD) predicted that global trade would
increase by 8.3%. As for the growth prospect of emerging and developing economic
bodies, the economic bodies headed by China will gain fast increase under the double
support from the recovery of demands home and abroad. Energy Information
Administration (abbreviation as EIA) believed that the demands for oil from developed
countries would assume a large increase with the global economic recovery, and it was
predicted that the global demands for oil per day would increase by 1.7% in 2011, higher
than that in 2010 as 1.3%.
In 2011, in light of the comprehensive factors such as growth trend of global economy,
the change in demands from core economic bodies, the production increase of domestic
industries and investment & consumption trends, foreign exchange fluctuation and price
change home and abroad, base effect in the same period, etc., it’s primarily predicted that
the export will increase by about 16%, import will increase by about 20%, and the
foreign trade surplus will reach USD 170 billion with a little year-on-year decrease.
The continued strengthen of economic recovery, risk of economic fluctuation and
adjustment of Chinese economic structure, will provide more opportunities for the
development of the Group, which will also set more requirements and challenge for the
group in the respects such as industrial upgrade, self-optimization, capacity hoisting and
the development goal of becoming the world-class enterprise.
(1) As for the container business, against the overall background of continued and stable
recovery of global economy & trade, it is predicted that the demands for containers will
continue to increase with a possible increase of 20~30% in 2011. In accordance with the
prediction from Clarkson, a British dynamic analysis institution for shipbuilding and
shipping, the global business of containers will increase by 9.7 % to reach 153 million
TEU in 2011. According to the prediction from relevant professional institution, the total
freight capacity of global containers will increase by 8.4% per year over the future three
years (excluding the factors of vessels dismantling).
At present, the number of global containers on hand is about 30 million TEU, and it is
predicted that the renewal and elimination of old containers will amount to more than 1.2
million TEU per year, which will also continue to increase.
In accordance with the prediction from the authoritative institution, due to the total global
new ships with freight capacity as 1.3 million TEU being delivered to use in 2011, and
the growth rate of containers business being lower than that of freight capacity,
meanwhile high price of oil, the operating cost of the shipping company will increase
compared with last year. In consideration of absorbing surplus freight capacity, saving
fuel cost, reducing carbon emissions, etc, the shipping company will continue to adopt
low-speed strategy, which will also bring the increased demands for containers.
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(2) As for road transport vehicle manufacturing and service business, with the economic
recovery and development, the structural demands from domestic markets of different
regions and the increase of Chinese export & import business will drive the increased
demands for port logistic service and road transport vehicle service business. With
synchronous accelerative development of industrialization and urbanization, the demands
for engineering transport vehicles and special vehicles for engineering operation, such as
environmental sanitation trucks, pumping appliance, and fire-fighting vehicles, will
remain at high-level; the demands for common transport vehicles (high-way transport
vehicles, in-city and inter-city logistic vehicles, etc.) such as container transport vehicles,
common dry cargo transport vehicles, reefer vehicles, liquid tank special vehicles, etc.
will continue to go up. However, due to the high base of demands in 2010, the demands
for Chinese special vehicles will be less than the supplies obviously in 2011, so the price
may suffer the pressure of falling. Meanwhile, the company will also face the pressure of
increased cost of raw materials.
In 2011, it is predicted that the overseas demands will be possible to continue to recover,
but is not possible to gain substantial increase due to the discontinued recovery of
American and European economies.
(3) As for business of energy, chemical, food equipments and service, with the overall
recovery of global economy, it is predicted that the demands for liquid tank containers
will have a substantial recovery. In China, with the acceleration of industrialization and
urbanization, the demands for energy especially natural gas will increase significantly, so
as to drive the substantial increased demands for natural gas storage equipments,
liquefied natural gas receiving stations and engineering service business. In the aspect of
demands for chemical equipments, the demands are mainly from the domestic market,
because during the period of the twelfth-five-year plan, it will reform a lot of large scale
oil refineries and fertilizer plants as well as build up many petrochemical production
bases. In additional, the start of the new technologies, such as joint circulatory power
generation with coal combined oil and coal gasification and etc., will bring the new
increased demands for chemical equipment industry.
(4) As for offshore engineering equipment business, under the drive of the factors such as
the global recovery demands for raw oil and the increase of its price, the increasing
strength in the exploration for and exploitation of ocean oil in the world, oil leaking event
in gulf of Mexico, update and etc., the global investment in the industry of offshore
engineering equipments will enter into a new prosperity cycle. And it is predicted that the
global demands for offshore engineering platform will continue to go up. During the
period of the eleventh-five-year plan, the input in development of the ocean oil and gas
resources reached RMB 120 billion; while in accordance with the primarily finished
Development Plan of Offshore Engineering Equipment during the Period of
Twelfth-five-year Plan, it is predicted that the input in offshore engineering will be RMB
250 billion to 300 billion, which will drive the upsurge of Chinese offshore engineering
equipments investment. In the future ten years, Chinese oil production will increase by
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20%, which will bring the unprecedented development opportunities for Chinese offshore
engineering equipments manufacturing industry. In international market, Raffles has
established solid business relationship with many famous companies in this trade in
offshore regional markets like North Europe, Middle East, Russia, Brazil, and West
Africa, to improve its industrial influence. In the future, Raffles will mainly explore the
said segmented regional markets. However, in domestic market, it will continue to
consolidate the relations with the three major gas companies, paying attention to
investment demands and business opportunities to achieve a substantial breakthrough.
At present, the global market, especially high-end offshore products, has still been
dominated by South Korea, and Singapore, the traditional offshore business powers.
However, because of its lower price and improvement of design and construction
capacity, offshore business now experiences a trend of moving to China, providing both
opportunities and challenges for CIMC’s offshore business.
3. Overall business objectives and measures taken to achieve them
With the gradual recovery of global economy in 2011, CIMC will face a new
environment both internally and externally, which brings new opportunities for
development. As a global enterprise, CIMC will take the economic crisis as an
opportunity to accelerate business structure adjustment and strategic upgrading, and to
conduct systematic transformation in terms of development strategies, business mode,
enterprise culture, organizational structure, operation flow, human resources, etc., with
the purpose of turning the crisis to an opportunity and lay a foundation for the excellent
development of CIMC for the next ten years. At the same time, it will grasp opportunities
brought by emerging markets in American and European countries, Japan and the rest of
the world, pay equal attention to market at home and abroad, and effectively promote
steady growth of all its businesses.
In 2010, CIMC has made the general upgrading objective for the future three years which
is to build a capacity platform for sustained and healthy business growth of CIMC. It
aims to generally upgrading the organization ability at all levels of CIMC through the
upgrading activity in the future three years, so as to support the operation and
development of CIMC at the plan scale of RMB 100 billion or more.
4. Capital expenditure and financing plan
Considering changes of the economic situation and operation environment, as well as the
Group’s need for strategic upgrading and business development, a capital expenditure
about RMB 10.4 billion is expected for the year 2011, and the funds will mainly come
from self-owned capital and bank borrowings.
5. Risk factors in future development
Although the global economy has resumed increase, the recovery road is not so smooth
duo to the obvious imbalanced pattern of recovery in the major economic bodies. The
recovery of developed economic bodies still have the risks of downturn, and the slow
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increase still not enough to reduce the high unemployment rate. The pressure of currency
inflation also exists in the emerging market and developing economic bodies, which face
the problems of avoiding overheated economy and capital inflow control. As for Chinese
economy, at home, it faces the continuous increasing pressure of currency inflation and
the long-term challenges in the aspects such as industrial structural adjustment and
upgrade, energy saving & emission reduction, income distribution restructuring and etc.;
at abroad, it faces the challenges such as the decline of external demands, inflation of
RMB, more complex strike between international politics and geopolitics, and the
economic growth also has the risk of downturn.
Keeping abreast with the strategic adjustment of Chinese economic structure, the
manufacturing industry which the Group belongs to faces a series issues such as how to
improve production efficiency, improve working conditions, save resources, protect
environment and so on. Besides, the fluctuation and increase in the price of energy and
materials will be possible to erode the profits of the Company.
In the containers business, the uncertainty of global economic recovery and the
rebalancing process of global trade structure will be likely to have influence on the global
trade so as to cause the decreasing demands for containers. The risks that shipping
industry mainly faces are as follows: 1) the centralized delivery of new ships and the
cargo volume being less than the freight capacity will affect the freight fees; 2) the up
trend of the oil price under the conditions of inflation and fluctuation in geopolitics; 3)
the risk of fluctuated demands for containers, such as the increase of the rent of
containers ship, containers and port fees.
In the business of energy, chemical and food equipments and service, the development of
chemical equipments is closely related to the macro economic cycle, so the instability of
relevant national industrial policies has substantial influence on its business development.
With the increasing competitors, the competitiveness is more than that of before so that
the market shares face the risk to be squeezed out. Moreover, the production for export
faces the risk of foreign exchange fluctuation.
In the business of road transport vehicles, due to the recovery of mainstream developed
economic bodies in 2011 still being the primary step, it’s impossible to gain substantial
increase in overseas demands. Basing on the high growth rate in domestic market in last
year, the growth rate may decline due to the gradual withdrawal of national economic
stimulus policies. Besides, the factors such as resources, environment, traffic have a more
and more restraint on the developments of vehicles industry, the railway construction has
a negative impact on the trunk line road cargo freight and also brings the risks of
decreasing demands for road transport vehicles.
In the business of offshore engineering equipments, the offshore engineering equipments
are the products with high input and high risk, and have a high requirement for
construction facilities and experience, capitals and research power. Compared with
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Singapore and South Korea with more mature construction technology as well as
America and Europe with stronger R&D ability, the construction level of Chinese
offshore engineering equipments still have a long way to catch up. With the offshore
engineering industry being included into the Strategic Emerging Industries and gaining
the support of policies, there will be more traditional ship building enterprises in the
downturn cycle to transform to offshore engineering equipments manufacturing
enterprises, so as to increase the industrial competitiveness.
II. Investments in the reporting period
(I) The Company did not raise funds in the report period. Nor there existed application of
previously raised funds.
(II) Investments with Non-raised Funds in Report Period
1. Acquiring equities: In the reporting period, the Company paid a total of RMB 1,082.38
million for acquiring equities of some enterprises.
2. Establishing new subsidiaries or increasing investment in subsidiaries: In the reporting
period, the Company paid a total of RMB 1.541 billion for establishing new subsidiaries
or increasing investment in subsidiaries.
3. Investment in fixed assets: The year 2010 saw a net increase of RMB 3.436 billion in
the Company’s fixed assets (including construction in progress).
4. As at 31 Dec. 2010, balance of the Company’s short-term securities investment stood
at RMB 393.49 million.
Unit: RMB Million
Project Accumulative
Shareholding ratio of
Project progress in investment at
the Company (%)
2010 year-end
Acquisition of 31.74% minority equity of Yantai CIMC
50.98% Completed 1,189
Raffles Shipyards Ltd. and investment increase
Acquisition of 33.55% of minority equity of Shenzhen
CIMC Tianyu Real Estate Development Co., Ltd. and 90% Completed 656
investment increase
Increased investment on CIMC Vehicle Financing Lease
80% Completed 41
Co., Ltd.
Newly establishment of CIMC Vehicles (Chengdu) Co.,
100% Completed 30
Ltd.
Newly establishment of CIMC Industrial Property Service
80% Completed 1
Management (Chengdu) Co., Ltd.
Newly establishment of CIMC (Group) Finance Co., Ltd. 100% Completed 500
Newly establishment of Qingdao CIMC Special Vehicles
88.86% Completed 27.88
Co., Ltd.
Newly establishment of Shenzhen CIMC Investment
100.00% Completed 75
Holding Co., Ltd.
Newly establishment of Wuhu CIMC Ruijiang Automobile
60.00% Completed 22.5
Co., Ltd.
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Newly establishment of CIMC Financial Leasing (HK) Co
100% Completed 3.4
Ltd.
Increased investment on Yangzhou CIMC Tonghua Special
80.00% Completed 77.21
Vehicles Co., Ltd.
Total 2,623
III. Routine Work of the Board of Directors
(I) Board Meetings and Resolutions Made
Time Session Resolutions made Disclosure
st
1 Feb. 2010 The 1 Session of Resolution on acquisition of equities of F&G Public notice on
th
the 5 Board of 2 Feb. 2010
Directors for Year 2010
10 Feb. 2010 The 2nd Session of Resolution on establishing Containers Service Business
th
the 5 Board of Investment Holding Company
Directors for Year 2010
19 Mar. 2010 The 3rd Session of 1. Resolutions of the 3rd Session of Public notice on
th th
the 5 Board of the 5 Board of Directors for Year 2010; 23 Mar. 2010
Directors for Year 2010 2. Resolution on financing plan for 2010;
3. Resolution on providing guarantees for credits
granted by banks to subsidiaries in 2010
4. Resolution on provision of credit guarantees by
CIMC Vehicle (Group) Co., Ltd. and its controlling
subsidiaries for dealers and customers;
5. Resolution on controlling subsidiary’s providing
guarantee for credits granted by banks to subsidiaries
of the Group.
th
2 Apr. 2010 The 4 Session of Resolution on nomination of director candidates of the Public notice on
th th
the 5 Board of 6 Board of Directors; 3 Apr. 2010
Directors for Year 2010 Resolution on nomination of independent director
candidates of the 6th Board of Directors;
Resolution on holding the annual shareholder’s general
meeting for 2009
th
23 Apr. 2010 The 4 Session of Resolution on 1st Quarterly Report 2010
the 5th Board of
Directors for Year 2010
26 Apr. 2010 The 1st Session of Resolution on the 1st Session of the 6th Board of Public notice on
th
the 6 Board of Directors for Year 2010 5 May 2010
Directors for Year 2010
30 Jun. 2010 The 2nd Session of Resolution on restructuring of Shenzhen CIMC Tianyu
th
the 6 Board of Real Estate Development Co., Ltd.
Directors for Year 2010 Resolution on Self-inspection Report on the Basic
Works of Financial & Accounting of CIMC Group
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5 Jul. 2010 The 3rd Session of Resolution on transferring the using right of land to
th
the 6 Board of Qingdao CIMC Eco-equipment Co., Ltd.
Directors for Year 2010
20 Aug. 2010 The 4th Session of Resolution on Semi-annual Report 2010
th
the 6 Board of
Directors for Year 2010
1 Sep. 2010 The 5th Session of 1. Resolutions made at 5th Session of the 6th Board of Public notice on
th
the 6 Board of Directors for year 2010; 2 Sep. 2010
st
Directors for Year 2010 2. Resolution on proposal of convening 1 Provisional
Shareholders’ General Meeting in 2010
th
27 Sep. 2010 The 6 Session of Resolution on the 6th Session of the 6th Board of 28 Sep. 2010
th
the 6 Board of Directors for Year 2010
Directors for Year 2010
25 Oct. 2010 The 7th Session of 1. Resolution on the 7th Session of the 6th Board of Public notice on
th
the 6 Board of Directors for Year 2010; 28 Oct. 2010
Directors for Year 2010 2. Resolution on changing the book keeping currency;
3. Resolution on equity exchange of CIMC Vehicle
Financing Lease Co., Ltd.
th
1 Dec. 2010 The 8 Session of 1. Resolution on the 8th Session of the 6th Board of
the 6th Board of Directors for Year 2010
Directors for Year 2010
(II) Execution on resolutions of shareholders’ general meetings by the Board of
Directors
1. The Board of Directors faithfully executed the resolutions of the shareholders’ general
meetings during the report year:
The Proposal on The Stock Option Incentive Scheme of China International Marine
Containers (Group) Co., Ltd. (Draft) (Revised) was reviewed and approved at the 1st
Provisional Shareholders’ General Meeting in 2010, which had fixed the exercise price,
grant date and etc., and finished the stock right register in Jan. 2011. The Proposal on
Register and issuance of Semi-period Notes was reviewed and approved at the 2nd
Provisional Shareholders’ General Meeting, which was still under the review and
approval of dealer; the proposal on Providing the Guarantees for Borrowings from Banks
to Taicang CIMC Containers Co., Ltd. and Proposal on Providing Guarantees for Credits
Granted by Banks to Yantai Raffles Shipyard Limited were still under the execution.
2. Implementation of the profit distribution scheme for 2009 by the Board of Directors
The Profit Distribution Scheme for 2009 was reviewed and approved at the 2009 Annual
Shareholders’ General Meeting held on 26 Apr. 2010. According to the Scheme, based on
the total 2,662,396,051 shares of the Company, a cash dividend of RMB 1.2 (tax included;
after tax, actual cash dividend for every 10 shares for individual shareholders, investment
funds and QFIIs stands at RMB 1.08.) is distributed for every 10 shares. On 29 Jun. 2010,
all parts of the profit distribution had been done.
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(III) Duty performance of three special committees under the Board
The Audit Committee, the Compensation and Appraisal Committee and the Strategy
Committee under the Board of Directors conscientiously performed their duties according
to the Administration Rules for Listed Companies, the Articles of Association of the
Company, Rules of Procedure for Board of Directors as well as the office power and
obligations stipulated in the implementation rules for the special committees.
Duty performance of Audit Committee
1. During the report period, the Audit Committee convened special meetings for
discussing periodical financial reports of the Company; it also communicated with the
auditors and issued the review comments on the financial report.
Since the commencement of the annual report audit for 2010, the Audit Committee
convened 2 meetings and it actively made the audit arrangement with the auditors. It
reviewed the financial statements twice and issued relevant comments. It kept contact
with auditors and paid much attention to the audit progress so as to make sure that the
audit would be accomplished on time.
2. Summary report by Audit Committee on 2010 audit conducted by KPMG
Pursuant to the Notification on Doing Well for the formulation, disclosure and audit
works of Annual Report 2010 from China Securities Regulatory Commission, the audit
carried out by KPMG is hereby summarized as follows:
Firstly, about preparation before the audit:
Formulating audit plan:
The 2010 audit lasted five months from the preliminary audit in early Nov. 2010 to the
completion of the preliminary audit, which was scheduled as follows:
From Nov. 2010 to Dec. 2010, preliminary audit was conducted on main subsidiaries.
On 28 Dec. 2010, KPMG communicated with the management and the Audit Committee
on the preliminary audit.
On 1 Jan. 2011, KPMG entered CIMC and its subsidiaries for audit. At the afternoon of
20 Mar. 2011, KPMG completed audit and issued a preliminary auditor’s report, which
was submitted to the Audit Committee for review and was approved by the Board of
Directors latter on 21 Mar. 2011.
Reviewing unaudited financial statements:
Before the entry of auditors, the Audit Committee carefully reviewed the financial
statements prepared by the Company.
Secondly, about the audit process:
Beginning from Nov. 2010, KPMG conducted preliminary audit on main subsidiaries.
From 1 Jan. 2011, KPMG conducted full audit on CIMC Headquarters and its
subsidiaries.
On 15 Mar. 2011, KPMG reported to the Audit Committee about the completion stage of
the audit.
On 20 Mar. 2011, KPMG submitted the preliminary Auditor’s Report 2010 to the Audit
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Committee.
On 21 Mar. 2011, KPMG officially issued the Auditor’s Report.
Thirdly, about the audit results
KPMG issued the Auditor’s Report 2010 for the Company with an unqualified opinion.
The Audit Committee was of the view that KPMG had done a good job in auditing the
Company’s 2010 annual financial statements.
3. Proposal on continuing employment of KPMG as external audit agency for 2011
The Audit Committee proposed to renew the employment of KPMG for auditing financial
statements of 2011.
Duty performance of Compensation and Appraisal Committee
During the report period, the Compensation and Appraisal Committee convened two
special meetings, at which the following matters were reviewed and discussed:
1. Issuing the audit opinion on the Appraisal Results for Management Team for 2009 and
Appraisal Measures for Management Team for 2010.
2. Issuing the audit opinion on the Disclosure for the Compensation of Directors,
Supervisors and Senior Management Staffs for 2009.
3. Reviewing and approving The Stock Option Incentive Scheme of China International
Marine Containers (Group) Co., Ltd. (Draft) (Revised) and The Appraisal Measures for
Implementing Stock Option Incentive Scheme of China International Marine Containers
(Group) Co., Ltd., which was submitted to the Board of Directors for review and
approval.
Duty Performance of Strategy Committee
During the report period, the Investment Examination Committee under the Strategy
Committee convened five special meetings on investment projects, thoroughly examining
significant investments and acquisition projects of the Company, which provided strong
basis for decision-making of the Board of Directors.
(IV) Statement of the Board of Directors on the responsibility of internal control
The Board of Directors is responsible for the establishment, improvement and effective
implementation of internal control. Generally speaking, the existing internal control rules
and system of the Group are complete, rational, effective and sound, with no material
internal control defects. All units within the Group that have established the internal
control system are able to control risks effectively. And the internal control system can
guarantee the healthy operation and the all the Company’s businesses and help the
Company control operating risks, which meets the relevant requirements of the Guideline
of Shenzhen Stock Exchange for Internal Control of Listed Companies. The
self-evaluation report of the Company on its internal control factually and objectively
presents the actual current situation of its internal control establishment, execution and
supervision. For more details, see the “Self-evaluation Report on Internal Control for
2010” disclosed by the Company.
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IV. Preplan for profit distribution or capitalization of capital reserve for 2010
As audited by KPMG, for the year 2010, the Company achieved a consolidated net profit
of RMB 3,001,850,708.56 after tax and minority interests. Based on the share capital of
2,662,396,051 shares as at 31 Dec. 2010, the earnings per share stood at RMB 1.13.
As per the Articles of Association of the Company and the current accounting standard,
the net profit of parent company was RMB -33,497,245.50 for the year 2010. And the
parent company’s profit available for distribution to shareholders as at 31 Dec. 2010
stood at RMB 1,579,889,470.04 as recorded in the statements. The profit distribution and
dividend declaration preplan is hereby proposed as: Based on the total share capital of
2,662,396,051 shares as at 31 Dec. 2010, a cash dividend of RMB 3.50 (tax included)
will be distributed for every 10 shares, representing a total dividend of RMB
931,838,617.85. After the said profit distribution, retained profit of the Company will
stand at RMB 648,050,852.19.
The above preplans are to be submitted to the Annual Shareholders’ General Meeting
2010 for examination and approval before implementation.
Cash bonus of the Company over the past three years
Unit: RMB Yuan
Ratio to net profit
Net profit attributable to Profit available for
Cash bonus (tax attributable to owners of
Year owners of listed company distribution for the
included) listed company under
under consolidated statements year
consolidated statements
2009 319,487,526.12 958,967,000 33.32% 1,932,874,000
2008 399,359,407.65 1,406,908,000 28.39% 1,064,613,000
2007 1,331,198,025.50 3,165,373,000 42.06% 1,493,044,000
Ratio of accumulative cash bonus to average annual net profit in past
111.19%
three years (%)
V. Other matters that need to be disclosed
(I) Foreign-currency financial assets and liabilities held by the Company
Unit: RMB Thousand
Accumulative
Gain/loss from fair fair value Impairment
Opening
Item value changes in changes provision for Ending amount
amount
report period recorded into report period
equity
Financial assets:
Of which: 1. Financial assets
measured at fair value with
88,9388 204,4299 349,3000
changes recorded into gain/loss
for current period
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Including: derivative financial
5,050 94,0322 119,0699
assets
2. Loans and receivables 2,202,816 -10,0566 5,815,4500
3. Financial assets available for
123,715 3,9355 9,0666
sale
4. Held-to-maturity
investments
5. Hedging 21,5655 14,0700 13,1011
Subtotal of financial assets 2,437,034 204,429 18,005 -10,056 6,186,917
Financial liabilities -9,312,911 -17,191 -12,293,6522
(II) Media designated for information disclosure
The Company has designated China Securities Journal, Shanghai Securities News,
Securities Times and Ta Kung Pao (HK) as media for its information disclosure.
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Section IX Report of the Board of Supervisors
I. Meetings of the Board of Supervisors and resolutions made
Date Session of meeting Resolutions made
st th
19 Mar. 2010 The 1 Session of the 5 Board st
Resolution on the 1 Session of the 5th Board of Supervisors
of Supervisors for Year 2010 for Year 2010
Review opinion on Self-evaluation Report on Internal
Control of CIMC for 2009
nd th
23 Apr. 2010 The 2 Session of the 5 Board Supervision opinion on 1st Quarterly Report 2010 of CIMC
of Supervisors for 2010
26 Apr. 2010 The 1st Session of the 6th Board Resolution on the 1st Session of the 6th Board of Supervisors
of Supervisors for Year 2010 for Year 2010
nd th
20 Aug. 2010 The 2 Session of the 6 Board Supervision opinion on Semi-annual Report 2010 of CIMC
of Supervisors for Year 2010
1 Sep. 2010 The 3rd Session of the 6th Board Resolution on the 3rd Session of the 6th Board of Supervisors
of Supervisors for Year 2010 for Year 2010
27 Sep. 2010 The 4th Session of the 6th Board Resolution on the 4th Session of the 6th Board of Supervisors
of Supervisors for Year 2010 for Year 2010
th th
25 Oct. 2010 The 5 Session of the 6 Board Supervision opinion on 3rd Quarterly Report 2010 of CIMC
of Supervisors for Year 2010
1 Dec. 2010 The 6th Session of the 6th Board Supervision opinion on the Self-inspection Report of the
of Supervisors for Year 2010 Establishment and Implementation of Long-term
Mechanism for Preventing the Fund Occupies
II. Independent opinion on events of the Company in 2010 by the Board of
Supervisors
The Board of Supervisors of the Company issued independent opinion on the following
events:
(I). Legitimate operation of the Company
1. The Board of Supervisors of the Company, on the basis of Company Law and Articles
of Association, carefully performed its duties. The supervisors sat in on the Board
Meetings as non-voting delegates and supervised the convening procedures, decision
making procedures of the general meetings of shareholders and board of directors as well
as the execution of the resolutions made in the general meetings of shareholders and the
decision making of the Company; the Board of Supervisors is of the view that during the
report period, the decision making procedures were consistent with the law, the internal
control procedures were consummated; there was no behavior of the directors, chairman
and senior management staff which violated the Articles of Association or damaged the
Company’s interest; there was no behavior of power abusing or damaged the interest of
the shareholders or employees.
2. In accordance with the Guideline of Internal Control in Listed Company Stipulated by
Shenzhen Stock Exchange, the Board of Supervisors fully inspected on the internal
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control of the Company and issued the following supervision opinions: the current
internal control system is in line with the requirements of relevant laws, rules and
stipulations at present, as well as meet the requirement of effective risk control in all the
material aspects; the Self-assessment Report of Internal Control of CIMC for Y2010
reflects the particulars on the establishment, operation, inspection and supervision of the
Company’s internal control objectively and truly.
3. The Stock Option Incentive Plan of the Company was successively approved and filed
by State Assets Supervision and Administration Committee (SASAC) and China Security
Regulatory Committee (CSRC), and the Board of Supervisors respectively issued the
supervision opinion on the following events in accordance with relevant rules and laws:
(1) The Board of Supervisors believes that the content of Stock Option Incentive Plan of
China International Marine Containers (Group) Co., Ltd. (Drafted) (Revised) is in line
with the stipulations of Company Law, Securities Law, Administration of Stock Option
Incentive of Listed Company, Memorandum of Relevant Events on Stock Option
Incentive No. 1, No. 2 and No. 3 as well as other relevant rules, laws and stipulations; the
Company has fulfilled the duties on legal procedure and information disclosure at current
period; it was legal, compliant and existed no harm to the interest of the Company and
the shareholders in the implementation of tock Option Incentive Plan of China
International Marine Containers (Group) Co., Ltd. (Drafted) (Revised), so it can be put
into practice in accordance with relevant laws, rules and stipulations once being approved
by the Shareholders’ General Meeting of the Company.
(2) The Board of Supervisors believes that the Appraisal Measures for Implementing
Stock Option Incentive Scheme of China International Marine Containers (Group) Co.,
Ltd. takes the correct appraise of the Company’s directors (excluding independent
directors and external directors), senior management staffs, other core technical personnel
on their professional ethics, attitude, ability and performance, etc., then positively uses
the stock incentive mechanism so as to improve the management performance and
maximize the interest of the Company and the shareholders.
(3) The Board of Supervisors supervised the List of Grantees for the Stock Option
incentive fixed by Stock Option Incentive Plan of China International Marine Containers
(Group) Co., Ltd. (Drafted) (Revised) and issued the following opinions: the Company’s
directors (excluding independent directors and external directors), senior management
staffs, other core technical personnel fixed by Stock Option Incentive Plan of China
International Marine Containers (Group) Co., Ltd. (Drafted) (Revised) all meet the
qualification stipulated in Company Law, Articles of Association as well as other laws
and rules, who also meet the conditions of incented objects stipulated by Administration
of Stock Option Incentive of Listed Company (Trial), so whose qualifications as the
incented objects for this stock option incentive of the Company are legal and effective.
4. After the review and approval of Shareholders’ General Meeting on the Stock Option
Incentive Plan of the Company, the Board of Supervisors issued the opinion on the
following events:
(1) In line with the authorization from the Shareholders’ General Meeting, the Board of
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Directors fixed the grant date for the stock option incentive plan of the Company as 28
Sep. 2010, and the Board of Supervisors issued the following opinion after supervision:
the determination of grant date is in line with Administration of Stock Option Incentive
of Listed Company (Trial)(hereinafter refers as Administration), Memorandum of
Relevant Events on Stock Option Incentive No. 1, No. 2 and No. 3 (hereinafter refers as
Memorandum) and Stock Option Incentive Plan of China International Marine
Containers (Group) Co., Ltd. (hereinafter refers as Stock Option Incentive Plan), which is
legal and effective.
(2) In view that the Company has carried out the Distribution Plan 2009 as distributing
RMB 1.2 for every ten shares in Jun. 2010, the Board of Directors adjusted the original
exercise price under the authorization of the Shareholders’ General Meeting and in line
with the stipulations of Administration, Memorandum and Stock Option Incentive Plan of
the Company, the details as follows:
Equity distribution for Y2009
Before adjustment After adjustment
Exercise price 12.51 12.39
After supervision, the Board of Supervisors believes that the above adjustment of the
original exercise price is in line with the relevant stipulations on the adjustment of
exercise price in Administration, Memorandum and Stock Option Incentive Plan, which
is legal and effective.
5. In accordance with the spirit of the Circular on Carrying out Self-inspection on the
Establishment and Implementation of Long-term Mechanism for Funds Occupies
Prevention, the Company carried out the self-inspection and form the Self-inspection
Report on the Establishment and Implementation of Long-term Mechanism for Funds
Occupies Prevention, the Board of Supervisors supervised the Self-inspection Report and
believes that the content of the report is objective and true; there existed no funds
occupies from the main shareholders and related parties of the Company.
(II) The Board of Supervisors examined the Company’s business and finance in 2010, as
well as the annual financial report, the semi-annual report and other documents submitted
by the Board of Directors. And it is of the opinion that the financial report has presented
the Company’s financial status and operating results in a factual and fair manner. In the
report period, KPMG issued a standard unqualified auditor’s report for the Company’s
Financial Report 2010. And it believes that the audit opinion issued by KPMG is
objective.
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Section X Significant Events
I. Significant lawsuits and arbitrations
Naught
II. Significant acquisition and sales of assets
On 16 Nov. 2009, by Bright Day Limited (hereinafter referred to as “the Offeror”), a
wholly-owned subsidiary of CIMC (Hong Kong) Limited, which is in turn a wholly-owned
subsidiary of the Company, and the person acting-in concert made a voluntary
unconditional cash tender offer for all the shareholders of Yantai Raffles Shipyard Limited
and other relevant parties. This offer was completed on 18 Jan. 2010, the subsidiary of the
Company held 136,810,425 shares of Yantai Raffles Shipyard Limited, amounting for
about 50.01% shares of Yantai Raffles Shipyard Limited, thus becoming the control
shareholder of Yantai Raffles Shipyard Limited. The the Company joined the shares
allotment and then made the proportion of shares of Yantai Raffles Shipyard Limited held
increase to 50.98% after this shares allotment. For details, please refer to Public Notices on
the Progress of Voluntary Unconditional Cash Tender Offer towards Yantai Raffles
Shipyard Limited from the Subsidiary of China International Marine Containers (Group)
Co., Ltd. and Pubic Notice on Joining in the New Share Allotment of the Subsidiary by
China International Marine Containers (Group) Co., Ltd. (Public notices in China
Securities Journal, Shanghai Securities, Securities Times and Ta Kung Pao on 20 Jan. 2010
and 6 Jul. 2010, Announcement No. : [CIMC] 2010-001 and [CIMC]2010-019).
III. Significant related transactions
During the reporting period, no significant related transaction occurred in 2010. For details
of relevant information, please refer to “Note VI Related Party Relationships and
Transactions” in the Notes to the Financial Statements.
IV. Significant contracts and execution
1. During the reporting period, the Company did not hold in trust, contract or lease any
significant assets from other companies, nor did it put in trust, contract or lease its
significant assets to other companies.
2. On 15 Nov. 2009, Bright Day Limited (hereinafter referred to as “the Offeror”), a
wholly-owned subsidiary of CIMC (Hong Kong) Limited, which is in turn a wholly-owned
subsidiary of the Company, signed the Shareholders’ Agreement with CIMC (Hong Kong)
Limited, Sharp Vision Holdings Limited, Leung Kee Holdings Limited and Bright Touch
Investment Limited. The Offeror made a voluntary unconditional cash tender offer for all
the shareholders of YRSL other than offeror and relevant parties on offer date (16 Nov.
2009). This offer was completed on 18 Jan. 2010, the subsidiary of the Company held
136,810,425 shares of Yantai Raffles Shipyard Limited, amounting for about 50.01% shares
of Yantai Raffles Shipyard Limited, thus becoming the control shareholder of Yantai
Raffles Shipyard Limited. In Jul. 2010, Yantai Raffles Shipyard Limited announced to, on
the basis of one additional share for every two existing shares, issue 136,782,500 shares of
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renounceable non-underwritten additional shares, and the Company joined in this share
allotment. The proportion of shares of Yantai Raffles Shipyard Limited held by the
Company increased to 50.98% after this shares allotment. For details, please referred to the
Announcement was disclosed in China Securities Journal, Shanghai Securities News,
Securities Times and Ta Kung Pao on 20 Jan. 2010 and 6 Jul. 2010(Announcement No. :
[CIMC] 2010-001 and [CIMC]2010-019).
3. The Company signed a strategic cooperation agreement with China Merchants Bank Co.,
Ltd. (hereinafter referred to as “China Merchants Bank”). According to the said agreement,
China Merchants Bank intends to provide a credit line of RMB 17.7 billion to the Company
and will cooperate with the Company in various business. For details, please referred to the
Announcement was disclosed in China Securities Journal, Shanghai Securities News,
Securities Times and Ta Kung Pao on 23 Dec. 2010 (Announcement No. : [CIMC]
2010-040).
4. Significant guarantee contracts
(1) The Company provided guarantees on operational capital for its subsidiaries. The
Company is a overall listed company, who provided guarantees on operational capital
within budgets for its subsidiaries for the purpose of demands of business and development.
The Company signed a General Agreement on Annual Credit of Head Office with the Bank
according to the annual budget approved by the Board of Directors. The various financing
activities of the subsidiaries must be within the annual credit in the General Agreement.
The Company, as approved by the Board of Directors, provided credit guarantee for the
subsidiaries with the total annual credit. As 31 Dec. 2010, the balance of the guarantee
provided by the Company for its subsidiaries was RMB 2,116.09 million. No overdue
external guarantee existed in the Company and holding subsidiaries.
(2) The Company did not provide any external guarantees to its shareholders, actual
controller and other related parties.
(3) As at 31 Dec. 2010, the balance of guarantee provided by the Company amounted to
RMB 3,154.02 million, accounting for 19.44% of the net assets at the end of 2010, direct or
indirect guarantee amount for liabilities of subsidiaries whose assets liability ratio was over
70% was RMB 720.01 million.
5. During the reporting period, the Company did not entrust any person to conduct cash
assets management.
V. Special explanation and independent opinion made by Independent Directors on
relevant events
(I) Special explanation and independent opinion made by Independent Directors in respect
of appropriations of funds of the Company by its related parties and external guarantee
We believed that the Company has strictly followed the requirements of relevant rules and
regulations to standardize the behaviors of external guarantee with perfect decision-making,
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and reached the effective financial risk control. There was no behavior of external
guarantee provided by the Company for its shareholders, actual controller and other related
parties in the Company. Both guarantees the Company provided for its subsidiaries and
guarantees CIMC Vehicle and its holding subsidiaries provided for their dealers and clients
are for the sake of promoting business development of the Group and demands of products
sales. The above-mentioned guarantees did not harm benefits of the Company and
shareholders.
(II) Special explanation and independent opinion made by Independent Directors on the
Company’s derivatives investment and risk control
In our opinion, the Company strictly complied with the requirements of relevant rules and
regulations issued by supervision department, as well as the principle of prudence, to
standardize derivatives investment. The internal approval system and operating process on
business was perfect. And risk control was valid.
VI. Performance on the stock option incentive scheme
(I) Implementation of the stock option incentive scheme of CIMC
On 28 Dec. 2009, the 16th Session of the 5th Board of Directors for year 2009 of CIMC and
the 7th Session of the 5th Board of Supervisors for year 2009 of CIMC were held, at which
the Stock Option Incentive Scheme of China International Marine Containers (Group) Co.,
Ltd. (Draft), the Appraisal Measures for Implementing Stock Option Incentive Scheme of
China International Marine Containers (Group) Co., Ltd. and the Proposal on Submitting
the Shareholders’ General Meeting to Authorize the Board of Directors to Transact Matters
Related with Stock Option Incentive Scheme of CIMC were reviewed and approved. And
the independent directors issued The Independent Opinion on the Stock Option Incentive
Scheme of China International Marine Containers (Group) Co., Ltd. (Draft) by the
Independent Directors.
On 1 Sep. 2010, the Company convened the 5th Session of the 6th Board of Directors for
Year 2010 and the 3rd Session of the 6th Board of Supervisors for Year 2010, which
reviewed and approved Proposal on Revising the Stock Option Incentive Scheme of China
International Marine Containers (Group) Co., Ltd (Draft), and amended the original
incentive scheme. With unanimous review by CSRC, on 17 Sep. 2010, the 1st Special
Shareholders’ Meeting for Year 2010 of the Company reviewed and passed the Stock
Option Incentive Scheme of China International Marine Containers (Group) Co., Ltd.
(hereafter referred to as Incentive Scheme of Stock Option).
The Company completed this stock option registration on 26 Jan. 2011.
The number of stock option granted to grantees in this scheme was 60 million, accounting
for 2.25% of the total share capital of the Company, of which 54 million was initially
granted. And the grantees were core technical (business) staff and middle management staff,
amounted to 181. And the initial exercise price was RMB 12.39 per share with the grant
date as 28 Sep. 2010, and the valid period of this stock option incentive scheme was ten
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years since the initial grant date of the stock option, which was divided into two periods to
exercise, and the first exercise period was from the initial trade date after two years since
the grant date to the last trade date within four years since the grant date, and it was
allowed to exercise no more than 25% of the total granted stock options; the second
exercise period was from the initial trade date after four years since the grant date to the
last trade date of this plan, and it was allowed to exercise no more than 75% of the total
stock options. The large-scale stock option incentive and the strict exercise conditions
would integrate the interest of the Company and that of the staffs themselves, so as to
stimulate the staffs’ enthusiasm significantly, and thus input endless energy to the
development of the Company.
For details, please referred to the Revised Stock Option Incentive Scheme of CIMC(Draft),
(Revised) disclosed in http://www.cninfo.com.cn on 3 Sep. 2010.
(II) Performance on Equity Trust Scheme of CIMC Vehicle (Group) Co., Ltd.
1. The Shareholders’ General Meeting of the Company held on 17 Oct. 2007 reviewed and
approved the Proposal on Shares Trust Plan of CIMC Vehicles (Group) Co., Ltd., the
Company’s wholly owned subsidiary. In accordance with the plan, the Company’s senior
management staffs involving in the vehicles business and the core staffs of the Company’s
subsidiary CIMC Vehicles (Group) Co., Ltd. held 20% of this subsidiary with increasing
capital as RMB 220.7 million through China Resources SZITIC Trust Co., Ltd..
2. The Shareholding Plan of Core Staffs in CIMC Vehicles (Group) Co., Ltd. was
implemented in 2007 through the establishment of Shares Trust Plan, of which the first
phase of distributed shares totaling 43 million shares, accounting for 19.48% in the total
beneficiary shares of the Shares Trust Plan. The second phase of beneficiary shares of
Shares Trust Plan of CIMC Vehicles (Group) Co., Ltd. was distributed with the total shares
as 72.87 million shares, representing 33.02% in the total beneficiary shares of the Shares
Trust Plan, with the number of beneficiary as 150.
As to 31 Dec. 2010, the distributed shares of Shares Trust Plan of CIMC Vehicles (Group)
Co., Ltd. were 115.32 million shares, accounting for 52.25% in the total beneficiary shares
of the Shares Trust Plan.
VII. Commitment made by the Company or shareholders holding more than 5% of
shares and performance thereof
(I) For the relevant commitment made by the Company, please refer to the Notes to the
Financial Statements.
(II) Commitment made by COSCO Container Industrial Limited in the Share Merger
Reform on listing of shares subject to trading moratorium and the performance thereof
(1) COSCO Container Industries Limited committed that the original non-tradable shares
held by it would not be sold at Shenzhen Stock Exchange or transferred according to
relevant regulations within 12 months since the first transaction day after implementation
of the share merger reform.
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(2) COSCO Container Industries Limited further committed that, after expiration of the
above commitment, the non-tradable shares sold through listing at Shenzhen Stock
Exchange in accordance with the relevant provisions would not exceed 5% of total shares
of CIMC within 12 months and not exceed 10% within 24 months.
The Board of Directors and CITIC Securities considered that up to date, COSCO Container
Industries Limited has strictly performed relevant commitments in the Share Merger
Reform.
VIII. Other investment events
(I) Securities investment
Unit: RMB Yuan
Number of Proportion to
Initial shareholding total securities Profits and
Stock Stock Short form of Closing book
No. investment at the investment at losses in the
variety code Stock value
(RMB Yuan) period-end the period-end reporting period
(share) （%）
1 A 000581 Weifu Hi-tech 24976714.19 1419710 52742226.5 13.40 27765512.32
2 A 000858 Wuliangye 98235671.43 3163623 109556264.5 27.84 11320593.06
3 B 200581 Su Weifu B 39108015.97 3367933 80513216.89 20.46 48018830.77
inotrans
4 H 00368 Shipping 20988542.68 2996500 7468205.16 0.19 -1717091.22
Limited H
5 S G05.SI GoodPack 105346054.5 13500000 142242646.9 36.15 72373195.09
Other securities investment at the
2,834,425.00 - 968,440.03 0.25 315,959.98
period-end
Profit and loss from selling securities
15,820,000.00
investment
Total 291,489,423.77 393,491,000.00 100.00% 173,897,000.00
(II) Equity of other listed companies held by the Company
Unit: RMB Yuan
Ratio to Profits and Change of owners’
equity of losses in the equity
Stock Short form Closing book
Initial investment invested reporting period
code of Stock value
company
(%)
China
600036 Merchants 25,461,492.90 0.53% 147,129,000.00 13,524,312.95 -35,182,305.08
Bank
China
600999 Merchants 57,517,510.73 0.90% 612,272,000.00 16,053,488.28 -183,838,694.92
Securities
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Otto
OEL 13,480,167.09 1.19% 9,066,000.00 - -14,027,000.00
Energy
Total 96,459,170.72 - 768,467,000 29,577,801.23 -233,048,000
(III) Equity of Pre-IPO and unlisted financial enterprises held by the Company
Naught
(VI) Derivatives investment
As at 31 Dec. 2010, main financial instrument held by the Company
included foreign exchange forwards or option contract and interest
rate swap contract. Risk of interest rate swap contract was nearly
related to fluctuation of interest rate. Risk of foreign exchange
Analysis on risks and control measures of derivatives forwards or option contract related to of risk from exchange rate
positions held in the report period (including but not market and certainty of future cash flow from foreign currency
limited to market risk, liquidity risk, credit risk, income. Control measures of derivative instrument showed in the
operation risk, law risk, etc.) following: carefully select and determine the type and amount of
new derivative instrument; aimed at derivative transaction, the
Company formulated strict and regular internal system of
examination and approval and operation process, and defined
procedure of examination and approval to control relevant risks.
Changes of market prices or fair values of the
The Group’s profit and loss from change in fair value of derivative
invested derivatives in the reporting period And the
financial instrument was RMB 76,841,000 from Jan to Dec. 2010.
analysis on the fair value of the derivatives should
Fire value of derivative financial instrument was recognized
disclose the specific use methods and the relevant
according to market quote from the external financial institution.
assumptions and parameters.
Whether significant changes occurred to the
Company’s accounting policy and specific accounting
No
principles of derivatives in the reporting period than
that of the previous reporting period
In our opinion, the Company strictly complied with the requirements
Specific opinion from independent directors, sponsors of relevant rules and regulations issued by supervision department,
or financial consultants on the Company’s derivatives as well as the principle of prudence, to standardize derivatives
investment and risk control investment. The internal approval system and operating process on
business was perfect. And risk control was valid.
Positions of derivatives investment as at the end of reporting period
Unit RMB Yuan
Profit and loss Proportion of closing
Opening contract Closing contract in the reporting contract amount to net assets
Type of contract
amount amount period of the Company at the end of
（RMB’0000） reporting period（%）
1. Forward foreign
1,469,500,244.47 4,673,302,392.70 77,190,000.00 28.81%
exchange contract
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2. Interest rate swaps 2,172,069,289.01 2,370,373,304.01 -6,974,000.00 14.61%
3. Option
346,401,816.57 370,908,516.65 6,625,000.00 2.29%
contracts-JPY
Total 3,987,971,350.05 7,414,584,213.36 76,841,000.00 45.70%
IX. Engagement and disengagement of CPA Firm
During the reporting period, as approved by the Annual Shareholders’ General Meeting
2009 held on 26 Apr. 2010, the Company reengaged KPMG, which has been providing
auditing services for the Company for 16 consecutive years since 1994, as the Company’s
accountants for providing auditing to the accounting statements for 2010.
2010 2009
Remuneration Continuous Name of Remuneration paid
Audited items Name of CPA
paid (audit fee service life CPA (audit fee and
Firm
and travel charge) Firm travel charge)
Preparing the consolidated
financial statements of the
Group in accordance with KPMG 4.5 million 17 KPMG 4.38 million
China Accounting Standard for
Business Enterprise
X. During the reporting period, none of the Company, its Board of Directors and its
directors was subject to administrative punishment by CSRC.
XI. Events after the balance sheet date
The change in book keeping currency
The book keeping currency of the Company and parts of its domestic subsidiaries in 2010
and previous years was US Dollar. Because the economical environment in which the
Company and parts of its domestic subsidiaries was substantially affected by the change in
value of Renminbi, their book keeping currency was changed into Renminbi from 1 Jan.
2011.
XII. Interviews and visits in the reporting period
During the reporting period, the Company received in aggregate 90 batches of visitors for
visiting, investigation and visiting plants by various institutional investors, such as fund
companies, investment companies and securities companies, and individual investors etc.
The Company did not disclose, reveal or divulge to any institutional investors and
individual investors any material information not generally available to the public.
Topics discussed and information
Time Location Means Investors
provided
The business structure of the
4 Jan. 2010 The Company Field research UBS Securities
Company, the recent status in the
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industry, the main business status,
investment progress, outlook for the
industry in 2010
Orient Securities Co., Ltd.,
7 Jan. 2010 The Company By telephone Bank of China Investment Ditto
Management
Guangzhou Securities,
7 Jan. 2010 The Company Field research Ditto
Morgan Stanley Huaxin Funds
Value Partners, Customers of
8 Jan. 2010 The Company Field research Ditto
Shenyin & Wanguo Securities
Changsheng Fund
12 Jan. 2010 The Company Field research Management, China Minzu Ditto
Securities
TX Investment Consulting,
ICBC Credit Suisse Asset
14 Jan. 2010 The Company Field research Ditto
Management, Pacific
Securities, Lord Abbett China
14 Jan. 2010 The Company By telephone Guosen Securities Ditto
China Universal Asset
15 Jan. 2010 The Company Field research Ditto
Management, Dacheng Fund
18 Jan. 2010 The Company Field research Nomura Securities Ditto
20 Jan. 2010 The Company Field research Harvest Fund Ditto
26 Jan. 2010 The Company By telephone First Shanghai Securities Ditto
27 Jan. 2010 The Company By telephone Customers of ABN AMRO Ditto
E Fund, KGI, China Galaxy
28 Jan. 2010 The Company Field research Securities, BNP Paribas Ditto
Peregrine
28 Jan. 2010 The Company By telephone Customers of CICC Ditto
29 Jan. 2010 The Company By telephone Capital Securities Ditto
Manulife Teda Fund
24 Feb. 2010 The Company Field research Management, PingAn Ditto
Securities
25 Feb. 2010 The Company Field research Standard Chartered Ditto
25 Feb. 2010 The Company Field research GF Securities Ditto
26 Feb. 2010 The Company By telephone Nomura Securities Ditto
China Post Fund, First-Trust
26 Feb. 2010 The Company Field research Fund Management, UBS Ditto
SDIC
28 Feb. 2010 The Company Field research CLSA Asia-Pacific Markets Ditto
Customers of BOC
5 Mar. 2010 The Company Field research Ditto
International (China) Limited
8 Mar. 2010 The Company By telephone Taikang Asset Management Ditto
11 Mar. 2010 The Company Field research Nikko Asset Management Ditto
76
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Customers of CICC,
2009 Annual Report and relevant
23 Mar. 2010 The Company Tele-conference customers of Shenyin &
business progress
Wanguo
The business structure of the
Company, the recent status in the
Morgan Stanley and its
24 Mar. 2010 The Company Field research industry, the main business status,
customer
investment progress, outlook for the
industry in 2010
25 Mar. 2010 The Company By telephone Dacheng Fund, Harvest Fund Ditto
9 Apr. 2010 The Company Field research Manulife Ditto
17 Apr. 2010 Yantai Field research Customers of Citibank Ditto
19 Apr. 2010 The Company Field research China Galaxy Securities Ditto
Shanghai Jianyong Investment
20 Apr. 2010 The Company Field research Ditto
Co., Ltd.
22 Apr. 2010 The Company Field research Customers of HSBC Bank Ditto
Shenyin & Wanguo Securities
28 Apr. 2010 The Company Field research Ditto
(HK)
Donghai Securities, CITIC
7 May 2010 The Company Field research Ditto
Securities
Martine Currie Investment
11 May 2010 The Company Field research Ditto
Management
28 May 2010 The Company Field research Chang Xin Asset Management Ditto
3 Jun. 2010 Shenzhen Field research Capital Securities Ditto
Asian Century Quest, Galaxy
21 Jun. 2010 The Company Field research Ditto
Asset Management
22 Jun. 2010 The Company Field research Customers of BNP Paribas Ditto
2010 Interim Strategy
One-to-many
23 Jun. 2010 Shenzhen Conference of China Ditto
conference
Merchants Securities
25 Jun. 2010 The Company Field research Gartmore Ditto
Morgan Stanley, Fidelity
28 Jun. 2010 The Company Field research Ditto
Investments Management
Business structure, recent industry,
Morgan Stanley, Fidelity Cash
28 Jun. 2010 The Company Field research main business status, investment
Fund
progress, industry outlook for 2010
Aijian Securities
6 Jul. 2010 The Company Field research Ditto
First Capital Securities
7 Jul. 2010 The Company By telephone Taiwan Yuanta Securities Ditto
Tufton Ocean Fund, Huatai
8 Jul. 2010 The Company Field research Ditto
Securities
12 Jul. 2010 The Company Field research Shanghai Zexi Investment Ditto
13 Jul. 2010 The Company Field research INVESCO Ditto
14 Jul. 2010 The Company Field research Standard Chartered Bank Ditto
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Customers of Goldman Sachs,
15 Jul. 2010 The Company By telephone Ditto
TPG Axon Capital
16 Jul. 2010 The Company Field research TX Investment Ditto
27 Jul. 2010 The Company Field research CITIC Securities Ditto
29 Jul. 2010 The Company Field research JP Morgan Ditto
29 Jul. 2010 The Company Field research GTJA Securities Ditto
30 Jul. 2010 The Company Field research Guosen Securities Ditto
5 Aug. 2010 The Company By telephone Customers of BNP Ditto
Everbright Pramerica Fund
12 Aug. 2010 The Company By telephone Ditto
(Taiwan)
The Company, Hai Tong Securities, Bank
31 Aug. 2010 Field research Ditto
eastern factory Fund
3 Sep. 2010 The Company Field research First State Cinda Fund Ditto
6 Sep. 2010 The Company Field research Yimin Securities Ditto
7 Sep. 2010 The Company Field research KGI Capital Asia Limited Ditto
10 Sep. 2010 The Company Field research Macquarie Securities Ditto
13 Sep. 2010 The Company Field research Shenyin & Wanguo Securities Ditto
13 Sep. 2010 The Company Field research Changjiang Securities Ditto
Fuh Hwa Securities
15 Sep. 2010 The Company Field research Ditto
Investment Trust, CPIC
Shenyin & Wanguo, Guosen
Securities, Ping An Securities,
Essence Securities, Sinolink
Securities, China Merchants
Securities, Hai Tong
Securities, E-Fund, GF
Securities, Hua An Fund,
Fortune SGAM Fund, Yinhua
Fund, Great Wall Fund, ICBC Business structure of the Company’s
Credit Suisse, Fullgoal Fund, marine industry, recent industry,
27 Sep. 2010 Yantai Raffles Field research China Post Fund, Lombarda progress situation of major orders,
China Fund, Tianhong Fund, investment progress, industry outlook
Changxin Fund, Taikang for the second of 2010 and 2011
Asset, Pacific Assets, Rising
Investment, Yongjin Asset,
Morgan Stanley, Macquarie
Capital Securities, China
AMC, Runhui Investment,
Changsheng Fund, CCIG,
Harvest Fund, Galaxy Fund,
Penghua Fund
Business structure, recent industry,
29 Sep. 2010 The Company Field research New silk road main business status, investment
progress, industry outlook for the
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second of 2010 and 2011
Business structure, recent industry,
main business status, investment
12 Oct. 2010 The Company Field research Guosen Securities
progress, industry outlook for the
second of 2010 and 2011
13 Oct. 2010 The Company Field research E Fund, UBS Ditto
Aisawa Securities, China Ditto
22 Oct. 2010 The Company Field research
Merchants Securities
28 Oct. 2010 The Company By telephone Customers of Citibank Ditto
Yantai CIMC Ditto
Taihe Investment ,E Fund,
28 Oct. 2010 Raffles Shipyard Field research
Individual Investors
Limited
2 Nov. 2010 The Company Field research China Merchants Fund Ditto
Invesco HK、Customers of Ditto
4 Nov. 2010 The Company Field research
Guosen Securities
5 Nov. 2010 The Company Field research Mitsui Life Insurance Ditto
9 Nov. 2010 The Company Field research Changjiang Pension Insurance Ditto
10 Nov. 2010 The Company Field research China Southern Fund Ditto
One-to-many Ditto
24 Nov. 2010 The Company Customers of Morgan Stanley
conference
One-to-many Customers of Shenyin & Ditto
25 Nov. 2010 Sanya
conference Wanguo
26 Nov. 2010 The Company Field research Jefferies Ditto
30 Nov. 2010 The Company Field research China Merchants Securities Ditto
The Company, Ditto
3 Dec. 2010 Field research GF Securities
eastern factory
6 Dec. 2010 The Company By telephone Harvest Fund Ditto
7 Dec. 2010 The Company Field research Everbright Securities Ditto
8 Dec. 2010 The Company Field research CICC Ditto
14 Dec. 2010 The Company Field research GF Securities Ditto
17 Dec. 2010 The Company Field research Harvest Fund Ditto
17 Dec. 2010 The Company Field research CICC Securities Ditto
20 Dec. 2010 The Company Field research KB Asset Management Ditto
23 Dec. 2010 The Company Field research Industrial Securities Ditto
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China International Marine Containers
(Group) Co., Ltd.
