China International