ENGLISH VERSION OF FINANCIAL STATEMENTS
FOR THE YEAR 1 JANUARY 2010 TO 31 DECEMBER 2010
IF THERE IS ANY CONFLICT OF MEANING BETWEEN THE CHINESE
AND ENGLISH VERSIONS, THE CHINESE VERSION WILL PREVAIL
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Auditors’ Report
KPMG-C (2011) AR No.0039
All shareholders of China International Marine Containers (Group) Co., Ltd.:
We have audited the accompanying financial statements of China International Marine
Containers (Group) Co., Ltd. (“the Company”), which comprise the consolidated balance
sheet and balance sheet as at 31 December 2010, the consolidated income statement and
income statement, the consolidated statement of changes in shareholders’ equity and
statement of changes in shareholders’ equity, the consolidated cash flow statement and
cash flow statement for the year then ended, and notes to the financial statements.
Management’s Responsibility for the Financial Statements
The Company’s management is responsible for the preparation of these financial statements
in accordance with China Accounting Standards for Business Enterprises issued by the
Ministry of Finance of the People’s Republic of China. This responsibility includes:
designing, implementing and maintaining internal control relevant to the preparation of
financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with China Standards on Auditing for Certified Public
Accountants. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance as to whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditors
consider internal control relevant to the entity’s preparation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
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Auditors’ Report (continued)
KPMG-C (2011) AR No.0039
Opinion
In our opinion, the financial statements comply with the requirements of China Accounting
Standards for Business Enterprises issued by the Ministry of Finance of the People’s
Republic of China and present fairly, in all material respects, the consolidated financial
position and financial position of the Company as at 31 December 2010, and the consolidated
results of operations and results of operations and the consolidated cash flows and cash flows
of the Company for the year then ended.
KPMG Huazhen Certified Public Accountants
Registered in the People’s Republic of
China
Beijing, the People’s Republic of China Lei Iun Mei
Liang Jiebing
21 March 2011
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China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Current assets:
Cash at bank and on hand
V.1 706,511 4,655,696 771,685 5,269,217
Financial assets held
for trading V.2 79,770 525,661 16,604 113,337
Bills receivable V.3 77,179 508,585 247,627 1,690,845
Accounts receivable V.4 1,233,719 8,129,836 565,684 3,862,604
Prepayments V.6 369,280 2,433,447 157,224 1,073,559
Interest receivable 718 4,732 - -
Other receivables V.5 339,359 2,236,272 164,537 1,123,489
Inventories V.7 2,037,080 13,423,747 989,070 6,753,566
Non-current assets
due within one year V.8 179,902 1,185,502 57,707 394,036
Other current assets V.9 104,410 688,030 37,292 254,677
Total current assets 5,127,928 33,791,508 3,007,430 20,535,330
Non-current assets:
Available-for-sale
financial assets V.10 116,616 768,467 172,196 1,175,785
Long-term receivables V.11 202,780 1,336,257 145,271 991,942
Long-term equity
Investments V.12 234,962 1,548,332 282,770 1,930,811
Investment property V.13 11,739 77,356 11,073 75,606
Fixed assets V.14 1,518,501 10,006,466 1,126,949 7,695,033
Construction in progress V.15 257,624 1,697,664 83,956 573,269
Intangible assets V.16 488,424 3,218,571 406,788 2,777,626
Goodwill V.17 177,336 1,168,594 176,697 1,206,522
Long-term deferred
expenses V.18 4,246 27,978 4,469 30,513
Deferred tax assets V.19 74,275 489,456 53,593 365,946
Total non-current assets 3,086,503 20,339,141 2,463,762 16,823,053
Total assets 8,214,431 54,130,649 5,471,192 37,358,383
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 31 December 2010
(continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Current liabilities:
Short-term loans V.22 1,260,954 8,309,309 608,869 4,157,477
Financial liabilities
held for trading V.23 578 3,810 58 395
Bills payable V.24 385,241 2,538,623 179,563 1,226,091
Accounts payable V.25 1,383,599 9,117,500 653,504 4,462,255
Advances from customers V.26 293,751 1,935,731 186,082 1,270,602
Employee benefits payable V.27 207,222 1,365,532 119,127 813,425
Taxes payable V.28 119,756 789,155 91,241 623,011
Interest payable V.29 1,998 13,168 1,295 8,844
Dividends payable V.30 2,435 16,046 4,604 31,434
Other payables V.31 362,438 2,388,367 216,294 1,476,903
Provisions V.32 98,574 649,573 75,687 516,801
Non-current liabilities
due within one year V.33 431,662 2,844,521 66,705 455,472
Other current liabilities - -
Total current liabilities 4,548,208 29,971,335 2,203,029 15,042,710
Non-current liabilities
Financial liabilities
held for trading V.23 23,414 154,292 22,647 154,641
Long-term loans V.34 593,676 3,912,148 821,382 5,608,560
Special payables V.35 2,495 16,442 1,997 13,639
Provisions V.32 - - 6,060 41,381
Deferred tax liabilities V.19 86,933 572,866 79,190 540,722
Long-term payables V.36 18,037 118,858 - -
Other non-current
liabilities V.37 27,013 178,008 19,053 130,099
Total non-current liabilities 751,568 4,952,614 950,329 6,489,042
Total liabilities 5,299,776 34,923,949 3,153,358 21,531,752
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 31 December 2010
(continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Shareholders’ equity
Share capital V.38 328,872 2,662,396 328,872 2,662,396
Capital reserve V.39 185,516 1,349,420 216,389 1,557,703
Surplus reserve V.40 434,170 3,577,588 434,170 3,577,588
Retained earnings V.41 1,412,800 10,689,335 1,047,547 8,229,532
Translation differences
of financial statements
denominated in
foreign currency 100,532 (2,055,682) 52,371 (1,829,011)
Total equity attributable to
shareholders of the
Company 2,461,890 16,223,057 2,079,349 14,198,208
Minority interests 452,765 2,983,643 238,485 1,628,423
Total equity 2,914,655 19,206,700 2,317,834 15,826,631
Total liabilities and
Shareholders’ equity 8,214,431 54,130,649 5,471,192 37,358,383
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Current assets
Cash at bank and on hand XII.1 63,727 419,945 93,398 637,738
Financial assets held
for trading XII.2 24,629 162,298 - -
Dividends receivable XII.3 643,950 4,243,437 693,576 4,735,874
Other receivables XII.4 633,590 4,175,168 771,156 5,265,606
Bills receivable 4,704 31,000 - -
Total current assets 1,370,600 9,031,848 1,558,130 10,639,218
Non-current assets
Available-for-sale
financial assets XII.5 115,241 759,401 154,077 1,052,070
Long-term equity
Investments XII.6 555,788 3,662,478 436,147 2,978,100
Fixed assets 21,957 144,692 19,469 132,936
Construction in progress 3,828 25,224 3,208 21,906
Intangible assets 3,507 23,109 4,576 31,249
Long-term deferred
expenses 759 4,999 1,138 7,770
Total non-current assets 701,080 4,619,903 618,615 4,224,031
Total assets 2,071,680 13,651,751 2,176,745 14,863,249
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 31 December 2010 (continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Current liabilities
Short-term loans XII.7 72,977 480,897 94,690 646,564
Financial liabilities held
for trading XII.8 84 556 - -
Billss payable XII.9 30,350 200,000 - -
Employee benefits
Payable XII.10 55,886 368,275 34,019 232,286
Taxes payable XII.11 8,966 59,080 36,439 248,814
Interest payable 838 5,522 538 3,673
Other payables 1,428 9,407 3,843 26,234
Non-current liabilities
due within one year XII.12 414,185 2,729,353 57,678 393,839
Total current liabilities 584,714 3,853,090 227,207 1,551,410
Non-current liabilities
Financial liabilities held
for trading XII.8 20,767 136,846 21,268 145,224
Long-term loans XII.13 375,340 2,473,381 743,787 5,078,728
Deferred tax liabilities XII.14 7,632 50,291 19,936 136,128
Total non-current
Liabilities 403,739 2,660,518 784,991 5,360,080
Total liabilities 988,453 6,513,608 1,012,198 6,911,490
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 31 December 2010 (continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
Shareholders’ equity
Share capital V.38 328,872 2,662,396 328,872 2,662,396
Capital reserve XII.15 112,162 852,264 141,809 1,045,202
Surplus reserve V.40 434,170 3,577,588 434,170 3,577,588
Retained earnings 208,023 1,579,889 259,696 1,932,874
Translation differences
of financial statements
denominated in
foreign currency - (1,533,994) - (1,266,301)
Total equity 1,083,227 7,138,143 1,164,547 7,951,759
Total liabilities and
Shareholders’ equity 2,071,680 13,651,751 2,176,745 14,863,249
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated income statement
for the year ended 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
I.Operating income V.42 7,673,359 51,768,316 2,997,659 20,475,507
II.Operating costs V.42 6,462,286 43,597,815 2,547,655 17,401,760
Business taxes and Surcharges V.43 11,397 76,892 7,563 51,658
Selling and distribution expenses V.44 185,317 1,250,243 106,536 727,693
General and administrative
expenses V.45 405,301 2,734,364 289,303 1,976,074
Financial expenses V.46 99,279 669,783 19,184 131,037
Impairment loss V.49 40,704 274,610 57,987 396,081
Add: Gains / (losses) from
changes in fair value V.47 34,821 234,918 (5,664） (38,689)
Add: Investment income V.48 5,728 38,641 229,552 1,567,955
Including: Income
from investment in
associates and jointly
controlled enterprises 15,258 102,938 15,217 103,938
III.Operating profit 509,624 3,438,168 193,319 1,320,470
Add: Non-operating
Income V.50 43,284 292,019 25,263 172,561
Less: Non-operating
Expenses V.51 8,238 55,580 4,047 27,646
Including: Losses from
disposal of non-current
assets 3,046 20,551 643 4,392
IV.Profit before income tax 544,670 3,674,607 214,535 1,465,385
Less: Income tax expenses V.52 122,100 823,748 56,317 384,674
V.Net profit for the year 422,570 2,850,859 158,218 1,080,711
Attributable to:
Shareholders of the Company 444,949 3,001,851 140,394 958,967
Minority shareholders (22,379) (150,992) 17,824 121,744
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated income statement
for the year ended 31 December 2010 (continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
VI.Earnings per share:
Basic earnings per share
(USD / RMB) V.53 0.17 1.13 0.05 0.36
Diluted earnings per share
(USD / RMB) V.53 0.17 1.13 0.05 0.36
VII.Other comprehensive income
for the year V.54 15,659 (536,354) 14,226 105,051
VIII.Total comprehensive income
for the year 438,229 2,314,505 172,444 1,185,762
Attributable to:
Shareholders of the Company 453,219 2,506,058 140,412 966,171
Minority interests (14,990) (191,553) 32,032 219,591
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Income statement for the year ended 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
I.Operating income 223 1,503 188 1,284
Less: Operating costs 12 81 40 272
General and administrative
Expenses 46,833 315,962 18,622 127,203
Financial expenses 1,169 7,884 1,157 7,902
Add: Gains from changes in fair
value XII.16 7,214 48,668 8,787 60,020
Investment income XII.17 26,443 178,396 248,305 1,696,049
II.Operating (loss) / profit (14,134) (95,360) 237,461 1,621,976
Add: Non-operating
Income 3,850 25,973 1,961 13,397
Less: Non-operating
Expenses 71 469 15,392 105,137
Including:Losses from
disposal of non-current assets 1 9 73 500
III.(Loss) / profit before income
tax (10,355) (69,856) 224,030 1,530,236
Less: Income tax expenses XII.18 (5,389) (36,359) 38,448 262,616
IV.Net (loss) / profit for the Year (4,966) (33,497) 185,582 1,267,620
VI.Other comprehensive
income for the year XII.19 (33,513) (486,714) (10,667) (69,270)
VII.Total comprehensive
income for the year (38,479) (520,211) 174,915 1,198,350
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated cash flow statement
for the year ended 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
I.Cash flows from operating
activities:
Cash received from sale of
goods and rendering
of services 7,986,953 53,883,978 3,373,596 23,043,347
Refund of taxes 237,172 1,600,081 85,391 583,263
Cash received relating
to other operating activities V.55(1) 29,605 199,730 44,256 302,291
Sub-total of cash inflows 8,253,730 55,683,789 3,503,243 23,928,901
Cash paid for goods and services 6,972,828 47,042,184 2,547,097 17,397,946
Cash paid to and for employees 522,568 3,525,509 285,634 1,951,023
Cash paid for all types of taxes 161,778 1,091,435 149,994 1,024,534
Cash paid relating to
other operating activities V.55(2) 376,753 2,541,760 378,554 2,585,713
Sub-total of cash outflows 8,033,927 54,200,888 3,361,279 22,959,216
Net cash inflow / (outflow)
from operating activities V.56(1) 219,803 1,482,901 141,964 969,685
II.Cash flows from investing
activities:
Cash received from disposal
of investments 15,632 105,461 238,675 1,630,270
Cash received from return
on investments 7,061 47,637 3,885 26,536
Net cash received from disposal of
fixed assets, intangible assets
and other long-term assets 9,958 67,182 8,246 56,324
Cash received from disposal of
Subsidiaries 3,124 21,076 - -
Cash received relating
to other investing activities V.55(3) 9,522 64,240 13,167 89,937
Sub-total of cash inflows 45,297 305,596 263,973 1,803,067
Cash paid for acquisition of
fixed assets, intangible assets
and other long-term assets 312,749 2,116,817 200,640 1,370,472
Cash paid for acquisition
of investments 86,304 582,250 57,466 392,522
Cash paid for acquisition
of subsidiaries V.56(2) 50,943 336,831 5,456 37,278
Sub-total of cash outflows 449,996 3,035,898 263,562 1,800,272
Net cash (outflow) / inflow from
investing activities (404,699) (2,730,302) 411 2,795
The notes on pages 20 to 250 form part of these financial statements.
10
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China International Marine Containers (Group) Co., Ltd.
Consolidated cash flow statement
for the year ended 31 December 2010 (continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
III.Cash flows from financing
activities
Cash received from investors 14,459 97,548 1,659 11,332
Including: Cash received from
minority
shareholders
of subsidiaries 14,459 97,548 1,659 11,332
Cash received from borrowings 2,982,427 20,120,944 1,325,424 9,053,309
Cash received relating to other
financing activities V.55(4) 32,118 216,684 - -
Sub-total of cash inflows 3,029,004 20,435,176 1,327,083 9,064,641
Cash repayments of borrowings 2,833,919 19,119,035 1,153,893 7,881,666
Cash paid for dividends, profits
distribution or interest 124,321 838,732 96,938 662,135
Including: Dividends and profits
paid to minority
shareholders
of subsidiaries 8,309 56,057 4,288 29,279
Sub-total of cash outflows 2,958,240 19,957,767 1,250,831 8,543,801
Net cash inflow
from financing activities 70,764 477,409 76,252 520,840
IV.Effect of foreign exchange rate
changes on cash and cash
equivalents 46,519 170,882 11,709 81,030
V.Net (decrease) / increase in cash
and cash equivalents V.56(1) (67,613) (599,110) 230,336 1,574,350
Add: Cash and cash equivalents
at the beginning of the
year 643,878 4,396,525 413,542 2,822,175
VI.Cash and cash equivalents at
the end of the year 576,265 3,797,415 643,878 4,396,525
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Cash flow statement for the year ended 31 December 2010
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
I.Cash flows from operating
activities:
Cash received relating to
other operating activities 1,265,075 8,533,690 1,040,621 7,107,962
Cash paid to and for employees 11,570 78,051 9,444 64,504
Cash paid for all types of taxes 32,394 218,517 24,962 170,503
Other cash paid relating to
operating activities 1,144,568 7,720,814 1,114,255 7,610,919
Sub-total of cash outflows 1,188,532 8,017,382 1,148,661 7,845,926
Net cash inflow / (outflow) from
operating activities XII.20 76,543 516,308 (108,040) (737,964)
II.Cash flows from investing
activities:
Cash received from disposal
of investments 12,492 84,266 236,773 1,617,278
Cash received from
return on investments 70,102 472,880 72,750 496,919
Net cash received from disposal of
fixed assets 15 101 11 75
Net cash received from dsposal of
subsidiary 2,296 15,488 - -
Cash received relating
to other investing activities 35,609 240,217 30,413 207,737
Sub-total of cash inflows 120,514 812,952 339,947 2,322,009
Cash paid for acquisition of
fixed assets and other long-term
assets 5,314 35,846 4,345 29,679
Cash paid for acquisition
of investments 31,400 211,812 168,431 1,150,468
Cash paid for subsidiay
establishment 10,987 74,118 - -
Sub-total of cash outflows 47,701 321,776 172,776 1,180,147
Net cash inflow from
investing activities 72,813 491,176 167,171 1,141,862
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Cash flow statement for the year ended 31 December 2010
(continued)
’000
Item Note 2010 2009
RMB RMB
USD equivalent USD equivalent
III.Cash flows from financing
activities:
Cash received from borrowings and
subtotal of cash inflows 258,468 1,743,522 360,272 2,460,838
Cash repayments of borrowings 292,121 1,970,531 383,977 2,622,755
Cash paid for dividends, profits
distribution or interest 72,517 489,171 78,293 534,654
Sub-total of cash outflows 364,638 2,459,702 462,270 3,157,409
Net cash outflow from financing
activities (106,170) (716,180) (101,998) (696,571)
IV.Effect of foreign exchange
rate changes on cash and
cash equivalents - (11,523) - 203
V.Net increase / (decrease) in
cash and cash equivalents XII.20 43,186 279,781 (42,867) (292,470)
Add: cash and cash equivalents at
the beginning of the year 20,164 137,680 63,031 430,150
VI.Cash and cash equivalents at
the end of the year XII.20 63,350 417,461 20,164 137,680
These financial statements have been approved by the Board of Directors of the Company on
21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2010
USD’000
2010 2009
Attributable to shareholders of the Company Attributable to shareholders of the Company
Translation Translation
differences differences
Item of financial of financial
statements statements
denominated denominate
Share Capital Surplus Retained in foreign Minority Total Share Capital Surplus Retained d in foreign Minority Total
Note capital reserve reserve earnings currency interests equity capital reserve reserve earnings currency interests equity
I.Balance at 1 January 328,872 216,389 434,170 1,047,547 52,371 238,485 2,317,834 328,872 186,386 434,170 965,638 52,711 220,612 2,188,389
II.Changes in equity for the year
(I)Net profit for the year - - - 444,949 - (22,379) 422,570 - - - 140,394 - 17,824 158,218
(II)Other comprehensive income
for the year V.54 - (39,891) - - 48,161 7,389 15,659 - 358 - - (340) 14,208 14,226
Sub-total of (I)&(II) - (39,891) - 444,949 48,161 (14,990) 438,229 - 358 - 140,394 (340) 32,032 172,444
(III)Shareholders’ contributions
and decrease of capital
1.Contributions by minority
Shareholders - - - - - 14,459 14,459 - - - - - 16,009 16,009
2.Acquisition of
minority interests of
subsidiary - 189 - - - (189) - - 28,862 - - - (27,283) 1,579
3. Increase in minority
interests resulted from
acquisition of subsidiary - - - - - 226,591 226,591 - - - - - 1,034 1,034
4.Decrease in minority
interests resulted from
disposal of subsidiary - - - - - (2,069) (2,069) - - - - - - -
5.Decrease in retained earnings
resulted from acquisition of
minority interests - - - (32,989) - (5,011) (38,000) - - - - - - -
6.Increase in shareholders’ equity
resulted from share-based
payments - 8,829 - - - 1,629 10,458 - 783 - - - 217 1,000
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The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2010 (continued)
USD’000
2010 2009
Attributable to shareholders of the Company Attributable to shareholders of the Company
Translation Translation
differences differences
of financial of financial
statements statements
denominated denominate
Share Capital Surplus Retained in foreign Minority Share Capital Surplus Retained d in foreign Minority Total
Item Note capital reserve reserve earnings currency interests Total equity capital reserve reserve earnings currency interests equity
(IV)Appropriation of profits
1.Distributions to V.41
shareholders (1) - - - (46,707) - (6,140) (52,847) - - - (58,485) - (4,136) (62,621)
III.Balance at 31 December 328,872 185,516 434,170 1,412,800 100,532 452,765 2,914,655 328,872 216,389 434,170 1,047,547 52,371 238,485 2,317,834
These financial statements have been approved by the Board of Directors of the Company on 21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2010 (continued)
RMB’000
2010 2009
Attributable to shareholders of the Company Attributable to shareholders of the Company
Translation Translation
differences of differences of
Item financial financial
statements statements
denominated denominated
Capital Surplus Retained in foreign Minority Share Capital Surplus Retained in foreign Minority
Note Share capital reserve reserve earnings currency interests Total equity capital reserve reserve earnings currency interests Total equity
I.Balance at 1 January 2,662,396 1,557,703 3,577,588 8,229,532 (1,829,011) 1,628,423 15,826,631 2,662,396 1,352,772 3,577,588 7,669,924 (1,833,779) 1,505,547 14,934,448
II.Changes in equity for the
Year
(I) Net profit for the year - - - 3,001,851 - (150,992) 2,850,859 - - - 958,967 - 121,744 1,080,711
(II)Other comprehensive
income for the year V.54 - (269,122) - - (226,671) (40,561) (536,354) - 2,436 - 4,768 97,847 105,051
Sub-total of (I)&(II) - (269,122) - 3,001,851 (226,671) (191,553) 2,314,505 - 2,436 - 958,967 4,768 219,591 1,185,762
(III) Shareholders’
contributions
and decrease of capital
1. Contributions by
minority Shareholders - - - - - 97,548 97,548 - - - - - 109,353 109,353
2. Acquisition of
minority interests of
subsidiary - 1,274 - - - (1,274) - - 197,148 - - - (189,367) 10,781
3. Increase in minority
interests resulted from
acquisition of
subsidiary - - - - - 1,528,694 1,528,694 - - - - - 7,063 7,063
4. Decrease in minority
interests resulted from
disposal of subsidiary - - - - - (13,956) (13,956) - - - - - - -
5.Decrease in retained earings
resulted from acquisition of V.41(2
minority interest ) - - - (222,560) - (33,803) (256,363) - - - - - - -
6. Increase in shareholders’
equity resulted from
share-based payments
VII.2 - 59,565 - - - 10,991 70,556 - 5,347 - - - 1,485 6,832
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2010 (continued)
RMB’000
2010 2009
Attributable to shareholders of the Company Attributable to shareholders of the Company
Translation Translation
differences of differences of
Item financial financial
statements statements
denominated denominated
Capital Surplus Retained in foreign Minority Share Capital Surplus Retained in foreign Minority
Note Share capital reserve reserve earnings currency interests Total equity capital reserve reserve earnings currency interests Total equity
(IV)Appropriation of profits
1. Distributions to V.41(1
shareholders ) - - - (319,488) - (41,427) (360,915) - - - (399,359) - (28,249) (427,608)
III.Balance at 31 December 2,662,396 1,349,420 3,577,588 10,689,335 (2,055,682) 2,983,643 19,206,700 2,662,396 1,557,703 3,577,588 8,229,532 (1,829,011) 1,628,423 15,826,631
These financial statements have been approved by the Board of Directors of the Company on 21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Statement of changes in shareholders’ equity
for the year ended 31 December 2010
USD’000
2010 2009
Item Note Retained
Share capital Capital reserve Surplus reserve earnings Total Share capital Capital reserve Surplus reserve Retained earnings Total
I.Balance at 1 January 328,872 141,809 434,170 259,696 1,164,547 328,872 152,476 434,170 132,599 1,048,117
II.Changes in equity for the year - - - - -
(I) Net (losses)/ profit for the year - - - (4,966) (4,966) - - - 185,582 185,582
(II)Other comprehensive income
for the year XII.19 - (33,513) - - (33,513) - (10,667) - - (10,667)
Sub-total of (I)&(II) - (33,513) - (4,966) (38,479) - (10,667) - 185,582 174,915
(III)Shareholders’ contributions
and decrease of capital - - - - -
1.Increase in shareholders’
equity resulted from VII
share-based payment - 3,866 - - 3,866 - - - - -
(IX) Appropriation of profits - - - - -
1.Distribution to shareholders V.41(1) - - - (46,707) (46,707) - - - (58,485) (58,485)
III.Balance at 31 December 328,872 112,162 434,170 208,023 1,083,227 328,872 141,809 434,170 259,696 1,164,547
These financial statements have been approved by the Board of Directors of the Company on 21 March 2011.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Statement of changes in shareholders’ equity
for the year ended 31 December 2010 (continued)
RMB’000
2010 2009
Translation Translation
differences differences of
of financial financial
Item
statements statements
denominated denominated
Capital Surplus Retained in foreign Capital Surplus Retained in foreign
Note Share capital reserve reserve earnings currency Total Share capital reserve reserve earnings currency Total
I.Balance at 1 January 2,662,396 1,045,202 3,577,588 1,932,874 (1,266,301) 7,951,759 2,662,396 1,118,064 3,577,588 1,064,613 (1,269,893) 7,152,768
II.Changes in equity for the year
(I) Net (losses)/ profit for the year - - - (33,497) - (33,497) - - - 1,267,620 - 1,267,620
(II) Other comprehensive income
for the year XII.19 - (219,021) - - (267,693) (486,714) - (72,862) - - 3,592 (69,270)
Sub-total of (I)&(II) - (219,021) - (33,497) (267,693) (520,211) - (72,862) - 1,267,620 3,592 1,198,350
(III)Shareholders’ contributions
and decrease of capital
1.Increase in shareholders’
equity resulted from
share-based payment VII.2 - 26,083 - - - 26,083 - - - - - -
(IX)Appropriation of profits
1.Appropriation for surplus
reserve - - - - - - - - - - - -
V.41
2.Distribution to shareholders
(1) - - - (319,488) - (319,488) - - - (399,359) - (399,359)
III.Balance at 31 December 2,662,396 852,264 3,577,588 1,579,889 (1,533,994) 7,138,143 2,662,396 1,045,202 3,577,588 1,932,874 (1,266,301) 7,951,759
These financial statements have been approved by the Board of Directors of the Company on 21 March 2010.
Legal representative’s [The person in charge of The head of the Company stamp
authorised person accounting affairs accounting department
The notes on pages 20 to 250 form part of these financial statements.
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China International Marine Containers (Group) Co., Ltd.
Notes to the financial statements
(Expressed in thousands of USD or RMB)
I COMPANY STATUS
China International Marine Containers (Group) Co., Ltd. (the “Company”), formerly
“China International Marine Containers Co., Ltd.”, was a Sino-foreign joint venture
set up by China Merchants Group, the East Asiatic Company (Denmark) and Ocean
Containers Inc.(USA). In December 1992, as approved by “Shen Fu Ban Fu [1992]
1736” issued by the General Office of the People’s Government of Shenzhen and
“Shen Ren Yin Fu Zi (1992) 261” issued by Shenzhen Special Economic Zone
Branch of People’s Bank of China, the Company was restructured as an incorporated
company set up by directional subscription and was renamed as “China International
Marine Containers Co., Ltd.” by the original corporate shareholders of the
Company. On 31 December 1993 and 17 January 1994 respectively, the Company
issued ordinary shares denominated in Renminbi for domestic investors (A Shares)
and for foreign shares issued domestically (B Shares), and commenced trading on
Shenzhen Stock Exchange. Pursuant to “Shen Fu Ban Fu [1993] 925” issued by the
General Office of the People’s Government of Shenzhen and “Shen Zheng Ban Fu
[1994] 22” issued by Shenzhen Securities Administration Office.
On 1 December 1995, as approved by the State Administration of Industry and
Commerce, the Company changed its name to “China International Marine
Containers (Group) Co., Ltd”. Up to 31 December 2010, the share capital of the
Company amounted to 2,662,396,051 shares. Please refer to Note V.38 for details
of the share capital.
The principal activities of the Company and its subsidiaries (together referred to as
the “Group”) are the manufacturing of modern transportation facilities, facilities for
energy, food, chemistry and rendering of relative services. Detailed activities are the
manufacturing and repairing of containers and other relevant business; utilizing the
Group’s equipment to process and manufacture various parts, structure components
and relevant machines; providing cutting, punching, moulding, riveting surface
treatment (including sand/paint spraying, welding and assembly) and other processing
services; developing, manufacturing and selling of various high-tech and high
performance special vehicles and semi-trailers; leasing of containers; developing,
production and sales of high-end fuel gas equipments such as pressure container and
compressor; providing integrated services for natural gas distribution; production of
static container and pot-type wharf equipments and providing EP+CS (engineering
procurement and construction supervision) technical service for the storage and
processing of LNG, LPG and other petrochemical gases. Apart from the above, the
Group is also engaged in manufacturing of logistic equipment and related services,
marine projects, railway trucks production and property development, etc.
CIMC Enric Holdings Limited, the subsidiary of the Group, is listed in the Main
Board of the Stock Exchange of Hong Kong Limited. The principal activities of the
Group are the design, development, manufacturing, engineering and sales of, and the
provision of technical maintenance service for, a wide spectrum of transportation,
storage and processing equipment that is widely used in energy, chemical and liquid
food industries.
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II. BASIS OF PREPARATION
1. BASIS OF FINANCIAL REPORTING
The financial statements have been prepared on the basis that the Company will
continue to operate throughout the next accounting period until 31 December 2011 as
a going concern.
2. STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with the requirements of
“Accounting Standards for Business Enterprises—Basic Standard” and 38 Specific
Standards issued by the Ministry of Finance (MOF) of the People’s Republic of
China (PRC) on 15 February 2006, and application guidance, bulletins and other
relevant accounting regulations issued subsequently (collectively referred to as
“Accounting Standards for Business Enterprises” or “CAS”). These financial
statements present truly and completely the consolidated financial position and
financial position, the consolidated results of operations and results of operations and
the consolidated cash flows and cash flows of the Company.
These financial statements also comply with the disclosure requirements of
“Regulation on the Preparation of Information Disclosures of Companies Issuing
Public Shares, No. 15: General Requirements for Financial Reports” as revised by the
China Securities Regulatory Commission (CSRC) in 2010.
3. ACCOUNTING PERIOD
The accounting year of the Group is from 1 January to 31 December.
4. FUNCTIONAL CURRENCY
The Company’s functional currency is U.S dollar, while certain domestic subsidiaries
use Renminbi (“RMB”) and Hong Kong and certain overseas subsidiaries use local
currencies as their functional currencies. Foreign currencies are defined as currency
other than functional currency. The Group determines its functional currency based
on its major currency in business transactions. The financial statements are prepared
using U.S dollars and presented in both U.S dollar and RMB. For subsidiaries using
currencies other than U.S dollar as their functional currencies, the Company translates
the financial statements of these subsidiaries into U.S dollars (see Note II.8).
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II. BASIS OF PREPARATION (CONTINUED)
5. ACCOUNTING TREATMENTS FOR BUSINESS COMBINATIONS INVOLVING
ENTERPRISES UNDER AND THOSE NOT UNDER COMMON CONTROL
(1) Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business
combination in which all of the combining enterprises are ultimately controlled by the
same party or parties both before and after the business combination, and that control
is not transitory. The assets and liabilities obtained are measured at the carrying
amounts as recorded by the enterprise being combined at the combination date. The
difference between the carrying amount of the net assets obtained and the carrying
amount of consideration paid for the combination (or the total face value of shares
issued) is adjusted to share premium in the capital reserve. If the balance of share
premium is insufficient, any excess is adjusted to retained earnings. The
combination date is the date on which one combining enterprise effectively obtains
control of the other combining enterprises.
(2) Business combinations involving enterprises not under common control
A business combination involving enterprises not under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by
the same party or parties both before and after the business combination.
Where 1) the aggregate of the fair value at the acquisition date of assets transferred
(including the acquirer’s previously held equity interest in the acquiree), liabilities
incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquiree, exceeds 2) the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference is recognised as goodwill (see Note
II.18). Where 1) is less than 2), the difference is recognised in profit or loss for the
current period. The costs of the issuance of equity or debt securities as a part of the
consideration paid for the acquisition are included as a part of initial recognition
amount of the equity or debt securities. Other acquisition-related costs arising from
the business combination are recognised as expenses in the periods in which the costs
are incurred. The difference between the fair value and the carrying amount of the
assets transferred is recognised in profit or loss. The acquisition date is the date on
which the acquirer effectively obtains control of the acquiree.
The acquirer, at the acquisition date, allocates the cost of the business combination by
recognising the acquiree’s identifiable asset, liabilities and contingent liabilities at
their fair value at that date.
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II. BASIS OF PREPARATION (CONTINUED)
5. ACCOUNTING TREATMENTS FOR BUSINESS COMBINATIONS INVOLVING
ENTERPRISES UNDER AND THOSE NOT UNDER COMMON CONTROL (CONTINUED)
(2) Business combinations involving enterprises not under common control (continued)
In a business combination, the acquiree’s deductible temporary differences obtained
by the Group are not recognised if the deductible temporary differences do not satisfy
the criteria for recognition of deferred tax assets at the acquisition date. The Group
recognises the relevant deferred tax assets and reduces goodwill accordingly if within
12 months of the acquisition date, new or updated information indicates that at the
acquisition date, the obtained deferred tax benefit is expected to be realised in future
periods. If the goodwill is insufficient to be deducted, any remaining deferred tax
benefits shall be recognised in profit or loss for the current period. All other acquired
deferred tax benefit shall be included in profit or loss for the current period.
6. PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements comprise the Company and its subsidiaries.
Control is the power to govern the financial and operating policies of an entity so as
to obtain benefits from its operating activities. In assessing control, potential voting
rights, such as warrants and convertible bonds, that are currently exercisable or
convertible, are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases.
Where a subsidiary was acquired during the reporting period, through a business
combination involving enterprises under common control, the financial statements of
the subsidiary are included in the consolidated financial statements as if the
combination had occurred at the date that the ultimate controlling party first obtained
control. Therefore the opening balances and the comparative figures of the
consolidated financial statements are restated. In the preparation of the consolidated
financial statements, the subsidiary’s assets, liabilities and results of operations are
included in the consolidated balance sheet and the consolidated income statement,
respectively, based on their carrying amount from the date that common control was
established.
Where a subsidiary was acquired during the reporting period, through a business
combination involving enterprises not under common control, the identifiable assets,
liabilities and results of operations of the subsidiaries are consolidated into
consolidated financial statements from the date that control commences, base on the
fair value of those identifiable assets and liabilities at the acquisition date.
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II. BASIS OF PREPARATION (CONTINUED)
6. PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For a business combination not involving enterprises under common control and
achieved in stages, the Group remeasures its previously-held equity interest in the
acquiree to its fair value at the acquisition date. The difference between the fair value
and the carrying amount is recognised as investment income for the current period;
the amount recognised in other comprehensive income relating to the previously-held
equity interest in the acquiree is reclassified as investment income for the current
period.
Where the Company acquires a minority interest from a subsidiary’s minority
shareholders or disposes of a portion of an interest in a subsidiary without a change in
control, the difference between the amount by which the minority interests are
adjusted and the amount of the consideration paid or received is adjusted to the
capital reserve in the consolidated balance sheet. If the credit balance of capital
reserve is insufficient, any excess is adjusted to retained earnings.
Where the Company acquired a minority interest from a subsidiary’s minority
shareholders before 7 August 2008, any excess of the investment cost for acquiring
the minority interest over the Group’s interest in the fair value of the identifiable net
assets of the minority interest acquired is recognised as goodwill. Where the
Company acquired a minority interest from a subsidiary’s minority shareholders, the
difference between the investment cost for acquiring the minority interest and the
corresponding reduction of minority interest in the consolidated financial statements,
is adjusted to the capital reserve in the consolidated balance sheet except for the
portion that has been recognised as goodwill. If the credit balance of capital reserve is
insufficient, any excess is adjusted to retained earnings.
When the Group loses control of a subsidiary due to the disposal of a portion of an
equity investment, the remaining equity investment is remeasured at its fair value at
the date when control is lost. The difference between 1) the total amount of
consideration received from the transaction that resulted in the loss of control and the
fair value of the remaining equity investment and 2) the carrying amounts of the
interest in the former subsidiary’s net assets immediately before the loss of the
control is recognised as investment income for the current period when control is lost.
The amount recognised in other comprehensive income in relation to the former
subsidiary’s equity investment is reclassified as investment income for the current
period when control is lost.
Minority interest is presented separately in the consolidated balance sheet within
shareholders’ equity. Net profit or loss attributable to minority shareholders is
presented separately in the consolidated income statement below the net profit line
item.
When the amount of loss for the current period attributable to the minority
shareholders of a subsidiary exceeds the minority shareholders’ portion of the
opening balance of shareholders’ equity of the subsidiary, the excess is allocated
against the minority interests.
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II. BASIS OF PREPARATION (CONTINUED)
6. PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
When the accounting period or accounting policies of a subsidiary are different from
those of the Company, the Company makes necessary adjustments to the financial
statements of the subsidiary based on the Company’s own accounting period or
accounting policies. Intra-group balances and transactions, and any unrealised profit
or loss arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised losses resulting from intra-group
transactions are eliminated in the same way as unrealised gains but only to the extent
that there is no evidence of impairment.
7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, demand deposits, and short-term,
highly liquid investments, which are readily convertible into known amounts of cash
and are subject to an insignificant risk of change in value.
8. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION OF FINANCIAL
STATEMENTS DENOMINATED IN FOREIGN CURRENCY
When the Group receives capital in foreign currencies from investors, the capital is
translated to functional currency at the spot exchange rate at the date of the receipt.
Other foreign currency transactions are, on initial recognition, translated to functional
currency at the rates that approximate the spot exchange rates at the dates of the
transactions.
A spot exchange rate is an exchange rate quoted by the People’s Bank of China. A
rate that approximates the spot exchange rate is a rate determined under a systematic
and rational method, normally the average exchange rate of the current period or the
weighted average exchange rate.
Monetary items denominated in foreign currencies are translated to functional
currency at the spot exchange rate at the balance sheet date. The resulting exchange
differences are recognised in profit or loss, except those arising from the principal and
interest on foreign currency borrowings specifically for the purpose of acquisition,
construction or production of qualifying assets (see Note II.16). Non-monetary items
denominated in foreign currencies that are measured at historical cost are translated to
functional currency using the foreign exchange rate at the transaction date.
Non-monetary items denominated in foreign currencies that are measured at fair
value are translated using the foreign exchange rate at the date the fair value is
determined; the exchange differences are recognised in profit or loss, except for the
differences arising from the translation of available-for-sale financial assets, which is
recognised in capital reserve.
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II. BASIS OF PREPARATION (CONTINUED)
8. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION OF FINANCIAL
STATEMENTS DENOMINATED IN FOREIGN CURRENCY (CONTINUED)
The assets and liabilities of foreign operation are translated to functional currency at
the spot exchange rates at the balance sheet date. The equity items, excluding
“Retained earnings”, are translated to functional currency at the spot exchange rates
at the transaction dates. The income and expenses of foreign operation are translated
to functional currency at the rates that approximate the spot exchange rates at the
transaction dates. The resulting exchange differences are recognised in a separate
component of equity. Upon disposal of a foreign operation, the cumulative amount
of the exchange differences recognised in equity which relates to that foreign
operation is transferred to profit or loss in the period in which the disposal occurs.
9. FINANCIAL INSTRUMENTS
Financial instruments include cash at bank and on hand, derivatives, investments in
debt and equity securities other than long-term equity investments (see Note II.12),
receivables, payables, loans and borrowings and share capital.
(1) Financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the
Group becomes a party to the contractual provisions of a financial instrument.
The Group classifies financial assets and liabilities into different categories at initial
recognition based on the purpose of acquiring assets or assuming liabilities: financial
assets and financial liabilities at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale financial assets and other
financial liabilities.
Financial assets and financial liabilities are measured initially at fair value. For
financial assets and financial liabilities at fair value through profit or loss, any directly
attributable transaction costs are charged to profit or loss; for other categories of
financial assets and financial liabilities, any attributable transaction costs are included
in their initial costs. Subsequent to initial recognition financial assets and liabilities
are measured as follows:
- Financial assets and financial liabilities at fair value through profit or loss
(including financial assets or financial liabilities held for trading)
A financial asset or financial liability is classified as at fair value through
profit or loss if it is acquired or incurred principally for the purpose of selling
or repurchasing it in the near term or if it is a derivative, unless the derivative
is a designated and effective hedging instrument, or a financial guarantee
contract or a derivative that is linked to and must be settled by delivery of an
unquoted equity instrument (without a quoted price from an active market)
whose fair value cannot be reliably measured.
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS
(1) Financial assets and financial liabilities (continued)
- Financial assets and financial liabilities at fair value through profit or loss
(including financial assets or financial liabilities held for trading) (continued)
Subsequent to initial recognition, financial assets and financial liabilities at
fair value through profit or loss are measured at fair value, and changes
therein are recognised in profit or loss.
- Receivables
Receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market.
Subsequent to initial recognition, receivables are stated at amortised cost
using the effective interest method.
- Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that
are designated upon initial recognition as available for sales and other
financial assets which do not fall into any of the above categories.
An investment in equity instrument which does not have a quoted market
price in an active market and whose fair value cannot be reliably measured is
measured at cost subsequent to initial recognition.
Other than investments in equity instruments whose fair value cannot be
measured reliably as described above, subsequent to initial recognition, other
available-for-sale financial assets are measured at fair value and changes
therein, except for impairment losses and foreign exchange gains and losses
from monetary financial assets, which are recognised directly in profit or loss,
are recognised directly in equity. When an investment is derecognised, the
cumulative gain or loss in equity is removed from equity and recognised in
profit or loss. Dividend income from these equity instruments is recognised
in profit or loss when the investee declares the dividends.
- Other financial liabilities
Financial liabilities other than the financial liabilities at fair value through
profit or loss are classified as other financial liabilities.
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS
(1) Financial assets and financial liabilities (continued)
- Other financial liabilities (continued)
Other financial liabilities include the liabilities arising from financial
guarantee contracts. Financial guarantees are contracts that require the
Group (i.e. the guarantor) to make specified payments to reimburse the
beneficiary of the guarantee (the holder) for a loss the holder incurs because a
specified debtor fails to make payment when due in accordance with the terms
of a debt instrument. Where the Group issues a financial guarantee,
subsequent to initial recognition, the guarantee is measured at the higher of
the amount initially recognised less accumulated amortisation and the amount
of a provision determined in accordance with the principles of contingent
liabilities (see Note II.21).
Except for the liabilities arising from financial guarantee contracts described
above, subsequent to initial recognition, other financial liabilities are
measured at amortised cost using the effective interest method.
Financial assets and financial liabilities are presented separately in the balance sheet
and are not offset. However, a financial asset and a financial liability are offset and
the net amount presented in the balance sheet when both of the following conditions
are satisfied:
- the Group has a legal right to set off the recognised amounts and the legal
right is currently enforceable;
- the Group intends either to settle on a net basis, or to realise the financial asset
and settle the financial liability simultaneously.
(2) Determination of fair values
If there is an active market for a financial asset or financial liability, the quoted price
in the active market without adjusting for transaction costs that may be incurred upon
future disposal or settlement is used to establish the fair value of the financial asset or
financial liability. For a financial asset held or a financial liability to be assumed, the
quoted price is the current bid price and, for a financial asset to be acquired or a
financial liability assumed, it is the current asking price.
If no active market exists for a financial instrument, a valuation technique is used to
establish the fair value. Valuation techniques include using recent arm’s length
market transactions between knowledgeable, willing parties; reference to the current
fair value of another instrument that is substantially the same. The Group calibrates
the valuation technique and tests it for validity periodically.
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS (CONTINUED)
(3) Derecognition of financial assets and financial liabilities
A financial asset is derecognised if the Group’s contractual rights to the cash flows from the
financial asset expire or if the Group transfers substantially all the risks and rewards of ownership
of the financial asset to another party.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the
difference between the two amounts below is recognised in profit or loss:
- carrying amount of the financial asset transferred;
- the sum of the consideration received from the transfer and any cumulative gain or loss
that has been recognised directly in equity.
The Group derecognises a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged.
(4) Impairment of financial assets
The carrying amounts of financial assets (other than those at fair value through profit or loss) are
reviewed at each balance sheet date to determine whether there is objective evidence of
impairment. If any such evidence exists, impairment loss is provided.
Objective evidences that a financial asset is impaired includes but is not limited to evidence
arising from the following events:
(a) significant financial difficulty of the issuer or obligor;
(b) a breach of contract by the borrower, such as a default or delinquency in interest or
principal payments;
(c) it becoming probable that the borrower will enter bankruptcy or other financial
reorganisations;
(d) the disappearance of an active market for that financial asset because of financial
difficulties of the issuer;
(e) significant changes with an adverse effect that have taken place in the technological,
market, economic or legal environment in which the issuer operates, indicating that the
cost of the investment in the equity instrument may not be recovered by the investor;
(f) a significant or prolonged decline in the fair value of an investment in an equity
instrument below its cost.
For the calculation method of impairment of receivables, refer to Note II.10, The
impairment of other financial assets are measured as follows:
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS (CONTINUED)
(4) Impairment of financial assets (continued)
- Available-for-sale financial assets
Available-for-sale financial assets are assessed for impairment on an
individual basis. When an available-for-sale financial asset is impaired, the
cumulative loss arising from decline in fair value that has been recognised
directly in equity is removed from equity and recognised in profit or loss even
though the financial asset has not been derecognised.
If, after an impairment loss has been recognised on an available-for-sale debt
instrument, the fair value of the debt instrument increases in a subsequent
period and the increase can be objectively related to an event occurring after
the impairment loss was recognised, the impairment loss is reversed through
profit or loss. An impairment loss recognised for an investment in an equity
instrument classified as available-for-sale is not reversed through profit or
loss.
(5) Equity investments
An equity instrument is a contract that proves the ownership interest of the assets
after deducting all liabilities in the Company.
The consideration received from the issuance of equity instruments net of transaction
costs is recognised in share capital and capital reserve.
Consideration and transaction costs paid by the Company for repurchasing self-issued
equity instruments are deducted from shareholders’ equity.
10. IMPAIRMENT OF RECEIVABLES
Receivables are assessed for impairment both on an individual basis and on a
collective group basis.
Where impairment is assessed on an individual basis, an impairment loss in respect of
a receivable is calculated as the excess of its carrying amount over the present value
of the estimated future cash flows (exclusive of future credit losses that have not been
incurred) discounted at the original effective interest rate. All impairment losses are
recognised in profit or loss.
The assessment is made collectively where receivables share similar credit risk
characteristics (including those having not been individually assessed as impaired),
based on their historical loss experiences, and adjusted by the observable figures
reflecting present economic conditions.
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II. BASIS OF PREPARATION (CONTINUED)
10. IMPAIRMENT OF RECEIVABLES (CONTINUED)
If, after an impairment loss has been recognised on receivables, there is objective
evidence of a recovery in value of the financial asset which can be related objectively
to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss. A reversal of an impairment loss
will not result in the asset’s carrying amount exceeding that which would have been
determined had no impairment loss been recognised in prior years.
(a) Receivables that are individually significant and are assessed for impairment
on an individual basis:
Criteria of provision for Individually significant receivables are the
receivable that are receivables with the individual amount over
individually significant RMB10 million (inclusive) or accounting to 5% or
and are assessed for more of the total receivables.
impairment on an
individual basis.
Method of provision for An impairment loss is calculated as the excess of
receivable that are its carrying amount over the present value of the
individually significant estimated future cash flows (exclusive of future
and are assessed for credit losses that have not been incurred)
impairment on an discounted at the original effective interest rate.
individual basis.
(b) Receivable that are individually insignificant but are assessed for impairment
on an individual basis:
Criteria of provision for Within the receivables whose amounts are
receivables that are individually insignificant, impairment is assessed
individually insignificant on an individual basis for the overdue receivables
but are assessed for unpaid after collection efforts or with unique
impairment on an characteristics.
individual basis.
Method of provision for An impairment loss is calculated as the excess of
receivable that are its carrying amount over the present value of the
individually insignificant estimated future cash flows (exclusive of future
but are assessed for credit losses that have not been incurred)
impairment on an discounted at the original effective interest rate.
individual basis.
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II. BASIS OF PREPARATION (CONTINUED)
10. IMPAIRMENT OF RECEIVABLES (CONTINUED)
(c) Receivables that are assessed for impairment on a collective group basis:
The assessment is made collectively where receivables share similar credit
risk characteristics, including those having not been individually assessed as
impaired.
Determination method of Accounts receivable are divided into six groups of
the group based on credit containers, vehicles, energy and chemistry
risk characteristics equipment, offshore engineering, other business, and
due from related parties, land lease prepayments and
operating deposits according to the industry and
business nature of customers and the characteristics
of the receivables. As to offshore engineering
groups, the relevant receivables within credit period
have lower credit risk after the grouping based on
credit risk characteristics according to individual
credit risk assessment and historical data. No
provision is provided accordingly. As to other groups
like due from related parties, land lease prepayments
operating deposits, and etc, if the credit risk is
assessed low after grouping based on the assessment
on credit risk and their historical loss experience, no
impairment loss is recognised for those groups.
Group 1 Containers
Group 2 Trailers
Group 3 Tank equipments
Group 4 Other business
Methods of provision for receivables assessed on a collective group basis
(based on an ageing analysis, a parentage of the total balance and others).
Containers Provision is determined based on an ageing analysis.
Trailers Provision is determined based on an ageing analysis.
Tank equipments Provision is determined based on an ageing analysis.
Other business Provision is determined based on an ageing analysis.
For the above groups, provision is made based on their respective ageing
analysis follows:
Percentage of total accounts receivable
Ageing (%)
Group 1 Group 2 Group 3 Group 4
Within 1 year
(inclusive) 5% 1.5
1 to 2 years
(inclusive) 30% 1.5
2 to 3 years
(inclusive) 100% 1.5 100% 100%
Over 3 years 100% 100% 100% 100%
Note: Aforesaid ageing group, the provision of Group 2 is determined based
on natural age, while others are determined based on the overdue age.
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II. BASIS OF PREPARATION (CONTINUED)
11. INVENTORIES
(1) Classification
Inventories include raw materials, work in progress, semi-finished goods, finished
goods and reusable materials. Reusable materials include low-value consumables,
packaging materials and other materials, which can be used repeatedly but do not
meet the definition of fixed assets.
(2) Cost of inventories
Cost of inventories is calculated using the weighted average method.
(3) The underlying factors in the determination of net realisable value of inventories and
the basis of provision for decline in value of inventories
Inventories are carried at the lower of cost and net realisable value.
Cost of inventories comprises all costs of purchase, costs of conversion and other
costs. Inventories are initially measured at their actual cost. Borrowing costs
directly related to the production of qualifying inventories are also included in the
cost of inventories (see Note II.16). In addition to the purchasing cost of raw
materials, work in progress and finished goods include direct labour costs and an
appropriate allocation of production overheads.
Net realisable value is the estimated selling price in the normal course of business less
the estimated costs to completion and the estimated expenses and related taxes
necessary to make the sale. The net realisable value of materials held for use in the
production of inventories is measured based on the net realisable value of the finished
goods in which they will be incorporated. The net realisable value of the quantity of
inventory held to satisfy sales or service contracts is based on the contract price. If the
quantities of inventories specified in sales contracts are less than the quantities held
by the Group, the net realisable value of the excess portion of inventories shall be
based on general selling prices.
Any excess of the cost over the net realisable value of each class of inventories is
recognised as a provision for diminution in the value of inventories.
(4) Inventory system
The Group maintains a perpetual inventory system.
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II. BASIS OF PREPARATION (CONTINUED)
11. INVENTORIES (CONTINUED)
(5) Amortisation of reusable material including low-value consumables and packaging
materials
Reusable materials including low-value consumables and packaging materials are
amortised in full when received for use. The amounts of the amortisation are included
in the cost of the related assets or profit or loss.
12. LONG-TERM EQUITY INVESTMENTS
(1) Investment cost
(a) Long-term equity investments acquired through a business combination
- The initial investment cost of a long-term equity investment obtained
through a business combination involving entities under common
control is the Company’s share of the subsidiary’s equity at the
combination date. The difference between the initial investment cost
and the carrying amounts of the consideration given is adjusted to
share premium in capital reserve. If the balance of the share
premium is insufficient, any excess is adjusted to retained earnings.
- For a long-term equity investment obtained through a business
combination not involving enterprises under common control and
achieved in stages, the initial cost comprises the carrying value of
previously-held equity investment in the acquiree immediately before
the acquisition date, and the additional investment cost at the
acquisition date. Any amounts recognised in other comprehensive
income relating to the previously-held equity interest in the acquiree,
are reclassified to profit or loss as investment income when the equity
investment is disposed of.
- For other long-term equity investments obtained through a business
combination involving enterprises not under common control, the
initial investment cost represents the aggregate of the fair values of
assets transferred, liabilities assumed, and equity securities issued by
the Company, in exchange for control of the acquiree.
(b) Long-term equity investments acquired otherwise than through a business
combination
- An investment in a subsidiary acquired otherwise than through a
business combination is initially recognised at actual payment cost if
the Group acquires the investment by cash, or at the fair value of the
equity securities issued if an investment is acquired by issuing equity
securities, or at the value stipulated in the investment contract or
agreement if an investment is contributed by shareholders.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments
in subsidiaries are accounted for using the cost method. Except for cash
dividends or profits distribution declared but not yet distributed that have been
included in the price or consideration paid in obtaining the investments, the
Company recognises its share of the cash dividends or profit distributions
declared by the investee as investment income irrespective of whether these
represent the net profit realised by the investee before or after the investment.
The investments in subsidiaries are stated in the balance sheet at cost less
impairment losses.
In the Group’s consolidated financial statements, investments in subsidiaries
are accounted for in accordance with the principles described in Note II. 6.
(b) Investment in jointly controlled enterprises and associates
A jointly controlled enterprise is an enterprise which operates under joint
control (see NoteII.12(3)) in accordance with a contractual agreement between
the Group and other parties.
An associate is an enterprise over which the Group has significant influence
(see NoteII.12(3)).
An investment in a jointly controlled enterprise or an associate is accounted
for using the equity method, unless the investment is classified as held for sale
(see Note II.28).
The Group makes the following accounting treatments when using the equity
method:
- Where the initial investment cost of a long-term equity investment
exceeds the Group’s interest in the fair value of the investee’s
identifiable net assets at the date of acquisition, the investment is
initially recognised at the initial investment cost. Where the initial
investment cost is less than the Group’s interest in the fair value of the
investee’s identifiable net assets at the date of acquisition, the
investment is initially recognised at the investor’s share of the fair
value of the investee’s identifiable net assets, and the difference is
charged to profit or loss.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement (continued)
(b) Investment in jointly controlled enterprises and associates (continued)
- After the acquisition of the investment, the Group recognises its share
of the investee’s profit or loss after deducting the amortisation of the
debit balance of equity investment difference, which was recognised
by the Group before the first-time adoption of CAS, as investment
income or losses, and adjusts the carrying amount of the investment
accordingly. The debit balance of the equity investment difference is
amortised using the straight-line method over the period of 10 years in
accordance with previous accounting standards. Once the investee
declares any cash dividends or profits distributions, the carrying
amount of the investment is reduced by that amount attributable to the
Group.
The Group recognises its share of the investee’s net profits or losses
after making appropriate adjustments to align the accounting policies
or accounting periods with those of the Group based on the fair values
of the investee’s identifiable net assets at the date of acquisition.
Unrealised profits and losses resulting from transactions between the
Group and its associates or jointly controlled enterprises are
eliminated to the extent of the Group’s interest in the associates or
jointly controlled enterprises. Unrealised losses resulting from
transactions between the Group and its associates or jointly controlled
enterprises are eliminated in the same way as unrealised gains but only
to the extent that there is no evidence of impairment.
- The Group discontinues recognising its share of net losses of the
investee after the carrying amount of the long-term equity investment
and any long-term interest that in substance forms part of the Group’s
net investment in the associate or the jointly controlled enterprise is
reduced to zero, except to the extent that the Group has an obligation
to assume additional losses. Where net profits are subsequently made
by the associate or jointly controlled enterprise, the Group resumes
recognising its share of those profits only after its share of the profits
equals the share of losses not recognised.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement (continued)
(c) Other long-term equity investments
Other long-term equity investments refer to investments where the Group
does not have control, joint control or significant influence over the investees,
and the investments are not quoted in an active market and their fair value
cannot be reliably measured.
Such investments are initially recognised at the cost determined in accordance
with the same principles as those for jointly controlled enterprises and
associates, and then accounted for using the cost method. Cash dividends or
profit distributions declared by subsidiaries and attributed to the Company
shall be recognised as investment income, except those that have been
declared but unpaid at the time of acquisition and therefore included in the
price paid or the consideration.
(3) Basis for determining the existence of joint control or significant influence over an
investee
Joint control is the contractual agreed sharing of control over an investee’s economic
activity, and exists only when the strategic financial and operating decisions relating
to the activity require the unanimous consent of the parties sharing the control. The
following evidences shall be considered when determining whether the Group can
exercise joint control over an investee:
no single venturer is in a position to control the operating activities unilaterally;
operating decisions relating to the investee’s economic activity require the unanimous consent of
the parties sharing the control;
if the parties sharing the control appoint one venturer as the operator or manager of the joint
venture through the contractual arrangement, the operator must act within the financial
and operating policies that have been agreed by the venturers in accordance with the
contractual arrangement.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(3) Basis for determining the existence of joint control or significant influence over an
investee (continued)
Significant influence is the power to participate in the financial and operating policy
decisions of an investee but is not control or joint control over those policies. The
following one or more evidences shall be considered when determining whether the
Group can exercise significant influence over an investee:
representation on the board of directors or equivalent governing body of the investee;
participation in policy-making processes;
material transactions between the investor and the investee;
interchange of managerial personnel; or
provision of essential technical information.
(4) Method of impairment testing and measuring
For the method of impairment testing and measuring for subsidiaries, jointly
controlled enterprises and associates, refer to Note II.20.
For other long-term equity investments, the carrying amount is required to be tested
for impairment at the balance sheet date. If there is objective evidence that the
investments may be impaired, the impairment shall be assessed on an individual
basis. The impairment loss is measured as the amount by which the carrying amount
of the investment exceeds the present value of estimated future cash flows discounted
at the current market rate of return for a similar financial asset. Such impairment
loss is not reversed. The other long-term equity investments are stated at cost less
impairment losses in the balance sheet.
13. INVESTMENT PROPERTY
Investment property is a property held either to earn rental income or for capital
appreciation or for both. Investment property is accounted for using the cost model
and stated in the balance sheet at cost less accumulated depreciation, amortisation and
impairment. Investment property is depreciated or amortised using the straight line
method over its estimated useful life, unless the investment property is classified as
held for sale (see Note II.28). For the method of impairment testing and measuring,
refer to Note II.20.
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II. BASIS OF PREPARATION (CONTINUED)
13. INVESTMENT PROPERTY (CONTINUED)
The useful lives and estimated residual values of each class of investment property
are as follows:
Depreciation
residual / Amortisation
useful life value rate rate
Land use rights 29 - 50 years - 2% - 3.4%
Plant and buildings 20 - 30 years 10% 3 - 4.5%
14. FIXED ASSETS
(1) Recognition
Fixed assets represent the tangible assets held by the Group for use in the production
of goods or supply of services, for rental to others or for operation and administrative
purposes with useful lives over one year.
The cost of a purchased fixed asset comprises the purchase price, related taxes, and
any directly attributable expenditure for bringing the asset to working condition for its
intended use. The cost of self-constructed assets is measured in accordance with the
policy set out in Note II.15.
Where parts of an item of fixed asset have different useful lives or provide benefits to
the Group in different patterns thus necessitating use of different depreciation rates or
methods, each part is recognised as a separate fixed asset.
The subsequent costs including the cost of replacing part of an item of fixed assets are
recognised in the carrying amount of the item if the recognition criteria are satisfied,
and the carrying amount of the replaced part is derecognised. The costs of the
day-to-day servicing of fixed assets are recognised in profit or loss as incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
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II. BASIS OF PREPARATION (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(2) Depreciation
Fixed assets are depreciated using the straight-line method over their estimated useful
lives, unless the fixed asset is classified as held for sale (see Note II.28). The
depreciation period and estimated residual value of each class of fixed assets are as
follows:
Residual Depreciation
period value Depreciation
Classes (years) rate rate
Plants and buildings 20-30 years 10% 3-4.5%
Machinery and equipment 10-12 years 10% 7.5-9%
Office and other equipment 3-5 years 10% 18%
Motor vehicles 5 years 10% 18%
Dock, wharf 50 years 10% 1.8%
Offshore engineering equipment 15-30 years 10% 3%-6%
Useful lives, residual values and depreciation methods are reviewed at least each
year-end.
(3) For the method of impairment testing and measuring, refer to Note II.20.
(4) Criteria of recognition and method of measuring for fixed assets under a finance lease
For criteria of recognition and method of measuring for fixed assets under a finance
lease, refer to Note II 27(3).
(5) Disposal
The carrying amount of a fixed asset shall be derecognised:
on disposal; or
when no future economic benefits are expected to be generated from its use or disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are
determined as the difference between the net disposal proceeds and the carrying
amount of the item and are recognised in profit or loss on the date of retirement or
disposal.
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II. BASIS OF PREPARATION (CONTINUED)
15. CONSTRUCTION IN PROGRESS
The cost of self-constructed assets includes the cost of materials, direct labour,
capitalised borrowing costs (see Note II.16), and any other costs directly attributable
to bringing the asset to working condition for its intended use.
A self-constructed asset is included in construction in progress before it is transferred
to fixed asset when it is ready for its intended use. No depreciation is provided against
construction in progress. Construction in progress is stated in the balance sheet at cost
less impairment losses (see Note II.20).
16. BORROWING COSTS
Borrowing costs incurred directly attributable to the acquisition, construction or
production of a qualifying asset are capitalised as part of the cost of the asset.
Except for the above, other borrowing costs are recognised as financial expenses in
the income statement when incurred.
During the capitalisation period, the amount of interest (including amortisation of any
discount or premium on borrowing) to be capitalised in each accounting period is
determined as follows:
- Where funds are borrowed specifically for the acquisition, construction or
production of a qualifying asset, the amount of interest to be capitalised is the
interest expense calculated using effective interest rates during the period less
any interest income earned from depositing the borrowed funds or any
investment income on the temporary investment of those funds before being
used on the asset.
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II. BASIS OF PREPARATION (CONTINUED)
16. BORROWING COSTS (CONTINUED)
- Where funds are borrowed generally and used for the acquisition, construction
or production of a qualifying asset, the amount of interest to be capitalised on
such borrowings is determined by applying a capitalisation rate to the
weighted average of the excess amounts of cumulative expenditures on the
asset over the above amounts of specific borrowings. The capitalisation rate
is the weighted average of the interest rates applicable to the general-purpose
borrowings.
The effective interest rate is determined as the rate that exactly discounts
estimated future cash flow through the expected life of the borrowing or,
when appropriate, a shorter period to the initially recognised amount of the
borrowings.
During the capitalisation period, exchange differences related to the principal
and interest on a specific-purpose borrowing denominated in foreign currency
are capitalised as part of the cost of the qualifying asset. The exchange
differences related to the principal and interest on foreign currency
borrowings other than a specific-purpose borrowing are recognised as a
financial expense in the period in which they are incurred.
The capitalisation period is the period from the date of commencement of
capitalisation of borrowing costs to the date of cessation of capitalisation,
excluding any period over which capitalisation is suspended. Capitalisation
of borrowing costs commences when expenditure for the asset is being
incurred, borrowing costs are being incurred and activities of acquisition,
construction or production that are necessary to prepare the asset for its
intended use or sale are in progress, and ceases when the assets become ready
for their intended use or sale. Capitalisation of borrowing costs is suspended
when the acquisition, construction or production activities are interrupted
abnormally and the interruption lasts over three months.
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II. BASIS OF PREPARATION (CONTINUED)
17. INTANGIBLE ASSETS
Intangible assets are stated in the balance sheet at cost less accumulated amortisation
(where the estimated useful life is finite) and impairment losses (see Note II.20). For
an intangible asset with finite useful life, its cost less residual value and impairment
loss is amortised on the straight-line method or other more appropriate methods that
can reflect the pattern in which the asset’s economic benefits are expected to be
realised over its estimated useful life, unless the intangible asset is classified as held
for sale (see Note II.28).
The respective amortisation periods for such intangible assets are as follows:
Amortisation periods (years)
Land use rights 20 - 50
Maritime space use rights 40 - 50
Technological know-how and trademarks 5 - 10
Timber concession rights 20
Customer base 8
Customer contracts 3-4
An intangible asset is regarded as having an indefinite useful life and is not amortised
when there is no foreseeable limit to the period over which the asset is expected to
generate economic benefits for the Group. At the balance sheet date, the Group does
not have any intangible assets with indefinite useful lives.
Expenditures on an internal research and development project are classified into
expenditures on the research phase and expenditures on the development phase.
Research is original and planned investigation undertaken with the prospect of
gaining new scientific or technical knowledge and understanding. Development is
the application of research findings or other knowledge to a plan or design for the
production of new or substantially improved materials, devices, products or processes
before the start of commercial production or use.
Expenditures on research phase are recognised in profit or loss when incurred.
Expenditures on development phase are capitalised if development costs can be
measured reliably, the product or process is technically and commercially feasible,
and the Group intends to and has sufficient resources to complete development.
Capitalised development costs are stated at cost less impairment losses (see Note
II.20). Other development expenditures are recognised as expenses in the period in
which they are incurred.
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II. BASIS OF PREPARATION (CONTINUED)
18. GOODWILL
Goodwill represents the excess of cost of acquisition over the acquirer’s interest in
the fair value of the identifiable net assets of the acquiree under the business
combination involving entities not under common control.
Goodwill is not amortised and is stated at cost less accumulated impairment losses
(see Note II.20). On disposal of an asset group or a set of asset groups, any
attributable amount of purchased goodwill is written off and included in the
calculation of the profit or loss on disposal.
19. LONG-TERM DEFERRED EXPENSE
Long-term deferred expenses are amortised on a straight-line method within the
beneficial period:
Item Amortisation period
Water and electricity
capacity enlargement expenses 5-10 years
Rental 2-10 years
Others 5-10 years
20. IMPAIRMENT OF ASSETS OTHER THAN INVENTORIES, FINANCIAL ASSETS AND
OTHER LONG-TERM INVESTMENTS
The carrying amounts of the following assets are reviewed at each balance sheet date
based on the internal and external sources of information to determine whether there
is any indication of impairment:
- fixed assets
- construction in progress
- intangible assets
- investment property measured using a cost model
- long-term equity investments in subsidiaries, associates and jointly controlled
entities
- goodwill
If any indication exists that an asset may be impaired, the recoverable amount of the
asset is estimated. In addition, the Group estimates the recoverable amounts of
goodwill at no later than each year-end, irrespective of whether there is any indication
of impairment or not. Goodwill is allocated to each asset group or set of asset groups,
which is expected to benefit from the synergies of the combination for the purpose of
impairment testing.
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II. BASIS OF PREPARATION (CONTINUED)
20. IMPAIRMENT OF ASSETS OTHER THAN INVENTORIES, FINANCIAL ASSETS AND
OTHER LONG-TERM INVESTMENTS (CONTINUED)
The recoverable amount of an asset, asset group or set of asset groups is the higher of
its fair value less costs to sell and its present value of expected future cash flows.
An asset group is the smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets or asset groups. An
asset group is composed of assets directly relating to cash-generation. Identification
of an asset group is based on whether major cash inflows generated by the asset group
are largely independent of the cash inflows from other assets or asset groups. In
identifying an asset group, the Group also considers how management monitors the
Group’s operations and how management makes decisions about continuing or
disposing of the Group’s assets.
An asset’s fair value less costs to sell is the amount determined by the price of a sale
agreement in an arm’s length transaction, less the costs that are directly attributable to
the disposal of the asset. The present value of expected future cash flows of an asset
is determined by discounting the future cash flows, estimated to be derived from
continuing use of the asset and from its ultimate disposal, to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset.
If the result of the recoverable amount calculating indicates the recoverable amount of
an asset is less than its carrying amount, the carrying amount of the asset is reduced to
its recoverable amount. That reduction is recognised as an impairment loss and
charged to profit or loss for the current period. A provision for impairment loss of
the asset is recognised accordingly. For impairment losses related to an asset group
or a set of asset groups first reduce the carrying amount of any goodwill allocated to
the asset group or set of asset groups, and then reduce the carrying amount of the
other assets in the asset group or set of asset groups on a pro rata basis. However,
that the carrying amount of an impaired asset will not be reduced below the highest of
its individual fair value less costs to sell (if determinable), the present value of
expected future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
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II. BASIS OF PREPARATION (CONTINUED)
21. PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognised for an obligation related to a contingency if the Group has a
present obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Where the effect of time
value of money is material, provisions are determined by discounting the expected
future cash flows.
In terms of a possible obligation resulting from a past transaction or event, whose existence will only be confirmed by the
occurrence or non-occurrence of uncertain future events or a present obligation resulting from a past transaction or event, where
it is not probable that the settlement of the above obligation will cause an outflow of economic benefits, or the amount of the
outflow cannot be estimated reliably, the possible or present obligation is disclosed as a contingent liability.
22. SHARE-BASED PAYMENTS
(1) Classification
Share-based payments transactions in the Group are equity-settled share-based
payments.
(2) Method to determine the fair value of equity instruments
Fair value of stock option is estimated based on binomial lattice model. Contract term
of the stock option is used as the input variable of this model. And the binomial lattice
model includes estimation of early execution of the option. The following factors are
taken into account when using the binomial lattice model: (1) exercise price of the
option; (2) vesting period; (3) current price of basic stocks; (4) expected fluctuation
of stocks; (5) expected dividends of stocks; (6) risk-free rate within the option term.
(3) Basis of the best estimate of the number of equity instruments expected to vest
At each balance sheet date during the vesting period, the Group makes the best
estimation according to the latest information of the number of employees who are
granted to vest and revises the number of equity instruments expected to vest. On
vesting date, the estimate shall be equal to the number of equity instruments that
ultimately vested.
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II. BASIS OF PREPARATION (CONTINUED)
22. SHARE-BASED PAYMENTS (CONTINUED)
(4) Accounting treatment for share-based payment
- equity-settled share-based payments
Where the Group uses shares or other equity instruments as consideration for
services received from the employees, the payment is measured at the fair
value of the equity instruments granted to the employees at the grant date. If
the equity instruments granted to employees do not vest until the completion
of services for a vesting period, or until the achievement of a specified
performance condition, the Group, at each balance sheet date during the
vesting period, makes the best estimation according to the latest information
of the number of employees who are granted to vest and revises the number of
equity instruments expected to vest. Based on the best estimation, the Group
recognises the services received for the current period as related costs or
expenses, with a corresponding increase in capital reserve, at an amount equal
to the fair value of the equity instruments at the grant date.
For share-based payment transactions among entities within the group of
companies (comprising the ultimate parent of the Group and all of its
subsidiaries), the Group receiving services recognises the transaction as an
equity-settled share-based payment transaction when the Group has no
obligation to settle the transaction.
23. REVENUE RECOGNITION
Revenue is the gross inflow of economic benefit in the periods arising in the course of
the Group’s ordinary activities when the inflows result in increase in shareholders’
equity, other than increase relating to contributions from shareholders. Revenue is
recognised in profit or loss when it is probable that the economic benefits will flow to
the Group, the revenue and costs can be measured reliably and the following
respective conditions are met:
(1) Sale of goods
Revenue from sale of goods is recognised when all of the general conditions stated
above and following conditions are satisfied:
- The significant risks and rewards of ownership of goods have been transferred
to the buyer
- The Group retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold.
Revenue from the sale of goods is measured at the fair value of the considerations
received or receivable under the sales contract or agreement.
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II. BASIS OF PREPARATION (CONTINUED)
23. REVENUE RECOGNITION (CONTINUED)
(2) Rendering of services
Revenue from rendering of services is measured at the fair value of the considerations
received or receivable under the contract or agreement.
At the balance sheet date, where outcome of a transaction involving the rendering of
services can be estimated reliably, revenue from the rendering of services is
recognised in the income statement by reference to the stage of completion of the
transaction based on the progress of work performed
Where outcome of rendering of services cannot be estimated reliably, if the costs
incurred are expected to be recoverable, revenues are recognised to the extent that the
costs incurred that are expected to be recoverable, and an equivalent amount is
charged to profit or loss as service cost; if the costs incurred are not expected to be
recoverable, the costs incurred are recognised in profit or loss and no service revenue
is recognised.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract
revenue and contract expenses associated with the construction contract are
recognised at the balance sheet date using the percentage of completion method.
The stage of completion of a contract is determined based on the proportion of the
physical construction work completed to the total estimated construction work.
When the outcome of a construction contract cannot be estimated reliably:
- If the contract costs can be recovered, revenue is recognised to the extent of
contract costs incurred that can be recovered, and the contract costs are
recognised as contract expenses when incurred;
- If the contract costs cannot be recovered, the contract costs are recognised as
contract expenses immediately when incurred, and no contract revenue is
recognised.
Construction contract revenue includes initial revenue stipulated by contract and
increased amount generated by contract alteration.
Increased amount cannot be recognized as contract revenue unless the following
contract alteration terms are all satisfied:
- Client accepts and confirms the increased amount generated by contract
alteration;
- Increased amount can be reliably measured.
Contract anticipated loss is recognised when estimated total construction contract cost
exceeds contract revenue. Provision should be made for contract anticipated loss and
charged into profit and losses for the current period.
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II. BASIS OF PREPARATION (CONTINUED)
23. REVENUE RECOGNITION (CONTINUED)
(4) Interest income
Interest income is recognised on a time proportion basis with reference to the
principal outstanding and the applicable effective interest rate.
24. EMPLOYEE BENEFITS
Employee benefits are all forms of considerations given and other relevant
expenditures incurred in exchange for services rendered by employees. Except for
termination benefits, employee benefits are recognised as a liability in the period in
which the associated services are rendered by employees, with a corresponding
increase in cost of relevant assets or expenses in the current period.
(1) Pension benefits
Pursuant to the relevant laws and regulations of the PRC, the Group has joined a
basic pension insurance for the employees arranged by local Labour and Social
Security Bureaus. The Group makes contributions to the pension insurance at the
applicable rates based on the amounts stipulated by the government organisation. The
contributions are capitalised as part of the cost of assets or charged to profit or loss on
an accrual basis. When employees retire, the local Labour and Social Security
Bureaus are responsible for the payment of the basic pension benefits to the retired
employees. The Group does not have any other obligations in this respect.
(2) Housing fund and other social insurances
Besides the pension benefits, pursuant to the relevant laws and regulations of the PRC,
the Group has joined defined social security contributions for employees, such as a
housing fund, basic medical insurance, unemployment insurance, injury insurance
and maternity insurance. The Group makes contributions to the housing fund and
other social insurances mentioned above at the applicable rate(s) based on the
employees’ salaries. The contributions are recognised as cost of assets or charged to
profit or loss on an accrual basis.
(3) Termination benefits
When the Group terminates the employment relationship with employees before the
employment contracts have expired, or provides compensation as an offer to
encourage employees to accept voluntary redundancy, a provision for the termination
benefits provided, is recognised in profit or loss when both of the following
conditions have been satisfied:
- The Group has a formal plan for the termination of employment or has made
an offer to employees for voluntary redundancy, which will be implemented
shortly
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II. BASIS OF PREPARATION (CONTINUED)
24. EMPLOYEE BENEFITS (CONTINUED)
(3) Termination benefits (continued)
- The Group is not allowed to withdraw from termination plan or redundancy
offer unilaterally.
25. GOVERNMENT GRANTS
Government grants are transfers of monetary assets or non-monetary assets from the
government to the Group at no consideration except for the capital contribution from
the government as an investor in the Group. Special funds such as investment grants
allocated by the government, if clearly defined in official documents as part of
“capital reserve” are dealt with as capital contributions, and not regarded as
government grants.
A government grant is recognised when there is reasonable assurance that the grant
will be received and that the Group will comply with the conditions attaching to the
grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at
the amount that is received or receivable. If a government grant is in the form of a
transfer of a non-monetary asset, it is measured at its fair value.
A government grant related to an asset is recognised initially as deferred income and
amortised to profit or loss on a straight-line basis over the useful life of the asset. A
grant that compensates the Group for expenses to be incurred in the subsequent
periods is recognised initially as deferred income and recognised in profit or loss in
the same periods in which the expenses are recognised. A grant that compensates the
Group for expenses incurred is recognised in profit or loss immediately.
26. DEFERRED TAXED ASSETS AND LIABILITIES
Deferred tax assets and liabilities arise from deductible and taxable temporary
differences respectively, being the differences between the carrying amounts of assets
and liabilities for financial reporting purposes and their tax bases, which include the
deductible losses and tax credits carry forward to subsequent periods. Deferred tax
assets are recognised to the extent that it is probable that future taxable profits will be
available against which deductible temporary differences can be utilised.
Deferred tax is not recognised for the temporary differences arising from the initial
recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting profit nor taxable profit (or tax loss). Deferred tax
is not recognised for taxable temporary differences arising from the initial recognition
of goodwill.
At the balance sheet date, the amount of deferred tax recognised is measured based on
the expected manner of recovery or settlement of the carrying amount of the assets
and liabilities, using tax rates that are expected to be applied in the period when the
asset is recovered or the liability is settled in accordance with tax laws.
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II. BASIS OF PREPARATION (CONTINUED)
26. DEFERRED TAXED ASSETS AND LIABILITIES (CONTINUED)
The carrying amount of a deferred tax asset is reviewed at each balance sheet date.
The carrying amount of a deferred tax asset is reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow the benefit of the
deferred tax asset to be utilised. Any such reduction is reversed to the extent that it
becomes probable that sufficient taxable profits will be available.
At the balance sheet date, deferred tax assets and liabilities are offset if all the
following conditions are met:
- the taxable entity has a legally enforceable right to set off current tax assets
against current tax liabilities, and
- they relate to income taxes levied by the same tax authority on either the same
taxable entity; or different taxable entities which either to intend to settle the
current tax liabilities and assets on a net basis, or to realize the assets and
settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or
recovered.
27. OPERATING AND FINANCE LEASES
A lease is classified as either a finance lease or an operating lease. A finance lease is a
lease that transfers substantially all the risks and rewards incidental to ownership of a
leased asset to the lessee, irrespective of whether the legal title to the asset is
eventually transferred or not. An operating lease is a lease other than a finance lease.
(1) Operating lease charges
Rental payments under operating leases are recognised as costs or expenses on a
straight-line basis over the lease term.
(2) Assets leased out under operating leases
Fixed assets leased out under operating leases, except for investment property (see
Note II.13) are depreciated in accordance with the Group’s depreciation policies
described in Note II.14(2). Impairment losses are provided for in accordance with
the accounting policy described in Note II.20. Other leased out assets under
operating leases are amortised using the straight-line method. Income derived from
operating leases is recognised in the income statement using the straight-line method
over the lease term. If initial direct costs incurred in respect of the assets leased out
are material, the costs are initially capitalised and subsequently amortised in profit or
loss over the lease term on the same basis as the lease income. Otherwise, the costs
are charged to profit or loss immediately.
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II. BASIS OF PREPARATION (CONTINUED)
(3) Assets acquired under finance leases
When the Group acquires an asset under a finance lease, the asset is measured at an
amount equal to the lower of its fair values and the present value of the minimum
lease payments, each determined at the inception of the lease. The minimum lease
payments are recorded as long-term payables. The difference between the value of the
leased assets and the minimum lease payments is recognised as unrecognised finance
charges. Initial direct costs that are attributable to a finance lease incurred by the
Group are added to the amounts recognised for the leased asset. Depreciation and
impairment losses are accounted for in accordance with the accounting policies
described in Notes II.14(2) and II.20, respectively.
If there is a reasonable certainty that the Group will obtain ownership of a leased
asset at the end of the lease term, the leased asset is depreciated over its estimated
useful life. Otherwise, the leased asset is depreciated over the shorter of the lease term
and its estimated useful life.
Unrecognised finance charge under finance lease is amortised using an effective
interest method over the lease term. The amortisation is accounted for in accordance
with policies of borrowing costs (see Note II.16).
At the balance sheet date, long-term payables arising from finance leases, net of the
unrecognised finance charges, are presented into long-term payables and non-current
liabilities due within one year, respectively in the balance sheet.
(4) Assets leased out under finance leases
The Group recognises the aggregate of the minimum lease receipts determined at the
inception of a lease and the initial direct costs as finance lease receivable. The
difference between the aggregate of the minimum lease receipts, the initial direct
costs, and the aggregate of their present values is recognised as unearned finance
income.
Unearned finance income is allocated to each accounting period during the lease term
using the effective interest method. At the balance sheet date, finance lease
receivables, net of unearned finance income, are presented as long-term receivables
or non-current assets due within one year, respectively in the balance sheet.
The Group makes provision for impairment losses of finance lease receivables (see
Note II.10).
The unguaranteed residual values are reviewed at least each year-end. Any excess of
the carrying amount of the unguaranteed residual values over their estimated
recoverable amounts is recognised as impairment loss. If there is an indication that
there has been a change in the factors used to determine the provision for impairment
and as a result the estimated recoverable amount of the unguaranteed residual values
is greater than its carrying amount, the impairment loss recognised in prior years is
reversed. Reversals of impairment losses are recognised in the income statement.
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II. BASIS OF PREPARATION (CONTINUED)
28. ASSETS HELD FOR SALE
A held-for-sale asset is classified as held for sale when the Group has made a decision
and signed a non-cancellable agreement on the transfer of the asset with the transferee,
and the transfer is expected to be completed within one year. Such non-current assets
may be fixed assets, intangible assets, and investment property subsequently
measured using the cost model, long-term equity investment etc. but not include
deferred tax assets. Non-current assets held for sale are stated at the lower of
carrying amount and net realisable value. Any excess of the carrying amount over the
net realisable value is recognised as impairment loss. At balance sheet date,
non-current assets held for sale are still presented under corresponding asset
classification as they were.
29. HEDGE ACCOUNTING
Hedge accounting is a method which recognises the offsetting effects on profit or loss
of changes in the fair values of the hedging instrument and the hedged item in the
same accounting period(s).
Hedged items are the items that expose the Group to risks of changes in fair value or
future cash flows and that are designated as being hedged. The Group’s hedged item
include a forecast transaction that is settled with a fixed amount of foreign currency
and expose the Group to foreign currency risk.
A hedging instrument is a designated derivative whose changes in fair value or cash
flows are expected to offset changes in the fair value or cash flows of the hedged item.
For a hedge of foreign currency risk, a non-derivative financial asset or
non-derivative financial liability may also be used as a hedging instrument.
The hedge is assessed by the Group for effectiveness on an ongoing basis and judged
whether it has been highly effective throughout the accounting periods for which the
hedging relationship was designated. A hedge is regarded as highly effective if both
of the following conditions are satisfied:
- at the inception and in subsequent periods, the hedge is expected to be highly
effective in achieving offsetting changes in fair value or cash flows
attributable to the hedged risk during the period for which the hedge is
designated;
- the actual results of offsetting are within a range of 80% to 125%.
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II. BASIS OF PREPARATION (CONTINUED)
29. HEDGE ACCOUNTING (CONTINUED)
- Cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows. The
portion of the gain or loss on the hedging instrument that is determined to be
an effective hedge is recognised directly in shareholders’ equity as a separate
component. That effective portion is adjusted to the lesser of the following
in absolute amounts:
- the cumulative gain or loss on the hedging instrument from inception
of the hedge
- the cumulative change in present value of the expected future cash
flows on the hedged item from inception of the hedge
The portion of the gain or loss on the hedging instrument that is determined to
be an ineffective hedge is recognised in profit or loss.
If a hedge of a forecast transaction subsequently results in the recognition of a
non-financial asset or non-financial liability, the associated gain or loss is
removed from shareholders’ equity and recognised in profit or loss in the same
period during which the financial asset or financial liability affects profit or
loss. However, if the Group expects that all or a portion of a net loss
recognised directly in shareholders’ equity will not be recovered in future
accounting periods, it reclassifies into profit or loss the amount that is not
expected to be recovered.
If a hedge of a forecast transaction subsequently results in the recognition of a
financial asset or a financial liability, the associated gain or loss is removed
from equity and recognised in profit or loss in the same period during which
the financial asset or financial liability affects profit or loss. However, if the
Group expects that all or a portion of a net loss recognised directly in
shareholders’ equity will not be recovered in future accounting periods, it
reclassifies into profit or loss the amount that is not expected to be recovered.
For cash flow hedges, other than those covered by the preceding two policy
statements, the associated gain or loss is removed from shareholders’ equity
and recognised in profit or loss in the same period or periods during which the
hedged forecast transaction affects profit or loss.
When a hedging instrument expires or is sold, terminated or exercised, or the
hedge no longer meets the criteria for hedge accounting, the Group will
discontinue the hedge accounting treatments prospectively. In this case, the
gain or loss on the hedging instrument that remains recognised directly in
shareholders’ equity from the period when the hedge was effective shall not be
reclassified into profit or loss and is recognised in accordance with the above
policy when the forecast transaction occurs. If the forecast transaction is no
longer expected to occur, the gain or loss on the hedging instrument that
remains recognised directly in shareholders’ equity from the period when the
hedge was effective shall be reclassified into profit or loss immediately.
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II.BASIS OF PREPARATION (CONTINUED)
30. DIVIDENDS APPROPRIATED TO INVESTORS
Dividends or distributions of profits proposed in the profit appropriation plan which
will be authorised and declared after the balance sheet date, are not recognised as a
liability at the balance sheet date but disclosed in the notes separately.
31. RELATED PARTIES
If a party has the power to control, jointly control or exercise significant influence
over another party, or vice versa, or where two or more parties are subject to common
control or joint control from another party, they are considered to be related parties.
Related parties may be individuals or enterprises. Enterprises with which the
Company is under common control only from the State and that have no other related
party relationships are not regarded as related parties of the Group. Related parties
of the Group and the Company include, but are not limited to:
(a) the Company’s parent;
(b) the Company’s subsidiaries;
(c) enterprises that are controlled by the Company’s parent;
(d) investors that have joint control or exercise significant influence over the
Group;
(e) enterprises or individuals if a party has control, joint control over both the
enterprises or individuals and the Group;
(f) joint ventures of the Group, including subsidiaries of joint ventures ;
(g) associates of the Group, including subsidiaries of associates;
(h) principal individual investors and close family members of such individuals;
(i) key management personnel of the Group and close family members of such
individuals;
(j) key management personnel of the Company’s parent;
(k) close family members of key management personnel of the Company’s parent;
and
(l) other enterprises that are controlled or jointly controlled by principal
individual investors, key management personnel of the Group, and close
family members of such individuals.
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II. BASIS OF PREPARATION (CONTINUED)
31. RELATED PARTIES (CONTINUED)
Besides the related parties stated above determined in accordance with the
requirements of CAS, the following enterprises and individuals are considered as (but
not restricted to) related parties based on the disclosure requirements of
Administrative Procedures on the Information Disclosures of Listed Companies
issued by the CSRC:
(m) enterprises or persons that act in concert that hold 5% or more of the
Company’s shares;
(n) individuals and close family members of such individuals who directly or
indirectly hold 5% or more of the Company’s shares, supervisors for listed
companies and their close family members;
(o) enterprises that satisfy any of the aforesaid conditions in (a), (c) and (m)
during the past 12 months or will satisfy them within the next 12 months
pursuant to a relevant agreement;
(p) individuals who satisfy any of the aforesaid conditions in (i), (j) and (n) during
the past 12 months or will satisfy them within the next 12 months pursuant to
a relevant agreement; and
(q) enterprises, other than the Company and subsidiaries controlled by the
Company, which are controlled directly or indirectly by an individual defined
in (i), (j), (n) or (p), or in which such an individual assumes the position of a
director or senior executive.
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II. BASIS OF PREPARATION (CONTINUED)
32 SEGMENT REPORTING
Reportable segments are identified based on operating segments which are
determined based on the structure of the Group’s internal organisation, management
requirements and internal reporting system. An operating segment is a component of
the Group that meets the following conditions:
- It engages in business activities from which it may earn revenues and incur
expenses
- Its operating results are regularly reviewed by the Group’s management to
make decisions about resource to be allocated to the segment and assess its
performance
- The Group is able to obtain its financial information regarding financial
position, results of operations and cash flows, etc.
Two or more operating segments may be aggregated into a single operating segment
if the segments have same or similar economic characteristics, and are similar in
respect of the following aspects:
- the nature of each product and service;
- the nature of production processes;
- the type or class of customers for the products and services;
- the methods used to distribute the products or provide the services;
- the legal and regulatory impact on manufacturing of products and rendering of
services.
Inter-segment revenues are measured on the basis of actual transaction price for such
transactions for segment reporting, and segment accounting policies are consistent
with those for the consolidated financial statements.
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements requires management to make estimates and
assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
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II. BASIS OF PREPARATION (CONTINUED)
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS CONTINUED)
Notes V.17, VII and XI.3 contain information about the assumptions and their risk
factors relating to impairment of goodwill, share-based payments and fair value of
financial instruments. Other key sources of estimation uncertainty are as follows:
(1) Impairment of receivables
As described in Note II.10, receivables that are measured at amortised cost are
reviewed at each balance sheet date to determine whether there is objective evidence
of impairment. If any such evidence exists, impairment loss is provided. Objective
evidence of impairment includes observable data that comes to the attention of the
Group about loss events such as a significant decline in the estimated future cash flow
of an individual debtor or the portfolio of debtors, and significant changes in the
financial condition that have an adverse effect on the debtor. If there is an indication
that there has been a change in the factors used to determine the provision for
impairment, the impairment loss recognised in prior years is reversed.
(2) Impairment of other assets excluding inventories, financial assets and other long-term
equity investments
As described in Note II.20, other assets excluding inventories, financial assets and
other long-term equity investments are reviewed at each balance sheet date to
determine whether the carrying amount exceeds the recoverable amount of the assets.
If any such indication exists, impairment loss is provided.
The recoverable amount of an asset (asset group) is the greater of its net selling price
and its present value of expected future cash flows. Since a market price of the asset
(the asset group) cannot be obtained reliably, the fair value of the asset cannot be
estimated reliably. In assessing value in use, significant judgements are exercised
over the asset’s production, selling price, related operating expenses and discounting
rate to calculate the present value. All relevant materials which can be obtained are
used for estimation of the recoverable amount, including the estimation of the
production, selling price and related operating expenses based on reasonable and
supportable assumption.
(3) Depreciation and amortisation
As described in Note II.13, 14 and 17, investment property, fixed assets and
intangible assets are depreciated and amortised using the straight-line method over
their useful lives after taking into account residual value. The useful lives are
regularly reviewed to determine the depreciation and amortisation costs charged in
each reporting period. The useful lives are determined based on historical
experiences of similar assets and the estimated technical changes. If there is an
indication that there has been a change in the factors used to determine the
depreciation or amortisation, the amount of depreciation or amortisation is revised.
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II. BASIS OF PREPARATION (CONTINUED)
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
(4) Warranty provisions
As described in V.32, the Group makes provisions under the warranties it gives on
sale of its products taking into account the group’s recent claim experience. Any
increase or decrease in the provision will affect profit or loss in future years.
(5) Impairment of inventories
As described in Note II.11, inventories are carried at the lower of cost and net
realisable value. Any excess of the cost over the net realisable value of each class of
inventories is recognised as a provision for diminution in the value of inventories.
Net realisable value is the estimated selling price in the normal course of business less
the estimated costs to completion and the estimated expenses and related taxes
necessary to make the sale. For inventories with committed sales orders or active
market, the Group estimates the new realisable value with reference to the selling
prices set out in the committed sales orders or in the active market. For inventories
without committed sales orders or active market, the Group carefully estimates the
new realisable value based on available information and reasonable and supportive
assumptions on expected selling prices, manufacturing costs, selling expenses, sales
tax and etc.
(6) Functional currency
As described in the Note II.4, the Group determines its functional currencies based on
the major currencies in business transactions. Since most revenue of the Group’s
subsidiaries within the container segment is denominated in US dollars, these
subsidiaries choose US dollars as their functional currencies. The subsidiaries in the
Trailers segment choose RMB as their functional currencies. If there is an indication
that there has been a change in the factors used to determine the functional currency,
the functional currency will be changed accordingly.
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II. BASIS OF PREPARATION (CONTINUED)
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)
(7) Construction contract
As described in Note II.23, contract revenue and contract profit are recognised based
on the stage of completion of a contract which is determined with reference to the
proportion of the physical construction work completed to the total estimated
construction work. Where a contract is completed substantially and its contract
revenue and contract expenses to completion can be reliably measured, the Group
estimates contract revenue and contract expenses with reference to its recent
construction experience and the nature of the construction contracts. For a contract
that is not completed substantially, contract revenue that should be recognised based
on its stage of completion, is not recognised and disclosed in the financial statements.
Therefore, at the balance sheet date, actual total contract revenue and total contract
cost may be higher or lower than the estimated total contract revenue and total
contract cost and any change of estimated total contract revenue and total contract
cost may have financial impact on future profit or loss.
(8) Income taxes
Determining income tax provisions involves judgement on the future tax treatment of
certain transactions. The Group carefully evaluates tax implications of transactions
and tax provisions are set up accordingly. The tax treatment of such transactions is
reconsidered periodically to take into account all changes in tax legislations. Deferred
tax assets are recognised for tax losses not yet used and temporary deductible
differences. As those deferred tax assets can only be recognised to the extent that it is
probable that future taxable profit will be available against which the unused tax
credits can be utilised, management’s judgment is required to assess the probability of
future taxable profits. Management’s assessment is constantly reviewed and
additional deferred tax assets are recognised if it becomes probable that future taxable
profits will allow the deferred tax asset to be recovered.
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II. BASIS OF PREPARATION (CONTINUED)
34 CHANGES IN ACCOUNTING POLICIES AND THEIR EFFECTS
(1) Changes in accounting policies
In accordance with CAS Bulletion No.4, which was newly issued by the Ministry of
Finance in 2010, the Group changed the following significant accounting policies:
USD’000
Affected items in
Description of and reasons for Approval consolidated Effects of
Note
changes in accounting policies procedure financial new policy
statements
Accounting treatment for the
expenditure of the acquirer in General and
Required by
business combinations not (a) administrative 3,493
standards
involving enterprises under expenses
common control
Accounting treatment at the
acquisition date for the
previously-held equity interests in
an acquiree which was acquired Required by Goodwill and
(b) 21,375
through business combinations standards investment loss
not involving enterprises under
common control and achieved in
stages
The excess of loss for the current
period attributable to the minority
shareholders in a subsidiary over
the minority shareholders’ portion Required by
(c) Minority interest 2,052
of the opening balance of standards
shareholders’ equity of the
subsidiary in the consolidated
financial statements
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II. BASIS OF PREPARATION (CONTINUED)
34 CHANGES IN ACCOUNTING POLICIES AND THEIR EFFECTS (CONTINUED)
(1) Changes in accounting policies (continued)
Note:
(a) Accounting treatment for the expenditure of the acquirer in business
combinations not involving enterprises under common control
Before 1 January 2010, the Group, as the acquirer, in a business combination
not involving enterprises under common control accounted for
acquisition-related costs (excluding transaction costs of the issuance of equity
or debt securities, same as below) as a part of cost of acquisition. Since 1
January 2010, the Group accounts for these acquisition-related costs as
expenses in the periods in which the costs are incurred.
The above change in accounting policy is with effect from 1 January 2010,
and no retrospective adjustment has been made by the Group.
In the current accounting year, the Group accounted for acquisition-related
costs of USD 3,493,000 equivalent to RMB 23,566,000 as general and
administrative expenses.
(b) Accounting treatment at the acquisition date for the previously-held equity
interests in an acquiree which was acquired through business combinations not
involving enterprises under common control and achieved in stages
Before 1 January 2010, for a business combination not involving enterprises
under common control and achieved in stages, the Group adjusted the carrying
value of its previously-held equity interest in the acquiree at the acquisition
date, which was accounted for using the equity method before the acquisition
date, to its initial cost.
As of 1 January 2010, in the Company’s separate financial statements, the
initial cost of such investment comprises the carrying value of previously-held
equity investments in an acquiree immediately before the acquisition date, and
the additional investment cost at the acquisition date. Any amounts recognised
in other comprehensive income relating to the previously-held equity interest
in the acquiree, are reclassified in profit or loss as investment income when
the equity investment is disposed of. In the consolidated financial statements,
the Group remeasures its previously-held equity interest in the acquiree to its
fair value at the acquisition date. The difference between the fair value and the
carrying amount are recognised as investment income for the current period;
the amount recognised in other comprehensive income relating to the
previously-held equity interest in the acquiree is reclassified as investment
income for the current period.
The above change in accounting policy is with effect from 1 January 2010,
and no retrospective adjustment has been made by the Group.
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II. BASIS OF PREPARATION (CONTINUED)
34 CHANGES IN ACCOUNTING POLICIES AND THEIR EFFECTS (CONTINUED)
(1) Changes in accounting policies (continued)
Note (continued):
(b) The change of accounting policy had no effect on the Company’s separate
financial statements. In the consolidated financial statements, as the effect of
the change of this accounting policy, the group reversed the goodwill of USD
39,182,000 (RMB 267,945,000) arising from the previously-held equity
interest in the acquiree accounted for using equity method before the
acquisition date. In addition, after deducting the effect of the Group’s share of
profit in the investee after the acquisition of the investment, the Group
recognised the gain from the change of USD 17,807,000 (RMB 123,739,000)
in fair value of the previously-held invest in the acquiree between the
acquisition date and the date of the acquisition of the previously-held
investment. The net effect of the above accounting treatment resulted in the
increase of investment loss of USD 21,375,000 (RMB 144,206,000) in the
current year.
(c) The excess of loss for the current period attributable to the minority
shareholders in a subsidiary over the minority shareholders’ portion of the
opening balance of shareholders’ equity of the subsidiary in the consolidated
financial statements.
Before 1 January 2010, in the consolidated financial statements, where losses
attributable to the minority shareholders of a subsidiary exceed the minority
shareholders’ interest in the opening balance of equity of the subsidiary, the
excess, and any further losses attributable to the minority shareholders, are
allocated against the equity attributable to the Company except to the extent
that the minority shareholders have a binding obligation under the Articles of
Association or a contract and are able to make additional investment to cover
the losses. From 1 January 2010, when the amount of loss for the current
period attributable to the minority shareholders of a subsidiary exceeds the
minority shareholders’ portion of the opening balance of shareholders’ equity
of the subsidiary, the excesses allocated to the minority interest.
According to this change in accounting policies, the Company should decrease
the opening balance of retained earnings by USD 2,052,000 (equivalent to
RMB 14,011,000) and decrease the minority interests accordingly in the
Company’s consolidated financial statements. The Group made no
retrospective adjustments for the above change in the accounting policy since
the effect was insignificant. The excess of loss for previous periods
attributable to the minority shareholders in a subsidiary was recognised in the
share of profit by minority shareholders in the current year and minority
shareholders’ equity was decreased in the consolidated financial statement.
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III. TAXATION
1. MAIN TAXES AND TAXES RATES
Types of tax Taxable base Tax rate
Value added tax (VAT) The output VAT calculated based on taxable income from 17%
sales of goods and rendering of service, after subtracting
the deductable input VAT of the period, is VAT payable
Business tax Taxable operating income 3%-5%
Urban maintenance and
construction tax Business tax payable and VAT payable 5%-7%
Income tax Taxable income Note1
Calculated based on revenue arising from sales of goods
The Netherlands / Australia and rendering of service, less deductible or refundable
service tax rate taxes for purchase of goods 10-19%
Note1: The income tax rates applicable to the Group for the year are as follows:
2010 2009
The Company 22% 20%
Domestic subsidiaries 10% - 25% 0 - 25%
Subsidiaries registered in Hong Kong 16.5% 16.5%
Subsidiaries registered in British Virgin Islands - -
Subsidiary registered in Suriname 36% 36%
Subsidiary registered in Cambodia 20% 20%
Subsidiary registered in US 15 – 35% 15 - 35%
Subsidiary registered in Germany 31.6% 31.6%
Subsidiary registered in Britain 28% 28%
Subsidiary registered in Australia 30% 30%
Subsidiary registered in the Netherlands 25.5% 25.5%
Subsidiary registered in Belgium 34% 34%
Subsidiary registered in Denmark 28% 28%
Subsidiary registered in Finland 26% 26%
Subsidiary registered in Poland 19% 19%
Subsidiary registered in Thailand 30% 30%
Subsidiary registered in Singapore 17% Not applicable
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III. TAXATION (CONTINUED)
2. TAX PREFERENCE
The Group’s subsidiaries that are entitled to preferential tax treatments are as follows:
Local
Statutory Preferential
Name of enterprises tax rate rate Reasons
1 Shenzhen CIMC - Tianda 22% 15% Recognised as high-tech
Airport Support Co., Ltd enterprises, entitled to
15% preferential rate
2 Shanghai CIMC Yangshan 25% 12.5% Entitled to tax holiday of
Logistics Equipment Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
3 Tianjin CIMC Special Vehicle Co., Ltd 22% 11% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the third profit making year
4 CIMC SHAC (Xi’An) Special Vehicle 25% 12.5% Entitled to tax holiday of
Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
5 Gansu CIMC Huajun Vehicle Co., Ltd. 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the fourth profit making year
6 Jiaxing CIMC Wood Co., Ltd. 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the fifth profit making year
7 Ianermongolia Holonbuir CIMC Wood 25% 12.5% Entitled to tax holiday of
Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
8 Tianjin CIMC Logistics Equipments 22% 11% Entitled to tax holiday of
Co., Ltd. “two-year exemption and
three-year reduction”, and 2010
is the fifth profit making year
9 Tianjin CIMC Containers Co., Ltd 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the third profit making year
10 Taicang CIMC Containers Co., Ltd 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the fifth profit making year
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III. TAXATION (CONTINUED)
2. TAX PREFERENCE (CONTINUED)
Local
Statutory Preferential
Name of enterprises tax rate rate Reasons
11 Shanghai CIMC Yangshan Container 25% 12.5% Entitled to tax holiday of
Service Co.,Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
12 Zhangjiagang CIMC Sanctum 25% 12.5% Entitled to tax holiday of
Cryogenic Equipment Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the fifth profit making year
13 Zhumadian CIMC Huajun Vehicle 25% 15% Recognised as high-tech
Co., Ltd. enterprises, entitled
to 15% preferential rate
14 Yangzhou Tonglee Reefer Equipment 25% 12.5% Entitled to tax holidays of
Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the fourth profit making year
15 Yangzhou Tonglee Reefer Container 25% 12.5% Entitled to tax holidays of
Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
16 Yangzhou CIMC Tonghua 25% 12.5% Entitled to tax holidays of
Tank Equipment Co., Ltd “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
17 Enric (Bengbu) Compressor Co., Ltd 25% 15% Recognised as high-tech enterprises
entitled to 15% preferential rate
18 Shanghai CIMC Reefer 25% 15% Recognised as high-tech enterprises
Containers Co., Ltd. entitled to 15% preferential rate
19 Nantong CIMC Special Transportation 25% 15% Recognised as high-tech enterprises
Equipment Manufacture Co., Ltd. entitled to 15% preferential rate
20 Wuhu CIMC RuiJiang Automobile 25% 15% Recognised as high-tech enterprises
Co., Ltd entitled to 15% preferential rate
21 CIMC Vehicle (Liaoning) Co., Ltd. 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2010
is the third profit making year
22 Chongqing CIMC Logistics Equipments 25% 12.5% Entitled to tax holiday of
Co., Ltd. “two-year exemption and
three-year reduction”, and 2010
is the third profit making year
23 Yangzhou CIMC Tong Hua Special 25% 15% Recognised as high-tech enterprises
Vehicles Co., Ltd entitled to 15% preferential rate
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III. TAXATION (CONTINUED)
2. TAX PREFERENCE (CONTINUED)
Local
Statutory Preferential
Name of enterprises tax rate rate Reasons
24 Shijiazhuang Enric Gas Equipment 25% 15% Recognised as high-tech enterprises
Co., Ltd. entitled to 15% preferential rate
25 Enric (Lang fang )Energy Equipment 25% 15% Recognised as high-tech
integration Co.,Ltd. enterprises, entitled
to 15% preferential rate
36 Jingmen Hongtu Special Aircraft 25% 15% Recognised as high-tech enterprises
Manufacturing Co., Ltd entitled to 15% preferential rate
Corporate income tax law of the PRC (“New Tax Law”) became effective on 1
January 2008. The statutory income tax rate for the Company and its domestic
subsidiaries will be 25%. According to the Notice for Transitional Preferential Tax
Policies of Enterprise, Income Tax Law(Guo Fa [2007] No. 39) issued by the State
Council, the tax rate for the companies which were previously entitled to preferential
tax rates will gradually transition to the statutory tax rate of 25% within 5 years.
The tax rate for the enterprises which are entitled to preferential tax rate of 15% will
be 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011 and 25% in 2012; the tax
rate for the enterprises whose applicable tax rates were 24% and above or equal to
25% will be 25% starting from 2008.
Effective from 1 January 2008, the companies which are previously entitled to tax
holidays of “two-year exemption and three-year reduction” and “one-year exemption
and two-year reduction” will continue to enjoy the tax holidays until their expirations.
The reduced tax rates will be based on the applicable tax rate in the transitional period.
The applicable tax rate will be the statutory tax rate after the expirations of tax
holidays.
On 6 December 2007, State Council of People’s Republic of China promulgated
detailed implementation rules of the New Tax Law. According to the
implementation rules started from 1 January 2008, a withholding tax is applied on
dividends distributed by foreign-invested enterprises to Hong Kong or other overseas
investors with a tax rate of 5% or 10%, respectively. Therefore, at 31 December 2010,
temporary difference caused by the Group’s subsidiaries’ undistributed profits
amounted to USD 377,864,000 (RMB 2,490,010,000). Accordingly, deferred tax
liabilities amounting to USD 28,410,000 (RMB 187,213,000) were recognised by the
Group at year end.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES
All subsidiaries of the Group were established or acquired through combination not
under common control. There is no acquisition of subsidiaries through combination
under common control.
In the reporting period, the number of companies included in the scope of
consolidation added up to 239. Except for the subsidiaries listed as below, the number
of other subsidiaries held by the Group was 104, with paid-in capital amounting to
USD 111,255,000. Other subsidiaries mainly included those engaged in
manufacturing or service provision, which have relatively small scale of operation
and the paid-in capital was below RMB 20 million or USD 3 million. Other
subsidiaries also included those investment holding companies with no operating
activities registered in Hong Kong, British Virgin Islands or other overseas countries.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination
(i) Domestic subsidiaries:
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
1 Shenzhen Southern Corporation Guangdong, USD 16,600,000.00 Manufacture, repair and sale of USD 16,600,000.00 100.00% 100.00% Yes - -
CIMC Containers China container, container stockpiling
Manufacture business
Co., Ltd. (SCIMC)
2 Shenzhen Southern Corporation Guangdong, USD 16,600,000.00 Manufacture and repair of container USD 16,600,000.00 100.00% 100.00% Yes - -
CIMC Eastern China design and manufacture of new-style
Logistics Equipment special road and port mechanical
Manufacturing equipment;
Co., Ltd. (SCIMCEL)
3 Xinhui CIMC Corporation Guangdong, USD 24,000,000.00 Manufacture, repair and sale of USD 16,800,000.00 70.00% 70.00% Yes 7,358 -
Container China containers
Co., Ltd.(XHCIMC)
4 Nantong CIMC Corporation Jiangsu, USD 7,700,000.00 Manufacture, repair and sale of USD 5,467,000.00 71.00% 71.00% Yes 7,452 -
Shunda Containers China containers
Co., Ltd. (NTCIMC)
5 Tianjin CIMC Corporation Tianjin, USD 23,000,000.00 Manufacture and sale of container USD 23,000,000.00 100.00% 100.00% Yes - -
Containers China as well as relevant technical advisory;
Co., Ltd.(TJCIMC) container stockpiling business
6 Dalian CIMC Corporation Dalian, USD 17,400,000.00 Manufacture and sale of container USD 17,400,000.00 100.00% 100.00% Yes - -
Containers China as well as relevant technical advisory;
Co., Ltd. (DLCIMC) container stockpiling business
7 Ningbo CIMC Corporation Ningbo, USD 15,000,000.00 Manufacture and sale of container USD 15,000,000.00 100.00% 100.00% Yes - -
Logistics Equipment China as well as relevant technical advisory;
Co., Ltd.(NBCIMC) container stockpiling business
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
8 Taicang CIMC Corporation Jiangsu, USD 40,000,000.00 Manufacture and repair of container USD 40,000,000.00 100.00% 100.00% Yes - -
Containers China
Co., Ltd.(TCCIMC)
9 Yangzhou Runyang Corporation Jiangsu, USD 5,000,000.00 Manufacture, repair and sale of container USD 5,000,000.00 100.00% 100.00% Yes - -
Logistics Equipments China
Co., Ltd.(YZRYL)
10 Shanghai CIMC Yangshan Corporation Shanghai, USD 20,000,000.00 Manufacture and sale of container USD 20,000,000.00 100.00% 100.00% Yes - -
Logistics Equipments China as well as relevant technical advisory
Co., Ltd.(SHYSLE)
11 Shanghai CIMC Reefer Corporation Shanghai, USD 31,000,000.00 Manufacture and sale of refrigeration USD 28,520,000.00 92.00% 92.00% Yes 7,171 -
Containers Co., Ltd. China and heat preservation device of reefer
( SCRC ) container, refrigerator car and heat
Preservation car
12 Nantong CIMC Special Corporation Jiangsu, USD 10,000,000.00 Manufacture, sale and repair of various USD 7,100,000.00 71.00% 71.00% Yes 3,606 -
Transportation China trough, tank as well as various
Equipment Manufacture special storing and transporting
Co., Ltd. (NTCIMCS) equipments and parts
13 Xinhui CIMC Special Corporation Guangdong, USD 16,600,000.00 Manufacture and sale of various USD 16,600,000.00 100.00% 100.00% Yes - -
Transportation China container, semi-finished container
Equipment product and relevant components
Co., Ltd. (XHCIMCS) and parts; providing leasing
and maintenance service
14 Nantong CIMC Tank Corporation Jiangsu, USD 25,000,000.00 Manufacture and sale of various USD 25,000,000.00 78.22% 100.00% Yes Note 1 -
Equipment Co., Ltd China container, semi-finished container
(NTCIMCT) relevant components and parts
Note IV. 1(4)
71
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
15 Dalian CIMC Railway Corporation Liaoning, USD 20,000,000.00 Design, manufacture and sale of various USD 20,000,000.00 100.00% 100.00% Yes - -
Equipment China railway freight equipment products such
Co., Ltd (DLCIMCS) as railway container flat car, open
wagon and hopper wagon
16 Nantong CIMC Large-sized Corporation Jiangsu, USD 33,000,000.00 Design, production and sale of tank USD 29,370,000.00 100.00% 100.00% Yes - -
Tank Co., Ltd. China relevant parts; undertaking tank-related
general contracting projects
17 Shenzhen CIMC Special Corporation Guangdong, RMB 200,000,000.00 Development, production and sales of RMB 160,000,000.00 80.00% 100.00% Yes Note 6 -
Vehicle Co., China various special-use vehicles, as well
Ltd.(CIMCSV) as relevant components and parts
18 Qingdao CIMC Special Corporation Shandong, RMB 62,880,000.00 Development, production and sales of RMB 55,875,168.00 88.86% 100.00% Yes Note 6 -
Vehicle Co., China various special-use vehicles, refitting
Ltd.(QDSV) vehicles, special vehicles, trailer series
as well as relevant components and
parts
19 Yangzhou CIMC Tonghua Corporation Jiangsu, USD 17,500,000.00 Development and production of various USD 14,000,000.00 80.00% 100.00% Yes Note 6 -
Tank Equipment Co., China trailer, special-use vehicles and tank
Ltd. (YZTHT) equipment as well as components and
parts
20 Shanghai CIMC Vehicle Corporation Shanghai, RMB 90,204,082.00 Development, construction, operation RMB 72,163,265.60 80.00% 100.00% Yes Note 6 -
Logistics Equipments China leasing, sales of warehousing and
Co., Ltd. (SHL) auxiliary facilities; property
21 Beijing CIMC Vehicle Corporation Beijing, RMB 20,000,000.00 Construction and operation of RMB 16,000,000.00 80.00% 100.00% Yes Note 6 -
Logistics Equipments China auxiliary warehousing equipments
Co., Ltd. (BJVL) management and relevant service
22 CIMC Vehicle (Liaoning) Corporation Liaoning, RMB 40,000,000.00 Development and production of various RMB 32,000,000.00 80.00% 100.00% Yes Note 6 -
Co., Ltd. (LNVS) China trailer, special-use vehicles as well
as components and parts
72
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
23 Tianjin CIMC Special Corporation Tianjin, RMB 30,000,000.00 Production and sales of box car, RMB 24,000,000.00 80.00% 100.00% Yes Note 6 -
Vehicles Co., China mechanical products, metal
Ltd.(TJXV) structure member; relevant advisory
service
24 CIMC -SHAC (Xi’An) Corporation Xi’An, RMB 50,000,000.00 Development and production of various RMB 30,000,000.00 60.00% 75.00% Yes Note 6 -
Special Vehicle Co., Ltd. China trailer, special vehicle and the
(XASV) components and parts; providing
relevant technical service
25 Gansu CIMC Huajun Corporation Gansu, RMB 25,000,000.00 Refitting of special vehicles, manufacture RMB 15,000,000.00 80.00% 100.00% Yes Note 6 -
Vehicle Co., Ltd. China of trailer and fittings as well automobile
(GSHJ) fittings; sales of relevant materials
26 Xinhui CIMC Composite Corporation Guangdong, USD 16,000,000.00 Production, development, processing USD 12,800,000.00 80.00% 100.00% Yes Note 6 -
Material Manufacture China and sales of various composite plate
CO., LTD (XHCM) products such as plastics, plastic alloy
27 Qingdao CIMC Eco- Corporation Shandong, RMB 137,930,000.00 Development, manufacture, sales and RMB 56,275,440.00 40.80% 51.00% Yes Note 6 -
Equipment Co., Ltd. China service for garbage treatment truck
(QDHB) and the components and parts
28 Shanghai CIMC Special Corporation Shanghai, RMB 30,000,000.00 Development and production of box RMB 24,663,000.00 82.21% 100.00% Yes Note 6 -
Vehicle Co., Ltd. China trailer, box car as well as relevant
(SHCIMCV) mechanical products
29 CIMC Financing and Corporation Guangdong, USD 20,000,000.00 Finance lease business; disposal and RMB 20,000,000.00 100.00% 100.00% Yes - -
Leasing Co., Ltd. China maintenance for residual value of
(CIMCVL) leased property; advisory and
warranty for leasing transaction
30 Qingdao Refrigeration Corporation Shandong, USD 25,000,000.00 Manufacture and sales of various USD 20,000,000.00 80.00% 100.00% Yes Note 6 -
Transport Equipment China refrigeration, heat preservation and
Co., Ltd. (QDRV) other transport equipments and spare parts
73
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
31 Nantong CIMC Tank Corporation Jiangsu, USD 10,000,000.00 Manufacture and repair of large-sized USD 8,000,000.00 85.00% 100.00% Yes Note 6 -
Equipment Co., China tank, production of various
Ltd. (NTCY) pressurization tank car, special
pressurization trough, tank and parts
32 Shenzhen CIMC – Tianda Corporation Guangdong, USD 13,500,000.00 Production and operation of various USD 9,450,000.00 70.00% 70.00% Yes 12,445 -
Airport Support Ltd. China airport-purpose electromechanical
(TAS) equipment products
33 Xinhui CIMC Wood Corporation Guangdong, USD 15,500,000.00 Production of container-purpose wood USD 15,500,000.00 100.00% 100.00% Yes - -
Co., Ltd. China floor and relevant products of various
(XHCIMCW) specifications; providing relevant
technical advisory service
34 Inner Mongolia Holonbuir Corporation Inner USD 12,000,000.00 Production and sales of various USD 12,000,000.00 100.00% 100.00% Yes - -
CIMC Wood Co., Ltd. Mongolia, container wood floors and wood
(NMGW) China products for transport equipments
35 Jiaxing CIMC Wood Corporation Zhejiang, USD 5,000,000.00 Production and sales of container USD 5,000,000.00 100.00% 100.00% Yes - -
Co., Ltd. (JXW) China wood floors, wood products for
transport equipments and other
wood products
36 Xuzhou CIMC Wood Corporation Jiangsu, RMB 50,000,000.00 Production and sales of container RMB 50,000,000.00 100.00% 100.00% Yes - -
Co., Ltd (XZW) China wood floor; purchasing and
sales of timber
37 Shenzhen Southern CIMC Corporation Guangdong, USD 5,000,000.00 Engaged in container transshipment, USD 5,000,000.00 100.00% 100.00% Yes - -
Containers Service China stockpiling, devanning, vanning,
Co., Ltd. (SCIMCL) maintenance
74
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
38 Ningbo CIMC Container Corporation Ningbo, RMB 30,000,000.00 Goods traffic; goods package, sorting, RMB 30,000,000.00 100.00% 100.00% Yes - -
Service Co., Ltd. China examination and logistics advisory
(NBCIMCL) service; container stockpiling, customs
declaration, repair, storing
39 Shanghai CIMC Yangshan Corporation Shanghai, USD 7,000,000.00 Container transshipment, stockpiling, USD 5,600,000.00 80.00% 80.00% Yes 993 -
Container Service Co., China devanning, vanning, and warehousing;
Ltd. (SHYLE) container maintenance, try-off
and technical service
40 CIMC Shenfa Corporation Shanghai, RMB 204,122,966.00 Investment, construction and operation RMB 204,122,966.00 100.00% 100.00% Yes - -
Development Co., China for infrastructure; real estate
Ltd.(CIMCSD) development and operation
41 CIMC Vehicle (Xinjiang) Corporation Xinjiang, RMB 80,000,000.00 Production and sales of mechanical RMB 64,000,000.00 80.00% 100.00% Yes Note 6 -
Co., Ltd. (SJ4S) China equipments as well as
relevant technical development
42 CIMC Vehicle (Group) Corporation Guangdong, USD 75,000,000.00 Development, production and USD 60,000,000.00 80.00% 80.00% Yes Note 6 -
Co., Ltd. (HI) China sales of various high-tech and
high-performance special
vehicle and trailer series
43 Qingdao CIMC Special Corporation Shandong, USD 11,500,000.00 Manufacture and sale of various USD 11,500,000.00 100.00% 100.00% Yes - -
Reefer Co., China container, semi-finished container
Ltd.(QDCSR) product and relevant components
and parts
44 Tianjin CIMC Logistics Corporation Tianjin, USD 5,000,000.00 Design, manufacture, sale, maintenance USD 5,000,000.00 100.00% 100.00% Yes - -
Equipments Co., Ltd. China and relevant technical advisory
(TJCIMCLE) for logistics equipments and
relevant components and parts
45 Dalian CIMC Logistics Corporation Dalian, USD 17,700,000.00 Design, manufacture, sale, maintenance USD 17,700,000.00 100.00% 100.00% Yes - -
Equipment Co., Ltd. China and relevant technical advisory
(DLL) for international trade, entrepot
trade, logistics equipment
and pressure vessel
75
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
46 Chongqing CIMC Corporation Chongqing, USD 8,000,000.00 Design, manufacture, lease, maintenance USD 8,000,000.00 100.00% 100.00% Yes - -
Logistics Equipments China of container, special container, other
Co., Ltd. (CQLE) logistic equipment and relevant
components and parts
47 Dalian CIMC Heavy Corporation Liaoning, USD 3,700,000.00 International trade, entrepot trade, USD 3,700,000.00 100.00% 100.00% Yes - -
Logistics Equipments China design, manufacture, sale, and relevant
Co., Ltd.(DLZH) technical advisory of pressure vessel;
manufacture and installation, other
service of relevant components
and parts of pressure vessel
48 Shenzhen CIMC Corporation Guangdong, RMB 20,000,000.00 Design, development, sale, surrogate RMB 20,000,000.00 100.00% 100.00% Yes - -
Intelligent Technology China of electron production, software
Co., Ltd.(CIMC Tech) and system
49 CIMC Taicang Corporation Jiangsu, RMB 450,000,000.00 Research and development, RMB 450,000,000.00 100.00% 100.00% Yes - -
refrigeration equipment China production and sale of reefer
logistics Co., Ltd.(TCCRC) container and special container
50 Hunan CIMC Bamboo Corporation Hunan, RMB 50,000,000.00 Manufacturing and sale of bamboo RMB 50,000,000.00 100.00% 100.00% Yes - -
Industry Development China and wood product
Co., Ltd.(HNW)
51 CIMC Jidong Corporation Hebei, RMB 70,000,000.00 Sale of car and car components RMB 52,500,000.00 75.00% 75.00% Yes Note 6 -
(Qinhuangdao) Vehicles China and parts
Manufacture Co.,
Ltd(QHDV)
52 CIMC Energy Chemical Corporation Guangdong, RMB 5,000,000.00 Design and development projects RMB 5,000,000.00 100.00% 100.00% Yes - -
Engineering technology China for energy, chemical food related
Co., Ltd. equipment; contractor techniques
transfer
76
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
53 CIMC Management and Corporation Guangdong, RMB 5,000,000.00 design of marketing activities scheme RMB 5,000,000.00 100.00% 100.00% Yes - -
Training(Shenzhen) China organization of academic and
Co., Ltd. commercial conference and
exhibition
54 Yangzhou Lijun Industry Corporation Jiangsu, RMB 10,000,000.00 Production and sales of mechanical RMB 10,000,000.00 100.00% 100.00% Yes - -
and Trade Co., Ltd. China equipments and relevant components
( “Yangzhou Lijun” ) and parts; technical advisory and other
service
55 Yangzhou Taili Special Corporation Jiangsu, RMB 10,000,000.00 Design, manufacturing and maintenance RMB 10,000,000.00 100.00% 100.00% Yes - -
Equipment Co., Ltd. China of containers, board square cabin
( “Yangzhou Taili” ) and relevant components and parts;
relevant advisory and service
56 Yantai CIMC Marine Corporation Shandong, RMB 150,000,000.00 Research and development of RMB 30,000,000.00 100.00% 100.00% Yes - -
Engineering Academe China marine operation platform and
Co., Ltd. other marine engineering service
(“MEA”)
57 Shanghai Lifan Container Corporation Shanghai, RMB 1,000,000.00 Refitting and maintenance of RMB 420,000.00 42.00% 60.00% Yes 92 -
Service Co., Ltd. China containers; providing containers
( “Shanghai Lifan” ) information system management and
advisory service
58 CIMC Wood Development Corporation Guangdong, RMB 150,000,000.00 Development, production and sales RMB 150,000,000.00 100.00% 100.00% Yes - -
Co., Ltd. China of wood products for various modern
( “CIMCWD” ) transportation equipment
77
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
59 Shenzhen CIMC Skyspace Corporation Shenzhen, RMB 254,634,066.00 Real estate development RMB 127,317,033.00 90.00% 90.00% Yes Note 2 -
Real Estate Development China
Co., Ltd (CIMC Tianyu)
60 Yangzhou CIMC grand space Corporation Jiangsu, RMB 25,000,000.00 Real Estate Development, RMB 12,500,000.00 94.00% 94.00% Yes Note 2 -
Real Estate Development China sales and leasing
Co., Ltd (CIMC Haoyu)
Note IV. 1(4)
61 Jiangmen CIMC skyspace Corporation Guangdong, RMB 30,000,000.00 Real estate development, projects RMB 15,000,000.00 90.00% 90.00% Yes Note 2 -
Real Estate China sale of decoration
Co.,Ltd. (“Jiangmen Dichan”) and building materials
Note IV. 1(4)
62 Ningbo Runxin Container Corporation Ningbo RMB 5,000,000.00 Cleaning and repair of containers, RMB 3,000,000.00 60.00% 60.00% Yes （112） -
Co., Ltd China stockpiling, vanning and devanning
service.
63 Chengdu CIMC Vehicle Corporation Sichuan RMB 60,000,000.00 Development, production and sale of RMB 48,000,000.00 80.00% 80.00% Yes Note 6 -
Co., Ltd China various special-use vehicles, as well as
(“CD Vehicle”) Warehouse equipment
64 CIMC Finance Company Corporation Guangdong RMB 500,000,000.00 Providing financial service RMB 500,000,000.00 100.00% 100.00% Yes - -
（”Finance Company”） China
65 Shenzhen CIMC Investment Corporation Shenzhen RMB 75,000,000.00 Investment, sale and leasing RMB 75,000,000.00 100.00% 100.00% Yes - -
Holding company China of containers and container property
(“SZ Investment”)
66 Zhumadian CIMC Huajun Corporation Henan RMB 10,000,000.00 Sales and repair of RMB 8,000,000.00 80.00% 80.00% Yes Note 6 -
Vehicle Trading Co.,Ltd China various vehicles, as well
(“HJQM” ) as relevant components
and parts
78
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
67 CIMC Holdings
(B.V.I.) Limited British Virgin USD 34,001.00 Investment USD 34,001.00 100.00% 100.00% Yes - -
(CIMC BVI) Islands
68 CIMC Tank Equipment Hong Kong HKD 4,680,000.00 Investment HKD 4,680,000.00 100.00% 100.00% Yes - -
Investment Holdings Co., Ltd.
69 CIMC-SMM Vehicle (Thailand) Thailand Baht 260,000,000.00 Production and operation of Baht 213,200,000.00 82.00% 82.00% Yes 1,656 -
CO., LTD. (Thailand V) various special vehicles
70 CIMC Vehicle Investment Hong Kong USD 50,000.00 Investment USD 40,000.00 80.00% 100.00% Yes Note 6 -
Holding Co., Ltd.
(CIMC Vehicle)
71 CIMC Europe BVBA Belgium EUR 18,550.00 Investment EUR 18,550.00 100.00% 100.00% Yes - -
( “BVBA” )
72 China International Hong Kong HKD 2,000,000.00 Investment HKD 2,000,000.00 100.00% 100.00% Yes - -
Marine Containers
(Hong Kong) Limited
( “CIMC Hong Kong” )
73 CIMC Burg B.V. Holland EUR 60,000,000.00 Investment EUR 48,000,000.00 80.00% 80.00% Yes Note 3 -
( “BV” )
74 Tacoba Consultant Forestry N.V Suriname SF 3,000,000.00 Sale of wood SF 3,000,000.00 100.00% 100.00% Yes - -
( “Tacoba” )
75 Charm Wise Limited Hong Kong USD 1.00 Investment USD 1.00 100.00% 100.00% Yes - -
( “Charm Wise” )
76 Gold Terrain Assets Limited British Virgin USD 1.00 Investment USD 1.00 100.00% 100.00% Yes - -
( “GTA” ) Islands
79
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
77 Full Medal British Virgin USD 50,000.00 Investment USD 78.22 78.22% 100.00% Yes Note 1 -
Holdings Ltd. Islands
(“Full Medal”)
Note IV. 1(4)
78 Charm Ray Holdings Limited Hong Kong HKD 1.00 Investment HKD 0.78 78.22% 100.00% Yes Note 1 -
( “Charm Ray” )
NoteIV.1(4)
79 Charm Beat British Virgin USD 1.00 Investment USD 1.00 100.00% 100.00% Yes - -
Enterprises Limited Islands
( “Charm Beat” )
80 Sharp Vision Hong Kong HKD 1.00 Investment HKD 1.00 100.00% 100.00% Yes - -
Holdings Limited
( “Sharp Vision” )
81 Sound Winner British Virgin USD 10,000.00 Investment USD 7,822.00 78.22% 100.00% Yes Note 1 -
Holdings Limited Islands
( “Sound Winner” )
82 Grow Rapid Limited Hong Kong USD 1.00 Investment HKD 1.00 100.00% 100.00% Yes - -
( “Grow Rapid” )
83 Powerlead Holding Ltd. British Virgin USD 10.00 Finance Lease USD 10.00 100.00% 100.00% Yes - -
( “Powerlead” ) Islands
84 Cooperatie Vela U.A. Holland EUR 18,000 Investment EUR 14,080.00 78.22% 100.00% Yes Note 1 -
85 Vela Holding B.V. Holland EUR 18,000 Investment EUR 14,080.00 78.22% 100.00% Yes Note 1 -
80
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED1. COMPANY STATUS OF
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
86 CIMC Financial Hong Kong HKD 500,000.00 Finance Lease HKD 500,000.00 100.00% 100.00% Yes - -
Leasing (HK) Ltd
(“Financial Leasing”)
87 CIMC Offshore Hong Kong HKD 224,206,025.00 Investment HKD 136,810,516.00 61.02% 61.02% Yes Note 5 -
Holdings Limited
( “CIMC Offshore” )
81
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(2) The Group does not have subsidiaries obtained through combination under common control.
(3) Subsidiaries acquired through combinations under non-common control:
(i) Domestics Subsidiaries
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
1 Luoyang CIMC Lingyu Corporation Henan, RMB 60,000,000.00 Production and sales of passenger RMB 36,000,000.00 60.00% 75.00% Yes Note 6 -
Automobile CO., LTD. China car, tank car; machining; operation
(LYV) of import and export business
2 Wuhu CIMC RuiJiang Corporation Anhui, RMB 70,000,000.00 Development, production and sales RMB 42,000,000.00 60.00% 75.00% Yes Note 6 -
Automobile CO LTD China of various special vehicles, ordinary
(WHVS) mechanical products and metal
structure parts
3 Liangshan Dongyue CIMC Corporation Shandong, RMB 90,000,000.00 Production and sales of mixing RMB 54,000,000.00 60.00% 75.00% Yes Note 6 -
Vehicle Co., Ltd. China truck, special vehicle and
(LSDYV) components and parts
4 Qingdao CIMC Container Corporation Shandong, USD 27,840,000.00 Manufacture and repair of container, USD 27,840,000.00 100.00% 100.00% Yes - -
Manufacture Co., Ltd China processing and manufacture of various
(QDCC) mechanical parts, structures and
equipment
5 Qingdao CIMC Reefer Corporation Shandong, USD 39,060,000.00 Manufacture and sale of refrigeration USD 34,880,580.00 89.30% 89.30% Yes 4,480 -
Container Manufacture China and heat preservation device of reefer
Co., Ltd.(QDCRC) container, refrigerator car and heat
preservation car; providing relevant technical
advisory and maintenance service
6 Tianjin CIMC North Corporation Tianjin, USD 16,682,000.00 Manufacture and sale of container USD 16,682,000.00 100.00% 100.00% Yes - -
Ocean Container China as well as vehicle, ship, equipment
Co., Ltd.(TJCIMC) and steel structure specially used
for container; warehousing and after
sales service for container
82
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(i) Domestics Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
7 Shanghai CIMC Baowell Corporation Shanghai, USD 28,500,000.00 Manufacture and sale of container USD 27,000,900.00 94.74% 100.00% Yes 2,600 -
Industries Co. Ltd China as well as relevant technical advisory
(SBWI)
8 CIMC Vehicle (Shandong) Corporation Shandong, USD 18,930,100.00 Development and manufacture of RMB 15,144,080.00 69.61% 87.01% Yes Note 6 -
Co. Ltd.(KGR) China refrigerator car, tank car, trailer, box car,
special vehicles and various series
products
9 Zhangzhou CIMC Corporation Fujian, USD 23,000,000.00 Manufacture and sale of container USD 23,000,000.00 100.00% 100.00% Yes - -
Container Co., Ltd. China as well as relevant technical advisory
(ZZCIMC)
10 Yangzhou CIMC Corporation Jiangsu, RMB 294,234,000.00 Development, production and sales of RMB 234,411,200.00 80.00% 100.00% Yes Note 6 -
Tong Hua Special Vehicles China various special-use vehicles, refitting
Co., Ltd. (YZTH) vehicles, special vehicles, trailer
series as well as relevant components
and parts
11 Zhumadian CIMC Corporation Henan, RMB 85,340,000.00 Refitting of special vehicles, RMB 68,272,000.00 80.00% 100.00% Yes Note 6 -
Huajun Vehicle Co. Ltd. China sales of trailer and fittings;
(HJCIMC) sales of vehicle-related materials
12 Zhangjiagang CIMC Corporation Jiangsu, RMB 144,862,042.01 Development, manufacture and RMB 115,889,633.61 78.22% 100.00% Yes Note 1 -
Sanctum Cryogenic China installation of deep freezing unit,
Equipment Machinery petrochemical mechanical equipment,
Co., Ltd. (SDY) tank container, pressure vessel
Note IV.1(4)
13 Donghwa Container Corporation Shanghai, USD 4,500,000.00 Container cargo devanning, vanning; USD 3,150,000.00 70.00% 70.00% Yes 3,752 -
Transportation China canvass for cargo; allotment and
Service Co., Ltd. (DHCTS) customs declaration; container
maintenance and stockpiling; supply
of components and parts
83
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(i) Domestics Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
14 Yangzhou Tonglee Corporation Jiangsu, USD 8,000,000.00 Manufacture and sale of reefer USD 8,000,000.00 100.00% 100.00% Yes - -
Reefer Container China container and special container;
Co., Ltd. (TLC) providing relevant technical advisory
and maintenance service
15 Qingdao Kooll Corporation Shandong, RMB 20,000,000.00 Container warehousing, stockpiling, RMB 16,000,000.00 80.00% 80.00% Yes 166 -
Logistics Co., Ltd China devanning, vanning, load and unload,
(QDHFL) cleaning, maintenance; goods processing
16 Enric (Bengbu) Compressor Corporation Anhui, HKD 21,320,000.00 Manufacturing base of NG compressor HKD 16,676,504.00 78.22% 100.00% Yes Note 1 -
Co.,Ltd. China and related products
(Enric Bengbu)
Note IV.1(4)
17 Shijiazhuang Enric Corporation Hebei, USD 7,000,000.00 Manufacturing pressure vessel USD 5,475,400.00 78.22% 100.00% Yes Note 1 -
Gas Equipment China
Co., Ltd.
(“Shijiazhuang Enric”)
Note IV.1(4)
18 Enric (Lang fang ) Corporation Hebei, HKD 50,000,000.00 Manufacturing and exploiting HKD 39,110,000.00 78.22% 100.00% Yes Note 1 -
Energy Equipment China Energy Equipment integration
integration Co.,Ltd.
(Langfang Enric)
Note IV.1(4)
19 Enric ( Beijing )Energy Corporation Beijing, HKD 40,000,000.00 Manufacturing and exploiting HKD 31,288,000.00 78.22% 100.00% Yes Note 1 -
TechnologyCo.,Ltd China Energy Equipment integration
(Beijing Enric)
Note IV.1(4)
20 CIMC Enric (Jingmen) Corporation Hubei, HKD 50,000,000.00 Sales of chemical and gas machineries HKD 39,110,000.00 78.22% 100.00% Yes Note 1 -
Energy Equipment China and equipments as well as after sales
Co., Ltd. services; research and development
Note IV.1(4) of energy conservation techniques
84
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(i) Domestics Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
21 Jingmen Hongtu Special Corporation Hubei, RMB 20,000,000.00 Development and sales of flight RMB 12,516,000.00 62.58% 80.00% Yes Note 1 -
Aircraft manufacturing China vehicle manufacturing techniques,
Co., Ltd design, production and sales of
Note IV.1(4) specialized motor vehicles, tanks
and pressure vessel
22 Longkou CIMC Raffles Corporation Shangdong USD 1,300,000.00 Construction of offshore project USD 780,000.00 60.00% 60.00% Yes (743)
-
offshore, Ltd China and supplime
( “LCRO” )
23 Yantai CMIC Raffles Corporation Shandong RMB 234,690,000.00 Construction of dock; Designation, RMB 119,644,962.00 50.98% 50.98% Yes Note 5 -
offshore Ltd China production of ship; production
(YCRO) of equipment of pressure and offshore
oil platform
24 Yantai CIMC Raffles Corporation Shandong RMB 125,980,000.00 Construction of ship aswell as component; RMB 64,224,604 50.98% 50.98% Yes Note 5 -
ship Co., Ltd China Sales of container and offshore oil platform,
(“YCRS”) channel and steel production
25 Haiyang CIMC Raffles Corporation Shandong RMB 200,000,000.00 Construction of dock; Designation, RMB 101,960,000 50.98% 50.98% Yes Note5 -
offshore Ltd. China production of ship; production
(“HCRO”) of equipment of pressure and offshore
oil platform
26 Longkou CIMC Raffles Corporation Shandong RMB 290,000,000.00 Construction of offshore project RMB 147,842,000.00 50.98% 50.98% Yes Note 5 -
offshore engineering China and suppliment
Co., Ltd (“LCRO”)
27 CIMC Rolling Stock Australia AUD 50,000.00 Sales of vehicles AUD 50,000.00 100.00% 100.00% - - -
Australia Pty Ltd.
(CIMC Aus)
85
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(ii) Overseas Subsidiaries
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
28 Enric Energy Equipment Cayman Islands HKD 120,000,000.00 Investment holding HKD 14,651,337.53 78.22% 56.59% Yes Note 1 -
Holdings Limited
(Enric)
Note IV.1(4) (i)
29 Burg Industries B.V. Holland EUR 3,403,351.62 Investment EUR 2,722,681.30 80.00% 100.00% Yes Note 3 -
30 Holvrieka Holding B.V. Holland EUR 12,000,000.00 Investment EUR 9,386,400.00 78.22% 100.00% Yes Note 1 -
Note IV.1(4)
31 Holvrieka Ido B.V. Holland EUR 136,200.00 Sales of tank equipment EUR 106,535.64 78.22% 100.00% Yes Note 1 -
Note IV.1(4)
32 Holvrieka Nirota B.V. Holland EUR 680,670.32 Production, assembly and EUR 532,420.32 78.22% 100.00% Yes Note 1 -
Note IV.1(4) sale of tank equipment
33 Noordkoel B.V. Holland EUR 500,000.00 Sales of tank equipment EUR 391,100.00 78.22% 100.00% Yes Note 1 -
Note IV.1(4)
34 Beheermaatschappij Holland EUR 453,780.22 Investment EUR 453,780.22 80.00% 100.00% Yes Note 3 -
Burg B.V.
35 Burg Carrosserie B.V. Holland EUR 90,756.04 Production of road transport vehicle EUR 72,604.83 80.00% 100.00% Yes Note 3 -
36 Exploitatiemaatschappij Holland EUR 79,411.54 Trade, financing and leasing EUR 63,529.63 80.00% 100.00% Yes Note 3 -
Intraprogres B.V of road transport vehicle
37 Hobur Twente Holland EUR 226,890.11 Production and sale of oil EUR 181,512.09 80.00% 100.00% Yes Note 3 -
B.V. and components and parts
38 Burg Service Holland EUR 250,000.00 Assembly and repair of road EUR 200,000.00 80.00% 100.00% Yes Note 3 -
B.V. transport vehicle and tank
equipment
39 LAG Trailers N.V. Belgium BEF 30,000,000.00 Manufacturing trailer BEF 24,000,000.00 80.00% 100.00% Yes Note 3 -
40 Holvrieka N.V. Belgium BEF 40,000,000.00 Manufacturing tank equipment BEF 31,288,000.00 78.22% 100.00% Yes Note 1 -
86
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(ii) Overseas Subsidiaries (continued)
Amount of loss
Amount for current
Actual investment and of period attributable
actual net amount of Shareholding Voting minority to minority
Investment of the percentage rights Within interest at shareholders
company at the end consolidation the end of that allocated to
Registered capital of the year scope the year minority interests
Currency Amount of Currency Amount of
Entity Registration original original USD’000 USD’000
Name type place currency Business scope currency
41 Immoburg N.V. Belgium BEF 10,000,000.00 Manufacturing road transport vehicle BEF 8,000,000.00 80.00% 100.00% Yes Note 3 -
42 Holvrieka Danmark A/S Denmark DKr 1,000,000.00 Manufacturing tank equipment DKr 782,200.00 78.22% 100.00% Yes Note 1 -
43 Direct Chassis LLC USA USD 10,000,000.00 Manufacturing and sales of USD 6,000,000.00 60.00% 100.00% Yes 908 -
( “DCEC” ) special vehicles
44 TGE GASINVESTMENTS Luxemburg EUR 50,000.00 Investment holding EUR 30,000.00 60.00% 60.00% Yes Note 4 -
S.A. ( “TGE SA” )
45 TGE Gas Engineering GmbH Germany EUR 1,000,000.00 Provide EP+CS(Design, Purchase and EUR 600,000.00 60.00% 100.00% Yes Note 4 -
Construction Supervision) or other
technical project services in LNG,LPG
and storage and disposal of other
46 CIMC Raffles Offshore Singapore SGD 521,965,822.00 Production of various ship for offshore SGD 266,098,176.00 50.98% 50.98% Yes Note 5 -
(Singapore) Limited oil and gas, including jack-up drilling
(“Raffles”) platforms, semi-submersible drilling
Platforms, FPSOs,FSOs
47 CIMC Raffles Investments Hongkong HKD 2.00 Investment HKD 2.00 50.98% 50.98% Yes Note 5 -
Limited China
48 CIMC Raffles Leasing Pte Ltd. Singapore SGD 2.00 Leasing of marine ship SGD 2.00 50.98% 50.98% Yes Note 5 -
49 Caspian Driller Pte. Ltd. Singapore USD 30,000,000.00 Leasing of marine ship HKD 15,294,000.00 50.98% 50.98% Yes Note 5 -
Note 1 Enric and its subsidiaries’ minority interests amounted to USD 95,717,000.
Note 2 CIMC Tianyu and its subsidiaries’ minority interests amounted to USD 11,474,000.
Note 3 Burg and its subsidiaries’ minority interests amounted to USD 18,838,000.
Note 4 TGE and its subsidiaries’ minority interests amounted to USD 11,470,000.
Note 5 CIMC Offshore, Raffles and its subsidiaries’ minority interests amounted to USD 162,129,000.
Note 6 HI and its subsidiaries’ minority interests amounted to USD 101,313,000.
87
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(4) Subsidiaries whose shareholding held by the Company differs from their voting rights
(i) Enric Energy Equipment Holdings Limited (Enric)
The ordinary shares that the Company hold in Enric take 56.59% of Enric’s
outstanding ordinary shares. Accompany with the convertible preferential shares that
the Company hold, the Company’s shareholding in Enric changed to 78.22%. Enric’s
issued convertible preferential shares enjoy the same rights for dividend distribution
as ordinary shares while have no voting rights. Therefore the Company’s
shareholding percentage in Enric is 78.22% while the voting right is 56.59%.
(ii) Except for the subsidiary mentioned above in (i), the Company’s voting rights in its
indirect-owned subsidiaries which are held by the Company’s non-wholly owned
subsidiaries were presented according to the voting rights of its subsidiaries.
2. There are no entities set up for special purpose or operating
entities controlled through entrusted operation and lease.
3. Changes in the scope of consolidation for the consolidation
financial statements.
Newly purchared (see Note IV.6) and established subsidiaries in the year change the
scope of the consolidation financial statements.
88
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. Subsidiaries newly included in the scope of consolidation and
excluded from the scope of consolidation for the current year
(1) Subsidiaries newly included in the scope of consolidation, special purpose entity,
business entities that having control through being enstusted to manage or
leasing
USD’000
Net asset as at Net
31 December profit/(loss)
Company Name Basis to identify control Notes 2010 for 2010
Raffles and Over half of voting rights
its subsidiaries in the Board of directors IV.6 371,188 (158,219)
Finance Company 3,280 3,686
CIMC BVI 10,695 (666)
Others Note 1 4,736 3,625
RMB’000
Net asset as at
31 December Net profit
Company Name Basis to identify control Notes 2010 for 2010
Raffles and Over half of voting rights
its subsidiaries in the Board of directors IV.6 2,446,018 (1,067,424)
Finance Company 21,614 24,868
CIMC BVI 70,477 (4,493)
Others Note 1 31,209 24,456
Note 1 Other subsidiaries newly included in the scope of consolidation mainly comprised
CD Vehicle, Chengdu Property Management, Asia Cargo Link Limited, CIMC WA
and Financial Leasing.
(2) There was no significant subsidiary, special purpose entity, business entity that
having control through being enstusted to manage or leasing that was excluded
from the scope of consolidation for the current year.
5. There is no acquisition through combination under common control
for the current year (2009: Nil).
89
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year
(1) Raffles
Acquiree Note Goodwill amount Calculation method of goodwill
Yantai Raffles Nil Bright Day Limited (renamed as CIMC
Shipbuilding Limited Offshore Holdings Limited afterward,
(renamed as Yantai hereafter referred to as “CIMC
CIMC Raffles offshore Offshore”), the Company’s subsidiary,
(Singapore) Limited acquired 31.74% of the equity interests of
afterwards, hereafter CIMC Raffle’s, the fair value of the
referred to as “Raffles” identifiable net assets of which at the
acquisition date amounted to USD
134,912,000(RMB 910,187,000). The
excess amount of acquisition cost over
fair value amounting to USD 12,475,000
(RMB 84,166,000) was recognised as
non-operating income.
The Group acquired Raffles at the considerations of USD93,288,000 and
USD788,000 in 2008 and 2009 for the equity interests of 17.86% and 0.41%
respectively. As at 31 December 2009, the Group’s equity interest in Raffles
accounted for 18.27%.
As Mai Boliang，president of the Group, was appointed as chairman of the board and
non-executive director of Raffles on 3 November 2008, the Group obtained the
power to participate in the financial and operating policy decisions of Raffles and
began to have significant influence on Raffles though the Group held merely 18.72%
equity interest. Since 3 November 2008, Raffles was measured as an associate of the
Group using equity method.
CIMC Offshore, a subsidiary of the Company (60.02% equity interests held by the
Company), paid USD 122,437,000 (RMB 826,021,000) as an acquisition cost for
additional 31.74% equity interest of Raffles on 21 January 2010. After the acquisition,
the Company held 50.01% of issued ordinary shares of Raffles through its
subsidiaries, and had more than half of the voting rights. The Company effectively
obtained its control of Raffles.
Based on the total number of 273,565,000 issued shares as at the date of 5 July 2010,
the allotment shares will be offered at USD0.735 each in the proportion of one offer
share for every two existing shares (totaling 136,782,500 shares) held on the Books
Closure Date.
A． After the completion of allotment shares on 12
August, 2010, CIMC offshore held 342,860,173 shares of Raffles,
around 83.55% of the total shares of 410,347,500. The Company’s
share holding percentage for Raffles increased to 50.98%
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year (Continued)
(1) Raffles (Continued)
Raffles was incorporated in Singapore in 1994 with its manufacturing plants located
in Yantai, Shandong Province, China. Raffles had its shares (Stock code: YRSLNO)
listed in the Over-The Counter Market (NOTC) in Norwegian Oslo Stock Exchange
since May 2006. Raffles mainly engages in the construction of various marine and
offshore projects including jack-up drilling platforms, semi-submersible drilling
platforms, FPSOs, FSOs, platform supply vessels, pipe lay vessels, and other special
vessels. Before the combination, the number of issued ordinary shares was
273,565,000. Brain Chang and his controlling parties totally held 36.91% shares of
Raffles; the Company held 18.72% through its subsidiaries Sharp Vision Holdings
Limited and CIMC Hong Kong. DnB NOR Bank ASA held 37.00% (on behalf of
investors), Platinum Nominee Limited held 7.4% (on behalf of investors). Except the
above shareholders, no others held shares exceeding 5%.
Raffles’ shares were last traded in the Over-The-Counter Market (NOTC) in
Norwegian Oslo Stock Exchange on 28 February 2011 (Norway time) and delisted at
market closing.
At acquisition date, the fair value of Raffles’ shares held by the Group before
acquisition date was USD 77,658,000 (equivalent to RMB 523,917,000). And the
investment losses is accounting for USD 21,375,000 (RMB 144,206,000) on the
recalculation of the fair value of the same day.
Financial information of Raffles is as follows:
Net operating cash
Sales from acquisition Net loss from outflow flows from
date to 31 December acquisition date to 31 acquisition date to 31
Amount 2010 December 2010 December 2010
USD’000 362,267 158,219 42,119
RMB’000 2,444,034 1,067,424 284,156
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year (continued)
(1) Raffles (Continued)
Acquiree’s identifiable assets and liabilities:
USD’000
Items 21 January 2010
Carrying amount Fair value
Cash at bank and on hand 114,670 114,670
Trading financial assets 8,358 8,358
Accounts receivable 330,781 330,781
Other receivables and prepayments 228,346 228,346
Inventories 282,934 282,934
Financial assets held for trading 813 813
Long-term equity investment 10,565 10,565
Fixed assets and construction in progress 356,606 356,606
Intangible assets 50,311 69,871
Deferred tax assets 7,688 7,688
Other non-current assets 5,597 5,597
Short-term loans (401,928) (401,928)
Trading financial liabilities (5,545) (5,545)
Accounts payable and bills payable (250,017) (250,017)
Other payables and accrued expenses (72,362) (72,362)
Tax payables (11,131) (11,131)
Long-term loans (231,195) (231,195)
Deferred tax liabilities - (4,890)
Minority interests (14,106) (14,106)
Identifiable net assets total 410,385 425,055
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year (continued)
(1) Raffles (continued)
RMB’000
Items 21 January 2010
Carrying amount Fair value
Cash at bank and on hand 773,621 773,621
Trading financial assets 56,387 56,387
Accounts receivable 2,231,614 2,231,614
Other receivables and prepayments 1,540,536 1,540,536
Inventories 1,908,814 1,908,814
Financial assets held for trading 5,485 5,485
Long-term equity investment 71,277 71,277
Fixed assets and construction in progress 2,405,842 2,405,842
Intangible assets 339,423 471,385
Deferred tax assets 51,867 51,867
Other non-current assets 37,760 37,760
Short-term loans (2,711,607) (2,711,607)
Trading financial liabilities (37,409) (37,409)
Accounts payable and bills payable (1,686,740) (1,686,740)
Other payables and accrued expenses (488,192) (488,192)
Tax payables (75,095) (75,095)
Long-term loans (1,559,757) (1,559,757)
Deferred tax liabilities - (32,990)
Minority interests (95,164) (95,164)
Identifiable net assets total 2,768,662 2,867,634
For the above identifiable assets which have an active market, the quoted prices in the
active market are used to establish their fair values; if there is no active market, their
fair values are estimated based on the market price of the same or similar types of
assets which have an active market; if there is no active market for even the same
asset or similar types of assets, valuation techniques will be used to determine the fair
value.
For the above identifiable liability, the payable amount or the present value of the
payable amount is its fair value.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year (continued)
(2) LCRO
Acquiree Note Goodwill amount Calculation method of goodwill
Longkou Sanlian (2) USD 1,170,000 Raffles, the Company’s subsidiary,
offshore Engineering (equivalent to RMB acquired 100% equity interest of
Co., Ltd.(renamed as 7,710,000) LCRO, the fair value of the
Longkou CIMC Raffles identifiable net assets of which at
offshore, Ltd afterwards, the acquisition date amounted to
hereafter referred to USD
as ”LCRO” 42,016,000(RMB276,785,000). The
excess amount of fair value over
acquisition cost amount to
USD1,170,000 (RMB7,710,000)
was recognised as goodwill.
On 30 April 2010, Raffles, the subsidiary of the Company acquired the entire equity
interests of LCRO at a cash consideration of RMB 284,495,000 (equivalent to USD
43,186,000). The total acquisition cost was RMB 284,495,000 (USD 43,186,000) on
the acquisition date.
LCRO was incorporated in Longkou, Shandong Province in August 2007 with the
headquarter in the Economic & Technology Development Zone of Longkou. It
mainly engages in the design, construction and repairs of petroleum drilling platforms
and offshore engineering equipment and commissioning of domestic and overseas
vessels construction projects and related equipment. Before the acquisition, LCRO
was owned by two individuals: Lin Yulong and Gao Chengge.
Financial information of LCRO is as follows:
Net operating cash out
Sales from acquisition Net profit from flows from
date to 31 December acquisition date to 31 acquisition date to 31
Amount 2010 December 2010 December 2010
USD’000 5,808 342 290
RMB’000 38,264 2,253 1,956
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. The Group’s acquisition through combination not under common
control for the current year (continued)
(2) Longkou (continued)
Acquiree’s identifiable assets and liabilities:
USD’000
Items 30 April 2010
Carrying amount Fair value
Cash at bank and on hand 10 10
Accounts receivable and bills receivable 13 13
Other receivables and prepayments 995 995
Inventories 2,765 3,022
Fixed assets and construction in progress 38,248 38,715
Intangible assets 35,115 35,018
Long-term equity investments 4,099 6,737
Accounts payable and bills payable (22,377) (22,377)
Other payables (20,117) (20,117)
Identifiable net assets total 38,751 42,016
RMB’000
Items 30 April 2010
Carrying amount Fair value
Cash at bank and on hand 64 64
Accounts receivable and bills receivable 88 88
Other receivables and prepayments 6,555 6,555
Inventories 18,213 19,906
Fixed assets and construction in progress 251,961 255,039
Intangible assets 231,326 230,685
Long-term equity investments 27,000 44,382
Accounts payable and bills payable (147,411) (147,411)
Other payables (132,523) (132,523)
Identifiable net assets total 255,273 276,785
For the above identifiable assets which have an active market, the quoted prices in the
active market are used to establish their fair values; if there is no active market, their
fair values are estimated based on the market price of the same or similar types of
assets which have an active market; if there is no active market for even the same
asset or similar types of assets, valuation techniques will be used to determine the fair
value.
For the above identifiable liability, the payable amount or the present value of the
payable amount is its fair value.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. There is no loss of control of subsidiaries through significant sales of interests of the Group
for the current year.
8. There is no reverse acquisition of the Group for the current year.
9. There is no consolidation by merger of the Group for the current year.
10. Exchange rate for foreign operating entities’ major financial statement items
Benchmark rate
Average exchange rate on reporting date
2010 2009 2010 2009
USD 6.7465 6.8305 6.5897 6.8282
EUR 8.8378 9.6055 8.7979 9.8388
HKD 0.8682 0.8813 0.8477 0.8805
JPY 7.7705 7.5400 8.0984 7.5634
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CASH AT BANK AND ON HAND
2010 2009
Original Exchange RMB Original Exchange RMB
currency Rate USD equivalent currency Rate USD equivalent
’000 ’000 ’000 ’000 ’000 ’000
Cash on hand
RMB 1,866 6.5897 283 1,866 3,698 6.8282 542 3,698
USD 45 1.0000 45 298 37 1.0000 37 249
HKD 63 7.7734 8 54 91 7.7546 12 80
JPY 678 81.3700 8 54 1,027 90.2800 11 78
AUD 12 0.9828 13 83 - - - -
EUR 49 0.7490 66 434 18 0.6940 25 176
Others - - 16 104 - - 1 6
439 2,893 628 4,287
--------- --------- --------- ---------
Deposits with banks
RMB 1,643,202 6.5897 249,359 1,643,202 1,568,993 6.8282 229,781 1,568,993
USD 220,781 1.0000 220,781 1,454,878 310,089 1.0000 310,089 2,117,348
HKD 151,076 7.7734 19,435 128,071 36,887 7.7546 4,757 32,480
JPY 426,769 81.3700 5,245 34,562 328,749 90.2800 3,641 24,864
AUD 7,636 0.9828 7,770 51,200 6,486 1.1116 5,835 39,840
EUR 45,072 0.7490 60,175 396,537 57,990 0.6940 83,558 570,550
Others - - 5,018 33,068 - - 4,269 29,148
567,783 3,741,518 641,930 4,383,223
--------- --------- --------- ---------
Other monetary funds
RMB 844,869 6.5897 128,210 844,869 376,591 6.8282 55,152 376,591
USD 10,079 1.0000 10,079 66,416 73,427 1.0000 73,427 501,376
AUD - 0.9828 - - 609 1.1116 548 3,740
138,289 911,285 129,127 881,707
--------- --------- --------- ---------
706,511 4,655,696 771,685 5,269,217
As at 31 December 2010, restricted cash at bank and on hand of the Group amounted
to USD 130,246,000, equivalent to RMB 858,281,000, (2009: USD 127,807,000,
equivalent to RMB 872,692,000). Refer to Note V.21 for details.
As at 31 December 2010, Finance Company, the subsidiary of the Group, had deposit
with banks of USD 218,369,000 (equivalent to RMB 1,438,988,000). Finance
Company is a finance institution authorised by the People’s Bank of China.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. FINANCIAL ASSETS HELD FOR TRADING
(1) Classification
2010 2009
Amount RMB Amount RMB
note USD’000 ’000 USD’000 ’000
1. Equity securities
investments held
for trading 59,713 393,491 12,701 86,722
2. Derivative financial
assets
- forward contract (3) 18,069 119,069 739 5,050
3. Hedging instrument 1,988 13,101 3,164 21,565
Total 79,770 525,661 16,604 113,337
(2) There is no material restriction of the investment in financial assets held for trading.
(3) Details of financial assets held for trading
As at 31 December 2010, the Group had certain open forward contracts (mainly
unsettled forward contracts) denominated in U.S. dollars. The nominal value of
these contracts amounted to USD 660 million. The Group had other unsettled forward
contracts of Japanese Yuan, Euro, Norwegian Krone and Australian Dollar. The
nominal value of these amounted to JPY 270 million, EUR 30 million, NOK 30
million and AUD 0.7 million respectively. Pursuant to these forward contracts, the
Group and the Company are required to buy / sell foreign currencies, such as USD,
Euro, Japanese Yuan, and etc. of contracted nominal value at agreed rates in
exchange of RMB at the contract settlement dates. These forwards contracts will be
settled on a net basis by comparing the market rates at the settlement dates and the
agreed rates. The settlement dates of the aforesaid forwards contracts range from 5
January 2011 to 28 December 2011.
As at 31 December 2010, the Group recognised the aforesaid forwards contracts in
their fair values of USD 18,069,000 (RMB 119,069,000) as held-for-trading financial
assets and USD 578,000 (RMB 3,810,000) as held-for-trading financial liabilities.
Transaction costs on realisation have not been considered when calculating the fair
values.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. BILLS RECEIVABLE
(1) Classification of bills receivable
2010 2009
Amount RMB Amount RMB
USD’000 ’000 USD’000 ’000
Bank acceptance bills 60,196 396,670 244,667 1,670,635
Commercial
acceptance bills 16,983 111,915 2,960 20,210
Total 77,179 508,585 247,627 1,690,845
All of the above bills receivable are due within one year.
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of bills receivable.
(2) As at the year end, the Group had no pledged bills receivable.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE
(1) Accounts receivable disclosed by customer categories:
Category 2010 2009
RMB RMB
Amount equivalent Amount equivalent
USD’000 RMB’000 USD’000 RMB’000
Containers group 546,918 3,604,026 216,871 1,480,841
Trailers group 293,512 1,934,155 207,100 1,414,117
Tank equipments group 178,401 1,175,611 139,780 954,442
Offshore engineering group 188,544 1,242,446 - -
Airport ground facilities group 37,545 247,412 37,715 257,542
Others 24,079 158,669 4,351 29,714
Subtotal 1,268,999 8,362,319 605,817 4,136,638
Less: provision for bad
and doubtful debts (35,280) (232,483) (40,133) (274,034)
Total 1,233,719 8,129,836 565,684 3,862,604
(2) An ageing analysis of accounts receivable is as follows:
Category 2010 2009
RMB RMB
Amount equivalent Amount equivalent
USD’000 RMB’000 USD’000 RMB’000
Within 1 year 1,162,770 7,662,297 403,279 2,901,922
1 to 2 years 58,950 388,465 184,606 1,112,324
2 to 3 years 14,316 94,341 10,325 70,450
More than 3 years 32,963 217,216 7,607 51,942
Subtotal 1,268,999 8,362,319 605,817 4,136,638
Less: provision for bad
and doubtful debts (35,280) (232,483) (40,133) (274,034)
Total 1,233,719 8,129,836 565,684 3,862,604
The ageing is counted starting from the date the accounts receivable is recognised.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories:
2010 2009
Provision for bad and Provision for bad and
Category Note Gross carrying amount Gross carrying amount
doubtful debts doubtful debts
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
RMB’000 (%) RMB’000 (%) RMB’000 (%) RMB’000 (%)
Individually significant and assessed for
impairment individually (4) 18,377 1.44% 6,780 36.89% 24,027 3.97% 5,631 23.43%
Individually insignificant but assessed for
impairment individually (5) 8,607 0.67% 3,829 44.49% 4,172 0.69% 2,380 57.05%
Assessed for impairment collectively *
Containers group (6) 545,904 43.03% 221 0.04% 199,197 32.87% 1,937 0.97%
Trailers group (6) 277,311 21.85% 14,086 5.08% 199,798 32.98% 18,107 9.06%
Tank equipments group (6) 177,367 13.98% 8,985 5.07% 136,568 22.54% 11,334 8.30%
Offshore engineering group 186,800 14.72% - - - - - -
Air ground facilities group (6) 37,545 2.96% 1,357 3.62% 37,715 6.23% 743 1.97%
Others (6) 17,088 1.35% 22 0.13% 4,340 0.72% 1 0.01%
Subtotal 1,242,015 97.89% 24,671 1.99% 577,618 95.34% 32,122 5.56%
Total 1,268,999 100.00% 35,280 2.78% 605,817 100.00% 40,133 6.62%
Note*: This category includes accounts receivable individually tested but not impaired.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories (continued):
2010 2009
Provision for bad and Provision for bad and
Category Note Gross carrying amount Gross carrying amount
doubtful debts doubtful debts
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
RMB’000 (%) RMB’000 (%) RMB’000 (%) RMB’000 (%)
Individually significant and assessed for
impairment individually (4) 121,099 1.44% 44,677 36.89% 164,063 3.97% 38,448 23.43%
Individually insignificant but assessed for
impairment individually (5) 56,718 0.67% 25,232 44.49% 28,488 0.69% 16,253 57.05%
Assessed for impairment collectively *
Containers group (6) 3,597,341 43.03% 1,455 0.04% 1,360,155 32.87% 13,224 0.97%
Trailers group (6) 1,827,394 21.85% 92,824 5.08% 1,364,262 32.98% 123,646 9.06%
Tank equipments group (6) 1,168,797 13.98% 59,206 5.07% 932,511 22.54% 77,389 8.30%
Offshore engineering group 1,230,957 14.72% - - - - - -
Air ground facilities group (6) 247,412 2.96% 8,944 3.62% 257,524 6.23% 5,073 1.97%
Others (6) 112,601 1.35% 145 0.13% 29,635 0.72% 1 0.01%
Portfolio subtotal 8,184,502 97.89% 162,574 1.99% 3,944,087 95.34% 219,333 5.56%
Total 8,362,319 100.00% 232,483 2.78% 4,136,638 100.00% 274,034 6.62%
Note*: This category includes accounts receivable individually tested but not impaired.
There were no collaterals that the Group held for accounts receivable that were made impairment aforesaid.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories (continued):
Individually significant items represent accounts receivable with an individual
amount over RMB 10,000,000 (inclusive) or the book value of which account for 5%
(inclusive) of the total accounts receivable in individual financial statements included
in the consolidated financial statement.
The analysis of the Group’s accounts receivable by original currency is as follows:
Currency 2010 2009
Original Exchange Original Exchange
currency rate Amount currency rate Amount
’000 USD’000 ’000 USD’000
RMB 2,546,871 6.5897 386,493 1,934,401 6.8282 283,296
USD 808,506 1.0000 808,506 263,074 1.0000 263,074
HKD 20,121 7.7734 2,588 7,917 7.7546 1,021
JPY 53,378 81.37 656 926 90.28 10
AUD 4,160 0.9828 4,233 7,101 1.1116 6,388
EUR 45,679 0.7490 60,987 32,897 0.6940 47,401
Others - - 5,536 - - 4,627
1,268,999 605,817
(4) An analysis of accounts receivable individually significant and assessed for
impairment individually is as follows:
USD’000
Provision for bad
Category Amount and doubtful debts Provision rate Reason
Trailers group 12,171 3,822 31.40%
Others 6,206 2,958 47.66%
Total 18,377 6,780 36.89% Note 1
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(4) An analysis of accounts receivable individually significant and assessed for
impairment individually is as follows (continued):
RMB’000
Provision for bad
Category Amount and doubtful debts Provision rate Reason
Trailers group 80,204 25,184 31.40%
Others 40,895 19,493 47.66%
Total 121,099 44,677 36.89% Note 1
Note 1: Provision was made based on the credit risk assessment of customers and
historical loss experiences.
(5) An analysis of accounts receivable individually insignificant but assessed for
impairment individually is as follows:
USD’000
Category Amount Provision Provision Reason
for bad and rate
doubtful
debts
Containers group 1,014 639 63.02% Provision is made
Trailers group 4,030 1,414 35.09% based on the estimated
Tank equipments group 1,034 991 95.84% recoverable amount
Offshore engineering group 1,744 552 31.65% according to
Others 785 233 29.68 assessment of credit
risk and historical data
Total 8,607 3,829 44.49%
RMB’000
Category Amount Provision for Provisio Reason
bad and n rate
doubtful debts
Containers group 6,685 4,209 63.02% is made
Provision
Trailers group 26,557 9,314 35.09% on the estimated
based
Tank equipments group 6,814 6,530 95.84% amount
Offshore engineering group 11,490 3,641 according to
Others 5,172 1,538 assessment of credit
29.68%
Total 56,718 25,232 risk
44.49%and historical data
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(6) An ageing analysis of account receivable assessed for impairment collectively is as
follows:
USD’000
2010 2009
Amount Percentage Provision Amount Percentage Provision
Ageing (%) for bad and (%) for bad and
doubtful doubtful
debts debts
Within 1 year 976,191 76.93% 9,518 388,874 64.19% 4,531
1 to 2 years 58,153 4.58% 3,356 174,817 28.86% 17,868
2 to 3 years 12,390 0.98% 3,316 6,337 1.05% 2,133
More than 3 years 8,481 0.67% 8,481 7,590 1.25% 7,590
Total 1,055,215 83.16% 24,671 577,618 95.35% 32,122
RMB’000
2010 2009
Amount Percentage Provision Amount Percentage Provision
Ageing (%) for bad and (%) for bad and
doubtful doubtful
debts debts
Within 1 year 6,432,794 76.93% 62,713 2,655,305 64.19% 30,933
1 to 2 years 383,213 4.58% 22,117 1,193,688 28.86% 122,007
2 to 3 years 81,648 0.98% 21,854 43,267 1.05% 14,566
More than 3 years 55,890 0.67% 55,890 51,827 1.25% 51,827
Total 6,953,545 83.16% 162,574 3,944,087 95.35% 219,333
The ageing is counted starting from the date the account receivable is recognised.
(7) The recovery of provision within this year
There were no accounts receivable for which a full provision or a significant
provision was made in previous years while were recovered in full or in significant
amount during the year (2009: Nil).
(8) Actual written-off of accounts receivable within this year
There were no material actual written-off of accounts receivable during the year
(2009: Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(9) Accounts receivable due from the five biggest debtors of the Group are as follows:
Percentage
in total
Relationship accounts
with the Amount Amount receivable
Company Name company USD’000 RMB’000 Ageing (%)
1. GE SeaCo Asia Pte Ltd None 80,949 533,428 Within 1
year 6.38%
2. Compagnie Maritime None 67,549 445,126 Within 1
d’Affretement year 5.32%
3. TAL International Container None 65,582 432,167 Within 1
Corporation year 5.17%
4. Mediterranean Shipping Co. None 51,172 337,208 Within 1
S.A. year 4.03%
5. Triton Container International None 41,101 270,842 Within 1
Ltd. , year 3.24%
Total - 306,353 2,018,771 ─ 24.14%
The total amount of the Group’s top 5 accounts receivable at 31 December 2009 was
USD106,861,000 (equivalent to RMB729,664,000), 17.64% of the total accounts
receivable.
(10) Accounts receivable due from shareholders who hold 5% or more of the voting rights
of the Company
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of accounts receivable (2009:Nil).
(11) Accounts receivable due from related parties
The Group’s accounts receivable due from related parties amount to USD13,511,000,
equivalent to RMB 89,035,000 (2009: USD1,007,000, equivalent to RMB6,878,000),
accounting for 1.06% of the total accounts receivable (2009: 0.17%).
(12) Derecognition of accounts receivable due to transferring of financial assets
There were no derecognition of accounts receivable due to transferring of financial
assets in the Group during the year (2009: Nil).
(13) Amount of assets and liabilities recognised due to the continuing involvement of
securitised accounts receivable
There were no securitised accounts receivables during the year (2009: Nil).
As at 31 December 2010, restricted accounts receivable amounted to USD
146,000,000, equivalent to RMB 962,096,000 (2009:USD3,221,000, equivalent to
RMB21,990,000). Refer to Note V.21.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES
(1) Other receivables by categories:
Category 2010 2009
Amount RMB Amount RMB
equivalent equivalent
USD’000 RMB’000 USD’000 RMB’000
Amounts due from
related parties 84,579 557,348 54,838 374,442
Loans 64,866 427,445 5,911 40,359
Drawback tax receivable 119,283 786,039 3,136 21,411
Prepayment for
land and equipment 11,129 73,336 45,870 313,211
Deposit 10,927 72,004 15,167 103,566
Others 63,996 421,717 42,876 292,768
Subtotal 354,780 2,337,889 167,798 1,145,757
Less: provision for bad
and doubtful debts (15,421) (101,617) (3,261) (22,268)
Total 339,359 2,236,272 164,537 1,123,489
(2) The ageing analysis of other receivables is as follows:
Category 2010 2009
Amount RMB Amount RMB
equivalent equivalent
USD’000 RMB’000 USD’000 RMB’000
Within 1 year 277,322 1,827,466 131,515 898,012
1 to 2 years 38,508 253,754 22,587 154,228
2 to 3 years 22,940 151,166 13,067 89,224
More than 3 years 16,010 105,503 629 4,293
Subtotal 354,780 2,337,889 167,798 1,145,757
Less: provision for bad
and doubtful debts (15,421) (101,617) (3,261) (22,268)
Total 339,359 2,236,272 164,537 1,123,489
The ageing is counted starting from the date the other receivable is recognised.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
2010 2009
Provision for bad and Provision for bad and
Category Note Amount Percentage doubtful debts Amount Percentage doubtful debts
USD’000 (%) Amount Percentage USD’000 (%) Amount Percentage
USD’000 (%) USD’000 (%)
Individually significant other receivables (4) 144,259 40.66% 8,889 6.16% 98,524 58.72% - -
Insignificant other receivables (5) 210,521 59.34% 6,532 3.10% 69,274 41.28% 3,261 4.71%
Total 354,780 100.00% 15,421 4.35% 167,798 100% 3,261 1.94%
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories (continued):
2010 2009
Provision for bad and Provision for bad and
Category Note Amount Percentage doubtful debts Amount Percentage doubtful debts
RMB’000 (%) Amount Percentage RMB’000 (%) Amount Percentage
RMB’000 (%) RMB’000 (%)
Individually significant (4) 950,622 40.66% 58,574 6.16% 672,739 58.72% - -
Individually insignificant (5) 1,387,267 59.34% 43,043 3.10% 473,018 41.28% 22,268 4.71%
Total 2,337,889 100.00% 101,617 4.35% 1,145,757 100.00% 22,268 1.94%
There were no collaterals that the Group held for other receivables that were made impairment aforesaid.
Individually significant items represent other receivables with an individual amount over RMB 10,000,000 (inclusive) or the book value
of which account for 5% (inclusive) of the total other receivables in individual financial statements included in the consolidated financial
statement.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(4) An analysis of individually significant other receivables assessed for impairment
individually are as follows:
USD’000
Provision
for bad and
doubtful Provision
Category Amount debts rate Reasons
Individually significant:
Capital increment amount due from
subsidiaries 20,027 - - Note 1
Amounts due from associates 43,933 - - Note 1
Receivables arising from transfer of equity
investment 10,721 - - Note 1
Capital increment amount due from
associates 6,829 Note 1
Receivables arising from financing to third
53,860 - -
parties Note 1
Others 8,889 8,889 100.00% Note 2
Total 144,259 8,889 6.16%
RMB’000
Provision
for bad and
doubtful Provision
Category Amount debts rate Reasons
Individually significant: - -
Capital increment amount due from
subsidiaries 131,970 - - Note 1
Amounts due from associates 289,507 - - Note 1
Receivables arising from transfer of equity
70,650
investment - - Note 1
Capital increment amount due from
45,000 - -
associates Note 1
Receivables arising from financing to third
354,921 - -
parties Note 1
Others 58,574 58,574 100.00% Note 2
Total 950,622 58,574 6.16%
Note 1: The estimated risk of loss is relatively low. The provision for bad and
doubtful debts is individually assessed based on the recoverability of
individual balance.
Note 2: Provision was made based on the credit risk assessment of creditors and
historical loss experiences.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(5) An analysis of individually insignificant other receivables but assessed for impairment
individually is as follows:
The Group assessed impairment of the insignificant other receivable and made
provision of impairment of USD 6,532,000 (RMB 43,043,000).
(6) The movement of provision within this year
There were no other receivables for which a full provision or a significant provision
was made in the previous years while were recovered in full or in significant amount
during the year (2009: Nil).
(7) The recovery of other receivables by restructuring within this year
There were no other receivables recovered during the year by means of restructuring
(2009: Nil).
(8) Actual written-off of other receivables within this year
There were no material actual written-off of other receivables during the year (2009:
Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(9) Other receivables due from the five biggest debtors of the Group are as follows:
Percentage in
Relationship total other
with the Amount Amount receivables
Company Name company USD’000 RMB’000 Aging (%)
Within 1
41,360 272,550
1. Sea Biscuit International Inc. None year 11.66%
2. C & C Trucks Co., Ltd. (“C&C 26,632 175,500 Within 1
Trucks”) Associate year 7.51%
3. Shanghai Fengyang Real Estate
Development Co., Ltd (“Shanghai 1 to 3
Fengyang”) Associate 24,130 159,007 years 6.80%
Minority
shareholder of
the Group’s 1 to 2
4. PGM Holding B.V. (“PGM”) subsidiary 20,027 131,970 years 5.64%
5. Marine Subsea Cyprus Holding 1 to 2
Ltd. None 12,500 82,371 years 3.52%
Total ─ 124,649 821,398 ─ 35.13%
The Group’s top 5 other receivables as at 31 December 2009 amounted to
USD94,885,000 (RMB647,893,000), accounting for 56.55% of the total other
receivables.
(10) Other receivables due from shareholders who hold 5% or more of the voting rights of
the Company
The balance of other receivables from shareholders who hold 5% or more of the
voting rights of the Company was withholding tax due from shareholders China
Merchants International (CIMC) Investment Co., Ltd (“Merchants International”) and
COSCO Container Industries Limited (“COSCO Container”), amounting to USD
1,169,000 and USD 286,000, equivalent RMB 7,704,000 and RMB 1,886,000 (2009:
Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(11) Other receivables due from related parties
Percentage in
total other
Relationship with Amount Amount receivables
Company Name the company USD’000 RMB’000 (%)
Minority
shareholder of the
Group’s
1. PGM subsidiary 20,027 131,970 5.64%
2. Shanghai Fengyang Associate 24,130 159,007 6.80%
Controlling
3. Shenzhen Merchant Property shareholder of the
Development Co., Ltd Group’s associate 10,721 70,650 3.02%
4.C & C Trucks Associate 26,632 175,500 7.51%
Important
shareholder of the
5.COSCO Container Group 286 1,886 0.08%
Important
shareholder of the
6.Merchants International Group 1,169 7,704 0.33%
7.Consafe MSVAB Associate 981 6,467 0.28%
8. Others ─ 633 4,164 0.18%
Total ─ 84,579 557,348 23.84%
The Group’s other receivables due from related parties as at 31 December 2009
amounted to USD54,838,000 (RMB 374,442,000), accounting for 32.68 % of total
other receivables.
(12) Derecognition of other receivables due to transferring of financial assets
There are no derecognition of other receivables due to transferring of financial assets
during the year (2009: Nil).
(13) Amount of assets and liabilities recognised due to the continuing involvement of
securitised other receivables
There were no securitised other receivables during the year (2009: Nil).
113
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PREPAYMENTS
(1) Prepayments by category are as follows:
2010 2009
Amount Amount Amount Amount
USD’000 RMB’000 USD’000 RMB’000
Raw material 278,087 1,832,516 122,328 835,278
Construction Cost 91,134 600,546 28,798 196,642
Other 14,792 97,472 13,479 92,037
Subtotal 384,013 2,530,534 164,605 1,123,957
Less: provision for bad
and doubtful debts 14,733 97,087 7,381 50,398
Total 369,280 2,433,447 157,224 1,073,559
(2) The ageing analysis of prepayments is as follows:
2010 2009
Amount Amount Percentage Amount Amount Percentage
USD’000 RMB’000 % USD’000 RMB’000 %
Within 1 year (inclusive) 327,264 2,156,578 85.22% 147,603 1,007,859 89.67%
1 and 2 years (inclusive) 8,763 57,744 2.28% 16,161 110,354 9.82%
2 and 3 years (inclusive) 42,576 280,565 11.09% 513 3,504 0.31%
More than 3 years 5,410 35,647 1.41% 328 2,240 0.20%
Subtotal 384,013 2,530,534 100.00% 164,605 1,123,957 100.00%
Less: provision for bad
and doubtful debts 14,733 97,087 3.84% 7,381 50,398 4.48%
Total 369,280 2,433,447 96.16% 157,224 1,073,559 95.52%
The ageing is counted starting from the date of recognition of prepayments.
Prepayments aged over 1 year included steel purchase prepayment made to a supplier
in total of RMB 92,140,000, equivalent to USD 13,980,000. The supplier has not
delivered the steels within due date for its own reasons. As at 31 December 2010,
the Group had made full provision of RMB 87,640,000 (equivalent to USD
13,300,000) for unsettled balances.(2009: RMB 50,000,000, equivalent to USD
7,320,000).
Other than the prepayments mentioned above, the remaining prepayments aged over 1
year mainly represented equipment purchase prepayment for offshore engineering
projects. The prepayments are not settled because the construction period of the
offshore engineering project usually last more than 1 year.
114
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PREPAYMENTS (CONTINUED)
(3) The Group’s top 5 prepayments are as follows:
Percentage
Relations of the total
hip with prepayment
the Amount Amount s Time of Reason for
Company name company USD’000 RMB’000 (%) recognition unsettlement
materials not
1.Ben steel None 20,845 137,361 5.43% 2010 yet received
materials not
2.Six Heavy Industry Co.,Ltd None 20,318 133,890 5.29% 2010 yet received
equipments
not yet
received
3.THRUSTMASTER OF within due
TEXAS, INC None 18,987 125,122 4.95% 2010 date
4.Guangzhou steel materials not
International trading Co., yet received
Ltd. None 16,174 106,583 4.21% 2010
materials not
yet received
5.Tian Jin Yinze sheet metal within due
Co., Ltd. None 13,300 87,640 3.46% 2008 date
Total ─ 89,624 590,596 23.34% - ─
(4) Prepayments due from shareholders who hold 5% or more of the voting rights of the
Company
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of prepayments (2009: Nil).
115
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INVENTORIES
(1) Inventories by categories
USD’000
2010 2009
Cost Provision Carrying Cost Provision Carrying
Category amount for amount amount for amount
diminution diminution
in value in value
Raw materials 793,764 (13,630) 780,134 588,439 (76,988) 511,451
Work in progress 262,346 (3,311) 259,035 148,645 (3,193) 145,452
Finished goods 484,153 (5,783) 478,370 246,896 (21,842) 225,054
Consignment stocks 51,450 (14) 51,436 43,760 (1,208) 42,552
Spare parts 6,591 - 6,591 14,208 - 14,208
Low-valued consumables 3,292 - 3,292 3,611 - 3,611
Materials in transit 1,895 - 1,895 1,443 - 1,443
Completed properties held
for sale 3,921 - 3,921 4,307 - 4,307
Properties under
development 68,279 - 68,279 40,992 - 40,992
Ship under construction 301,976 - 301,976 - - -
Offshore engineering
equipment 82,151 - 82,151 - - -
Total 2,059,818 (22,738) 2,037,080 1,092,301 (103,231) 989,070
RMB’000
Category 2010 2009
Cost Provision Carrying Cost Provision Carrying
amount for amount amount for amount
diminution diminution
in value in value
Raw materials 5,230,667 (89,821) 5,140,846 4,017,980 (525,688) 3,492,292
Work in progress 1,728,783 (21,816) 1,706,967 1,014,980 (21,799) 993,181
Finished goods 3,190,426 (38,106) 3,152,320 1,685,856 (149,143) 1,536,713
Consignment stocks 339,038 (95) 338,943 298,804 (8,250) 290,554
Spare parts 43,434 - 43,434 97,016 - 97,016
Low-valued consumables 21,696 - 21,696 24,649 - 24,649
Materials in transit 12,487 - 12,487 9,849 - 9,849
Completed properties held
for sale 25,835 - 25,835 29,409 - 29,409
Properties under
development 449,938 - 449,938 279,903 - 279,903
Ship under construction 1,989,931 - 1,989,931 - - -
Offshore engineering
equipment 541,350 - 541,350 - - -
Total 13,573,585 (149,838) 13,423,747 7,458,446 (704,880) 6,753,566
116
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INVENTORIES (CONTINUED)
(1) Inventories by categories (continued)
The Group’s closing balances of inventories included no capitalised borrowing cost
(2009: USD182,000, equivalent to RMB1,241,000). The interest rate per annum at
which the borrowing costs were capitalised for 2009 was 10.07%.
As at 31 December 2010, the Group had no inventories with restricted ownership
(2009: Nil).
(2) Inventories movement for the year is as follows:
USD’000
Opening
balance at Effect of Closing
Category the foreign balance at
beginning of Additions Diminutions exchange the end of
the year for the year for the year rate changes the year
Raw materials 588,439 7,084,027 (6,886,270) 7,568 793,764
Work in progress 148,645 5,584,712 (5,472,800) 1,789 262,346
Finished goods 246,896 7,031,947 (6,801,743) 7,053 484,153
Consignment stocks 43,760 476,056 (468,805) 439 51,450
Ship under construction - 324,589 (22,613) - 301,976
Other 64,561 231,149 (131,961) 2,380 166,129
Subtotal 1,092,301 20,732,480 (19,784,192) 19,229 2,059,818
Less: provision for
diminution in value
of inventories (103,231) (14,381) 95,340 (466) (22,738)
Total 989,070 20,718,099 (19,688,852) 18,763 2,037,080
RMB’000
Opening
balance at Effect of Closing
the foreign balance at
beginning of Additions Diminutions exchange the end of
Category the year for the year for the year rate changes the year
Raw materials 4,017,980 47,792,388 (46,458,223) (121,478) 5,230,667
Work in progress 1,014,980 37,677,269 (36,922,244) (41,222) 1,728,783
Finished goods 1,685,856 47,441,025 (45,887,960) (48,495) 3,190,426
Consignment stocks 298,804 3,211,709 (3,162,793) (8,682) 339,038
Ship under construction - 2,189,842 (152,561) (47,350) 1,989,931
Other 440,826 1,559,450 (890,272) (15,264) 1,094,740
Subtotal 7,458,446 139,871,683 (133,474,053) (282,491) 13,573,585
Less: provision for
diminution in value
of inventories (704,880) (97,022) 643,211 8,853 (149,838)
Total 6,753,566 139,774,661 (132,830,842) (273,638) 13,423,747
117
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INVENTORIES (CONTINUED)
(3) Provision for diminution in value of inventories
Opening Effect of Closing
Category balance at the Provision Written back foreign balance
beginning made for during the year exchange at the end
of the year the year Reversal Write-off rate changes of the year
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Raw materials 76,988 9,715 (2,532) (70,749) 208 13,630
Work in progress 3,193 1,830 - (1,785) 73 3,311
Finished goods 21,842 2,726 (2,093) (16,863) 171 5,783
Consignment stocks 1,208 110 (1,217) (101) 14 14
Total 103,231 14,381 (5,842) (89,498) 466 22,738
Opening Effect of Closing
Category balance at the Provision Written back foreign balance
beginning made for during the year exchange at the end
of the year the year Reversal Write-off rate changes of the year
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Raw materials 525,688 65,540 (17,082) (477,308) (7,017) 89,821
Work in progress 21,799 12,349 - (12,041) (291) 21,816
Finished goods 149,143 18,393 (14,118) (113,768) (1,544) 38,106
Consignment stocks 8,250 740 (8,212) (682) (1) 95
Total 704,880 97,022 (39,412) (603,799) (8,853) 149,838
118
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INVENTORIES (CONTINUED)
(3) Provision for diminution in value of inventories (continued)
(a) The provision for diminution in value of the Group’s inventories during the
year was recognised mainly for the slow-moving or long-aging.
(b) Written back of provision for diminution in value of the Group’s inventories
during the year is as follows:
Percentage of
Basis of provision for provision written back
diminution in value Reasons for written over total inventories
of inventories back of provision balance at year end
Net realisable value was Inventories were
lower than book value used or sold and the
net realisable value
Raw materials ascended 0.32%
Net realisable value was Inventories were
lower than book value used or sold and the
net realisable value
Work in progress ascended -
Net realisable value was Inventories were
lower than book value used or sold and the
net realisable value
Finished goods ascended 0.43%
Net realisable value was Inventories were
lower than book value used or sold and the
net realisable value
Consignment stocks ascended 2.37%
119
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. NON-CURRENT ASSETS DUE WITHIN ONE YEAR
2010 2009
Amount Amount Amount Amount
USD’000 RMB’000 USD’000 RMB’000
Finance leases 115,147 758,786 57,226 390,751
Sales of goods by
instalments 67,686 446,031 1,979 13,513
Others - - 106 724
Subtotal 182,833 1,204,817 59,311 404,988
Less: Provision for
impairment (2,931) (19,315) (1,604) (10,952)
Total 179,902 1,185,502 57,707 394,036
9. OTHER CURRENT ASSETS
2010 2009
Amount Amount Amount Amount
USD’000 RMB’000 USD’000 RMB’000
Tax deductible/
withheld 103,883 684,560 37,095 253,293
Other 527 3,470 197 1,384
Total 104,410 688,030 37,292 254,677
120
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. AVAILABLE-FOR-SALE FINANCIAL ASSETS
2010 2009
Amount Amount Amount Amount
USD’000 RMB’000 USD’000 RMB’000
Available-for-sale
equity instruments 116,616 768,467 172,196 1,175,785
During the year, available-for-sale financial assets held by the Group and the
Company included shares of China Merchants Bank and of China Merchants
Securities Co., Ltd, with a carrying value of USD 22,327,000 and USD 92,914,000
respectively, equivalent to RMB 147,129,000 and RMB 612,272,000. Besides, the
Group and the Company held equity investment of Otto Energy Limited of USD
1,375,000, equivalent to RMB 9,066,000.
On 31 January 2010, three shareholders of TSC Offshore Group Limited (Hereafter
referred to as “TSC”): the Company, a subsidiary of Raffles and Brian Chang who is
also a board member, entered into an agreement on concerted action in which the
three parties committed to act together to take concert of action on the exercise of
their voting rights with the Company empowered as the ultimate decision maker.
Therefore, the Group became to have significant influence on TSC since 31 January
2010. Considering TSC to be its associate company since that date, the Group
accounted the equity investment in TSC of USD 16,466,000, equivalent to RMB
108,509,000 as long-term equity investment using the equity method.
121
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. LONG-TERM RECEIVABLES
(1) The long-term receivables by categories are as follows:
Item 2010 2009
Amount Amount Amount Amount
USD’000 RMB’000 USD’000 RMB’000
Finance Leases 141,820 934,554 98,167 670,304
including: Unrealised
finance income 11,390 75,060 4,248 29,006
Sales of goods by
instalment 61,636 406,161 45,895 313,380
Car/housing loans to
staff 2,053 13,528 2,736 18,685
Subtotal 205,509 1,354,243 146,798 1,002,369
Less: Provision for
impairment (2,729) (17,986) (1,527) (10,427)
Total 202,780 1,336,257 145,271 991,942
(2) Significant changes of provision for bad and doubtful debts during the year:
There were no long-term receivables due within one year for which a full provision or
a significant provision was in the previous years while were recovered in full or in
significant amount during the year (2009: Nil).
(3) Derecognition of long-term receivables due to transfer of financial assets
: USD’000
Derecognition Gains due to
amount derecognition
Derecognition of finance lease due to sales of
ownership 80,258 4,784
Subtotal 80,258 4,784
:RMB’000
Derecognition Gains due to
amount derecognition
Derecognition of finance lease due to sales of
ownership 528,876 32,275
Subtotal 528,876 32,275
122
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. LONG-TERM RECEIVABLES (CONTINUED)
(4) Long-term receivables due from shareholders who hold 5% or more of the voting
rights of the Company
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of long-term receivables (2009: Nil).
12. LONG-TERM EQUITY INVESTMENTS
(1) As at 31 December 2010, the Group’s long-term equity investments by categories are
as follows:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Investments in
joint ventures 6,042 39,812 2,002 13,670
Investments in
associates 169,854 1,119,285 221,702 1,513,827
Other long-term
equity investments 59,531 392,300 59,531 406,489
Subtotal 235,427 1,551,397 283,235 1,933,986
Less: Provision for
impairment 465 3,065 465 3,175
Total 234,962 1,548,332 282,770 1,930,811
123
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows:
USD’000
Initial Balance at the Additions Balance at the The Company Whether voting right is Impairment Dividend
Shareholding Provision for
Investee investment beginning of during the end of the subsidiaries voting defferent from the loss of the receivable/receive
percentage (%) impairment
cost the year year year right (%) shareholding interest year d of the year
Equity method—Joint ventures
Yangzhou
Maxi-CUBE Tong
Composite Co., Ltd
(MST) 1,151 2,002 199 2,201 50.00% 50.00% N/A - - 329
RuiJi Logistic
(Wuhu) Co., Ltd 1,500 - 1,520 1,520 50.00% 50.00% N/A - - -
North CIMC
Logistic Co., Ltd. 2,276 - 2,321 2,321 50.00% 50.00% N/A - - -
Subtotal 4,927 2,002 4,040 6,042 - - 329
Equity method —Associates
KYH Steel
Holding Ltd.
(“KYH”) 3,336 17,261 1,063 18,324 31.83% 31.83% N/A - - 410
Tianjin Port CIMC
Zhenhua Logistic
Co., Ltd
(TJCIMCZL) 2,660 5,913 326 6,239 36.00% 36.00% N/A - - -
Dalian Jinong
Logistic Co., Ltd
(DLJLL) 3,015 5,256 464 5,720 30.00% 30.00% N/A - - -
Xiamen CIMC
Haitou Container
Service Co., Ltd
(Xiamen Haitou) 1,494 1,982 141 2,123 45.00% 45.00% N/A - - 334
Tianjin Zhenhua
Logistic Group Co.,
Ltd (TJZL) 47,453 59,008 11,966 70,974 38.22% 38.22% N/A - - 1,717
124
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
USD’000
Initial Balance at the The Company Whether voting right is Dividend
Additions Balance at the Shareholding Provision for Impairment
Investee investment beginning of subsidiaries voting defferent from the receivable/received
during the year end of the year percentage (%) impairment loss of the year
cost the year right (%) shareholding interest of the year
Equity method —Associates (continued)
Ningbo Beilun
Donghua Container
Service Co., Ltd
(NBBL) 432 512 25 537 21.00% 21.00% N/A - - 93
New Atlantic Timber
(HK) Limited (XYW) 396 433 (1) 432 20.00% 20.00% N/A - - -
Shanghai Fengyang 1,643 9,417 3,377 12,794 40.00% 40.00% N/A - - -
TRS Transportkoeling 1,647 2,081 (88) 1,993 32.00% 32.00% N/A - - -
Eurotank Oy 951 1,224 21 1,245 40.00% 40.00% N/A - - -
Xiamen Haitou
Logistics Co., Ltd
(XMHLC) 888 733 39 772 49.00% 49.00% N/A - - -
Raffles (Notes
IV.6.CD) - 99,033 (99,033) - - - N/A - - -
C&C TRUCKS
Co.,LTD (C&C
TRUCKS) 19,772 18,849 (3,360) 15,489 45.00% 45.00% N/A - - -
TSC 24,841 - 25,367 25,367 14.60% 24.15% Note 5-10 - - -
Xiamen Hongji
Container
Development Co.,
Ltd. (“XMHJ”) 726 - 743 743 49.00% 49.00% N/A - - -
Consafe MSV AB
( “Consafe” ) 534 - 959 959 36.00% 36.00% N/A - - -
Haiyang Blue Island
Offshore Ltd
( “HBIO” ) 1,366 - 2,865 2,865 30.00% 30.00% N/A - - -
Vostok-Raffles Joint
Stock Company
( “Vostok” ) 2,500 - 2,500 2,500 25.00% 25.00% N/A - - -
Sengju (Jiangmen)
Science & Technology
Materials Co., Ltd.
(“SJKJ”) 90 - 778 778 30.00% 30.00% N/A - - -
Subtotal 113, 744 221,702 (51,848) 169,854 - - 2,554
125
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
USD’000
Initial Balance at the Additions Balance at the The Company Whether voting right is Impairment Dividend
Shareholding Provision for
Investee investment beginning of during the end of the subsidiaries voting different from the loss of the receivable/receive
percentage (%) impairment
cost the year year year right (%) shareholding interest year d of the year
Costing method
BOCM Schroder
Stolt Fund
Management 1,233 1,233 - 1,233 5.00% 5.00% N/A - - 1,105
Donghua Container 40 40 - 40 5.00% 5.00% N/A - - -
China Railway
United Logistics 57,784 57,784 - 57,784 10.00% 10.00% N/A - - -
Guangdong Samsung 207 207 - 207 0.09% 0.09% N/A 207 - -
Beihai Yinjian 258 258 - 258 1.01% 1.01% N/A 258 - -
Jinmen General
Aviation Company
Limited 9 9 - 9 39.00% 39.00% N/A - - -
Subtotal 59,531 59,531 - 59,531 465 - 1,105
Total 178,202 283,235 (47,808) 235,427 ─ ─ ─ 465 - 3,988
126
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
RMB’000
Initial Balance at the Additions Balance at the The Company Whether voting right is Impairment Dividend
Shareholding Provision for
Investee investment beginning of during the end of the subsidiaries voting different from the loss of the receivable/receive
percentage (%) impairment
cost the year year year right (%) shareholding interest year d of the year
Equity method—Joint ventures
Yangzhou
Maxi-CUBE Tong
Composite Co., Ltd
(MST) 9,530 13,670 827 14,497 50.00% 50.00% N/A - - 2,220
RuiJi Logistics
(Wuhu) 9,884 - 10,020 10,020 50.00% 50.00% N/A - - -
GXNFWL 15,000 - 15,295 15,295 50.00% 50.00% N/A - - -
Subtotal 34,414 13,670 26,142 39,812 - - 2,220
Equity method —Associates
KYH 27,625 117,856 2,897 120,753 31.83% 31.83% N/A - - 2,764
TJCIMCZL 21,403 40,375 740 41,115 36.00% 36.00% N/A - - -
DLJLL 16,844 35,889 1,804 37,693 30.00% 30.00% N/A - - -
Xiamen Haitou 11,479 13,533 466 13,999 45.00% 45.00% N/A - - 2,250
TJZL 302,144 402,918 64,763 467,681 38.22% 38.22% N/A - - 11,583
NBBL 3,579 3,496 37 3,533 21.00% 21.00% N/A - - 631
XYW 2,916 2,957 (107) 2,850 20.00% 20.00% N/A - - -
Shanghai Fengyang 12,000 64,301 20,012 84,313 40.00% 40.00% N/A - - -
TRS
Transportkoeling 12,030 14,209 (1,076) 13,133 32.00% 32.00% N/A - - -
Eurotank Oy 6,946 8,358 (154) 8,204 40.00% 40.00% N/A - - -
XMHLC 6,153 5,005 82 5,087 49.00% 49.00% N/A - - -
Raffles - 676,225 (676,225) - - - N/A - - -
C&C TRUCKS 135,000 128,705 (26,640) 102,065 45.00% 45.00% N/A - - -
TSC 167,591 - 167,161 167,161 14.60% 24.15% Note 5-10 - - -
XMHJ 4,900 - 4,900 4,900 49.00% 49.00% N/A - - -
Consafe 3,532 - 6,315 6,315 36.00% 36.00% N/A - - -
HBIO 9,000 - 18,884 18,884 30.00% 30.00% N/A - - -
Vostok 16,474 - 16,474 16,474 25.00% 25.00% N/A - - -
SJKJ 6,072 - 5,125 5,125 30.00% 30.00% N/A - - -
Subtotal 765,688 1,513,827 (394,542) 1,119,285 - - 17,225
127
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
RMB’000
Initial Balance at the Additions Balance at the The Company Whether voting right is Impairment Dividend
Shareholding Provision for
Investee investment beginning of during the end of the subsidiaries voting different from the loss of the receivable/receive
percentage (%) impairment
cost the year year year right (%) shareholding interest year d of the year
Costing method
BOCM Schroder
Stolt Fund
Management 8,125 8,419 (294) 8,125 5.00% 5.00% N/A - - 7,458
Donghua Container 270 273 (3) 270 5.00% 5.00% N/A - - -
China Railway
United Logistics 380,780 394,561 (13,781) 380,780 10.00% 10.00% N/A - - -
Guangdong Samsung 1,365 1,413 (48) 1,365 0.09% 0.09% N/A 1,365 - -
Beihai Yinjian 1,700 1,762 (62) 1,700 1.01% 1.01% N/A 1,700 - -
Jinmen General
Aviation Company
Limited 60 61 (1) 60 39.00% 39.00% N/A - - -
Subtotal 392,300 406,489 (14,189) 392,300 3,065 7,458
Total 1,192,402 1,933,986 (382,589) 1,551,397 ─ ─ ─ 3,065 26,903
As at 31 December 2010, there is no need for the Group to made provision for long-term equity investments in joint ventures and associates based on the provision testing result that compared the
estimated recoverable amount and book value of long-term equity investments in joint ventures and associates
128
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(3) Information for major joint ventures and associates is as follows:
Percentage of Net profit/
Entity Registered Legal Principal Registered Shareholding voting rights Total assets Total liabilities Net assets Total revenue (loss)
Investee type place representative activities capital percentage in the investees at year end at year end at year end for the year for the year
Currency ’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
a.Joint ventures
Production
and sales of
composition
MST Corporation Yangzhou Li Guisen materials RMB 154,634 50.00% 50.00% 43,239 14,228 29,011 70,563 6,102
RuiJi Logistics Corporation Anhui Li Lizhong Logistic RMB 2,049,210 50.00% 50.00% 24,358 4,331 20,027
13,698 607
GXNFWL Corporation Guangxi Yan Jie Logistic RMB 30,000 50.00% 50.00% 52,720 22,124 30,596 7,253 595
b.Associates
The British Investment
KYH Stee Corporation Corporation Virgin Islands Huo Jinghui
holding HKD 72,289 31.83% 31.83% 934,391 526,400 407,991 1,405,023 27,332
TJCIMCZL Corporation Tianjin Gao Xiang Logistic RMB 100,000 36.00% 36.00% 119,022 4,822 114,200 31,482 2,404
DLJLL Corporation Dalian Xu Song Logistic RMB 70,000 30.00% 30.00% 237,481 129,759 107,722 43,204 6,010
Xiamen Haitou Corporation Xianmen Jiang Jingdong Logistic RMB 25,000 45.00% 45.00% 37,521 6,396 31,125 39,884 495
TJZL Corporation Tianjin Yang Liqiang Logistic RMB 51,956 38.22% 38.22% 2,245,096 1,134,403 1,110,693 6,266,996 113,214
Martime
auxiliary
NBBL Corporation Ningbo Zhu Shuilin services RMB 4,000 21.00% 21.00% 21,774 4,952 16,822 40,835 3,173
Wood
XYW Corporation HongKong Wu Zhiquan processing RMB 12,500 20.00% 20.00% 28,745 20,945 7,800 - (1,999)
Property
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Shanghai Fengyang Corporation Shanghai Yang Zhiguang development RMB 30,000 40.00% 40.00% 817,812 607,030 210,782 129,431 50,032
XMHLC Corporation Xiamen Jiang Jingdong Logistic RMB 12,000 49.00% 49.00% 12,627 2,287 10,340 6,996 130
Ocean
engineering
equipment
C&C TRUCKS Corporation Wuhu Yin Tongyao construction RMB 400,000 45.00% 45.00% 1,291,161 736,023 555,138 - (32,858)
TSC Corporation Cayman Islands Jiang Binhua Energy and Oil RMB 2,000,000 14.60% 14.60% 1,787,008 719,813 1,067,195 938,782 50,916
XMHJ Corporation Xiamen Li Qiang Container RMB 10,000 49.00% 49.00% 10,113 113 10,000 - -
SJKJ Corporation Jiangmen Zheng Xiande Leasing RMB 3,000 30.00% 30.00% 26,945 9,945 17,000 798 (3,402)
Vostok Raffles Corporation Russia Not applicable Offshore USD 10,000,000 25.00% 25.00% 286,521 6,880 279,641 - (21,307)
Joint Stock engineering
Company Construction
Cconsafa MSV AB CompanyCorporation Sweden Not applicable Investment SEK 1,000,000 36.00% 36.00% 583,244 542,815 40,429 - 9,367
Haiyang Blue Island Corporation China Dou Jiangrong Offshore RMB 30,000,000 30.00% 30.00% 193,139 131,353 61,786 232,510 5,297
Offshore Ltd Engineering
Construction
(a) As at 31 December 2010, the fair value of investment in TSC amounting to USD23,757,000 (RMB156,551,000).
130
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(4) There is no restriction on the ability of the Group to transfer funds to invested enterprises.
131
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. INVESTMENT PROPERTY
USD’000
Effect of the
Balance at foreign Balance at
the beginning exchange the end of
Item of the year Additions Disposals rate changes the year
Cost 14,301 1,114 (1,230) 417 14,602
1.Buildings 4,920 1,114 (1,230) 78 4,882
2.Land use rights 9,381 - - 339 9,720
Accumulated depreciation or
3,228
amortisation 320 (727) 42 2,863
1.Buildings 2,287 122 (727) 4 1,686
2.Land use rights 941 198 - 38 1,177
Carrying amounts 11,073 794 (503) 375 11,739
1.Buildings 2,633 992 (503) 74 3,196
2.Land use rights 8,440 (198) - 301 8,543
Provision of impairment - - - - -
1.Buildings - - - - -
2.Land use rights - - - - -
Carrying amounts 11,073 794 (503) 375 11,739
1.Buildings 2,633 992 (503) 74 3,196
2.land use rights 8,440 (198) - 301 8,543
RMB’000
Effect of the
Balance at foreign Balance at
the beginning exchange the end of
Item of the year Additions Disposals rate changes the year
Cost 97,646 7,518 (8,300) (641) 96,223
1.Buildings 33,595 7,518 (8,300) (641) 32,172
2.Land use rights 64,051 - - - 64,051
Accumulated depreciation or
amortisation 22,040 2,160 (4,904) (429) 18,867
1.Buildings 15,615 826 (4,904) (429) 11,108
2.Land use rights 6,425 1,334 - - 7,759
Carrying amounts 75,606 5,358 (3,396) (212) 77,356
1.Buildings 17,980 6,692 (3,396) (212) 21,064
2.Land use rights 57,626 (1,334) - - 56,292
Provision of impairment - - - - -
1.Buildings - - - - -
2.Land use rights - - - - -
Carrying amounts 75,606 5,358 (3,396) (212) 77,356
1.Buildings 17,980 6,692 (3,396) (212) 21,064
2.land use rights 57,626 (1,334) - - 56,292
The depreciation and amortisation charged for investment property in 2010 was
USD320,000 (RMB: 2,160,000). There was no provision for impairment for
investment property in 2010.
132
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. FIXED ASSETS
(1) Fixed assets by categories
USD’000
Effect of
Balance at the foreign
the exchange Balance at
beginning rate the end of
Item of the year Additions Disposals changes the year
Cost: 1,650,270 594,412 (53,314) 15,580 2,206,948
Including: Plant & buildings 761,615 103,815 (15,708) 8,263 857,985
Machinery & equipment 722,652 132,665 (24,874) 9,451 839,894
Other equipment 99,835 23,821 (5,768) (9,187) 108,701
Motor vehicles 66,168 56,235 (6,964) 514 115,953
Offshore engineering
- 197,280 - 3,671 200,951
special equipment
Dock and port - 80,596 - 2,868 83,464
Additions Charge for
for the year the year
Accumulated depreciation: 486,841 35,324 170,439 (38,472) (620) 653,512
Including: Plant & buildings 139,844 3,146 74,333 (12,467) 452 205,308
Machinery & equipment 260,964 3,187 63,473 (17,923) 726 310,427
Other equipment 49,300 2,457 18,551 (4,066) (3,439) 62,803
Motor vehicles 36,733 202 7,613 (4,016) 767 41,299
Offshore engineering
special equipment - 16,589 4,384 - 466 21,439
Dock and port - 9,743 2,085 - 408 12,236
Carrying amount 1,163,429 388,649 (14,842) 16,200 1,553,436
Including: Plant & buildings 621,771 26,336 (3,241) 7,811 652,677
Machinery & equipment 461,688 66,005 (6,951) 8,725 529,467
Other equipment 50,535 2,813 (1,702) (5,748) 45,898
Motor vehicles 29,435 48,420 (2,948) (253) 74,654
Offshore engineering
- - 3,205 179,512
special equipment 176,307
Dock and port - 68,768 - 2,460 71,228
Provision for impairment 36,480 2,624 (3,114) (1,055) 34,935
Including: Plant & buildings 23,852 2 (12) (1,125) 22,717
Machinery & equipment 12,439 206 (2,474) 4 10,175
Other equipment 165 7 (78) (7) 87
Motor vehicles 24 - - - 24
Offshore engineering
- 2,409 (550) 73 1,932
special equipment
Dock and port - - - - -
Carrying amount 1,126,949 386,025 (11,728) 17,255 1,518,501
Including: Plant & buildings 597,919 26,334 (3,229) 8,936 629,960
Machinery & equipment 449,249 65,799 (4,477) 8,721 519,292
Other equipment 50,370 2,806 (1,624) (5,741) 45,811
Motor vehicles 29,411 48,420 (2,948) (253) 74,630
Offshore engineering
special equipment - 173,898 550 3,132 177,580
Dock and port - 68,768 - 2,460 71,228
133
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(1) Fixed assets by categories (continued)
RMB’000
Effect of
the
Balance at foreign Balance
the exchange at the end
beginning rate of the
Item of the year Additions Disposals changes year
Cost: 11,268,374 4,010,132 (359,686) (375,692) 14,543,128
Including: Plant & buildings 5,200,460 700,356 (105,971) (140,981) 5,653,864
Machinery & equipment 4,934,410 894,991 (167,815) (126,937) 5,534,649
Other equipment 681,692 160,706 (38,914) (87,178) 716,306
Motor vehicles 451,812 379,390 (46,986) (20,118) 764,098
Offshore engineering
-
special equipment 1,330,948 - (6,740) 1,324,208
Dock and port - 543,741 - 6,262 550,003
Additions for Charge for
the year the year
Accumulated depreciation: 3,324,249 238,315 1,149,802 (259,540) (146,377) 4,306,449
Including: Plant & buildings 954,885 21,228 501,485 (84,107) (40,573) 1,352,918
Machinery & equipment 1,781,913 21,498 428,217 (120,914) (65,093) 2,045,621
Other equipment 336,629 16,577 125,093 (27,428) (37,018) 413,853
Motor vehicles 250,822 1,361 51,361 (27,091) (4,306) 272,147
Offshore engineering
-
special equipment 111,920 29,576 - (217) 141,279
Dock and port - 65,731 14,070 - 830 80,631
Carrying amount 7,944,125 2,622,015 (100,146) (229,315) 10,236,679
Including: Plant & buildings 4,245,575 177,643 (21,864) (100,408) 4,300,946
Machinery & equipment 3,152,497 445,276 (46,901) (61,844) 3,489,028
Other equipment 345,063 19,036 (11,486) (50,160) 302,453
Motor vehicles 200,990 326,668 (19,895) (15,812) 491,951
Offshore engineering
- 1,189,452 - (6,523) 1,182,929
special equipment
Dock and port - 463,940 - 5,432 469,372
Provision for impairment 249,092 17,703 (21,013) (15,569) 230,213
Including: Plant & buildings 162,867 16 (79) (13,105) 149,699
Machinery & equipment 84,934 1,386 (16,698) (2,572) 67,050
Other equipment 1,130 49 (526) (80) 573
Motor vehicles 161 - - (3) 158
Offshore engineering
-
special equipment 16,252 (3,710) 191 12,733
Dock and port - - - - -
Carrying amount 7,695,033 2,604,312 (79,133) (213,746) 10,006,466
Including: Plant & buildings 4,082,708 177,627 (21,785) (87,303) 4,151,247
Machinery & equipment 3,067,563 443,890 (30,203) (59,272) 3,421,978
Other equipment 343,933 18,987 (10,960) (50,080) 301,880
Motor vehicles 200,829 326,668 (19,895) (15,809) 491,793
Offshore engineering
-
special equipment 1,173,200 3,710 (6,714) 1,170,196
Dock and port - 463,940 - 5,432 469,372
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(1) Fixed assets by categories (continued)
The depreciation charged for the year of the Group was USD170,439,000 (RMB:
1,149,802,000).
Fixed assets transferred from construction in progress in 2010 was USD115,171,000
(RMB859,752,000).
As at 31 December 2010, the fixed assets of the Group restricted in ownership
amounted to USD24,450,000 (RMB161,120,000). Refer to Note V.21 for details.
In 2009, as a result of change of governmental land use plan and management
operation strategy, part of buildings and machineries of the containers segment would
be dismantled or disposed. Also, as a result of decrease in demand in the European
and American market and the corresponding poor performance in operation and
continuing downturn in property market, indication existed that some of machineries
and buildings in the Netherland belonging to the trailers segment might be impaired.
Therefore, the Group performed impairment test for these fixed assets. Based on the
result of the test, the Group made USD 27,013,000 (RMB 184,518,000) of provision
for impairment for the aforesaid fixed assets. The recoverable amount is determined
as either its fair value less costs to sell or its present value of expected future cash
flows.
If there is an active market for aforesaid fixed assets, net realisable value is the quoted
price in the active market less the estimated selling expenses according to the
management’s disposal plan. The realisable value of fixed assets, which have no
value in use and are pending for dismantling, is their fair value less the estimated
disposal expenses.
For fixed assets still in use and without an active market, the realisable value is the
present value of expected future cash flows, which is calculated based on the
discounting rate. The benchmark rate of bank loans will be adopted as the
discounting rate.
135
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(2) As at the end of 2010, the Group had no temporarily idle fixed assets.
(3) Fixed assets held under finance leases (2009: Nil)
USD’000
Accumulated
Item Cost depreciation Carrying amount
As at 31 December 2010
Special equipment for marine
(1,648) 31,010
Engineering project 32,658
Total 32,658 (1,648) 31,010
RMB’000
Accumulated
Item Cost depreciation Carrying amount
As at 31 December 2010
Special equipment for marine
220,326 (11,120) 209,206
Engineering project
Total 220,326 (11,120) 209,206
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(4) Fixed assets leased out under operating leases
Item Net book value
USD’000 RMB’000
Plant & buildings 783 5,157
Motor vehicles 786 5,182
Total 1,569 10,339
(5) Fixed assets held for sale at the year end
As at 31 December 2010, there were no fixed assets held for sale (2009: Nil).
(6) Fixed assets with pending certificates for ownership
Expected time of
getting certificate
Item Carrying amount Reasons for pending of ownership
USD’000 RMB’000
Certificate being in the September, 2011
Factory 10,532 69,400
progress
Incomplete procedure, End of 2011
Workshop 41,355 272,517 certificate being in the
progress
Put to use, certificate being June, 2011
Office building 29,266 192,855
in the progress
Lack of reporting End of 2011
Warehouse 14,213 93,663 materials, under
preparation
Dormitory and Put to use, certificate being End of 2011
5,855 38,581
Canteen in the process
Certificate being in the By the end of
Others 9,116 60,071
progress 2011
Total 110,337 727,087
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS
(1) Construction in progress
USD’000
2010 2009
Carrying Carrying
Item Cost Impairment amount Cost Impairment amount
DLZH Plant Project 2,849 - 2,849 20,496 - 20,496
Nantong CIMC Special Transportation
511 - 511 4,197 - 4,197
Equipment Third Workshop Project
TCCIMC 2nd Project - - - 1,606 - 1,606
Enric Four-column Hydraulic Press Project - - - 1,601 - 1,601
Enric Roller-type Rotary Machine and
243 - 243 1,233 - 1,233
Top-and-bottom Machine
SMIMCL Jincheng Information System - - - 773 - 773
KGR Vehicle Installation Project 520 - 520 464 - 464
Nantong Sunda Container Complete-line and
30 - 30 455 - 455
Coating-line project
Dalian Heavy Logistics Equipments Pressure
28 - 28 59 - 59
Vessels Project
Enric First Stage Project 1,316 - 1,316 6,569 - 6,569
Dalian Heavy Logistics Production Line
2,629 - 2,629 4,979 - 4,979
equipment
Group headquarters MTS Vehicle Systems - - - 3,253 - 3,253
CIMC Grand Sky Light Hotel Project 5,514 - 5,514 2,279 - 2,279
XHCIMCS Production Line and Power
2,018 - 2,018 2,217 - 2,217
Facilities Reconstruction Project
Enric Heavy Pressure Vessel Workshop 1,939 - 1,939 1,123 - 1,123
TCCIMC Inside-container Automatic Spray
- - - 1,106 - 1,106
Project
Enric Staff Apartment project - - - 1,005 - 1,005
Xinhui Wood Factory 5th and 6th Project 2,003 - 2,003 - - -
Southern Salt Square 2nd Stage Project 6,042 - 6,042 - - -
LYLY vehicle 2nd Phase Project 1,335 - 1,335 - - -
Head office residential facilities for Haigong
2,952 - 2,952
research center
YZTL Steel Structure Factory Project 1,247 - 1,247 - - -
Enric 3rd Phase Project 1,095 - 1,095 - - -
Eastern Logistic 3rd Phase Project 5,517 - 5,517
Raffles Offshore Drilling Platform
46,268 - 46,268 - - -
outfitting quay project
Raffles harbor basin project 12,573 - 12,573 - - -
Raffles Dredging Offshore Project 5,856 - 5,856 - - -
Raffles No1 and No 2 slideway project 15,065 - 15,065 - - -
Raffles sea route project 1,778 - 1,778 - - -
Raffles Longmen Crane Project 3,341 - 3,341 - - -
Raffles Plant Road Project 1,554 - 1,554 - - -
Raffles Jack-up Drilling Platform 82,180 - 82,180 - - -
Others 51,221 - 51,221 30,541 - 30,541
Total 257,624 - 257,624 83,956 - 83,956
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS (CONTINUED)
(1) Construction in progress (continued)
RMB’000
2010 2009
Carrying Carrying
Item Cost Impairment amount Cost Impairment amount
DLZH Plant Project 18,774 - 18,774 139,952 - 139,952
Nantong CIMC Special Transportation
3,367 - 3,367 28,657 - 28,657
Equipment Third Workshop Project
TCCIMC 2nd Project - - - 10,963 - 10,963
Enric Four-column Hydraulic Press Project - - - 10,935 - 10,935
Enric Roller-type Rotary Machine and
1,601 - 1,601 8,423 - 8,423
Top-and-bottom Machine
SMIMCL Jincheng Information System - - - 5,278 - 5,278
KGR Vehicle Installation Project 3,427 - 3,427 3,169 - 3,169
Nantong Sunda Container Complete-line
198 - 198 3,103 - 3,103
and Coating-line project
Dalian Heavy Logistics Equipments
185 - 185 406 - 406
Pressure Vessels Project
Enric First Stage Project 8,672 - 8,672 44,853 - 44,853
Dalian Heavy Logistics Production Line
17,324 - 17,324 33,996 - 33,996
equipment
Group headquarters MTS Vehicle Systems - - - 22,210 - 22,210
CIMC Grand Sky Light Hotel Project 36,337 - 36,337 15,559 - 15,559
XHCIMCS Production Line and Power
13,298 - 13,298 15,141 - 15,141
Facilities Reconstruction Project
Enric Heavy Pressure Vessel Workshop 12,777 - 12,777 7,667 - 7,667
TCCIMC Inside-container Automatic Spray
- - - 7,550 - 7,550
Project
Enric Staff Apartment project - - - 6,864 - 6,864
Xinhui Wood Factory 5th and 6th Project 13,200 - 13,200 - - -
Southern Salt Square 2nd Stage Project 39,815 - 39,815 - - -
LYLY vehicle 2nd Phase Project 8,800 - 8,800 - - -
Head office residential facilities for Haigong
19,453 - 19,453 - - -
research center
YZTL Steel Structure Factory Project 8,218 - 8,218 - - -
Enric 3rd Phase Project 7,213 - 7,213 - - -
Eastern Logistic 3rd Phase Project 36,355 - 36,355 - - -
Raffles Offshore Drilling Platform
304,892 - 304,892 - - -
outfitting quay project
Raffles harbor basin project 82,851 - 82,851 - - -
Raffles Dredging Offshore Project 38,588 - 38,588
Raffles No1 and No 2 slideway project 99,275 - 99,275
Raffles sea route project 11,718 - 11,718
Raffles Longmen Crane Project 22,018 - 22,018
Raffles Plant Road Project 10,243 - 10,243
Raffles Jack-up Drilling Platform 541,542 - 541,542
Others 337,523 - 337,523 208,543 - 208,543
Total 1,697,664 - 1,697,664 573,269 - 573,269
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS (CONTINUED)
(1) Construction in progress (continued)
The carrying amounts of construction in progress at the end of the year included
capitalised borrowing cost of USD2,655,000, equivalent to RMB 17,912,000 (2009:
USD1,381,000, equivalent to RMB9,427,000). The interest rate adopted for
determining capitalised at borrowing cost for the current year was 5.09% (2009:
4.72%).
As at 31 December 2010, the construction in progress of the Group with restrictions
in ownership amounted to USD 5,514,000, equivalent to RMB 36,337,000. Refer to
Note V.21 for details. (2009: Nil).
(2) Provision for impairment
There was no provision for impairment for work in progress in 2010 (2009: Nil).
140
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS (CONTINUED)
(3) The Group’s major construction projects in progress were set out as follows:
USD’000
Balance at Effect of the
the Percentage of Accumulated Including current foreign Balance at
beginning of Transfer to Other current input capitalized year capitalized Capitalized rate Sources of exchange rate the end of the
Project Budget the year Additions fixed assets deduction over budget (%) Progress borrowing cost borrowing cost (%) funds changes year
DLZH Plant Project 25,000 20,496 144 (17,791) - 82.56% 82.56% 770 - 4.78% Bank Loan - 2,849
Nantong CIMC Special Transportation
5,202 4,197 1,939 (5,625) - 117.90% 95.00% - - - Self-funding - 511
Equipment Third Workshop Project
TCCIMC 2nd stage project 1,606 1,606 - (1,606) - 100.00% 100.00% - - - Self-funding - -
Enric Four-column Hydraulic Press Project 2,136 1,601 - (1,601) - 74.96% 100.00% - - - Self-funding - -
Enric Roller-type Rotary Machine and
1,514 1,233 - (1,011) - 81.49% 81.49% - - - Self-funding 21 243
Top-and-bottom Machine
Enric First Stage Project 7,608 6,569 188 (5,550) - 88.81% 88.81% - - - Self-funding 109 1,316
Dalian Heavy Logistics Production Line
21,000 4,979 - (2,350) - 23.71% 23.71% - - - Self-funding - 2,629
Equipment
Group headquarters MTS Vehicle Systems 3,647 3,253 - (3,253) - 89.19% 100.00% - - - Self-funding - -
CIMC Grand Sky Light Hotel Project 12,595 2,279 3,016 - - 42.54% 42.54% 64 64 4.96% Bank Loan 155 5,514
XHCIMCS Production Line and Power
2,900 2,217 - (199) - 76.46% 76.46% - - - Self-funding - 2,018
Facilities Reconstructions Project
Enric Heavy Pressure Vessel Workshop 3,745 1,123 758 - - 50.58% 50.58% - - - Self-funding 58 1,939
TCCIMC Inside-container Automatic Spray
1,391 1,106 - (1,106) - 79.47% 100.00% - - - Self-funding - -
Project
Enric Staff Apartment Project 1,005 1,005 - (1,005) - 100.00% 100.00% - - - Self-funding - -
Southern Salt Square Project 9,860 - 5,902 - - 59.85% 59.85% - - - Self-funding 140 6,042
LYLY Vehicle 2nd Phase Project 2,908 - 1,304 - - 44.85% 44.85% - - - Self-funding 31 1,335
Head Office residential facilities for Haigong
Self-funding
research center 3,000 - 2,952 - - 98.40% 98.40% - - - - 2,952
YZTL Steel Structure Factory Project 2,276 - 1,218 - - 53.51% 53.51% - - - Self-funding 29 1,247
Enric 3rd Phase Project 4,269 - 1,069 - - 25.64% 25.64% - - - Self-funding 26 1,095
Eastern Logistic 3rd Phase Project 28,000 - 5,517 - - 19.70% 19.70% - - - Self-funding - 5,517
XHW 5th and 6th Stage Project 4,866 - 1,957 - - 40.21% 40.21% - - - Self-funding 46 2,003
Raffles Offshore Drilling Platform outfitting
Bank Loan
quay project 57,062 - 44,486 - - 77.96% 77.96% 1,782 1,782 5.74% - 46,268
Raffles harbor basin project 24,288 - 12,573 - - 51.77% 51.77% - - - Self-funding - 12,573
Raffles Dredging Offshore Project 9,479 - 5,856 - - 61.78% 61.78% - - - Self-funding - 5,856
Raffles No.1 and No.2 Slideway Project 17,761 - 15,065 - - 84.82% 84.82% - - - Self-funding - 15,065
Raffles Sea Route Project 10,930 - 1,778 - - 16.27% 16.27% - - - Self-funding - 1,778
Raffles Longmen Crane Project 4,858 - 3,551 (210) - 73.11% 73.11% - - - Self-funding - 3,341
Raffles Plant Road Project 1,670 - 1,554 - - 93.09% 93.09% - - - Self-funding - 1,554
Raffles Jack-up Drilling Platform 180,000 - 82,180 - - 45.66% 45.66% - - - Self-funding - 82,180
Total 450,576 51,664 193,007 (41,307) - 2,616 1,846 - 615 205,825
141
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS (CONTINUED)
(3) The Group’s major construction projects in progress were set out as follows:
RMB’000
Including: Effect of the
Balance at the Percentage of Accumulated current year foreign
beginning of Additions Transfer to Other current input capitalised capitalised Capitalised Sources of exchange rate Balance at the
Project Budget the year fixed assets deduction over budget(%) Progress borrowing cost borrowing cost rate(%) funds changes end of the year
DLZH Plant Project 170,705 139,952 971 (120,032) - 82.56% 82.56% 5,196 - 4.78% Bank Loan (2,117) 18,774
Nantong CIMC Special Transportation Equipment Third
Self-funding
Workshop Project 35,519 28,657 13,079 (37,946) - 117.90% 95.00% - - - (423) 3,367
TCCIMC 2nd stage project 10,832 10,963 - (10,832) - 100.00% 100.00% - - - Self-funding (131) -
Enric Four-column Hydraulic Press Project 14,588 10,935 - (10,935) - 74.96% 100.00% - - - Self-funding - -
Enric Roller-type Rotary Machine and Top-and-bottom
Self-funding
Machine 10,336 8,423 - (6,822) - 81.49% 81.49% - - - - 1,601
Enric First Stage Project 51,950 44,853 1,265 (37,446) - 88.81% 88.81% - - - Self-funding - 8,672
Dalian Heavy Logistics Production Line Equipment 143,392 33,996 - (15,849) - 23.71% 23.71% - - - Self-funding (823) 17,324
Group headquarters MTS Vehicle Systems 24,902 22,210 - (21,945) - 89.19% 100.00% - - - Self-funding (265) -
CIMC Grand Sky Light Hotel Project 86,000 15,559 20,344 - - 42.54% 42.54% 434 434 4.96% Bank Loan - 36,337
XHCIMCS Production Line and Power Facilities
- - - Self-funding
Reconstruction Project 19,802 15,141 - (1,348) - 76.46% 76.46% (495) 13,298
Enric Heavy Pressure Vessel Workshop 25,570 7,667 5,110 - - 50.58% 50.58% - - - Self-funding - 12,777
TCCIMC Inside-container Automatic Spray Project 9,500 7,550 - (7,460) - 79.47% 100.00% - - - Self-funding (90) -
Enric Staff Apartment project 6,864 6,864 - (6,864) - 100.00% 100.00% - - - Self-funding - -
Southern Salt Square Project 66,520 - 39,815 - - 59.85% 59.85% - - - Self-funding - 39,815
LYLY vehicle 2nd Phase Project 19,620 - 8,800 - - 44.85% 44.85% - - - Self-funding 8,800
Head office residential facilities for Haigong research center 19,769 - 19,916 - - 98.40% 98.40% - - - Self-funding (463) 19,453
YZTL Steel Structure Factory Project 15,000 - 8,218 - - 53.51% 53.51% - - - Self-funding - 8,218
Enric 3rd Phase Project 28,132 - 7,213 - - 25.64% 25.64% - - - Self-funding - 7,213
Eastern Logistic 3rd Phase Project 184,512 - 37,220 - - 19.70% 19.70% - - - Self-funding (865) 36,355
XHW 5th and 6th stage Factrory 32,831 - 13,200 - - 40.21% 40.21% - - - Self-funding - 13,200
Raffles Offshore Drilling Platform
Bank Loan
outfitting quay project 384,966 - 300,126 - - 77.96% 77.96% 12,021 12,021 5.47% (7,255) 304,892
Raffles harbor basin project 163,859 - 84,823 - - 51.77% 51.77% - - - Self-funding (1,972) 82,851
Raffles Dredging Offshore Project 63,951 - 39,506 - - 61.78% 61.78% - - - Self-funding (918) 38,588
Raffles No1 and No 2 slideway project 119,822 - 101,637 - - 84.82% 84.82% - - - Self-funding (2,362) 99,275
Raffles sea route project 73,737 - 11,997 - - 16.27% 16.27% - - - Self-funding (279) 11,718
Raffles Longmen Crane Project 32,772 - 23,960 (1,418) - 73.11% 73.11% - - - Self-funding (524) 22,018
Raffles Plant Road Project 11,265 - 10,486 - - 93.09% 93.09% - - - Self-funding (243) 10,243
Raffles Jack-up Drilling Platform 1,214,370 554,428 45.66% Self-funding 541,542
45.66% - - - (12,886)
Total 3,041,086 352,770 1,302,114 (278,897) - 17,651 12,455 - (32,111) 1,356,331
B．
142
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. INTANGIBLE ASSETS
(1) Intangible assets by categories
USD’000
Effect of the
Balance at foreign Balance at
the beginning exchange the end of
Item of the year Additions Disposals rate changes the year
Cost 514,115 118,634 (2,432) 5,770 636,087
Land use rights 351,448 81,468 (2,423) 5,271 435,764
Technical know-how and
98,844
trademarks 23,738 (9) 972 123,545
Timber concession rights 36,052 - - (88) 35,964
Customer relationships 16,794 - - (293) 16,501
Customer contracts 10,977 9,526 - (233) 20,270
Maritime use rights 3,902 - 141 4,043
Accumulated amortisation 91,428 41,150 (165) (659) 131,754
Land use rights 32,623 7,557 (158) 382 40,404
Technical know-how and
30,610
trademarks 23,469 (7) 1,589 55,661
Timber concession rights 13,841 712 - (72) 14,481
Customer relationships 6,177 2,442 - (1,207) 7,412
Customer contracts 8,177 6,229 - (1,377) 13,029
Maritime space use rights 741 - 26 767
Carrying amount 422,687 77,484 (2,267) 6,429 504,333
Land use rights 318,825 73,911 (2,265) 4,889 395,360
Technical know-how and
68,234
trademarks 269 (2) (617) 67,884
Timber concession rights 22,211 (712) - (16) 21,483
Customer relationships 10,617 (2,442) - 914 9,089
Customer contracts 2,800 3,297 - 1,144 7,241
Maritime space use rights 3,161 - 115 3,276
Provision for impairment 15,899 - - 10 15,909
Land use rights - - - - -
Technical know-how and
-
trademarks - - - -
Timber concession rights 15,899 - - 10 15,909
Customer relationships - - - - -
Customer contracts - - - - -
Maritime space use rights - - - -
Carrying amount 406,788 77,484 (2,267) 6,419 488,424
Land use rights 318,825 73,911 (2,265) 4,889 395,360
Technical know-how and
68,234
trademarks 269 (2) (617) 67,884
Timber concession rights 6,312 (712) - (26) 5,574
Customer relationships 10,617 (2,442) - 914 9,089
Customer contracts 2,800 3,297 - 1,144 7,241
Maritime space use rights - 3,161 - 115 3,276
143
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. INTANGIBLE ASSETS (CONTINUED)
(1) Intangible assets by categories (continued)
RMB’000
Effect of the
Balance at foreign Balance at
the beginning exchange the end of
Item of the year Additions Disposals rate changes the year
Cost 3,510,468 800,365 (16,408) (102,800) 4,191,625
Land use rights 2,399,754 549,623 (16,344) (61,479) 2,871,554
Technical know-how and
674,926
trademarks 160,150 (64) (20,884) 814,128
Timber concession rights 246,167 - - (9,175) 236,992
Customer relationships 114,676 - - (5,940) 108,736
Customer contracts 74,945 64,269 - (5,641) 133,573
Maritime use rights 26,323 - 319 26,642
Accumulated amortisation 624,283 277,672 (1,113) (32,622) 868,220
Land use rights 222,751 50,984 (1,066) (6,419) 266,250
Technical know-how and
209,015
trademarks 158,380 (47) (558) 366,790
Timber concession rights 94,509 4,803 - (3,887) 95,425
Customer relationships 42,176 16,476 - (9,809) 48,843
Customer contracts 55,832 42,027 - (12,002) 85,857
Maritime space use rights 5,002 - 53 5,055
Carrying amount 2,886,185 522,693 (15,295) (70,178) 3,323,405
Land use rights 2,177,003 498,639 (15,278) (55,060) 2,605,304
Technical know-how and
465,911
trademarks 1,770 (17) (20,326) 447,338
Timber concession rights 151,658 (4,803) - (5,288) 141,567
Customer relationships 72,500 (16,476) - 3,869 59,893
Customer contracts 19,113 22,242 - 6,361 47,716
Maritime space use rights 21,321 - 266 21,587
Provision for impairment 108,559 - - (3,725) 104,834
Land use rights - - - - -
Technical know-how and
-
trademarks - - - -
Timber concession rights 108,559 - - (3,725) 104,834
Customer relationships - - - - -
Customer contracts - - - - -
Maritime space use rights - - - -
Carrying amount 2,777,626 522,693 (15,295) (66,453) 3,218,571
Land use rights 2,177,003 498,639 (15,278) (55,060) 2,605,304
Technical know-how and
465,911
trademarks 1,770 (17) (20,326) 447,338
Timber concession rights 43,099 (4,803) - (1,563) 36,733
Customer relationships 72,500 (16,476) - 3,869 59,893
Customer contracts 19,113 22,242 - 6,361 47,716
Maritime space use rights - 21,321 - 266 21,587
144
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. INTANGIBLE ASSETS (CONTINUED)
(1) Intangible assets by categories (continued)
The amortisation charged for the year of the Group was USD 31,054,000 (RMB:
209,506,000).
As at 31 December 2010, the cost of the Group’s intangible assets with certificates of
ownership to be obtained amounted to USD 6,327,000 (RMB41,694,000). The
relevant procedures were under progress and expected to be completed at the end of
2011.
As at 31 December 2010, the Group had intangible assets with restriction in
ownership amounted to USD 23,765,000 (RMB 156,607,000). (2009: USD2,929,000,
RMB20,000,000).
The Group consolidated Raffles (Refer to Note IV.6 (1) for details) in 2010. The
intangible assets of Raffles were stated at assessed fair value in the consolidated
financial statement. The intangible assets whose value was over USD 1 million were
listed below:
Initial costs Assessment method
RMB
Amount equivalent
USD’000 RMB’000
- Land and Maritime use rights 48,889 329,830 Market approach
- Customer relationships 9,526 64,269 Discounted cash flow method
- Software using right 11,456 77,286 Discounted cash flow method
69,871 471,385
The intangible assets assessment institute for Raffles is Deloitte & Touche Financial
Advisory Services Limited.
The timber concession right amounting to USD18,574,000, in respect of the 450,000
acres in Suriname was acquired by Topco Forestry N.V, a wholly owned subsidiary
of Gold Terrain Assets Limited, a subsidiary of the Group Since around 75,000 acres
of the forest in the above timber concession rights were located in a nature reservation
zone, the government of Suriname took back the timber concession rights in 2003.
The Group had negotiated with the Suriname government for a plan to substitute the
original 75,000 acres with other forest locations. Since there were no clear results of
the negotiation, a full provision for impairment of USD2,116,000 was made to this
part of timber concession rights.
145
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. INTANGIBLE ASSETS (CONTINUED)
(1) Intangible assets by categories (continued)
In 1998, Silveroad Wood Products Limited, a wholly owned subsidiary of Gold
Terrain Assets Limited purchased 315,460 acres of timber concession rights in
Cambodia amounting to USD17,501,000. The government of Cambodia has
suspended all timber concession rights in its region, including those of the Group
since 2001. In view of this, full provision for impairment amounting to
USD13,783,000 was made on the carrying value of the above timber concession
rights.
As at 31 December 2010, there were no intangible assets with indefinite useful lives.
17. GOODWILL
USD’000
Effect of
Balance at the foreign
the exchange Balance at Provision
Name of investee or beginning rate the end of for
goodwill items Note of the year Additions Deduction changes the year impairment
Enric (1)a 92,114 - - - 92,114 -
TGE SA (1)b 28,557 - - (1,128) 27,429 -
IV.6(
LCRO 2) 1,170 - - 1,170 -
Others 56,026 - (28) 625 56,623 1,757
Total 176,697 1,170 (28) (503) 177,336 1,757
RMB’000
Effect of
Balance at the foreign
the exchange Balance at Provision
Name of investee or beginning rate the end of for
goodwill items Note of the year Additions Deduction changes the year impairment
Enric (1)a 628,973 - - (21,969) 607,004 -
TGE SA (1)b 194,993 - - (14,244) 180,749 -
IV.6
LCRO (2) 7,710 - - 7,710 -
Others 382,556 - (189) (9,236) 373,131 11,578
Total 1,206,522 7,710 (189) (45,449) 1,168,594 11,578
146
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
17. GOODWILL
(1) Impairment test for asset group including goodwill
The Group’s allocation of goodwill to asset group according to operation segments or
business segments is as follows:
USD’000
2010 2009
Container Industry 19,352 19,352
Trailers 11,799 11,799
Tank equipments industry 127,690 128,873
Asset groups with insignificant allocation
percentage of goodwill 18,495 16,673
Total 177,336 176,697
RMB’000
2010 2009
Container Industry 127,524 132,139
Trailers 77,752 80,566
Tank equipments industry 841,439 879,971
Asset groups with insignificant allocation
121,879 113,846
percentage of goodwill
Total 1,168,594 1,206,522
(a) Goodwill attributable to Enric
The Group paid USD144,291,628 (RMB1,094,076,842) as acquisition cost for
acquiring 41.55% equity interest in Enric in 2007. The excess of acquisition
cost over the Group’s interest in the fair value of Enric’s identifiable assets
and liabilities, amounted to USD92,113,833 (RMB701,034,168), was
recognised as goodwill attributable to Enric.
The recoverable amount of Enric is determined based on the present value of
expected future cash flows. The present value of expected future cash flows
was calculated based on the most recent ten-year financial budgets approved
by management of the Group and a discounting rate of 6.4%. The cash flows
beyond the ten-year budget period was assumed to keep stable. There was
no impairment considered necessary for the goodwill based on the
calculations. As key assumptions on which management has made the future
cash projections are subject to change, management believes that any adverse
change in the key assumptions would cause the carrying amount exceeding its
recoverable amount.
The calculation of present value of expected future cash flows of Enric was
based on key assumptions of 19% of gross profit ratio and 10% of operating
sales growth, which was determined by management on the basis of past
performance before the budget period.
147
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
17. GOODWILL (CONTINUED)
(b) Goodwill attributable to TGE SA
The Group paid USD35,605,021 (RMB243,096,841) as acquisition cost for
the 60% equity interests in TGE SA in 2008. The excess of acquisition cost
over the Group’s interest in the fair value of TGE SA’s identifiable assets and
liabilities, amounting to USD13,188,894 (RMB90,048,493), was recognised
as good will attributable to TGE SA. The goodwill together with which
arose from TGE SA restructuring, amounting to USD15,197,477
(RMB103,759,294), are USD28,386,371 (RMB193,807,787).
The recoverable amount of TGE SA is determined based on the present value
of expected future cash flows. The present value of expected future cash flows
was calculated based on the most recent ten-year financial budgets approved
by management of the Group and a discounting rate of 6.4%. The cash flows
beyond the ten-year budget period was assumed to keep stable. There was no
impairment considered necessary for the goodwill based on the calculations.
As key assumptions on which management has made the future cash
projections are subject to change, management believes that any adverse
change in the key assumptions would cause the carrying amount exceeding its
recoverable amount.
The calculation of present value of expected future cash flows of TGE SA was
based on key assumptions of 9% of gross profit ratio and 5% of operating
sales growth, which was determined by management on the basis of past
performance before the budget period.
148
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18. LONG-TERM DEFERRED EXPENSES
USD’000
Effect of
the foreign
Balance at the exchange Balance at Reasons
beginning of Other rate the end of for other
Item the year Additions Amortisation deduction changes the year deduction
Water and
electricity
capacity
enlargement
expenses 474 104 (404) - 5 179 None
Rental 1,167 536 (807) - 21 917 None
Others 2,828 2,455 (2,207) - 74 3,150 None
Total 4,469 3,095 (3,418) - 100 4,246 None
RMB’000
Effect of
the foreign
Balance at the exchange Balance at Reasons
beginning of Other rate the end of for other
Item the year Additions Amortisation deduction changes the year deduction
Water and
electricity
capacity
enlargement
expenses 3,234 705 (2,723) - (38) 1,178 None
Rental 7,965 3,614 (5,446) - (95) 6,038 None
Others 19,314 16,564 (14,890) - (226) 20,762 None
Total 30,513 20,883 (23,059) - (359) 27,978 None
149
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES
(1) Deferred tax assets or liabilities after offsetting and corresponding deductable or
taxable timing differences
USD’000
Deductible/(taxa Deferred tax Deductible/(tax Deferred tax
ble) temporary assets/(liabilitie able) temporary assets/(liabilitie
Item difference 2010 s) 2010 difference 2009 s) 2009
Deferred tax assets:
Provisions for impairment 96,296 20,323 92,808 20,430
Provisions 68,749 13,911 55,913 12,626
Employee benefits payable 134,444 30,109 70,927 15,080
Accrued expenses 43,851 7,042 17,562 4,373
Tax losses carry-forward 135,878 23,273 39,059 9,164
Movement for fair value of financial
assets held for trading/hedging
instruments 20,864 5,008 21,171 4,667
Others 10,117 3,229 2,025 483
Subtotal 510,199 102,895 299,465 66,823
Offsetting amount (123,057) (28,620) (59,954) (13,230)
Net amount after offsetting 387,142 74,275 239,511 53,593
Deferred tax liabilities:
Movement for fair value of financial
assets held for trading/hedging
instruments (11,734) (2,435) (323) (64)
Available-for-sale financial assets (105,478) (25,184) (145,906) (32,099)
Movement for fair value of hedging
instrument (2,053) (565) (3,164) (693)
Revaluation gain through combination (150,349) (41,891) (163,713) (45,401)
Estimated dividend income earned for
non-resident foreign enterprises (377,864) (28,410) (206,080) (12,966)
Others (94,168) (17,068) (4,753) (1,197)
Subtotal (741,646) (115,553) (523,939) (92,420)
Offsetting amount 123,057 28,620 59,954 13,230
Net amount after offsetting (618,589) (86,933) (463,985) (79,190)
150
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
(1) Deferred tax assets or liabilities after offsetting and corresponding deductable or
taxable timing differences (continued)
RMB’000
Deductible/(tax Deferred tax Deductible/(tax Deferred tax
able) temporary assets/(liabilitie able) temporary assets/(liabilitie
Item difference 2010 s) 2010 difference 2009 s) 2009
Deferred tax assets:
Provisions for impairment 634,562 133,922 633,710 139,500
Provisions 453,035 91,669 381,782 86,214
Employee benefits payable 885,946 198,409 484,302 102,969
Accrued expenses 288,965 46,405 119.917 29,860
Tax losses carry-forward 895,395 153,362 266,702 62,575
Movement for fair value of financial
assets held for trading/hedging
instruments 137,488 33,001 144,561 31,865
Others 66,668 21,285 14,192 3,297
Subtotal 3,362,059 678,053 2,045,166 456,280
Offsetting amount (810,909) (188,597) (409,734) (90,334)
Net amount after offsetting 2,551,150 489,456 1,635,432 365,946
Deferred tax liabilities:
Movement for fair value of financial
assets held for trading/hedging
instruments (77,324) (16,046) (2,207) (435)
Available-for-sale financial assets (723,531) (172,414) (996,275) (219,680)
Movement for fair value of hedging
instrument (14,070) (3,858) (21,565) (4,108)
Revaluation gain through combination (990,755) (276,049) (1,117,866) (309,938)
Estimated dividend income earned for
non-resident foreign enterprises (2,490,010) (187,213) (1,407,153) (88,534)
Others (591,535) (105,883) (32,849) (8,361)
Subtotal (4,887,225) (761,463) (3,577,915) (631,056)
Offsetting amount 810,909 188,597 409,734 90,334
Net amount after offsetting (4,076,316) (572,866) (3,168,181) (540,722)
151
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
(2) Unrecognised deferred tax assets
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Tax losses carry-forward 54,886 361,682 60,679 414,326
Impairment losses of timber
Concession rights 8,463 55,769 8,463 57,787
Others 25,914 170,765 11,693 79,845
Total 89,263 588,216 80,835 551,958
(3) Expiry dates of tax credit for unrecognised deferred tax assets are as follows:
Year 2010 2009 Note
USD’000 RMB’000 USD’000 RMB’000
2010 - - 1,406 9,599
2011 13,524 89,119 11,110 75,860
2012 6,446 42,477 22,273 152,086
2013 34,212 225,447 63,113 430,946
2014 43,944 289,578 131,575 898,422
2015 79,798 525,845 - -
More than 5 years 59,605 392,779 53,265 363,709 Note 1
Total 237,529 1,565,245 282,742 1,930,622
At 31 December 2010, the Group had no unrecognised deferred tax liabilities.
Note 1: By the end of 2009 and 2010, unrecognised deferred tax assets aged over 5
years (inclusive) arising from deductible tax losses resulted from foreign
subsidiaries’ operating losses. Deductible tax losses generated from Hong
Kong, the United States of America, the United Kingdom of Great Britain
and Australia can be offset with future profit indefinitely; deductible tax
losses generated from the Netherlands can be offset in the subsequent nine
years.
152
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
20. PROVISIONS FOR IMPAIRMENT
Effect of
Note Balance at foreign Balance at
at the beginning Charge for Decrease exchange the end
of the year the year during the year rate changes of the year
Item USD’000 USD’000 Reversal Write off USD’000 USD’000
USD’000 USD’000
Receivables V.4-6,8,11 53,906 42,650 (10,571) (16,811) 1,920 71,094
Inventories V.7 103,231 14,381 (5,842) (89,498) 466 22,738
Long-term equity
investment V.12 465 - - - - 465
Fixed assets V.14 36,480 2,624 - (3,114) (1,055) 34,935
Intangible assets V.16 15,899 - - - 10 15,909
Goodwill V.17 1,757 - - - - 1,757
Total 211,738 59,655 (16,413) (109,423) 1,341 146,898
Effect of
Balance at foreign Balance at
the beginning Charge for Decrease exchange the end
Note of the year the year during the year rate changes of the year
Item RMB’000 RMB’000 Reversal Write off RMB’000 RMB’000
RMB’000 RMB’000
Receivables V.4-6,8,11 368,071 287,958 (71,326) (113,412) (2,811) 468,488
Inventories V.7 704,880 97,022 (39,412) (603,799) (8,853) 149,838
Long-term equity
investment V.12 3,175 - - - (110) 3,065
Fixed assets V.14 249,092 17,703 - (21,013) (15,569) 230,213
Intangible assets V.16 108,559 - - - (3,725) 104,834
Goodwill V.17 11,997 - - - (419) 11,578
Total 1,445,782 402,683 (110,738) (738,224) (31,487) 968,016
Please refer to the respective notes of the assets for reasons of the provisions.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
21. RESTRICTED ASSETS
As at 31 December 2010, the Group’s assets with restrictions in their ownership are
as follows:
Effect of
Balance at Decrease foreign Balance at
the beginning Additions during exchange the end
Item Note of the year for the year the year rate changes of the year
USD’000 USD’000 USD’000 USD’000 USD’000
Assets guaranteed
- Cash at bank
and on hand V.1 127,807 140,908 (141,987) 3,518 130,246
- Accounts
receivable V.4 3,221 146,000 (3,221) - 146,000
- Fixed assets V.14 6,798 19,616 (2,142) 178 24,450
- Construction
in progress V.15 - 5,386 - 128 5,514
- Intangible assets V.16 2,929 23,765 (2,929) - 23,765
Total 140,755 335,675 (150,279) 3,824 329,975
Effect of
Balance at Decrease foreign Balance at
the beginning Additions during exchange the end
Item Note of the year for the year the year rate changes of the year
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Assets guaranteed
- Cash at bank
and on hand V.1 872,692 950,635 (957,917) (7,129) 858,281
- Accounts
receivable V.4 21,990 984,989 (21,727) (23,156) 962,096
- Fixed assets V.14 46,415 132,340 (14,450) (3,185) 161,120
- Construction
in progress V.15 - 36,337 - - 36,337
- Intangible assets V.16 20,000 160,333 (19,761) (3,965) 156,607
Total 961,097 2,264,634 (1,013,855) (37,435) 2,174,441
The above fixed assets, construction in progress and intangible assets were secured
for bank loans. Accounts receivable was pledged for borrowings. Refer to Note V.22
and Note V.34 for short-term and long-term secured loans analysis.
154
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
22. SHORT-TERM LOANS
(1) Short-term loans by categories:
Item Note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Guarantee loans (a)
- RMB 582,125 3,836,026 78,893 538,700
- USD 68,360 450,471 5,500 37,555
- JPY 1,521 10,021 - -
- GBP 5,819 38,343 - -
- EUR 11,586 76,351 - -
- SGD 715 4,710 - -
Subtotal 670,126 4,415,922 84,393 576,255
Secured loans (b)
- RMB - - 1,977 13,500
- USD 13,100 86,325 14,900 101,740
- EUR 2,632 17,346 - -
- SGD 95 624 - -
Subtotal 15,827 104,295 16,877 115,240
Pledge loans (c)
- USD 146,000 962,096 3,221 21,990
Subtotal 146,000 962,096 3,221 21,990
Loans on credit
- RMB 101,996 672,125 185,158 1,264,301
- USD 233,204 1,536,746 203,822 1,391,735
- EUR 29,477 194,247 88,930 607,232
- HKD 64,324 423,878 - -
- AUD - - 148 1,007
Subtotal 429,001 2,826,996 478,058 3,264,275
Other loans (d)
- RMB - - 26,320 179,717
Subtotal - - 26,320 179,717
Total 1,260,954 8,309,309 608,869 4,157,477
(a) As at 31 December 2010, guarantee loans of the Group included bank loans
amounting to USD 16,072,000 guaranteed by the Company for its
subsidiaries, USD 84,426,000 guaranteed by HI for its subsidiaries, USD
3,000,000 guaranteed by Enric for its subsidiaries and USD 558,539,000
guaranteed by Raffles for its subsidiaries, USD 8,089,000 guaranteed by the
minority shareholders of the Group’s subsidiaries.
(b) As at 31 December 2010, borrowings of Vangurad National Trailer
Corporation(“Vanguard”), a subsidiary of the Group, amounting to USD
13,100,000 raised from Bank of Communications Co., Ltd. New York Branch
were secured by Vanguard’s property and guaranteed by CIMC Hong Kong.
Borrowings amounting to EUR 1,971,000, equivalent to USD2,632,000,
raised from bank were secured by Enric’s property.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
22. SHORT-TERM LOANS (CONTINUED)
(1) Short-term loans by categories (continued):
(c) As at 31 December 2010, the Group’s pledge loans amounting to
USD130,000,000 and USD16,000,000 were pledged by the accounts
receivable of its subsidiaries, Raffles and YZRYL.
(d) As at 31 December 2009, the Group’s other short-term loans were obtained
from discounting bills receivable of its subsidiaries.
(e) As at 31 December 2010, the Group’s bank loan includes short-term loans of
USD50,000,000 (RMB329,485,000) and long-term loans of USD 80,000,000
(RMB 527,176,000) of Raffles, a subsidiary of the Group. The long-term
loans of USD 80,000,000 (RMB 527,176,000) were reclassified as short-term
due to Raffles’ breach of terms of the loan agreement regarding the
requirements of certain Raffles’ financial ratios.
(f) As at 31 December 2010, no amount due to shareholders who hold 5% or
more of the voting rights of the Company or related parties was included in
the above balance of short-term loans.
(2) As at 31 December 2010, the Group had no past due and un-repaid short-term
loans.
23. FINANCIAL LIABILITIES HELD FOR TRADING
Item Note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Current:
Derivative financial
liabilities
- foreign future
contracts V.2.(3) 578 3,810 58 395
Subtotal 578 3,810 58 395
Non-current:
Derivative financial
liabilities
- swap contract
for interest rateV.23.(1) 11,543 76,066 12,161 83,040
- foreign exchange
option V.23.(2) 11,871 78,226 10,486 71,601
Subtotal 23,414 154,292 22,647 154,641
Total 23,992 158,102 22,705 155,036
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23. FINANCIAL LIABILITIES HELD FOR TRADING (CONTINUED)
(1) As at 31 December 2010, the Company and subsidiaries separately had 9 and 5
unsettled interest rate swap contracts denominated in U.S. dollars. The nominal
value of these contracts amounted to USD 380,000,000. The maturity dates of these
interest rate swap contracts range from 23 May 2012 to 28 April 2017. As at 31
December 2010, the Group recognised on the foresaid contracts in their fair values of
USD11,543,000 (including USD8,896,000 of fair value recognised by the Company)
as expenses and financial liabilities held for trading. Transaction costs on realisation
have not been considered when calculating the fair values.
(2) As at 31 December 2010, the Company had 2 unsettled forward contracts
denominated in Japanese Yen. The nominal value of these contracts amounted to
Japanese Yen 4,580,000,000. Pursuant to these forward contracts, the Company is
entitled to buy U.S. dollar at an amount equivalent to contracted nominal value at
agreed rates where the market spot rates at the settlement dates are higher than the
agreed rates. These forwards contracts are not executed where the market spot rates
at the settlement dates are equal to or lower than the agreed rates. The settlement
dates of the aforesaid forwards contracts range from 30 May 2012 to 29 June 2012.
As at 31 December 2010, the Company recognised the aforesaid 2 forwards contracts
in their fair values of USD11,871,000 as expenses and financial liabilities held for
trading. Transaction costs on realisation haven not been considered when
calculating the fair values.
24. BILLS PAYABLE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Bank acceptance bills 369,523 2,435,043 175,760 1,200,122
Commercial acceptance
bills 15,718 103,580 3,803 25,969
Total 385,241 2,538,623 179,563 1,226,091
The above bills are due within one year.
No amount due to the shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of bills payable.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
25. ACCOUNTS PAYABLE
(1) The Group’s accounts payable is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Raw materials suppliers 1,383,599 9,117,500 653,504 4,462,255
As at 31 December 2010, there was no individual major accounts payable aged over
one year.
Group’s accounts payable is analysed by currencies as follows:
2010 2009
Original Exchange Original Exchange
currency rate USD RMB currency rate USD RMB
Currency ’000 ’000 ’000 ’000 ’000 ’000
RMB 5,806,328 6.5897 881,123 5,806,328 2,855,123 6.8282 418,137 2,855,123
USD 443,815 1.0000 443,815 2,924,606 213,025 1.0000 213,025 1,454,578
HKD 200,411 7.7734 25,782 169,893 103,964 7.7546 13,407 91,544
JPY 43,843 81.37 538 3,551 4,569 90.28 51 346
EUR 17,757 0.7490 23,708 156,227 6,110 0.6940 8,804 60,113
AUD 8,255 0.9828 8,399 55,350 59 1.1116 53 361
Others - - 234 1,545 - - 27 190
Total 1,383,599 9,117,500 653,504 4,462,255
(2) No amount due to shareholders who hold 5% or more of the voting rights of the
Company or related parties is included in the balance of accounts payable.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
26. ADVANCES FROM CUSTOMERS
(1) The Group’s advances from customers is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Advances for goods 123,173 811,674 74,255 507,028
Advances for construction 94,212 620,826 76,044 519,243
Advances for property 76,267 502,573 34,454 235,261
Others 99 658 1,329 9,070
Total 293,751 1,935,731 186,082 1,270,602
No amount due to shareholders who hold 5% or more of the voting rights of the
Company is included in the balance of advances from customers.
As at 31 December 2010, there was no significant advances aged over one year.
27. EMPLOYEE BENEFITS PAYABLE
Effect of
Balance at Accrued Paid foreign Balance at
the beginning during during exchange the end
Item of the year the year the year rate changes of the year
USD’000 USD’000 USD’000 USD’000 USD’000
Salaries, bonus, and
allowances 66,830 469,009 (418,064) 795 118,570
Senior management bonus 26,018 16,862 (1,987) - 40,893
Severance payment 18 225 (231) - 12
Social insurances
and others 26,261 123,278 (102,286) 494 47,747
Total 119,127 609,374 (522,568) 1,289 207,222
Effect of
Balance at Accrued Paid foreign Balance at
the beginning during during exchange the end
Item of the year the year the year rate changes of the year
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Salaries, bonus, and
allowances 456,331 3,164,166 (2,820,468) (18,686) 781,343
Senior management bonus 177,656 113,762 (13,405) (8,538) 269,475
Severance payment 123 1,517 (1,561) - 79
Social insurances
and others 179,315 831,698 (690,075) (6,303) 314,635
Total 813,425 4,111,143 (3,525,509) (33,527) 1,365,532
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
27. EMPLOYEE BENEFITS PAYABLE (CONTINUED)
As at 31 December 2010, there was no delayed payment of employee benefits.
As at 31 December 2010, aforesaid “social insurances and others” included labour
union fees and employee education fees amounting to USD4,604,000
(RMB30,341,000). There was no non-monetary benefits during the year.
Salaries, bonus and allowances payables represent salaries accrued for current month
and bonus accrued for subsidiaries in accordance with the result of annual
performance and the performance assessment plan of the Group. According to the
requirement of the performance assessment plan, annual accrued bonus would be paid
over three years based on the percentage determined by the management, therefore,
there was a balance of such accrued bonus at the end of the year.
Senior management bonus is determined on the assessment of certain key
performance index. The above bonus is proposed by Chief Executive Officer of the
Group and the payment is subject to review and approval by board chairman and vice
board chairman of the Group. The balance of senior management bonus payable
was unpaid balance accrued in prior years.
28. Taxes payable
2010 2009
USD’000 RMB’000 USD’000 RMB’000
VAT payable 10,129 66,744 21,162 144,500
Business tax payable 1,295 8,533 787 5,374
Income tax payable 89,537 590,029 53,244 363,562
Withholding tax 12,095 79,699 11,643 79,503
Others 6,700 44,150 4,405 30,072
Total 119,756 789,155 91,241 623,011
29. INTEREST PAYABLE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Interest payable for
long-term loan 473 3,120 295 2,017
Interest payable for
short-term loan 1,525 10,048 1,000 6,827
1,998 13,168 1,295 8,844
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
30. DIVIDENDS PAYABLE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Minority shareholders
of subsidiaries 2,435 16,046 4,604 31,434
31. OTHER PAYABLES
(1) The analysis of the Group’s other payables is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Quality guarantees 21,538 141,932 17,599 120,171
Deposits and mortgage
Advance received 71,228 469,371 39,988 273,041
Transportation expenses 38,923 256,492 23,808 162,566
Equipment or land
use rights 60,030 395,583 33,218 226,817
Accruals 80,820 532,578 33,586 229,330
Housing maintenance
fees 1,684 11,096 1,302 8,887
Current account with
subsidiary’s minority 37,290 245,728 13,379 91,354
Professional and
training fees 2,706 17,833 4,084 49,414
Insurances 1,517 10,000 1,490 10,174
Royalties 635 4,187 3,844 26,247
Others 46,067 303,567 43,996 278,902
Total 362,438 2,388,367 216,294 1,476,903
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
31. OTHER PAYABLES (CONTINUED)
(1) The analysis of the Group’s other payables is as follows (continued):
The analysis of the Group’s other payables by currencies is as follows:
2010 2009
Original Exchange Original Exchange
currency rate USD RMB currency rate USD RMB
Currency ’000 ’000 ’000 ’000 ’000 ’000
RMB 721,950 6.5897 109,556 721,950 905,639 6.8282 132,634 905,639
USD 170,943 1.0000 170,943 1,126,461 62,458 1.0000 62,458 426,476
HKD 254,149 7.7734 32,695 215,448 8,357 7.7546 1,078 7,359
JPY 264,082 81.37 3,245 21,387 460 90.28 5 35
EUR 27,106 0.7490 36,189 238,476 12,031 0.6940 17,336 118,375
AUD 9,582 0.9828 9,749 64,245 2,940 1.1116 2,645 18,062
Others 61 400 138 957
Total 362,438 2,388,367 216,294 1,476,903
(2) Other payables due to shareholders or related parties who hold 5% or more of the
voting rights of the Company:
USD’000
Organization name Relationship with the Group 2010 2009
Minority shareholder of
1. Gasfin Investment S.A.( “Gasfin”) subsidiary 3,157 3,177
2. Bright Touch Investment Limited (“Bright Minority shareholder of
Touch”) subsidiary 9,140 -
Minority shareholder of
3. Leung Kee Holdings Limited (“Leung Kee”) subsidiary 15,922 -
4. Yantai Shipyard Pte. Ltd. (“Yantai Minority shareholder of
Shipyard”) subsidiary 7,056 -
Total 35,275 3,177
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
31. OTHER PAYABLES (CONTINUED)
(2) Other payables due to shareholders or related parties who hold 5% or more of the
voting rights of the Company (continued):
RMB’000
Organization name Relationship with the Group 2010 2009
Minority shareholder of
1. Gasfin subsidiary 20,806 21,692
Minority shareholder of
2. Bright Touch subsidiary 60,231 -
Minority shareholder of
3. Leung Kee subsidiary 104,919 -
Minority shareholder of
4. Yantai Shipyard subsidiary 46,497 -
Total 232,453 21,692
(3) Significant other payables aged over one year:
As at 31 December 2010, significant other payables aged over one year represented
quality guarantee, vehicle mortgage guarantee and various deposits.
(4) As at 31 December 2010, there was no significant other payables.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
32. PROVISIONS
Effect of
Balance at Payment Reversal foreign Balance at
the beginning Charges during during exchange the end
of the year for the year the year the year rate changes of the year
Note USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Current
Warranties for
product quality (1) 71,945 50,557 (714) (44,420) 6,907 84,275
Guarantees for
third parties(2) 1,484 1,214 (225) (587) 7 1,893
Others 2,258 15,985 (1,470) (4,414) 47 12,406
Subtotal 75,687 67,756 (2,409) (49,421) 6,961 98,574
Not-current (3) 6,060 - - (6,048) (12) -
Total 81,747 67,756 (2,409) (55,469) 6,949 98,574
Effect of
Balance at Payment Reversal foreign Balance at
the beginning Charges during during exchange the end
of the year for the year the year the year rate changes of the year
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current
Warranties for
product quality (1) 491,246 341,085 (4,817) (299,680) 27,507 555,341
Guarantees for
third parties (2) 10,133 8,190 (1,514) (3,963) (368) 12,478
Others 15,422 107,843 (9,919) (29,778) (1,814) 81,754
Subtotal 516,801 457,118 (16,250) (333,421) 25,325 649,573
Non-current (3) 41,381 - - (40,805) (576) -
Total 558,182 457,118 (16,250) (374,226) 24,749 649,573
(1) The Group provides after-sales repair warranty to the customers, ranging from
two to seven years for containers, one year for trailers, one to seven years for
tank equipments, one to two years for airport ground facilities and one year
for offshore business after delivery of vessels. The Group will provide repair
and maintenance services in accordance with sales contracts during the
warranty period in the event of any non-accidental breakdown or quality
problems. The balance of “Provisions - Warranties for product quality”
represents the Group’s estimated obligation for such warranties.
(2) The amount represents the possible loss for a bank guarantee letter issued by
the Company’s subsidiary - Shenzhen CIMC Tianda Airport Equipment.
(3) As the performance target of TGE SA deemed in the share transfer agreement
failed to met, the Group wrote back the provision recognised in 2008 for
contingent payment at acquisition date and transferred it into non-operating
income.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
33. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR
(1) The analysis of the Group’s non-current liabilities due within one year by categories is
as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Long-term loans
Due within one year
- Credit loans 414,185 2,729,353 64,130 437,888
- Guarantee loans 2,668 17,584 2,575 17,584
Subtotal 416,853 2,746,937 66,705 455,472
Long-term payables
due within year 14,809 97,584 - -
Total 431,662 2,844,521 66,705 455,472
(2) The analysis of the Group’s non-current liabilities due within one year by categories is
as follows:
(a) The analysis of the Group’s non-current liabilities by currencies due within one
year is as follows:
Annual interest rate 2010 2009
Original Exchange Original Exchange
currency rate USD currency rate USD
’000 ’000 ’000 ’000
Bank loans
- RMB 4.01% - 4.73% 2,000,000 6.5897 303,504 42,022 6.8282 6,154
- USD LIBOR+90BP 100,000 1.0000 100,000 40,000 1.0000 40,000
- HKD HKIBOR+17BP 20,743 7.7734 2,668 70,000 7.7546 9,024
- EUR EURIBOR+65BP 8,000 0.7490 10,681 8,000 0.6940 11,527
416,853 66,705
As at 31 December 2010, there was no renewal of past due long-term included in the
balance of long-term loans due within one year.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
33. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(2) The analysis of the Group’s non-current liabilities due within one year by categories is as follows: (continued)
(b) As at 31 December 2010, the top five long-term loans due within one year are as follows:
2010 2009
Initial date of the Maturity date of the
Lender Currency Interest rate (%) Original Original
loans loans USD USD
currency currency
’000 ’000 ’000 ’000
1. The Export-Import Bank of
China 23/06/2008 23/06/2011 RMB 4.73% 1,400,000 212,453 42,000 6,151
2. China Development Bank 12/12/2007 21/12/2011 USD LIBOR +90BP 100,000 100,000 40,000 40,000
3. The Export-Import Bank of
China 23/05/2008 23/05/2011 RMB 4.01% 600,000 91,051 - -
4. The Export-Import Bank of
China 18/06/2007 18/12/2011 EUR EURIBOR +65BP 8,000 10,681 8,000 11,527
5. Bank of China (Hong Kong)
Co., Ltd. 02/03/2009 02/03/2011 HKD HKIBOR+17BP 20,743 2,668 20,000 2,575
Total —— —— —— 416,853 60,253
(3) Long-term payables due within one year
As at 31 December 2010, Long-term payables due within one year included net financial leasing payable of USD 14,809,000 (RMB
97,584,000), which is total amount of USD 16,313,000 (RMB 107,499,000) minus unrecognised financing expresses of USD 1,504,000
(RMB 9,915,000).
The Group had no financial leasing guaranteed by independent third parties.
166
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
33. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(3) Long-term payables due within one year (continued)
As at 31 December 2010, the top three of long-term payable due within one year (including all long-term payable due within one year) were
as follows:
Initial date of the Maturity date of the Ending Balance
Lender Currency Interest Rate (%)
loans loans Original Currency ’000 Equivalent USD ’000
1. China Merchant Finance 21/01/2009 19/09/2013 RMB 4.97% 96,726 14,679
leasing Ltd.
2. CIT Finance & Leasing 01/01/2009 01/07/2011 RMB 5.40% 784 119
Corporation
3.Yantai Port Group 18/08/2009 18/08/2012 RMB 5.80% 74 11
Total 97,584 14,809
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
34. LONG-TERM LOANS
(1) The analysis of the Group’s long-term loans is as follows:
Item Note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Bank loans
- Credit loans 384,654 2,534,754 815,588 5,568,996
- Guarantee
loans 117,183 772,202 5,794 39,564
- Secured loans (a) 69,828 460,146 - -
- Pledge loans (b) 22,011 145,046
Total 593,676 3,912,148 821,382 5,608,560
Long-term loans in original currencies are as follows:
Annual interest rate 2010 2009
Original Exchange Original Exchange
currency rate USD currency rate USD
’000 ’000 ’000 ’000
Bank loans
- RMB 3.51%~5.85% 1,438,770 6.5897 218,336 1,460,000 6.8282 213,819
- USD LIBOR+30~185BP 370,000 1.0000 370,000 520,000 1.0000 520,000
- HKD HKIBOR+17~33BP - 7.7704 - 545,000 7.7546 70,272
- EUR EURIBOR+65BP 4,000 0.7490 5,340 12,000 0.6940 17,291
593,676 821,382
(a) As at Dec 31, 2010, Rattles, the subsidiary of the Group borrowed USD
69,828,000 secured with its marine space using right.
(b) As at Dec 31, 2010, the subsidiaries of Raffles borrowed USD22,011,000
guaranteed by Raffles and pledged by Raffles’ equity interest in the subsidiaries
(c) No amount due to the shareholders who hold 5% or more of the voting rights of
the Company is included in the above balance of long-term loans.
168
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
34. LONG-TERM LOANS (CONTINUED)
(2) The analysis of the Group’s long-term loans is as follows: (continued)
(a) As at 31 December 2010, the top five long-term loans are as follows:
2010 2009
Initial date of the Maturity date of the
Lender Currency Interest rate (%) Original Original
loans loans USD USD
currency currency
’000 ’000 ’000 ’000
1.China Development Bank 12/12/2007 10/12/2013 USD Six-month LIBOR+90BP 270,000 270,000 370,000 370,000
2. Bank of Communications 21/07/2009 12/07/2012 RMB 5.85% 500,000 75,900 - -
Three-month
3. Bank of China
26/05/2010 21/05/2012 USD LIBOR+55BP 50,000 50,000 50,000 50,000
Six-month
4. Algemene Bank Nederland
26/05/2010 21/05/2013 USD LIBOR+185BP 50,000 50,000 100,000 100,000
5. The Export-Impart Bank of
China 18/08/2010 15/03/2012 RMB 3.51% 200,000 30,360 - -
Total —— —— —— —— 476,260 - 520,000
As at 31 December 2010, there was no renewal of past due long-term bank loans included in the above balance of long-term
loans.
169
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C． V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
35. SPECIAL PAYABLES
Effect of
Balance at Additions Settlements foreign Balance at
the beginning during during exchange the end
Item of the year the year the year rate changes of the year
USD’000 USD’000 USD’000 USD’000 USD’000
Project funds 1,997 1,215 (737) 20 2,495
Effect of
Balance at Additions Settlements foreign Balance at
the beginning during during exchange the end
Item of the year the year the year rate changes of the year
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Project funds 13,639 8,199 (4,974) (422) 16,442
36. Long-term payable
USD’000
Item Note 2010 2009
USD’000 USD’000
Financial Leasing payable (1) 18,037 -
Total 18,037 -
D． RMB’000
Item Note 2010 2009
RMB’000 RMB’000
Financial Leasing payable (1) 118,858 -
Total 118,858 -
(1) The breakdown of financial leasing payable:
‘000
Organization Name 2010 2009
USD RMB USD RMB
China Merchant Bank
Financial Leasing Co., Ltd. 18,037 118,858 - -
As at 31 December 2010, the unrecognised financing expense of the Group amounted
to USD 918,000, equivalent to RMB 6,049,000. (2009: nil)
The Group had no financial leasing guaranteed by third party in the year.
The Group had no amount due to shareholders who hold 5% or more of the voting
rights of the Company or related parties.
170
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37. OTHER NON-CURRENT LIABILITIES
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Deferred income 27,013 178,008 19,053 130,099
38. SHARE CAPITAL
The Company’s share capital status at 31 December is as follows:
Balance at the Additions Change of shares subject Balance at the
Beginning of the year during the year to selling restriction end of the year
Original Original Original Original
currency USD currency USD currency USD currency USD
RMB’000 ’000 RMB’000 ’000 RMB’000 ’000 RMB’000 ’000
Shares subject to
selling restriction
- Shares held by
overseas legal
persons - - - - - - - -
- Share held by
domestic natural
persons 620 77 - - - - 620 77
Shares not subject to
selling restriction
- RMB denominated
Ordinary shares1,231,297 152,095 - - - - 1,231,297 152,095
- Domestically listed
foreign shares 1,430,479 176,700 - - - - 1,430,479 176,700
2,662,396 328,872 - - - - 2,662,396 328,872
The face value of the aforesaid shares was RMB 1.00 per share.
171
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
39. CAPITAL RESERVE
Balance at Additions Settlements Balance at
the beginning during during the end
of the year the year the year of the year
USD’000 USD’000 USD’000 USD’000
Share premiums 21,245 - - 21,245
Other capital reserves
- Property revaluation
reserve 6,640 - - 6,640
- Exchange reserve
on foreign
currency capital 105 - - 105
- Donated non-cash
assets reserve 39 - - 39
- Net changes in fair
value of
available-for-sale
financial assets 151,904 563 (46,396) 106,071
- Effective portion of
changes in fair value
of cash flow hedges 3,164 - (1,111) 2,053
- Deferred tax effect (32,792) 7,043 - (25,749)
- Equity settled
share-based payment 3,182 8,829 - 12,011
- Capital reserves due to
minority shareholders’
contribution 11,992 - - 11,992
- Capital reserves due to
acquiring minority
shareholders’ equity 37,311 189 - 37,500
- Others 13,599 10 - 13,609
216,389 16,634 (47,507) 185,516
172
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
39. CAPITAL RESERVE (CONTINUED)
Balance at Additions Settlements Balance at
the beginning during during the end
of the year the year the year of the year
RMB’000 RMB’000 RMB’000 RMB’000
Share premiums 201,222 - - 201,222
Other capital reserves
- Property revaluation
reserve 54,979 - - 54,979
- Exchange reserve on
foreign currency
capital 866 - - 866
- Donated non-cash
assets reserve 324 - - 324
- Net changes in fair
value of
available-for-sale
financial assets 1,036,681 3,796 (313,011) 727,466
- Effective portion of
changes in fair value
of cash flow hedges 21,565 - (7,495) 14,070
- Deferred tax effect (223,788) 47,516 - (176,272)
- Equity settled
share-based
payment 22,867 59,565 - 82,432
- Capital reserves due
to minority
shareholders’
contribution 88,251 - - 88,251
- Capital reserves due to
acquiring minority
shareholders’ equity 254,804 1,274 - 256,078
- Others 99,932 72 - 100,004
1,557,703 112,223 (320,506) 1,349,420
173
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
40. Surplus reserve
USD’000
Balance at the
beginning of Additions Settlements Balance at the
Item the year during the year during the year end of the year
Statutory surplus
reserve 162,520 - - 162,520
Discretionary
surplus reserve 271,650 - - 271,650
Total 434,170 - - 434,170
RMB’000
Balance at the
beginning of Additions Settlements Balance at the
Item the year during the year during the year end of the year
Statutory surplus
reserve 1,331,198 - - 1,331,198
Discretionary
surplus reserve 2,246,390 - - 2,246,390
Total 3,577,588 - - 3,577,588
41. RETAINED EARNINGS
Appropriatio
Item Note USD’000 RMB’000 n proportion
Retained earnings brought forward 1,047,547 8,229,532 ─
Add: profit attributable to ─
shareholders of the Company 444,949 3,001,851
Less: Dividends of ordinary shares (1) (46,707) (319,488) ─
Decrease in retained earnings
resulted from acquiring minority
interest (2) (32,989) (222,560)
Retained earnings carry forward (3) 1,412,800 10,689,335 ─
(1) Dividends of ordinary shares
(a) Dividends of ordinary shares declared during the year
Pursuant to the shareholders’ approval at the shareholders’ Meeting on 26
April 2010, a cash dividend of RMB 0.12 per share (2009: RMB 0.15 per
share) totaling RMB 319,487,526.17, equivalent to USD 46,707,392.20 (2009:
RMB 399,359,407.65, equivalent to USD 58,485,063.51), was declared and
paid to the Company’s ordinary shareholders on 25 June 2010.
174
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
41. RETAINED EARNINGS (CONTINUED)
(2) Decrease from acquisition of minority interests
CIMCSD, a wholly – owned subsidiary of the Company, entered in to a restructuring
framework agreement and equity transfer agreement on 7 May 2010 and 1 November
2010 respectively with Shenzhen Eastern Skyspace Investment Development Co.,
Ltd(Eastern Tianyu) , the minority equity holder of the Company’s subsidiary
CIMC Tianyu. Pursuant to the agreements, CIMCSD acquired 33.55% equity interest
of CIMC Tianyu from Eastern Tianyu at a cash consideration of RMB 256,363,000
(USD 38,000,000) and made a capital injection of RMB 400,000,000 (USD
59,290,000) in CIMC Tianyu. After the transaction, the share of equity in interest in
CIMC Tianyu held by CIMCSD increased from 50% to 90%. Because share premium
was insufficient to be reversed, retained earnings amounting to RMB 222,560,000
(USD 32,898,000) of CIMCSD were reversed based on the excess of acquisition cost
for the additional equity interest over CIMCSD’s share of the carrying value of CIMC
Tianyu’s net assets amount for the additionally acquired equity interest.
(3) Retained earnings at the end of the year
As at 31 December 2010, the retained earnings attributable to the Company included
an appropriation of USD 86,428,000 to surplus reserve made by the subsidiaries
(2009: USD79,517,000).
175
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
42 OPERATING INCOME AND OPERATING COST
(1)
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Operating income 7,509,587 50,663,426 2,901,618 19,819,498
Other operating income 163,772 1,104,890 96,041 656,009
Operating cost 6,462,286 43,597,815 2,547,655 17,401,760
There was no individual construction contract whose revenue amounted for more than
10% of the total operating income in 2009.
(2) Operating income and operating cost (by industries and by products)
USD’000
2010 2009
Operating Operating
Industry income Operating cost income Operating cost
Containers 3,698,165 2,995,689 743,917 645,490
Trailers 2,409,470 2,078,033 1,566,276 1,367,165
Tank equipments 753,160 626,365 497,774 412,666
Offshore Engineering 354,423 477,125 - -
Air ground facilities 45,517 33,982 57,361 35,875
Others 248,852 172,229 36,290 23,925
Total 7,509,587 6,383,423 2,901,618 2,485,121
RMB’000
2010 2009
Operating Operating
Industry income Operating cost income Operating cost
Containers 24,949,668 20,210,417 5,081,327 4,409,017
Trailers 16,255,487 14,019,450 10,698,442 9,338,426
Tank equipments 5,081,191 4,225,770 3,400,048 2,818,714
Offshore Engineering 2,391,112 3,218,922 - -
Air ground facilities 307,079 229,260 391,805 321,146
Others 1,678,889 1,161,946 247,876 87,318
Total 50,663,426 43,065,765 19,819,498 16,974,621
176
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
42. OPERATING INCOME AND OPERATING COST (CONTINUED)
(3) Operating income and operating cost (by regions)
USD’000
2010 2009
Operating Operating Operating Operating
Regions income cost income cost
P.R China 7,043,822 5,967,791 2,560,863 2,155,103
America 141,722 135,975 95,129 91,066
Europe 247,640 214,161 182,678 186,378
Asia 15,759 13,746 6,323 5,483
Others 60,644 51,750 56,625 47,091
Total 7,509,587 6,383,423 2,901,618 2,485,121
RMB’000
2010 2009
Operating Operating Operating Operating
Regions income cost income cost
P.R China 47,521,140 40,261,708 17,491,965 14,720,439
America 956,129 917,356 649,778 622,023
Europe 1,670,704 1,444,836 1,247,785 1,273,053
Asia 106,315 92,736 43,191 37,450
Others 409,138 349,129 386,779 321,656
Total 50,663,426 43,065,765 19,819,498 16,974,621
The regional operating income and operating cost is determined on the location
at which the services were provided or the goods were delivered.
(4) Operating income of top five customers in 2010 is as follows:
Percentage of
total operating
Customer Operating income income (%)
USD’000 RMB’000
1. TAL International Container Corporation 679,872 4,586,757 8.86%
2. Triton Container International Ltd. 589,486 3,976,967 7.68%
3. Hamburg Südamerikanische
Dampfschifffahrts-Gesellschaft KG 245,101 1,653,576 3.19%
4. GE SeaCO Asia Pte Ltd. 207,229 1,398,072 2.70%
5. Mediterranean Shipping Co. S.A. 186,195 1,256,157 2.43%
Total
1,907,883 12,871,529 24.86%
The Group’s operating income of top five customers in 2009 totaled USD321,085,000, equivalent
to RMB2,193,170,000, accounting for 10.72% of total operating income.
177
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
43. BUSINESS TAXES AND SURCHARGES
2010 2009
Taxation basis and rate USD’000 RMB’000 USD’000 RMB’000
Business tax 3% - 5% of operating income 6,514 43,947 4,192 28,634
Urban maintenance and
construction tax 5%-7% of VAT and business tax paid 3,487
23,527 986 6,734
Education fee
and surcharges 3% of VAT and business tax paid 763 5,150 383 2,614
Land appreciation Appreciation amount in transferring
tax property and applicable tax rate 76 511 1,627 11,114
Others 557 3,757 375 2,562
11,397 76,892 7,563 51,658
44. SELLING AND DISTRIBUTION EXPENSES
Category 2010 2009
RMB RMB
Amount equivalent Amount equivalent
USD’000 RMB’000 USD’000 RMB’000
Transportation and
distribution charges 92,357 623,084 35,709 243,913
External sales commission 9,534 64,320 10,896 74,422
Employ Benefit 26,824 180,967 23,889 163,173
Warranty 6,137 41,405 2,731 18,656
Others 50,465 340,467 33,311 227,529
Total 185,317 1,250,243 106,536 727,693
45. GENERAL AND ADMINISTRATIVE EXPENSES
Category 2010 2009
RMB RMB
Amount equivalent Amount equivalent
USD’000 RMB’000 USD’000 RMB’000
Low- value consumables
and materials consumed 8,934 60,271 4,884 33,362
Rental 6,435 43,411 4,677 31,947
Depreciation 21,892 147,697 15,190 103,756
Employ Benefit 132,130 891,417 77,115 526,732
Taxes and surcharges 17,491 118,005 13,180 90,023
Agency fee 23,502 158,554 21,818 149,028
Technology
development costs 33,573 226,503 21,764 148,662
Amortisation 36,909 249,010 30,613 209,105
Performance Bonus and
president bonus 42,862 289,171 13,034 89,026
Office expenditure,
entertainment fee and others 81,573 550,325 87,028 594,433
Total 405,301 2,734,364 289,303 1,976,074
178
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
46. FINANCIAL EXPENSES
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Interest expenses from
loans and payables 70,008 472,312 27,862 190,308
Less: Borrowing
costs capitalised 1,885 12,717 1,563 10,668
Interest income from
deposits and receivables (10,240) (69,085) (12,814) (87,528)
Net exchange losses /
(gains) 33,481 225,878 2,945 20,114
Other financial expenses 7,915 53,395 2,754 18,811
Total 99,279 669,783 19,184 131,037
47. GAINS / LOSSES FROM CHANGES IN FAIR VALUE
2010 2009
Sources of gain/loss
from changes in fair value USD’000 RMB’000 USD’000 RMB’000
Financial assets held for
trading
- Changes in fair value
during the year
1.Gains from changes
in fair value of held for
trading investments 25,438 171,617 4,073 27,843
2.Gains / losses from changes
in fair value of derivative
financial instrument 13,938 94,032 (46,828) (319,566)
Subtotal 39,376 265,649 (42,755) (291,723
- Income
for derecognised
financial assets
held for trading (2,007) (13,540) (201) (1,373)
Financial liabilities held
for trading
- Changes in fair value
during the year
1.(Losses)/gains from changes
in fair value of derivative
financial instrument (2,548) (17,191) 37,292 254,407
Total 34,821 234,918 (5,664) (38,689)
179
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
48. INVESTMENT INCOME
(1) The analysis of the Group’s investment income is as follows:
Note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Long-term equity investments in cost 1,161 7,933
(2)
method 1,105 7,458
Long-term equity investments in 15,217 103,938
(3)
equity method 15,258 102,938
Loss on disposal of long-term equity IV.6 (423) (2,891)
investments (1) (21,375) (144,206)
Investment gains of held-for-trading - -
financial assets 338 2,280
Investment gains of 202 1,381
available-for-sale financial assets 2,735 18,452
Gains / (losses) on sale of 201 1,373
held-for-trading financial assets 2,007 13,540
Gains on sale of available-for-sale 213,363 1,457,378
financial assets 6,024 40,641
Others (364) 2,462 (169) (1,157)
Total 5,728 38,641 229,552 1,567,955
(2) Long-term investments in cost method with individual investment income over 5% of
total investment income or less than 5% but ranked the top five investment income
for the year are as follows:
Reasons for variances
Investee 2010 2009 between two years
USD’000 RMB’000 USD’000 RMB’000
More cash dividend
BOCM Schroder Stolt Fund was distributed during
Management 1,105 7,458 732 5,000 the year
No cash dividend
Shanghai Haifu International distribution during the
Container Transport - - 400 2,733 year
No cash dividend
distribution during the
Stolt-Nielsen Limited - - 29 200 year
Total 1,105 7,458 1,161 7,933 ─
180
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
48. INVESTMENT INCOME (CONTINUED)
(3) Long-term investments in equity method with individual investment income over 5%
of total investment income or less than 5% but ranked the top five investment income
for the year are as follows:
Reasons for variances
Investee 2010 2009 between two years
USD’000 RMB’000 USD’000 RMB’000
TJCIMCZL Changes in profit and
12,999 87,698 4,269 29,159 loss of the investee
Shanghai Fengyang Changes in profit and
2,966 20,010 5,432 37,103 loss of the investee
KYH Changes in profit and
1,289 8,696 984 6,721 loss of the investee
TSC Changes in profit and
526 3,549 - - loss of the investee
MST Changes in profit and
452 3,049 - - loss of the investee
Total 18,232 123,002 10,685 72,983 ─
Note1: Only top five investees with largest profits before income tax are listed
above.
Note2: There was no significant restriction on the remittance of investment income
to the investor.
49. IMPAIRMENT LOSSES
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Receivables 29,541 199,297 17,944 122,558
Inventories 8,539 57,610 13,030 89,005
Fixed assets 2,624 17,703 27,013 184,518
Total 40,704 274,610 57,987 396,081
181
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
50. NON-OPERATING INCOME
(1) The analysis of the Group’s non-operating income is as follows:
Amount
included in
non-operating
income /
losses for
Item 2010 2009 the year
USD’000 RMB’000 USD’000 RMB’000 ’000
Gains on disposal of
fixed assets 215 1,452 351 2,398 215
Gains on disposal of
intangible assets 195 1,315 - - 195
Compensation income 3,647 24,607 297 2,029 3,647
Penalty income 1,231 8,307 316 2,159 1,231
Gains on fixed assets
surplus 19 128 3 22 19
Government grants (2) 13,886 93,685 20,874 142,583 13,886
Recovery due to
accrual of contingent
consideration on
enterprise combination 6,048 40,805 578 3,949 6,048
Gain on enterprise
combination 12,475 84,166 - - 12,475
Others 5,568 37,554 2,844 19,421 5,568
Total 43,284 292,019 25,263 172,561 43,284
(2) Government grants
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Financial subsidies 13,691 92,370 20,018 136,739
Tax refund 195 1,315 856 5,844
Total 13,886 93,685 20,874 142,583
51. NON-OPERATING EXPENSES
Amount
included in
non-operating
income /
losses for
Item 2010 2009 the year
USD’000 RMB’000 USD’000 RMB’000 ’000
Losses on disposal of
fixed assets 3,456 23,318 994 6,790 3,456
Donation expenses 408 2,751 190 1,296 408
Penalty expenses 322 2,173 434 2,962 322
Compensation expenses 737 4,974 433 2,961 737
Others 3,315 22,364 1,996 13,637 3,315
Total 8,238 55,580 4,047 27,646 8,238
182
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
52. INCOME TAX
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Current tax expenses
for the year 126,510 853,500 74,078 505,993
Deferred taxation (4,410) (29,752) (17,761) (121,319)
Total 122,100 823,748 56,317 384,674
(2) Reconciliation between income tax expenses and accounting profits is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Profits before taxation 544,670 3,674,607 214,535 1,465,385
Expected income tax expenses
at applicable tax rates 131,098 884,453 35,155 240,106
Effect of tax incentive (22,264) (150,204) (18,672) (127,539)
Tax effect of non-
deductible expenses 4,296 28,983 7,091 48,438
Tax effect of non-
taxable income (11,212) (75,642) (7,534) (51,462)
Tax effect of utilisation of tax
losses not recognised
in prior years (36,652) (247,273) (2,501) (17,081)
Tax effect of unrecognised tax
losses 24,762 167,057 42,675 291,495
Deductible temporary
differences of unrecognised
deferred tax assets 17,927 120,945 2,403 16,404
Effect of tax rate change on
deferred tax 2,553 17,224 (2,872) (19,615)
Tax refund for income tax
annual filing (2,663) (17,966) (1,675) (11,439)
Domestic purchased equipment
tax refund (1,189) (8,022) (2,570) (17,554)
Income tax accruals for
profit of foreign holding
companies in current year 15,444 104,193 4,817 32,921
Income tax expenses 122,100 823,748 56,317 384,674
183
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
53. CALCULATION OF EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE
(1) Basic earnings per share
The calculation of basic earnings per share is based on the consolidated profit
attributable to ordinary equity shareholders of the Company during the year and the
weighted average ordinary shares in issue:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Consolidated profit attributable to
ordinary equity shareholders of the
Company 444,949 3,001,851 140,394 958,967
Weighted average of ordinary
shares in issue (’000) 2,662,396 2,662,396 2,662,396 2,662,396
Basic earnings per share 0.17 1.13 0.05 0.36
Calculation of weighted average number of ordinary
shares 2010 2009
Issued ordinary shares at 1 January (’000) 2,662,396 2,662,396
Weighted average number of ordinary shares at 31
December (’000) 2,662,396 2,662,396
(2) Diluted earnings per share
The calculation of diluted earnings per share is based on the consolidated profit
attributable to ordinary equity shareholders of the Company during the year and the
adjusted weighted average of ordinary shares in issue:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Consolidated profit attributable to
ordinary equity shareholders of the
Company (diluted) 444,949 3,001,851 140,394 958,967
Weighted average of ordinary
shares in issue (diluted) (’000) 2,662,396 2,662,396 2,662,396 2,662,396
Diluted earnings per share 0.17 1.13 0.05 0.36
Calculation of weighted average number of ordinary
shares (diluted) 2010 2009
Issued ordinary shares at 1 January (’000) 2,662,396 2,662,396
Weighted average number of ordinary shares at 31
December (diluted) (’000) 2,662,396 2,662,396
The board of directors the Company was authorised to grant 5,400,000 share (2.03%
of the total issued share 2,662,396,051 of the Company) to the senior management
and other staff. According to the share options plan, there is no exercisable share
options during the year. Please refer to VII for the details of share options.
184
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
54. OTHER COMPREHENSIVE INCOME
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
1. Gain/(losses) on available-for-sale
financial assts (38,216) (257,827) 218,192 1,490,362
Less: Effect of income tax
arising from available-for-sale
financial assets (6,915) (46,652) 981 6,700
Amount recognised in other
comprehensive income in
prior period transferred to
profit and loss in current
period 7,617 51,388 213,363 1,457,378
Subtotal (38,918) (262,563) 3,848 26,284
2. Gain on cash flow hedges financial
instrument 968 6,531 800 5,465
Less: Effect of income tax
arising from cash flow hedges
financial instrument (128) (864) (114) (781)
Amount recognised in other
comprehensive income in
prior period transferred to
profit and loss in current
period 2,079 14,026 5,702 38,944
Subtotal (983) (6,631) (4,788) (32,698)
3. Effect of foreign exchange rate
changes 55,550 (267,232) 13,868 102,615
4. Others 10 72 1,298 8,850
Total 15,659 (536,354) 14,226 105,051
55. NOTES TO CASH FLOW STATEMENT
(1) Other cash received from operating activities
Item Amount
USD’000 RMB’000
Cash received from government grants
7,960 53,702
related to assets
Cash received from government grants
13,691 92,370
related to income
Cash received from penalty 1,231 8,307
Cash received from quality compensation 1,073 7,239
Others 5,650 38,112
Total 29,605 199,730
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
55. NOTES TO CASH FLOW STATEMENT (CONTINUED)
(2) Other cash paid for operating activities
Item Amount
USD’000 RMB’000
Cash paid for financial leasing business 108,716 733,452
Cash paid for loans to joint ventures 19,803 130,500
Cash paid for transportation expenses 92,357 623,084
Cash paid for rental, insurance and other
49,431 333,486
selling expenses
Cash paid for technical development fee 33,573 226,503
Cash paid for warranty 2,409 16,250
Cash paid for commission of external sales 9,534 64,320
Cash paid for entertainment 11,772 79,420
Cash paid for travelling, office expenses and
49,158 334,745
other expenses in ordinary operation
Total 376,753 2,541,760
(3) Other cash paid for investing activities
Item Amount
USD’000 RMB’000
Interest income received from deposits and
receivables 9,522 64,240
(4) Other cash paid for financing activities
Item Amount
USD’000 RMB’000
Cash received from borrowings from
minority shareholders 32,118 216,684
186
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
56. INFORMATION TO CASH FLOW STATEMENT
(1) Supplement to cash flow statement:
1 Reconciliation of net profit to cash flow from operating activities:
Supplement 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Net profit 422,570 2,850,859 158,218 1,080,711
Add: Impairment for assets 40,704 274,610 57,987 396,081
Depreciation of fixed assets 170,439 1,149,802 92,264 630,204
Amortisation of intangible
assets 31,054 209,506 28,410 194,051
Amortisation of long-term
deferred expenses 3,738 25,218 3,180 21,718
Losses on disposal of fixed
assets, intangible assets,
and other long-term assets 3,046 20,551 643 4,392
Reverse of gains from accrued
contingent consideration of
enterprise combination (6,048) (40,805) - -
Gains from enterprise combination
(12,475) (84,166) - -
Losses on changes in fair value (34,821) (234,918) 5,664 38,689
Financial expenses 57,883 390,510 13,485 92,112
Investment income (5,728) (38,641) (229,552) (1,567,955)
Share-based payment expenses 10,458 70,556 - -
Increase in deferred tax assets (28,384) (191,493) (1,700) (11,183)
Increase/(decrease) in deferred
tax liabilities 25,286 170,592 (9,692) (66,468)
(Increase) / decrease in gross
inventories (777,510) (5,245,471) 164,454 1,123,303
(Increase) / decrease in
operating receivables (580,614) (3,917,112) (266,489) (1,820,253)
Increase in operating payables 872,042 5,883,231 125,092 854,441
Effect of foreign exchange rate
changes 28,163 190,072 - (158)
Net cash inflow from operating
activities 219,803 1,482,901 141,964 969,685
2 Significant investment or finance activities not related to cash is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Assets acquired under
finance leases 32,846 216,442 - -
187
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
55. INFORMATION TO CASH FLOW STATEMENT (CONTINUED)
(1) Supplement to cash flow statement (continued):
3 Cash and cash equivalents held by the Group is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Cash at bank and on hand at the
end of the year: 576,265 3,797,415 643,878 4,396,525
Less: Cash at bank and on
hand at the beginning of the year 643,878 4,396,525 413,542 2,822,175
Net (decrease) / increase of cash
at bank and on hands (67,613) (599,110) 230,336 1,574,350
(2) Information on acquisition of subsidiaries and other business units during the year
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
1. Consideration for acquiring
subsidiaries and other business
units 165,623 1,110,516 8,121 55,472
2 Cash and cash equivalents paid
for acquiring subsidiaries and
other business units 165,623 1,110,516 8,121 55,472
Less: Cash and cash equivalents
held by subsidiaries and
other business units 114,680 773,685 165 1,124
Less: Cash and cash equivalents
already paid - - 2,500 17,070
3. Net cash paid for the acquisition 50,943 336,831 5,456 37,278
4. Non-cash assets and liabilities
held by the acquired subsidiaries
and other business units
Current assets 854,449 5,763,900 11,197 76,499
Non-current assets 531,610 3,573,722 3,612 24,674
Current liabilities (783,477) (5,278,977) (9,558) (65,301)
Non-current liabilities (236,085) (1,592,747) - -
Minority interest (14,106) (95,164) (246) (1,682)
(3) Cash and cash equivalents held by the Group is as follows
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Cash at bank and on hand
Including: Cash at bank 439 2,893 628 4,287
Bank deposits
available on demand 567,783 3,741,518 641,930 4,383,223
Other monetary funds
available on demand 8,043 53,004 1,320 9,015
Closing balance of cash and cash
equivalents 576,265 3,797,415 643,878 4,396,525
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. The company does not have immediate holding company.
2. For the information on the subsidiaries of the company, refer to Note IV.1.
3. For the information about the associates and joint ventures of the Group, refer to Note
V.12(3).
4. OTHER RELATED PARTIES RELATIONSHIPS
Organisation name Relationship with the Group Organisation code
Florens Container Services Ltd. Subsidiary of significant shareholder N/A
Florens Container Corporation S.A. Subsidiary of significant shareholder N/A
Shenzhen China Merchants Real
Estated Co., Ltd Subsidiary of significant shareholder 61884513-6
CIMC Tianyu Minority shareholder of subsidiary 71526714-7
Gasfin Minority shareholder of subsidiary N/A
Wuhu Ruijiang Automobile Co., Ltd Minority shareholder of subsidiary 78858986-8
PGM Minority shareholder of subsidiary N/A
COSCO Countainer Significant shareholder N/A
China Merdant International Ltd. Significant shareholder N/A
Bright Touch Minority shareholder of subsidiary N/A
Leung Kee Minority shareholder of subsidiary N/A
Yantai Shipyard Minority shareholder of subsidiary N/A
C & C Trucks Associates of the Group 68685184-5
Note ： Significant shareholders represent shareholders holding more than 5%
(inclusive) of the Company’s shares.
189
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES
The follow transactions with related parties were conducted under normal commercial
terms or relevant agreements.
(1) Purchase of goods and receiving of services
The Group
USD’000
2010 2009
Nature of Transaction Percentage Percentage
Related party Pricing Mechanism
transaction details Amount on similar Amount on similar
deals (%) deals (%)
conducted under
Other related Purchase of
party Purchase raw material normal 860 0.03% 50 0.01%
Key non-related party
management transaction
staff Remuneration commercial terms 3,077 - 406 -
RMB’000
2010 2009
Nature of Transaction Percentage Percentage
Related party Pricing Mechanism
transaction details Amount on similar Amount on similar
deals (%) deals (%)
conducted under
Other related Purchase of
party Purchase raw material normal 5,802 0.03% 344 0.01%
Key non-related party
management transaction
staff Remuneration commercial terms 20,758 - 2,774 -
The Company
USD’000
2010 2009
Nature of Transaction Pricing Percentage Percentage
Related party
transaction details Mechanism Amount on similar Amount on similar
deals (%) deals (%)
Key management staff Remuneration 3,077 - 406 -
RMB’000
2010 2009
Nature of Transaction Pricing Percentage Percentage
Related party
transaction details Mechanism Amount on similar Amount on similar
deals (%) deals (%)
Key management staff Remuneration 20,758 - 2,774 -
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(2) Sales of goods and provision of services
The Group
USD’000
2010 2009
Nature of Transaction Percentage Percentage
Related party Pricing Mechanism
transaction details Amount on similar Amount on similar
deals (%) deals (%)
conducted under
Other related Sales of
party Sales containers
normal 228,621 6.18% 20,419 2.74%
non-related party
Other related Provision of Processing transaction
party services services commercial terms - - 1,037 0.90%
RMB’000
2010 2009
Nature of Transaction Percentage Percentage
Related party Pricing Mechanism
transaction details Amount on similar Amount on similar
deals (%) deals (%)
conducted under
Other related Sales of
party Sales containers
normal 1,542,395 6.18% 139,473 2.74%
non-related party
Other related Provision of Processing transaction
party services services commercial terms - - 7,082 0.90%
191
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(3) Funding
The Group
USD’000
Funding
Related party amount Initial date Maturity date Note
Borrowings
Not fixed repayment
Gasfin 3,157 19 September 2008 date Shareholder loans
Not fixed repayment
Bright Touch 9,140 5 July 2010 date Shareholder loans
Not fixed repayment
Leung Kee 15,922 5 July 2010 date Shareholder loans
Not fixed repayment
Yantai shipyard 7,056 5 July 2010 date Shareholder loans
Lending
Not fixed repayment
Shanghai Fengyang 24,130 25 December 2007 date Shareholder loans
Not fixed repayment
XYW 627 20 June 2006 date Shareholder loans
Advance payment
Not fixed repayment for capital injection
PGM 20,027 14 August 2009 date to subsidiary
USD 6,829,000
was capital
injection from the
Group to the C&C
Truck. As at
December 31,2010,
it was recognized
as other receivable
for the capital
injection was in the
process，other USD
19,803,000 were
shareholder loans.
C & C Trucks 26,632 14 April 2010 N/A
192
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(3) Funding (continued)
The Group (continued)
RMB’000
Funding
Related party amount Initial date Maturity date Note
Borrowings
Not fixed
Gasfin 20,806 19 September 2008 repayment date Shareholder loans
Not fixed
Bright Touch 60,231 5 July 2010 repayment date Shareholder loans
Not fixed
Leung Kee 104,919 5 July 2010 repayment date Shareholder loans
Not fixed
Yantai shipyard 46,497 5 July 2010 repayment date Shareholder loans
Lending
Not fixed
Shanghai Fengyang 159,007 25 December 2007 repayment date Shareholder loans
Not fixed
XYW 4,133 20 June 2006 repayment date Shareholder loans
Advance payment
for capital
Not fixed injection to
PGM 131,970 14 August 2009 repayment date subsidiary
RMB 45,000,000
was capital
injection from the
Group to the C&C
Truck. As at 31
December, 2010, it
was recognized as
other receivable
for the capital
injection was in the
process，other USD
130,500,000 were
shareholder loans.
C & C Trucks 175,500 14 April 2010 N/A
The Company
USD’000
Funding
Related party amount Initial date Maturity date Note
Lending
Not fixed repayment
Shanghai Fengyang 24,130 25 December 2007 date Shareholder loans
RMB’000
Funding
Related party amount Initial date Maturity date Note
Lending
Not fixed repayment
Shanghai Fengyang 159,007 25 December 2007 date Shareholder loans
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(4) Other related party transactions
(i) Sale of a subsidiary
In 2007, CIMC Shenfa Development Co., Ltd. (“CIMCSD”), a subsidiary of
the Group and Shenzhen China Merchants Real Estate Co., Ltd., entered into a
share transfer agreement, in which CIMCSD will transfer 60% of the equity of
Shanghai Fengyang to Shenzhen China Merchants Real Estate Co., Ltd for a
price of USD 48,363,000 (RMB 353,250,000). As at 31 December 2010, USD
10,721,000 (RMB 70,650,000) of the total price had not been paid.
(ii) The Company adopted a new share options scheme since 28 September 2010
(see note VII). Details of share options granted to key management personnel
are as follows:
Name Position Number of granted share options
(in’000)
Mai Boliang President, Chairman 3,800
Zhao Qingsheng Vice Chairman 1,500
Li Ruiting Vice Chairman 1,300
Wu Fapei Vice Chairman 1,000
Li Yinhui Vice Chairman 1,000
Yu Ya Vice Chairman 1,000
Liu Xuebin Vice Chairman 1,500
General Manager of Finance
Jin Jianliong 1,000
Department
General Manager of Treasury
Zeng Beihua 1,000
Department
Yu Yuqun Secretary of the Board 1,000
Total 14,100
Detailed information for fair value of the granted share options aforesaid see
note VII
194
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)
6. THE BALANCES WITH RELATED PARTIES AS AT 31 DECEMBER ARE SET OUT AS
FOLLOWS:
Receivables:
Caption Note The Group
2010 2010 2009 2009
USD’000 RMB’000 USD’000 RMB’000
Accounts receivable V.4 13,511 89,035 1,007 6,878
Other receivables V.5 84,579 557,348 54,838 374,442
Long-term
receivables - - 5,310 36,254
Payables:
Caption Note The Group
2010 2010 2009 2009
USD’000 RMB’000 USD’000 RMB’000
Accounts payable 192 1,263 23 160
Other payables V.31 35,275 232,453 3,177 21,692
VII. SHARE-BASED PAYMENTS
1. INFORMTION ABOUT SHARE-BASED PAYMENTS
USD’000 RMB’000
Total equity instruments granted during the year 50,350 339,693
Total equity instruments exercised during the year - -
Total equity instruments forfeited during the year - -
The exercise price of outstanding share options at 1. Share options granted by Enric in
the end of the year and residual life of the share 2009: HKD4 per share, the residual
options contracts life of contract is 8.83 years;
2. Share options granted by Raffles in
2007 and 2008: from USD 1.64 to
USD 4.39 per share, the residual life
of contract is 6.72 years.
3. Share options granted by the Company
in 2010: RMB12.39 per share, the
residual life of contract is 9.74 years
The price of other outstanding equity instruments Nil
at the end of the year and residual life of relevant
contracts
195
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VII. SHARE-BASED PAYMENTS (CONTINUED)
1. INFORMTION ABOUT SHARE-BASED PAYMENTS (CONTINUED)
Expenses recognised for the year arising from share-based payments are as follows:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Equity-settled share-based
payment 10,458 70,556 1,000 6,832
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
Enric, a subsidiary of the Company, carried out a share options plan (the “Plan”),
which was approved by the shareholders’ meeting on 12 July 2006. According to
the Plan, the key management personnel and other employees the company were
granted share options of the company at nil consideration to subscribe for shares of
the company. The options are 50% exercisable after one year from the date of grant
and are then 100% exercisable after two years from the date of grant. Each option
gives the holder the right to subscribe for one ordinary share in the company.
A share options scheme (the “Scheme”) was approved in the shareholders’ meeting of
the Company held on 28 September 2010. According to the Scheme, the board of
directors of the Company was authorised to grant share potions to the key
management personnel and other employees to subscribe for shares of the Company.
The effective period of the Scheme is ten years from the first grant date of share
options. The options are exercisable in two periods. The options are 25% exercisable
from the first transaction date after 24 months since grant date to the last transaction
date after 48 months since grant date. The remaining 75% are exercisable from the
first transaction date after 48 months since grant date to the last transaction date of the
Scheme. Each option gives the holder the right to subscribe for one ordinary share in
the Company.
As mentioned in Note IV 6(1), before Raffles was acquired by the Company, Raffles
carried out a share option plan approved by the shareholders’ meeting on 21 June
2006. According to the share options plan, the board of directors was authorised to
grant share options to the key management personnel and other employees to
subscribe for shares of Raffles. Each eligible participant purchased the share options
at the cost of SGD 1. The numbers of options were 6,355,003 and 1,154,003 granted
in 2007 and 2008 by the board of directors, with the exercise prices of from USD 1.64
to USD1.65, from NOK 10.50 to NOK 26.00, and from USD 1.6425 to USD 1.65.
The longest effective period of the share options plan was ten years from the first
grant date of share options. As at 31 December 2010, there were 6,239,005
outstanding share options with were still effective. All the costs relating to the share
options were recognized before 1 July 2010. The above cost was USD 710,000
(equivalent to RMB 4,785,000), of which USD 362,000 (RMB 2,492,000) was
attributable to the parent company and recorded as capital reserve, and the remaining
USD 348,000 (RMB 2,293,000) was attributable to the minority shareholders and
recorded in minority interests.
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VII. SHARE-BASED PAYMENTS (CONTINUED)
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT (CONTINUED)
Method to determine the fair Fair value of stock option is estimated based on binomial lattice
value of equity instruments at model. Contract term of the stock option is used as the input
grant date variable of this model. And the binomial lattice model includes
estimation of early execution of the option.
The following are fair value of share options and factors taken
into account when using the binomial lattice model:
2010 2009
Fair value of share options RMB4.80 HKD1.64
and RMB6.80
Current share price RMB13.21 HKD4.00
Exercise price RMB12.39 HKD4.00
Expected fluctuation of stocks 45% 64.78%
Vesting period 10 years 10 years
Expected dividends 0.60% 0.68%
Risk-free rate 2.60% and 3.40% 2.24%
Note：The fair value and risk-free rate of share options granted
by the Company for the year are RMB4.8 per share and 2.6% in
the first exercisable period, and RMB6.8 per share and 3.4% in
the second exercisable period.
Basis of the best estimate of the At each balance sheet date during the vesting period, the
number of equity instruments Company makes the best estimation according to the latest
expected to vest information of the number of employees who are granted to vest
and revises the number of equity instruments expected to vest.
On vesting date, the estimate shall be equal to the number of
equity instruments that ultimately vested.
Reasons for significant Nil
differences of estimation between
current year and last year
Amount RMB equivalent
USD’000 RMB‘000
Accumulated amount in capital
reserve for equity-settled
share-based payments 12,011 82,432
Total expenses recognised for
equity-settled share-based
payments 10,458 70,556
Including：
- attributable to the Company 3,866 26,083
- attributable to Enric 5,882 39,688
- attributable to Raffles 710 4,785
There is no share option exercised for the year.
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VIII. CONTINGENCIES
1. CONTINGENT LIABILITIES
Raffles, the subsidiary of the Company, and its subsidiaries (hereafter collectively
referred as “CIMC Raffles”) entered into ship construction contracts with the
customer. Both parties carried out the negotiations regarding to the significant
increase in construction cost due to the change of the initial design. CIMC Raffles
requested the customer to compensate it for the additional costs and losses due to the
change of the contract and agree the postponement of delivery of ships. Based on
management assessment on the negotiation result, CIMC Raffles made no provision
on the potential losses and the compensation for delivery postponement. the
maximum amount for the potential losses and compensation for delivery
postponement that CIMC Raffles may need to bear is USD 41,400,000 (RMB
272,814,000), depending on the final negotiation result.
2. GUARANTEES PROVIDED FOR OTHER ENTITIES
During the year, HI signed contracts with China Construction Bank, Bank of China,
China Merchants Bank and China Everbright Bank, to provide guarantees in respect
of banking facilities granted to customers who drew down loans under banking
facilities to settle outstanding payables arising from purchase of trailers from the
Group. As at 31 December 2010, the Group has the above outstanding guarantees
totaling RMB1,044,329,000, equivalent to USD 158,479,000(2009: RMB
627,162,000, equivalent to USD 91,849,000).
3. Bills issued but not recorded on books, outstanding letter of credit
and performance guarantee
The Group does not recognise bills payable or letter of credit issued as deposits.
Corresponding inventories, prepayment and bills receivable are recognised at the
earlier of delivery of the goods by the suppliers and the maturity of the bill issued.
As at 31 December 2010, the Group had bills issued to suppliers but not recorded on
books and outstanding letter of credit totaling USD 117,195,000 (RMB 772,281,000).
As at 31 December 2009, the balance was USD 20,357,000 (RMB 139,005,000).
As at 31 December 2010, Raffles had outstanding balance of performance guarantees
issued by bank totaling to USD 112,128,000, equivalent to RMB 738,890,000.
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IX. COMMITMENTS
1. SIGNIFICANT COMMITMENTS
(1) Capital commitments
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Construction contracts entered into
but not exercised or not fully
exercised 270,673 1,783,657 63,359 432,631
Investment contracts entered into but
not exercised or not fully exercised - - 59,313 405,000
Total 270,673 1,783,657 122,672 837,631
(2) Operating lease commitments
As at 31 December, the total future minimum lease payments under non-cancellable
operating leases of properties, fixed assets and so on were payable as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Within 1 year (inclusive) 7,220 47,578 14,183 96,847
After 1 year but within 2 years
(inclusive) 7,036 46,365 7,639 51,152
After 2 years but within 3 years
(inclusive) 3,405 22,437 6,522 44,536
After 3 years 15,934 104,998 19,399 132,460
Total 33,595 221,378 47,743 324,995
X. NON-ADJUSTING POST BALANCE SHEET EVENTS
1. Change of functional currency
The functional currency of the Company was USD in 2010 and prior years. As the
impact of RMB on economic environment of the Company and some domestic
subsidiaries was getting strengthened, the Company will change the functional
currency to RMB since 1 January 2011.
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X. NON-ADJUSTING POST BALANCE SHEET EVENTS (CONTINUED)
2. INFORMATION ABOUT PROFITS DISTRIBUTION AFTER BALANCE SHAEET DATE
RMB’000
Dividend proposed to be distributed after Note 1
balance sheet date 931,839
(1) Dividend for ordinary shares proposed after balance sheet date
Board of directors proposed to distribute cash dividend of RMB 0.35 per share (2009:
RMB 0.12 per share) to ordinary shareholders of the Company on 21 March 2011,
totally RMB 931,838,617.85 (2009: RMB 319,487,526.12). The proposal is
pending for approval of the Shareholders Meeting. The cash dividend proposed
after the balance sheet date had not been recognised as a liability at the balance sheet
date.
XI. OTHER SIGNIFICANT MATTERS
1. FINANCE LEASE
(1) The total future minimum lease receivables as finance lease leasor is as follows:
Residual contractual life Minimum lease receivables
USD’000 RMB’000
Within 1 year (inclusive) 131,699 867,858
After 1 year but within 2 years (inclusive) 64,954 428,028
After 2 years but within 3 years (inclusive) 43,149 284,333
After 3 years 45,109 297,256
Total 284,911 1,877,475
(2) The total future minimum lease payables as finance lease leasee
is as follows:
Residual contractual life Minimum lease receivables
USD’000 RMB’000
Within 1 year (inclusive) 14,809 97,584
After 1 year but within 2 years (inclusive) 10,081 66,432
After 2 years but within 3 years (inclusive) 7,956 52,426
Total 32,846 216,442
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
E． 2. SEGMENT REPORTING
In accordance with the Group’s internal organisation structure, management
requirement and internal reporting process, eight reportable segments are identified
by the Group including containers, trailers, energy chemistry and food equipment,
marine projects, airport facilities, logistic equipments and services, railway trucks
manufactory and property development. Each reportable segment is an independent
business segment providing different products and services. Independent management
is applied to individual business segment as different technical and market strategy
are adopted. The Group reviews the financial information of individual segment
regularly to determine resources allocation and performance assessment.
(1) Segment revenue, expenses, assets and liabilities
In order to assess the segment performance and resources allocation, the Group’s
management review segment revenue, expenses, assets and liabilities of each segment
regularly. The preparations basis of such information are detailed as follows:
Segment assets include tangible assets, intangible assets, other long-term assets and
accounts receivable, etc, but exclude deferred tax assets and other un-allocated
headquarter assets. Segment liabilites include payables, bank loans, provision, special
payables and other liabilities, while deferred tax liabilities are excluede.
Segment profit represents revenue (including external operating income and
inter-segment operating income), offsetting segment expenses, depreciation and
amortisation, impairment losses, interest expenses and income attributable to
individual segment. Transactions conducted among segments are under normal
non-related party transaction commercial terms. The Group dose not allocate
non-operating income/expenses and income tax expenses to individual segment.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(1) Segment revenue, expenses, assets and liabilities (continued)
Information to be disclosed on each of the Group’s reportable segment (including management’s periodically reviewed information and
disclosure required by accounting standard) that the Group uses in measuring segments’ profit/ (losses), assets and liabilities is set out as
follows:
USD’000
Energy chemistry Elimination
And food Offshore Airport between Unallocated
Item Containers Trailers equipment business facilities others segments items Total
2010 2010 2010 2010 2010 2010 2010 2010 2010
External transaction 3,756,434 2,464,711 775,128 362,267 50,784 264,035 - - 7,673,359
Inter segment transaction 14,406 501 17,994 - - 41,052 (73,953) - -
Investment income / (losses) in
joint ventures and associates 13,747 (3,475) - 707 - 2,978 - 1,301 15,258
Impairment loss
for the year 3,149 15,510 (435) 15,513 611 6,356 - - 40,704
Depreciation and amortisation
expenses 52,172 78,776 41,339 25,688 512 6,744 - - 205,231
Interest income 2,926 2,273 2,180 1,271 21 402 - 1,167 10,240
Interest expenses 4,141 7,556 3,649 23,314 71 1,613 - 27,779 68,123
Segment operating profit / (losses) 577,042 105,027 23,582 (182,074) 4,523 19,391 - (2,821) 544,670
Income tax expenses 81,817 22,461 13,696 (12,745) 778 15,835 - 258 122,100
Net profit / (losses) 495,225 82,566 9,886 (169,329) 3,745 3,556 - (3,079) 422,570
Segment total assets 2,102,409 1,664,155 960,639 1,817,570 71,785 915,070 - 682,803 8,214,431
Segment total liabilities 1,035,716 804,959 387,009 1,445,635 31,968 277,234 - 1,317,255 5,299,776
Supplementary information:
- Segment expenditures
other than depreciation and amortization - - 5,882 710 - - - 12,766 19,358
- Long-term equity investment
of joint ventures and associates 88,345 21,705 - 6,324 - 12,795 - 46,727 175,896
- Segment expenditures raising from
additions of non-current assets 106,302 103,765 87,059 170,701 10,005 24,194 - 5,246 507,272
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(1) Segment revenue, expenses, assets and liabilities (continued)
Information to be disclosed on each of the Group’s reportable segment (including management’s periodically reviewed information and
disclosure required by accounting standard) that the Group uses in measuring segments’ profit/ (losses), assets and liabilities is set out as
follow (continued):
USD’000
Energy chemistry Elimination
And food Offshore Airport between Unallocated
Item Containers Trailers equipment business facilities others segments items Total
2009 2009 2009 2009 2009 2009 2009 2009 2009
External transaction 781,243 1,603,270 508,907 - 66,642 37,597 - - 2,997,659
Inter segment transaction 34,741 8,991 18,176 - 11,142 19,401 (92,451) - -
Investment income / (losses) in
joint ventures and associates 5,286 (241) - 3,909 - 5,433 - 830 15,217
Impairment loss
for the year 16,635 32,371 8,132 - 541 308 - - 57,987
Depreciation and amortisation
expenses 50,691 37,563 31,234 - 289 1,437 - 3,147 124,361
Interest income 28,049 15,728 276 - 417 4,426 (67,629) 31,547 12,814
Interest expenses 32,276 34,085 4,725 - - 1,974 (67,629) 20,868 26,299
Segment operating (losses) / profit (33,999) 41,022 (2,728) - 10,262 (10,516) (16,809) 227,303 214,535
Income tax expenses 12,448 10,091 (1,789) - 1,466 2,465 - 31,636 56,317
Net profit / (losses) (46,447) 30,931 (939) - 8,796 (12,981) (16,809) 195,667 158,218
Segment total assets 1,689,636 1,682,145 985,805 117,152 72,821 649,181 (70,592) 345,044 5,471,192
Segment total liabilities 505,291 930,270 301,555 - 28,237 122,319 (70,592) 1,336,278 3,153,358
Supplementary information:
- Segment (income) / expenditures other than
depreciation and amortization (24,740) (57) (1,112) - (72) (115) - 32,760 6,664
- Long-term equity investment
of joint ventures and associates 77,885 23,232 - 99,033 - 14,848 - 8,706 223,704
- Segment expenditures raising from
additions of non-current assets 50,505 69,202 183,530 - 294 7,717 (86,735) 4,335 228,848
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(1) Segment revenue, expenses, assets and liabilities (continued)
Note: The Group recognised the offshore engineering business as a reportable segment in 2010. For the purpose of comparison, the
Group re-stated the segment report of 2009, which treat the offshore engineering business as a segment.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(2) Geographic information
The following table sets out information about the geographical information of the
Group’s revenue from external customers and the Group’s non-current assets
(excluding financial assets and deferred tax assets, same for the below). The
geographical locations of customers are based on the location at which the services
were provided or the goods were delivered. The geographical locations of the
specified non-current assets are based on the physical location of the assets (for fixed
assets), or the location of the business to which they are allocated (for intangible
assets and goodwill), or the location of operations of the associates and joint ventures.
Geographic information
USD’000
Item Revenue from external
customers Non-current assets
2010 2009 2010 2009
P.R.China 2,851,058 1,772,332 2,454,903 1,800,823
Asia (exclusive of China) 625,073 239,836 6,501 4,034
America 2,342,264 347,681 44,835 199,488
Europe 1,721,850 497,676 179,132 84,779
Others 133,114 140,134 7,461 3,578
Total 7,673,359 2,997,659 2,692,832 2,092,702
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS
The Group has exposure to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Interest rate risk
Foreign currency risk
This note presents information about the Group’s exposure to each of the above risks
and their sources, the Group’s objectives, policies and processes for measuring and
managing risks, etc.
The Group’s risk management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Group’s activities. The
internal audit department of the Group undertakes both regular and ad-hoc reviews of
risk management controls and procedures.
(1) Credit risk
The Group’s credit risk is primarily attributable to receivables, debt investments and
derivative financial instruments entered into for hedging purposes. Exposure to these
credit risks are monitored by management on an ongoing basis.
In respect of receivables, the risk management committee of the Group has
established a credit policy under which individual credit evaluations are performed on
all customers requiring credit over a certain amount. These evaluations focus on the
external ratings of the customers and their bank credit records where available and
previous payment records (if available). Receivables are due within from 30 to 90
days from the date of billing. Normally, the Group does not obtain collateral from
customers, but earnest or prepayment money is requested sometimes due to the
customer’s situation.
Most of the Group’s and the Company’s customers have been transacting with the
Group or the Company for a long time, and losses have occurred infrequently. In
monitoring customer credit risk, customers are grouped according to some factors,
such as ageing and maturity date. This Group has made the provision for the
significant overdue receivables at 31 December 2010.
Guideline from the Group basis to the assets of associates and jointly controlled,
profit forecast of development project provide fund to associates and jointly
controlled entity and continue to monitor the project progress and its operating to
ensure the recoverability of the fund.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(1) Credit risk (continued)
The Group’s exposure to credit risk is influenced mainly by the individual
characteristics and industries of each customer rather than country or area in which
the customers operate and therefore significant concentrations of credit risk arise
primarily when the Group has significant exposure to individual customers. At the
balance sheet date, the Group and the Company had a certain concentration of credit
risk, as 24.14% (2009: 17.64%) of the total accounts receivable were due from the
five largest customers of the Group.
Investments are normally made only in liquid securities quoted on a recognised stock
exchange, except where entered into for long-term strategic purposes. Transactions
involving derivative financial instruments are made with counterparties of sound
credit standing and with whom the Group has a signed netting ISDA agreement
(International Swap Derivative Association). Given their high credit standing,
management does not expect any investment counterparty to fail to meet its
obligations.
The maximum exposure to credit risk is represented by the carrying amount of each
financial asset, including derivative financial instruments, in the balance sheet.
Except for the financial guarantees given by the Group as set out in Note VIII, the
Group and the Company do not provide any other guarantees which would expose the
Group or the Company to credit risk. The maximum exposure to credit risk in
respect of these financial guarantees at the balance sheet date is disclosed in Note
VIII.
(2) Liquidity risk
The Company is responsible for the cash management, including short term
investment of cash surpluses and the raising of loans to cover expected cash demands,
for individual subsidiaries subject to approval by the Company’s board when the
borrowings exceed certain predetermined levels of authority. The Group’s policy is to
regularly monitor its liquidity requirements and its compliance with lending
covenants, to ensure that it maintains sufficient reserves of cash, readily realisable
marketable securities and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(2) Liquidity risk (continued)
The following tables show the remaining contractual maturities at the balance sheet
date of the Group’s financial assets and financial liabilities, which are based on
contractual undiscounted cash flows (including interest payments computed using
contractual rates or if floating, based on prevailing interest rates at 31 December) and
the earliest date the Group can be required to pay:
USD’000
2010
Contractual undiscounted cash flow
Balance sheet
More than 2
Item carrying
Within 1 More than 1 years but
amount
year or on year but less less than 5 More than 5
demand than 2 years years years Total
Financial assets
Cash at bank and on hand 706,511 - - - 706,511 706,511
Accounts receivable and
other receivables 1,573,078 - - - 1,573,078 1,573,078
Long-term receivables 200,226 116,174 88,492 13,828 418,720 382,682
Subtotal 2,479,815 116,174 88,492 13,828 2,698,309 2,662,271
Financial liabilities
Short-term loans (1,260,954) - - - (1,260,954) (1,260,954)
Accounts payable and
other payables (1,746,037) - - - (1,746,037) (1,746,037)
Long-term loans (432,823) (63,678) (254,713) (318,391) (1,069,605) (1,010,529)
Long-term payables (16,313) (10,799) (8,156) - (35,268) (32,846)
Subtotal (3,456,127) (74,477) (262,869) (318,391) (4,111,864) (4,050,366)
Net total (976,312) 41,697 (174,377) (304,563) (1,413,555) (1,388,095)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(2) Liquidity risk (continued)
The following tables show the remaining contractual maturities at the balance sheet
date of the Group’s financial assets and financial liabilities, which are based on
contractual undiscounted cash flows (including interest payments computed using
contractual rates or if floating, based on prevailing interest rates at 31 December) and
the earliest date the Group can be required to pay (continued):
RMB’000
2010
Contractual undiscounted cash flow
Balance sheet
More than 2
Item carrying
More than 1 years but
amount
Within 1 year year but less less than 5 More than 5
or on demand than 2 years years years Total
Financial assets
Cash at bank and on hand 4,655,696 - - - 4,655,696 4,655,696
Accounts receivable and
other receivables 10,366,108 - - - 10,366,108 10,366,108
Long-term receivables 1,319,429 765,552 583,136 91,122 2,759,239 2,521,759
Subtotal 16,341,233 765,552 583,136 91,122 17,781,043 17,543,563
Financial liabilities
Short-term loans (8,309,309) - - - (8,309,309) (8,309,309)
Accounts payable and
other payables (11,505,867) - - - (11,505,867) (11,505,867)
Long-term loans (2,852,174) (419,619) (1,678,482) (2,098,101) (7,048,376) (6,659,085)
Long-term payables (107,499) (71,161) (53,746) - (232,406) (216,442)
Subtotal (22,774,849) (490,780) (1,732,228) (2,098,101) (27,095,958) (26,690,703)
Net total (6,433,616) 274,772 (1,149,092) (2,006,979) (9,314,915) (9,147,140)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(2) Liquidity risk (continued)
USD’000
2009
Contractual undiscounted cash flow
Balance sheet
More than 2
Item carrying
Within 1 More than 1 years but
amount
year or on year but less less than 5 More than 5
demand than 2 years years years Total
Financial assets
Cash at bank and on hand 771,685 - - - 771,685 771,685
Accounts receivable and
other receivables 773,615 - - - 773,615 730,221
Long-term receivables 69,563 90,020 57,545 1,362 218,490 202,978
Subtotal 1,614,863 90,020 57,545 1,362 1,763,790 1,704,884
Financial liabilities
Short-term loans (608,869) - - - (608,869) (608,869)
Accounts payable and
other payables (869,798) - - - (869,798) (869,798)
Long-term loans (76,405) (382,411) (443,639) - (902,455) (888,087)
Subtotal (1,555,072) (382,411) (443,639) - (2,381,122) (2,366,754)
Net total 59,791 (292,391) (386,094) 1,362 (617,332) (661,870)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(2) Liquidity risk (continued)
RMB’000
2009
Contractual undiscounted cash flow
Balance sheet
More than 2
Item carrying
More than 1 years but
amount
Within 1 year year but less less than 5 More than 5
or on demand than 2 years years years Total
Financial assets
Cash at bank and on hand 5,269,217 - - - 5,269,217 5,269,217
Accounts receivable and
other receivables 5,282,395 - - - 5,282,395 4,986,093
Long-term receivables 474,990 614,675 392,929 9,300 1,491,894 1,385,978
Subtotal 11,026,602 614,675 392,929 9,300 12,043,506 11,641,288
Financial liabilities
Short-term loans (4,157,477) - - - (4,157,477) (4,157,477)
Accounts payable and
other payables (5,939,158) - - - (5,939,158) (5,939,158)
Long-term loans (521,711) (2,611,182) (3,029,254) - (6,162,147) (6,064,032)
Subtotal (10,618,346) (2,611,182) (3,029,254) - (16,258,782) (16,160,667)
Net total 408,256 (1,996,507) (2,636,325) 9,300 (4,215,276) (4,519,379)
(3) Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the
Group to cash flow interest rate risk and fair value interest risk, respectively. The
Group adopts an interest rate policy of ensuring that interest rate risk is reasonable.
The Group has entered into interest rate swaps denominated in the currency of the
loan, to achieve an appropriate mix of fixed and floating rate exposure consistent with
the Group’s policy.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(3) Interest rate risk (continued)
(a) As at 31 December, the Group held the following interest-bearing financial
instruments:
USD’000
2010 2009
Item Annual interest Annual interest
rate Amount rate Amount
Fixed rates interest-bearing financial
instruments
Financial assets
- Long-term receivables 6.63% - 24.17% 202,780 5.50%-6.50% 145,271
-Long-term receivables due within
one year 6.63% - 24.17% 179,902 5.50%-6.50% 57,707
Financial liabilities
-Short-term loans 2.34% - 4.30% (1,260,954) 1.53% - 5.35% (608,869)
-Long-term payable 4.97% ~ 5.80% (18,037) - -
-Long-term payable due within
one year 4.97% ~ 5.80% (14,809) - -
Total (911,118) (405,891)
USD’000
Item 2010 2009
Annual interest Annual interest
rate Amount rate Amount
Variable rates interest-bearing
financial instruments
Financial assets
-Cash and cash equivalents 0.40%-3.90% 706,511 0.36%-3.87% 771,685
Financial liabilities
-Long-term loans due within one Refer to Note (416,853) Refer to (66,705)
year V.33 NoteV.33
- Long-term loans Refer to Note (593,676) Refer to
V.34 NoteV.34 (821,382)
Total (304,018) (116,402)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(3) Interest rate risk (continued)
(b) Sensitivity analysis
As at 31 December 2010, it is estimated that a general increase / decrease of
75 basis points in interest rates, with all other variables held constant, would
increase/decrease the Group’s net profit by USD1,710,000 (2009:
USD437,000), and equity by USD1,710,000 (2009: USD437,000).
The sensitivity analysis above indicates the instantaneous change in the net
profit and equity that would arise assuming that the change in interest rate had
occurred at the balance sheet date and had been applied to re-measure those
financial instruments held by the Group which expose the Group to fair value
interest rate risk at the balance sheet date. In respect of the exposure to cash
flow interest rate risk arising from floating rate non-derivative instruments
held by the Group at the balance sheet date, the impact on the net profit and
equity is estimated as an annualised impact on interest expense or income of
such a change in interest rates. The analysis was performed on the same basis
for 2009.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(4) Foreign currency risk
The major currency received by the Group is USD and the major currency paid out is
RMB. In order to avoid the risks resulting from the fluctuation of the exchange rate
of RMB, in respect of accounts receivables and payables denominated in foreign
currencies, the Group ensures that its net exposure is kept to an acceptable level by
buying or selling foreign currencies at spot rates when necessary to address
short-term imbalances.
(a) Besides the exposure to currency risk arising from financial assets and
financial liabilities disclosed in Note V.2 and V.23, the Group’s exposure as at
31 December to currency risk arising from recognised assets or liabilities
denominated in foreign currencies is follows. For presentation purposes, the
amounts of the exposure are shown in RMB, translated using the spot rate at
the balance sheet date. Differences resulting from the translation of the
financial statements denominated in foreign currency are excluded.
RMB’000
Item 2010 2009
USD EUR HKD JPY USD EUR HKD JPY
Cash at bank
and on hand 1,521,592 396,971 128,125 34,616 2,618,973 570,726 32,560 24,942
Accounts receivable 5,327,812 401,886 17,054 4,323 1,796,322 323,664 6,971 70
Short-term loans (3,035,638) (287,944) (423,878) (10,021) (1,553,020) (607,232) - -
Long-term loans (2,438,189) (35,189) - - (3,550,664) (118,064) (479,832) -
Accounts payable (2,924,606) (156,227) (169,893) (3,551) (1,454,578) (60,113) (91,544) (346)
Provisions (294,478) (25,644) (23,472) - (478,391) (38,410) (41,381) -
Non-current
liabilities due
within one year (658,970) (70,385) (17,581) - (273,128) (78,708) (61,618) -
Gross balance
sheet exposure (2,502,477) 223,468 (489,645) 25,367 (2,894,486) (8,137) (634,844) 24,666
(b) Significant exchange rates applied by the Group are as follows at reporting
date:
Item Average exchange rate Benchmark exchange rate
2010 2009 2010 2009
USD 6.7465 6.8305 6.5897 6.8282
EUR 8.8378 9.6055 8.7979 9.8388
HKD 0.8682 0.8813 0.8477 0.8805
JPY 7.7705 7.5400 8.0984 7.5634
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(4) Foreign currency risk (continued)
(c) Sensitivity analysis
Assuming all other risk variables remained constant, 4%, 3%, 4% and 10%
strengthening of the RMB against the USD, EUR, HK dollar and Japanese
Yen respectively at 31 December 2010 (1%, 3%, 1% and 1% strengthening of
the RMB against the USD, EUR, HK dollar, and Japanese Yen respectively at
31 December 2009) would have increased (decreased) equity and net profit by
the amount shown below; whose effect is in RMB and translated using the
spot rate at the balance sheet date:
RMB’000
Item Equity Net profit
31 December 2010
USD 75,074 75,074
EUR (5,028) (5,028)
HKD 14,689 14,689
JPY (1,903) (1,903)
Total 82,832 82,832
31 December 2009
USD 21,709 21,709
EUR 183 183
HKD 4,761 4,761
JPY (185) (185)
Total 26,468 26,468
4%, 3%, 4% and 10% weakening of the RMB against USD, EUR, HK dollar
and Japanese Yen respectively at 31 December 2010 (1%, 3%, 1% and 1%
weakening of the RMB against the USD, EUR, HK dollar, and Japanese Yen
respectively at 31 December 2009) would have had the equal but opposite
effect on the amounts shown above, on the basis that all other variables
remain constant.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(4) Foreign currency risk (continued)
(c) Sensitivity analysis (continued)
The sensitivity analysis above assumes that the change in foreign exchange
rates had been applied to re-measure those financial instruments held by the
Group which expose the Group to foreign currency risk at the balance sheet
date, the analysis excludes differences that would result from the translation of
the financial statements denominated in foreign currency. The analysis is
performed on the same basis for 2009.
The above sensitive analysis does not include exposure to currency risk
arising from foreign future contracts, Japanese Yen exchange option and swap
contact for interest rate disclosed in Note V.2 and V.23 about financial assets
and financial liabilities, but the change in exchange rate may have effect on
shareholders’ equity and net profit.
(5) Other price risks
Other price risks are stock price risk. As at 31 December 2010, the Group held
32,291,152 tradable shares of China Merchants Securities and 11,526,000 tradable
shares of China Merchants Bank.
As at 31 December 2010, it is estimated that a general increase/decrease of composite
index of Shanghai A-share by 14.31% (2009: 58.46%), or 469 point (2009: 2,562
point), with all other variables held constant, would increase/decrease the Group’s
shareholders’ equity by USD 12,368,000 (2009:USD 67,555,000).
The sensitivity analysis above arise assuming that the change in composite index of
Shanghai A-share occurred at the balance sheet date is reasonable and had been
applied to re-measure those investments in securities held by the Group. The
sensitivity analysis is also based on another assumption, namely, the fair value of the
investments in securities held by the Group is relevant to composite index of stock
market, and available-for-sales securities investment has same risk factor as trading
securities investment, and all other variables held constant. 14.31% change in
composite index of Shanghai A-share is a reasonable expectation of the Group for the
period from the balance date to the next balance sheet date. The analysis was
performed on the same basis for 2008.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(6) Fair values
(a) Financial instruments carried at fair value
The following table presents the carrying value of financial instruments
measured at fair value as at 31 December 2010 across the three levels of the
fair value hierarchy. The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on the basis of
the lowest level input that is significant to the fair value measurement in its
entirety. The levels are defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices that are observable for the asset or
liability, either directly (ie as prices) or indirectly (ie derived from
prices);
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
USD’000
Assets Note Level 1 Level 2 Level 3 Total
Financial assets held for
trading
Held for trading V.2 59,713 - - 59,713
Derivative financial assets V. 2 - 18,069 - 18,069
Hedging Instrument V. 2 - 1,988 - 1,988
Subtotal 59,713 20,057 - 79,770
Available-for-sale
financial assets V. 10 116,616 - - 116,616
Subtotal 116,616 - - 116,616
Total 176,329 20,057 - 196,386
USD’000
Liabilities Note Level 1 Level 2 Level 3 Total
Financial liabilities held for
trading
Derivative financial
liabilities V. 23 - (23,992) - (23,992)
Total - (23,992) - (23,992)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(6) Fair values (continued)
(a) Financial instruments carried at fair value (continued)
RMB’000
Assets Note Level 1 Level 2 Level 3 Total
Financial assets held for
trading
held for trading V.2 393,491 - - 393,491
Derivative financial assets V. 2 - 119,069 - 119,069
Hedging Instrument V. 2 - 13,101 - 13,101
Subtotal 393,491 132,170 - 525,661
Available-for-sale
financial assets V. 10 768,467 - - 768,467
Subtotal 768,467 - - 768,467
Total 1,161,958 132,170 - 1,294,128
RMB’000
Liabilities Note Level 1 Level 2 Level 3 Total
Financial liabilities held for
trading
Derivative financial
liabilities V. 23 - (158,102) - (158,102)
Total - (158,102) - (158,102)
Excluding available-for-sale financial assets that invested in shares of China
Merchants Securities Co., Ltd., there is no change in the fair value
measurement of the Group’s financial instruments in 2010. As at 31 December
2009, shares of China Merchants Securities Co., Ltd., that the Company held
were restricted tradable shares, whose fair value were based on the market
price of listed tradable shares of China Merchants Securities Co., Ltd. at
balance sheet date, which were priced using Black Scholes Option Pricing
Model, belonged to Level 2. The aforesaid restricted tradable shares listed and
became tradable since 18 November 2010. The Company measured the shares’
fair value using the market price of listed tradable shares, which belonged to
Level 1.
(b) Fair value of other financial instruments (the carrying amounts are not
measured at fair value
All financial instruments are carried at amounts not materially different from
their fair values as at 31 December 2010.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(7) Estimation and assumption of fair values
The following summarises the major methods and assumptions used in estimating the
fair values of financial assets and liabilities held for trading, available-for-sale
financial assets, and items set out in Note XI.3.(6) that measured at fair value on the
balance sheet date.
(a) Equity investments
Fair value is based on quoted market prices at the balance sheet date for
financial assets and liabilities held for trading (excluding derivatives), and
available-for-sale financial assets if there is an active market.
(b) Receivables
The fair value is estimated as the present value of the future cash flows,
discounted at the market interest rates at the balance sheet date.
(c) Loans and other non-derivatives financial liabilities
The fair value is estimated as the present value of future cash flows,
discounted at the market rate of interest at the balance sheet date.
(d) Derivatives
The fair value of forward exchange contracts is either based on their listed
market prices or by discounting the contractual forward price and deducting
the current spot rate. The fair value of interest rate swaps is based on broker
quotes. The quotes are tested for reasonableness by discounting estimated
future cash flows based on the terms and maturity of each contract and using
market interest rates for a similar interest rate instrument at the measurement
date.
(e) Financial guarantees
The fair value of financial guarantees issued is determined by reference to fees
charged in an arm’s length transaction for similar services, when such
information is obtainable, or is otherwise estimated by reference to interest
rate differentials, by comparing the actual rates charged by lenders when the
guarantee is made available with the estimated rates that the lenders would
have charged, had the guarantees not been available, where reliable estimates
of such information can be made.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (CONTINUED)
(7) Estimation and assumption of fair values (continued)
(f) Interest rates used for determining fair value
The interest rates used to discount estimated cash flows are based on same
term loans’ rates announced by People Bank of China at the balance sheet date
plus an adequate credit spread and are as follows:
Interest rates Interest rates
used in 2010 used in 2009
Long-term loans 0.85% - 5.23% 0.56% - 5.94%
Receivables 5.35 - 6.40% 4.86% - 5.94%
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
4. ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
USD’000
Accumulated
Balance at the Change in fair change in fair Provision of Balance at the
Item
beginning of value of the value in impairment end of the
the year year equity for the year year
Financial assets
1 Financial
assets at
fair value
through
profit or
loss
(excluding
derivative
financial
assets) 12,701 23,431 - 59,713
2. Derivative
financial
instrument 739 13,938 - 18,069
3. Hedging
Instrument 3,164 - 2,053 - 1,988
4.
Availabl
e-for-sale
financial
assets 172,196 - 106,071 - 116,616
Subtotal 188,800 37,369 108,124 - 196,386
Financial
liabilities (22,705) (2,548) - (23,992)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
4. ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (CONTINUED)
RMB’000
Balance at the Change in fair Accumulated Provision of
Item beginning of value of the change in fair impairment for Balance at the
the year year value in equity the year end of the year
Financial assets
1 Financial
assets at
fair value
through
profit or
loss
(excluding
derivative
financial
assets) 86,722 158,077 - - 393,491
2. Derivative
financial
instrument 5,050 94,032 - - 119,069
3. Hedging
Instrument 21,565 - 14,070 - 13,101
4.
Available
-for-sale
financial
assets 1,175,785 - 727,466 - 768,467
Subtotal 1,289,122 252,109 741,536 - 1,294,128
Financial
liabilities (155,036) (17,191) - - (158,102)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
5. FINANCIAL ASSETS AND LIABILITIES IN FOREGIN CURRENCIES
USD’000
Accumulat Provision
Balance at ed change of
Item the Change in in fair impairmen Balance at
beginning fair value value in t for the the end of
Note of the year of the year equity year the year
Financial assets
1. Financial assets at
fair value through
profit or loss
(excluding
derivative financial
assets) 12,286 16,753 - - 34,938
2. Derivative financial
instrument (1) 739 13,938 - - 18,069
3. Hedging
Instrument 3,164 - 2,053 - 1,988
4. Loans and
receivables (2) 322,606 - - (1,526) 882,506
5. Available-for-sale
financial assets 18,118 - 593 - 1,375
Subtotal 356,913 30,691 2,646 (1,526) 938,876
Financial liabilities (3) (1,363,890) (2,548) - - (1,865,586)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
5. FINANCIAL ASSETS AND LIABILITIES IN FOREGIN CURRENCIES (CONTINUED)
RMB’000
Balance at Accumulated
the Change in change in Provision of Balance at
Item
beginning of fair value of fair value in impairment the end of
Note the year the year equity for the year the year
Financial assets
1. Financial assets at
fair value through
profit or loss
(excluding
derivative financial
assets) 83,888 110,397 - - 230,231
2. Derivative financial
instrument (1) 5,050 94,032 - - 119,069
3. Hedging
Instrument 21,565 - 14,070 - 13,101
4. Loans and
receivables (2) 2,202,816 - - (10,056) 5,815,450
5. Available-for-sales 123,715 - 3,935 - 9,066
Subtotal 2,437,034 204,429 18,005 (10,056) 6,186,917
Financial liabilities (3) (9,312,911) (17,191) - - (12,293,652)
Note: (1) Derivative financial instrument in foreign currency includes foreign
currency future contract.
(2) Loans and receivables in foreign currency includes accounts receivable,
other receivables, prepayments and long-term receivable denominated in
foreign currencies.
(3) Financial liabilities includes foreign currency loans, accounts payable,
other payables, advances from customers, interest rate swap contracts
and stock option contracts.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
1. CASH AT BANK AND ON HAND
2010 2009
Original Exchange Original Exchange
currency rate USD RMB currency rate USD RMB
’000 ’000 ’000 ’000 ’000 ’000
Cash at bank
RMB 293,010 6.5897 44,464 293,010 80,767 6.8282 11,829 80,767
USD 2,953 1.0000 2,953 19,457 4,540 1.0000 4,540 31,002
HKD 94 7.7734 12 79 64 7.7546 8 56
JPY 384,917 81.37 4,730 31,172 311,795 90.28 3,454 23,583
EUR 2 0.7490 3 17 65 0.6940 93 637
Subtotal 52,162 343,735 19,924 136,045
--------- --------- --------- ---------
Other momentary funds
RMB 73,726 6.5897 11,188 73,726 1,635 6.8282 240 1,635
USD 377 1.0000 377 2,484 73,234 1.0000 73,234 500,058
Subtotal 11,565 76,210 73,474 501,693
--------- --------- --------- ---------
Total 63,727 419,945 93,398 637,738
As at 31 December 2010, restricted cash at bank and on hand of the Company was
USD 377,000, equivalent to RMB 2,484,000 (2009: USD 73,234,000, equivalent to
RMB 500,058,000).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
2. Financial assets held for trading
(1) Financial assets held for trading by categories:
Category 2010 2009
Amount RMB equvalent Amount RMB equvalent
USD’000 RMB’000 USD’000 RMB’000
1、 Equity securities investments
held for trading 24,629 162,298 - -
Total 24,629 162,298 - -
(2) There is no restriction in liquidity of financial assets held for trading for the
current year.
3. DIVIDENDS RECEIVABLE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
SCIMC 85,038 560,378 85,039 580,659
SCIMCEL 22,742 149,861 55,157 376,621
XHCIMC 262 1,726 262 1,789
QDCC 5,213 34,355 5,213 35,599
DLCIMC 8,401 55,361 8,401 57,364
NBCIMC 4,856 32,001 11,733 80,115
SCRC 12,761 84,097 15,877 108,414
XHCIMCS 23,549 155,179 23,549 160,795
QDCSR 3,435 22,635 1,241 8,471
DLL 7,018 46,248 7,018 47,922
CIMC(HK) 461,838 3,043,364 462,834 3,160,330
TCCIMC 3,616 23,831 3,616 24,693
ZZCIMC 3,541 23,333 3,541 24,177
TJCIMCLE 949 6,253 - -
SBWI - - 615 4,198
QDCRC 731 4,815 - -
CIMCSD - - 9,480 64,727
Total 643,950 4,243,437 693,576 4,735,874
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of dividends receivable.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES
(1) Other receivables by customers’ categories:
Category 2010 2009
Amount RMB Amount RMB
equivalent equivalent
USD’000 RMB’000 USD’000 RMB’000
Amounts due from
related parties 633,029 4,171,470 768,076 5,244,575
Deposits 122 804 119 814
Others 1,130 7,448 3,652 24,936
Subtotal 634,281 4,179,722 771,847 5,270,325
Less: provision for bad
and doubtful debts (691) (4,554) (691) (4,719)
Total 633,590 4,175,168 771,156 5,265,606
(2) The ageing analysis of other receivables is as follows:
Category 2010 2009
Amount RMB Amount RMB
equivalent equivalent
USD’000 RMB’000 USD’000 RMB’000
Within 1 year 611,677 4,030,771 749,260 5,116,097
1 to 2 years - - 22,587 154,228
2 to 3 years 22,604 148,951 - -
More than 3 years - - - -
Subtotal 634,281 4,179,722 771,847 5,270,325
Less: provision for bad
and doubtful debts (691) (4,554) (691) (4,719)
Total 633,590 4,175,168 771,156 5,265,606
The ageing is counted starting from the date the other receivable is recognised.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
2010 2009
Provision for bad and Provision for bad and
Category Note Gross carrying amount Gross carrying amount
doubtful debts doubtful debts
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
USD’000 (%) USD’000 (%) USD’000 (%) USD’000 (%)
Individually significant other receivables (4) 630,971 99.48% - - 744,953 96.52% - -
Other insignificant other receivables (5) 3,310 0.52% 691 20.88% 26,894 3.48% 691 2.57%
Total 634,281 100.00% 691 0.11% 771,847 100.00% 691 0.09%
2010 2009
Provision for bad and Provision for bad and
Category Note Gross carrying amount Gross carrying amount
doubtful debts doubtful debts
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
RMB’000 (%) RMB’000 (%) RMB’000 (%) RMB’000 (%)
Individually significant other receivables (4) 4,157,910 99.48% - - 5,086,688 96.52% - -
Other insignificant other receivables (5) 21,812 0.52% 4,554 20.88% 183,637 3.48% 4,719 2.57%
Total 4,179,722 100.00% 4,554 0.11% 5,270,325 100.00% 4,719 0.09%
There are no collaterals the Group holds for accounts receivable that made impairment aforesaid.
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SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories (continued):
Individually significant items represent other receivables which individual amount
over RMB 10,000,000 (inclusive) or the book value of which account for 5%
(inclusive) of the total other receivables in individual financial statements grouped in
the consolidated financial statement.
(4) An analysis of other receivables individually significant and assessed for impairment
individually is as follows:
There are no other receivables individually significant and individually assessed for
impairment at the year end. (2009: Nil).
(5) An analysis of individually insignificant but assessed for impairment individually is as
follows:
There are no other receivables individually insignificant but assessed for impairment
individually at the year end. (2009: Nil).
(6) Written-back or recovery of accounts receivable during the year
There were no other receivables for which a full provision or a significant provision
was made in previous years while were recovered in full or in significant amount
during the year (2009: Nil).
(7) Write-off of other receivables during the year
There was no material write-off of other receivables during the year (2009: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(8) Other receivables due from the five largest debtors of the Group are as follows:
Proportion in
Relationship total other
with the receivables
Debtor Company USD’000 RMB’000 Aging (%)
1. Total amounts due from Within 1
subsidiaries Subsidiary 606,841 3,998,902 year 95.67%
2. Shanghai Fengyang Real 1 to 3
Estate Development Co., Ltd Associates 24,130 159,007 years 3.80%
3. China Merchants Within 1
International Ltd. Shareholder 1,169 7,704 year 0.18%
4. Nanshan Construction 2to 3
Bureau. Third Party 477 3,140 years 0.08%
5. Xietong Real Estate Within 1
Company Third Party 304 2,000 year 0.05%
Total ─ 632,921 4,170,753 ─ 99.78%
The Group’s top 5 other receivables as at 31 December 2009 amounted to USD
482,398,000 (RMB 3,293,918,000), accounting for 62.50% of the total other
receivables.
(9) Status of share holders holding to 5% or above voting rights, in the Company’s other
receivables
Balance of other receivables due from shareholders who hold 5% or more of the
voting rights of the Group as at balance sheet date represented withholding Corporate
Income Tax of oversea shareholder dividend due from China Merchants International
Ltd and COSCO Container, amounting to USD1,169,000 and USD286,000
respectively, equivalent to RMB7,704,000 and RMB1,886,000. (2009:Nil)
(10) Receivables due from related parties
Percentage
in total other
Relationship with receivables
Related party the Company USD’000 RMB’000 (%)
Shareholders who hold
5% or more of the voting
rights of the Group Shareholders 1,455 9,590 0.23%
Associates Associates 24,130 159,007 3.80%
Subsidiaries Subsidiaries 606,841 3,998,902 95.67%
Minority
shareholders of
associates and
Others subsidiaries 603 3,971 0.10%
Total ─ 633,029 4,171,470 99.80%
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(11) Derecognition of other receivables due to transferring of financial assets
There was no derecognition of other receivables due to transferring of financial assets
of the Company in 2010 (2009: Nil).
(12) Amount of assets and liabilities recognised due to the continuing involvement of
securitised other receivables
There were no securitised other receivables during the year (2009: Nil).
5. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Available-for-sale
equity instruments 115,241 759,401 154,077 1,052,070
Detailed analysis for the Group’s available-for-sale financial assets, refer to Note
V.10.
6. LONG-TERM EQUITY INVESTMENTS
(1) As at 31 December 2010, the Company’s long-term equity investments are as follows:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Investments to
subsidiaries 496,771 3,273,573 377,130 2,575,120
Other long-term
equity
investments 59,482 391,970 59,482 406,155
Subtotal 556,253 3,665,543 436,612 2,981,275
Less: provision of
impairment 465 3,065 465 3,175
Total 555,788 3,662,478 436,147 2,978,100
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows:
USD’000
Initial Balance at the Additions Balance at Shareholding The Company Whether voting right is Dividend
investment beginning of during the the end of percentage subsidiaries defferent from the Provision for Impairment receivable/received
Investee cost the year year the year (%) voting right(%) shareholding interest impairment loss of the year of the year
Costing method – Investment in subsidiaries
SCIMC 12,450 12,450 - 12,450 100.00% 100.00% - - - -
SCIMCEL 12,450 12,450 - 12,450 100.00% 100.00% - - - -
XHCIMC 5,539 5,539 - 5,539 100.00% 100.00% - - - -
CIMC 100.00% - - -
Yuandong 17,338 17,338 - 17,338 100.00% -
TJCIMC 12,342 12,342 - 12,342 100.00% 100.00% - - - -
TJCIMCn 11,500 11,500 - 11,500 100.00% 100.00% - - - -
QDCC 9,139 9,139 - 9,139 100.00% 100.00% - - - -
DLCIMC 7,400 7,400 - 7,400 100.00% 100.00% - - - -
NBCIMC 3,750 3,750 - 3,750 100.00% 100.00% - - - -
SBWI 10,100 10,100 - 10,100 94.75% 100.00% IV、1、(4)(ii) - - -
TCCIMC 19,979 19,979 - 19,979 100.00% 100.00% - - - -
ZZCIMC 15,266 15,266 - 15,266 100.00% 100.00% - - - -
SHYSLE 11,982 11,982 - 11,982 100.00% 100.00% - - - -
CQCIMC 5,994 5,994 - 5,994 100.00% 100.00% - - - -
SCRC 30,486 30,486 - 30,486 92.00% 100.00% - - - 12,762
QDCRC 8,229 8,229 - 8,229 89.30% 89.30% - - - 731
XHCIMCS 12,448 6,748 5,700 12,448 100.00% 100.00% - - - 5,700
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows (continued):
USD’000
Initial Balance at the Additions Balance at The Company Whether voting right Dividend
investment beginning of during the the end of Shareholding subsidiaries is defferent from the Provision for Impairment receivable/received
Investee cost the year year the year percentage (%) voting right(%) shareholding interest impairment loss of the year of the year
Costing method – Investment in subsidiaries (continued)
DLL 7,024 7,024 - 7,024 100.00% 100.00% - - - -
QDCSR 1,931 1,931 - 1,931 100.00% 100.00% - - - 2,194
TJCIMCLE 2,498 2,498 - 2,498 100.00% 100.00% - - - 949
CIMC (HK) 256 256 - 256 100.00% 100.00% - - - -
CIMC (USA) 26,009 26,009 - 26,009 100.00% 100.00% - - - -
CIMCSD 24,688 24,688 - 24,688 100.00% 100.00% - - - -
HI 41,906 41,906 - 41,906 80.00% 80.00% - - - -
SZVL 4 4 - 4 80.20% 80.20% - - - -
CIMC TEI - 900 (900) - - - - - - -
CIMC Tech 384 384 - 384 100.00% 100.00% - - - -
TCCIMC 9,073 9,073 - 9,073 100.00% 100.00% - - - -
YTLRC - 1,645 (1,645) - - - - - - -
CIMCWD 16,473 16,473 - 16,473 100.00% 100.00% - - - -
CIMC
Management
and
Training(Shenzh
en) 7,300 7,300 - 7,300 100.00% 100.00% - - - -
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows (continued):
USD’000
Initial Balance at the Additions Balance at the The Company Whether voting right is Dividend
investment beginning of the during the end of the Shareholding subsidiaries voting defferent from the Provision for Impairment loss receivable/received
Investee cost year year year percentage (%) right(%) shareholding interest impairment of the year of the year
Costing method – Investment in subsidiaries (continued)
DLZH 16,857 16,857 - 16,857 100.00% 100.00% - - - -
MEA 3,293 3,293 - 3,293 100.00% 100.00% - - - -
SZW 527 527 - 527 100.00% 100.00% - - - -
TLC 12,375 12,375 - 12,375 100.00% 100.00% - - - -
SCIMCEL 3,295 3,295 - 3,295 100.00% 100.00% - - - -
Shenzhen CIMC
Investment 10,987 - 10,987 10,987
Company Limited 100.00% 100.00% - - - -
CWGS. 73,234 - 73,234 73,234 100.00% 100.00% - - - -
CIMC Vehicle
Finance and 28,180 -
Leasing Co., Ltd. 28,180 28,180 100.00% 100.00% - - - -
QDSV 4,085 - 4,085 4,085 80.00% 100.00% 四、1、(4)(ii) - - -
Subtotal 496,771 377,130 119,641 496,771 - - - - - 22,336
Costing method – Other long-term equity investment
China Railway
United Logistics 57,783 57,783 - 57,783 10.00% 10.00% - - - -
Beihai Yinjian 258 258 - 258 1.01% 1.01% - 258 - -
Guangdong
Samsung 207 207 - 207 0.09% 0.09% - 207 - -
BOCM Schroder
Stolt Fund
Management 1,234 1,234 - 1,234 5.00% 5.00% - - - 1,105
Subtotal 59,482 59,482 - 59,482 - - - 465 - 1,105
Total 556,253 436,612 119,641 556,253 - - - 465 - 23,441
234
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows (continued):
RMB’000
Initial Balance at the Additions Balance at Shareholding The Company Whether voting right Dividend
investment beginning of during the the end of the percentage subsidiaries is defferent from the Provision for Impairment receivable/recei
Investee cost the year year year (%) voting right(%) shareholding interest impairment loss of the year ved of the year
Costing method – Investment in subsidiaries:
SCIMC 82,042 85,011 (2,969) 82,042 100.00% 100.00% - - - -
SCIMCEL 82,042 85,011 (2,969) 82,042 100.00% 100.00% - - - -
XHCIMC 36,500 37,821 (1,321) 36,500 100.00% 100.00% - - - -
CIMB
Yuandong 114,249 118,384 (4,135) 114,249 100.00% 100.00% - - - -
TJCIMC 81,333 84,276 (2,943) 81,333 100.00% 100.00% - - - -
TJCIMCn 75,780 78,523 (2,743) 75,780 100.00% 100.00% - - - -
QDCC 60,255 62,405 (2,180) 60,225 100.00% 100.00% - - - -
DLCIMC 48,764 50,529 (1,765) 48,764 100.00% 100.00% - - - -
NBCIMC 24,711 25,606 (895) 24,711 100.00% 100.00% - - - -
SBWI 66,558 68,967 (2,409) 66,558 94.75% 100.00% 四、1、(4)(ii) - - -
TCCIMC 131,654 136,419 (4,765) 131,654 100.00% 100.00% - - - -
ZZCIMC 100,597 104,238 (3,641) 100,597 100.00% 100.00% - - - -
SHYSLE 78,955 81,812 (2,857) 78,955 100.00% 100.00% - - - -
CQVL 39,499 40,928 (1,429) 39,499 100.00% 100.00% - - - -
SCRC 200,892 208,163 (7,271) 200,892 92.00% 100.00% - - - 86,098
QDCRC 54,225 56,188 (1,963) 54,225 89.30% 89.30% - - - 4,929
XHCIMCS 82,026 46,074 35,952 82,026 100.00% 100.00% - - - 38,455
DLL 46,284 47,959 (1,675) 46,284 100.00% 100.00% - - - -
QDCSR 12,743 13,204 (461) 12,743 100.00% 100.00% - - - 14,804
235
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows (continued):
RMB’000
Balance at the The Company Whether voting right is Dividend
Initial beginning of the Additions Balance at the Shareholding subsidiaries voting defferent from the Provision for Impairment loss of receivable/receiv
Investee investment cost year during the year end of the year percentage (%) right(%) shareholding interest impairment the year ed of the year
Costing method – Investment in subsidiaries (continued):
TJCIMCLE 16,459 17,054 (595) 16,459 100.00% 100.00% - - - 6,401
CIMC (HK) 1,690 1,751 (61) 1,690 100.00% 100.00% - - - -
CIMC (USA) 171,397 177,600 (6,203) 171,397 100.00% 100.00% - - - -
CIMCSD 162,686 168,574 (5,888) 162,686 100.00% 100.00% - - - -
HI 276,148 286,143 (9,995) 276,148 80.00% 80.00% - - - -
SCVL 24 25 (1) 24 80.20% 80.20% - - - -
CIMC TEI - 6,145 (6,145) - - - - - - -
CIMC Tech 2,526 2,618 (92) 2,526 100.00% 100.00% - - - -
TCCIMC 59,792 61,956 (2,164) 59,792 100.00% 100.00% - - - -
YTLRC 11,230 (11,230) 100.00% 100.00% - - - -
CIMCWD 108,544 112,472 (3,928) 108,544 100.00% 100.00% - - - -
CIMC
Management and
Training(Shenzhe
n) 48,102 49,843 (1,741) 48,102 100.00% 100.00% - - - -
DLZH 111,083 115,103 (4,020) 111,083 100.00% 100.00% - - - -
MEA 21,703 22,488 (785) 21,703 100.00% 100.00% - - - -
SZW 3,472 3,598 (126) 3,472 100.00% 100.00% - - - -
TLC 81,548 84,499 (2,951) 81,548 100.00% 100.00% - - - -
SCIMCEL 21,717 22,503 (786) 21,717 100.00% 100.00% - - - -
Shenzhen CIMC
Investment 72,401 - 72,401 72,401
Company Limited 100.00% 100.00% - - - -
Finance Company 482,590 - 482,590 482,590 100.00% 100.00% - - - -
CIMC Vehicle
Finance and 185,700 - 185,700 185,700
Leasing Co., Ltd. 100.00% 100.00% - - - -
QDSV 26,912 - 26,912 26,912 80.00% 100.00% 四、1、(4)(ii) - - -
Subtotal 3,273,573 2,575,120 698,453 3,273,573 100.00% 100.00% - - - 150,687
236
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 31 December 2010, the Company’s investments on subsidiaries are as follows (continued):
RMB’000
Initial Balance at the Additions Balance at Shareholding The Company Whether voting right is Dividend
investment beginning of during the the end of percentage subsidiaries voting different from the Provision for Impairment receivable/recei
Investee cost the year year the year (%) right(%) shareholding interest impairment loss of the year ved of the year
Costing method – Other long-term equity investment
China Railway
United
Logistics 380,780 394,561 (13,781) 380,780 10.00% 10.00% - - - -
Beihai Yinjian 1,700 1,762 (62) 1,700 1.01% 1.01% - 1,700 - -
Guangdong
Samsung 1,365 1,413 (48) 1,365 0.09% 0.09% - 1,365 - -
BOCM
Schroder Stolt
Fund
Management 8,125 8,419 (294) 8,125 5.00% 5.00% - - - 7,458
Subtotal 391,970 406,155 (14,185) 391,970 - 3,065 - 7,458
Total 3,665,543 2,981,275 684,268 3,665,543 - 3,065 - 158,145
Information for the Company’s subsidiaries see note IV.
237
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
7. SHORT-TERM LOANS
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Credit loans
- RMB 72,977 480,897 94,690 646,564
8. FINANCIAL LIABILITIES HELD FOR TRADING
Note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Current:
Derivative financial
liabilities
- Foreign exchange
forward contract 84 556 - -
Subtotal 84 556 - -
Non-current:
Derivative financial
liabilities
- Swap contract
for interest rate V.23.1 8,896 58,620 10,782 73,623
- Foreign exchange
option contracts V.23.2 11,871 78,226 10,486 71,601
Subtotal 20,767 136,846 21,268 145,224
Total 20,851 137,402 21,268 145,224
238
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
9. Bills payable
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Bank acceptance bills 30,350 200,000 - -
Total 30,350 200,000 - -
The above bills are due within one year.
No amount due to the shareholders who hold 5% or more of the voting rights of the Group in
included in the above balance of bills payable.
10. EMPLOYEE BENEFITS PAYABLE
Balance at Accrued Paid Balance at
the beginning during during the end
Item of the year the year the year of the year
USD’000 USD’000 USD’000 USD’000
Salaries, bonuses, and
allowances 8,000 15,335 (8,335) 15,000
Senior management bonus 26,018 16,862 (1,987) 40,893
Social insurances
and others 1 1,240 (1,248) (7)
Total 34,019 33,437 (11,570) 55,886
Effect of
Balance at Accrued Paid foreign Balance at
the beginning during during exchange the end
Item of the year the year the year rate changes of the year
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Salaries, bonuses, and
allowances 54,627 103,456 (56,226) (3,000) 98,857
Senior management bonus 177,656 113,762 (13,405) (8,538) 269,475
Social insurances
and others 3 8,365 (8,420) (5) (57)
Total 232,286 225,583 (78,051) (11,543) 368,275
11. TAXES PAYABLE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Income tax payable 265 1,743 27,923 190,663
Withholding
individual tax 8,860 58,384 8,480 57,900
Others (159) (1,047) 36 251
Total 8,966 59,080 36,439 248,814
239
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
12. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR
(1) The analysis of the Company’s non-current liabilities due within one year by categories
is as follows:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Long-term loans
due within one year
- Credit loans 414,185 2,729,353 57,678 393,839
(2) The analysis of the Company’s non-current liabilities by currencies due within one
year is as follows:
Annual interest rate 2010 2009
Original Exchange Original Exchange
currency rate USD currency rate USD
’000 ’000 ’000 ’000
Bank loans
- RMB 3.51%~4.73% 2,000,000 6.5897 303,504 42,000 6.8282 6,151
- USD LIBOR+90BP 100,000 1.0000 100,000 40,000 1.0000 40,000
- EUR EURIBOR+65BP 8,000 0.7490 10,681 8,000 0.6940 11,527
414,185 57,678
As at 31 December 2010, there was no renewal of past due long-term bank loans
which was included in the above non-current liabilities due within one year (2009:
Nil).
240
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
12. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(a) As at 31 December 2010, the top four long-term loans due within one year is as follows:
2010 2009
Lender Initial date Maturity date Currency Interest rate (%) Original Original
currency USD currency USD
’000 ’000 ’000 ’000
1. The Export-Import Bank of
China 23 June 2008 23 June 2011 RMB 4.73% 1,400,000 212,453 42,000 6,151
12 December 21 December
2. China Development Bank 2007 2010 USD Six-month LIBOR+90BP 100,000 100,000 40,000 40,000
3. The Export-Import Bank of
China 23 May 2008 23 May 2010 RMB 4.01% 600,000 91,051 - -
4.The Export-Import Bank of
China 18 June 2007 18 December 2011 EUR EURIBOR+65BP 8,000 10,681 8,000 11,527
Total 414,185 57,678
(b) As at 31 December 2010, there was no overdue loan of non-current liabilities due within one year(2009:Nil).
241
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
13. LONG-TERM LOANS
(1) Long-term loans by categories:
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Bank loans
- Credit loans 375,340 2,473,381 743,787 5,078,728
(2) The analysis of the Company’s long-term loans by currencies as follows:
Annual interest rate 2010 2009
Original Exchange Original Exchange
currency rate USD currency rate USD
’000 ’000 ’000 ’000
Bank loans
- RMB 3.51%~4.23% - 6.5897 - 1,410,000 6.8282 206,497
- USD LIBOR+55~185BP 370,000 1.0000 370,000 520,000 1.0000 520,000
- EUR EURIBOR+65BP 4,000 0.7490 5,340 12,000 0.6940 17,290
375,340 743,787
No amount due to the shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of long-term loans (2009: Nil).
242
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
13. LONG-TERM LOANS (CONTINUED)
(3) As at 31 December 2010, the top four long-term loans (including all long-term loans) is as follows:
2010 2009
Borrower Initial date Maturity date Currency Interest rate (%) Original Original
currency USD currency USD
’000 ’000 ’000 ’000
Six-month
1. China Development Bank 12 December 2007 10 December 2013 USD LIBOR+90BP 270,000 270,000 370,000 370,000
The first quarter
2. The Export-Import Bank of 5.67%，renew
China 23 May 2008 23 May 2011 RMB quarterly - - 800,000 117,161
Six-month
3. ABN-AMRO Bank 26 May 2010 21 May 2012 USD LIBOR+185BP 50,000 50,000 -
Three-month
4. Bank of China 19 October 2009 19 October 2012 USD LIBOR+55BP 50,000 50,000 50,000 50,000
5.The Export-Import Bank of Six-month
China 18 June 2007 18 June 2012 EUR EURIBOR+65BP 4,000 5,340 12,000 17,291
Total —— —— —— —— —— 375,340 —— 554,452
As at 31 December 2010, there was no renewal of past due long-term bank loans which was include in the above long-term loans
(2009:Nil).
243
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
14. DEFERRED TAX ASSETS AND LIABILITIES
(1) Deferred tax assets and liabilities after offsetting
USD’000
Deductible/(tax Deferred tax Deductible/(tax Deferred tax
able) temporary assets/(liabilitie able) temporary assets/(liabilitie
Item difference 2010 s) 2010 difference 2009 s) 2009
Deferred tax assets:
Employee benefits payable 55,886 13,971 34,019 7,484
Movement for fair value of
financial assets held for
trading/derivative financial
instruments 20,851 5,004 21,268 4,679
Subtotal 76,737 18,975 55,287 12,163
Offsetting amount (76,737) (18,975) (55,287) (12,163)
Net amount after offsetting - - - -
Deferred tax liabilities:
Movement for fair value of
financial assets held for
trading/derivative financial
instruments (6,797) (1,423) - -
Movement for fair value of
available-for-sale financial
assets charged to equity (105,478) (25,184) (145,906) (32,099)
Subtotal (112,275) (26,607) (145,906) (32,099)
Offsetting amount 76,737 18,975 55,287 12,163
Net amount after offsetting (35,538) (7,632) (90,619) (19,936)
244
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
14. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
(1) Deferred tax assets and liabilities after offsetting (continued)
RMB’000
Deductible/(tax Deferred tax Deductible/(tax Deferred tax
able) temporary assets/(liabilitie able) temporary assets/(liabilitie
Item difference 2010 s) 2010 difference 2009 s) 2009
Deferred tax assets:
Employee benefits payable 368,275 92,069 232,286 51,352
Movement for fair value of
financial assets held for
trading/derivative financial
instruments 137,402 32,977 145,224 32,200
Subtotal 505,677 125,046 377,510 83,552
Offsetting amount (505,677) (125,046) (377,510) (83,522)
Net amount after offsetting - - - -
Deferred tax liabilities:
Movement for fair value of
financial assets held for
trading/derivative financial
instruments (45,854) (9,383) - -
Movement for fair value of
available-for-sale financial
assets charged to equity (723,531) (165,954) (996,278) (219,680)
Subtotal (769,385) (175,337) (996,278) (219,680)
Offsetting amount 505,677 125,046 377,510 83,552
Net amount after offsetting (263,708) (50,291) (618,768) (136,128)
As at 31 December 2010, there was no unrecognised deferred tax liabilities for the
Company.
245
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
15. CAPITAL RESERVE
Balance at Additions Settlements Balance at
the beginning during during the end
Note of the year the year the year of the year
USD’000 USD’000 USD’000 USD’000
Share premiums 21,245 - - 21,245
Other capital reserves
- Property revaluation
reserve 6,640 - - 6,640
- Exchange reserve
on foreign
currency capital 104 - - 104
- Donated non-cash
assets reserve 13 - - 13
- Net changes in
fair value of
available-for-sale
financial assets 145,906 - (40,428) 105,478
- Deferred tax effect (32,099) - 6,915 (25,184)
-Amount of share-based
payments charged
to equity - 3,866 - 3,866
141,809 3,866 (33,513) 112,162
Balance at Additions Settlements Balance at
the beginning during during the end
Note of the year the year the year of the year
RMB’000 RMB’000 RMB’000 RMB’000
Share premiums 212,656 - - 212,656
Other capital reserves
- Property revaluation
reserve 54,979 - - 54,979
- Exchange reserve
on foreign
currency capital 861 - - 861
- Donated non-cash
assets reserve 108 - - 108
- Net changes in fair
value of
available-for-sale
financial assets 996,278 - (272,747) 723,531
- Deferred tax effect (219,680) - 53,726 (165,954)
-Amount of share-based
payments charged
to equity - 26,083 - 26,083
1,045,202 26,083 (219,021) 852,264
246
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
16. GAINS FROM CHANGES IN FAIR VALUE
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Financial assets held for trading
- Changes in fair value
during the year 7,930 53,501 - -
Including: Gains / losses from
changes in fair value of
derivative financial
instrument - - - -
- Transfer to investment
losses for derecognition of
financial assets
held for trading (1,133) (7,647) - -
Financial liabilities held
for trading
- Changes in fair value
during the year 417 2,814 8,787 60,020
Including: Gains / losses from
changes in fair value of
derivative financial
instrument 417 2,814 8,787 60,020
Total 7,214 48,668 8,787 60,020
247
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
17. INVESTMENT INCOME
(1) The analysis of the Company’s investment income is as follows:
note 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Long-term equity investments in cost
method (2) 23,441 158,145 36,924 252,207
Losses on disposal of long-term
equity investment (249) (1,680) (2,184) (14,917)
Investment gains on
available-for-sale financial assets 2,735 18,452 202 1,381
Investment losses on sale of
held-for-trading financial assets (1,133) (7,647) - -
Gains on sale of available-for-sale
financial assets 1,649 11,126 213,363 1,457,378
Total 26,443 178,396 248,305 1,696,049
(2) Long-term investments in cost method with individual investment income over 5% of
total investment income or less than 5% but the top five investment income for the
year are as follows:
Reasons for
variances between
Investee 2010 2009 two years
USD’000 RMB’000 USD’000 RMB’000
12,762 86,098 Dividend
distributed in 2010
is less than that in
SCRC 15,877 108,451 2009
5,700 38,455 Dividend
distributed in 2010
is less than that in
XHCIMCS 13,416 91,637 2008
2,194 14,804 Dividend
distributed in 2010
is more than that in
QDCSR 659 4,503 2009
1,105 7,458 Dividend
distributed in 2010
BOCM Schroder Stolt Fund is more than that in
Management 732 4,999 2009
949 6,401 Dividend
distributed in 2010
is less than that in
TJCIMCLE 2,198 15,016 2009
Total 22,710 153,216 35,270 240,915 ─
Note 1: There was no significant restriction on the remittance of investment income
to the investor
248
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
18. INCOME TAX
2010 2009
USD’000 RMB’000 USD’000 RMB’000
Current tax expenses
for the year - - 37,528 256,884
Deferred taxation (5,389) (36,359) 920 5,732
Total (5,389) (36,359) 38,448 262,616
Reconciliation between income tax expenses and accounting profits is as follows:
The Company
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
Profits before taxation (10,355) (69,855) 224,030 1,530,236
Expected income tax expenses
at applicable tax rates (2,278) (15,368) 44,806 306,048
Tax effect of non-
deductible expenses 364 2,458 3,204 21,877
Tax effect of tax losses of
unrecognised deferred
tax assets 4,449 30,012 - -
Effect of tax rate change on
deferred tax (2,164) (14,609) (1,106) (7,553)
Tax effect of non-
taxable income (5,760) (38,852) (8,456) (57,756)
Income tax expenses (5,389) (36,359) 38,448 262,616
19. Other comprehensive income / (losses)
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
1. (losses) / Gain on
available-for-sale financial assts (38,779) (261,621) 203,667 1,391,831
Less: Effect of income tax
arising from
available-for-sale financial
assets (6,915) (53,726) 981 7,315
Amount recognised in other
comprehensive income in
prior period transferred to
profit and loss in current
period 1,649 11,126 213,363 1,457,378
2. Effect of foreign exchange rate
changes - (267,693) - 3,592
Total (33,513) (486,714) (10,667) (69,270)
249
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
20. INFORMATION TO CHAS FLOW STATEMENT
(1) Supplement to cash flow statement:
Supplement 2010 2009
USD’000 RMB’000 USD’000 RMB’000
1. Reconciliation of net profit to
cash flow from operating
activities:
Net profit (4,966) (33,497) 185,582 1,267,620
Add: Depreciation of fixed
assets 1,772 11,953 1,609 10,990
Amortisation of intangible
assets 147 992 302 2,063
Amortisation of long-term
deferred expenses 379 2,557 441 3,012
(Gains) / losses on disposal
of fixed assets (2,811) (18,962) 73 500
Gains on changes in fair
value (7,214) (48,668) (8,787) (60,020)
Financial income (8,785) (59,260) (5,964) (40,737)
Investment gains (26,443) (178,396) (248,305) (1,696,049)
Expenses recognized by
share-based payments 3,866 26,083 - -
(Increase) / decrease in
deferred tax assets (6,812) (45,958) 920 5,732
Increase in deferred tax
liabilities 1,423 9,599 - -
Increase in operating
receivables 104,304 703,590 (47,806) (326,539)
Increase in operating
payables 21,683 146,244 13,895 94,910
Effect of foreign exchange
rate changes - 31 - 554
Net cash outflows from
operating activities 76,543 516,308 (108,040) (737,964)
2. Net movement in cash and cash
equivalents:
Closing balance of cash and cash
equivalents 63,350 417,461 20,164 137,680
Less: Opening balance of cash
and cash equivalents 20,164 137,680 63,031 430,150
Net decrease of cash and cash
equivalents 43,186 279,781 (42,867) (292,470)
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
20. INFORMATION TO CHAS FLOW STATEMENT (CONTINUED)
(2) Cash and cash equivalents held by the Group is as follows:
Item 2010 2009
USD’000 RMB’000 USD’000 RMB’000
1 Cash at bank and on hand
Including: Bank deposits
available on demand 52,162 343,735 19,924 136,045
Other monetary funds
available on demand 11,188 73,726 240 1,635
2 Closing balance of cash and cash
equivalents 63,350 417,461 20,164 137,680
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
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SUPPLEMENTARY INFORMATION
1. EXTRAORDINARY GAIN AND LOSS IN 2010
Item
USD’000 RMB’000 Note
Disposal of non-current assets (24,421) (164,757)
Government grants charge to profit and loss (excluded
government grants closely related to business and applied
to all similar businesses according to national unity or
quantitative standards) 13,886 93,685
Capital occupied interests from non-financial enterprises
charged into current profit and loss 1,174 7,919
Gains on movement of fair value of financial assets held for
trading and financial liabilities; gains on disposal of
financial assets held for trading, financial liabilities and
available-for-sale financial assets (excluding hedge
financial instruments related to ordinary business of the
Group) 31,047 209,457
The Group’s interest in gains from the excess of the fair
value of identifiable net assets of the acquiree over the
acquisition cost 12,475 84,166
Other non-operating income / expenses 11,731 79,139
Effect of income tax (9,275) (62,571)
Effect of minority shareholder equity (after tax) (5,439) (36,694)
Total 31,178 210,344
Note: Aforesaid extraordinary gain and loss were presented at amount before
taxation.
2. Reconciliation statements of differences in financial statements
prepared under different GAAPs
(1) The effect of the difference between PRC GAAP and IFRS on consolidated net profit
and equity attributable to shareholders of the Group is analysed as follows:
USD’000
Profit Equity
2010 2009 2010 2009
Amounts under PRC GAAP 444,949 140,394 2,461,890 2,079,349
Adjustments under IFRS GAAP:
Others 832 833 (600) (734)
Amounts under IFRS GAAP 445,781 141,227 2,461,290 2,078,615
RMB’000
Profit Equity
2010 2009 2010 2009
Amounts under PRC GAAP 3,001,851 958,967 16,223,057 14,198,208
Adjustments under IFRS GAAP:
Others 5,612 5,682 (3,950) (5,010)
Amounts under IFRS GAAP 3,007,463 964,649 16,219,107 14,193,198
Adjustments include current year depreciation and amortisation of fixed assets and
intangible assets revaluated in previous years.
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SUPPLEMENTARY INFORMATION (CONTINUED)
3. EARNINGS PER SHARE AND RETURN ON NET ASSETS
In accordance with Interpretive Pronouncement on the Preparation of Information
Disclosures of Companies Issuing Public Shares No. 9 – Earnings per share and
return on net assets (2010 revised) and relevant requirements of accounting standard,
the calculation of earnings per share and return on net assets of the Group is listed as
follows:
’000
Weighted average Earnings per share
Profit return on net Basic earnings per Diluted earnings per
assets (%) share share
USD’000 RMB’000 USD’000 RMB’000
Profit attributable to ordinary
equity shareholders 20% 0.17 1.13 0.17 1.13
Profit attributable to ordinary
equity shareholders net of
extraordinary gain and loss 18% 0.16 1.05 0.16 1.05
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Section 12. Content of Documents Available for Reference
I. The text of annual report 2009 with signature of Chairman of the Board.
II. Accounting statements carrying signatures and seal of Legal Representative, Chief
Officer in charge of accounting and person in charge of accounting firms (Chief Accountant).
III. Original of the Audit Report carrying official seal of accounting firm, signatures and seals
of certified public accountants.
IV. Originals of documents and announcements disclosed on the newspaper designated by
China Securities Regulatory Commission during the reporting period.
V. Full text of Articles of Association;
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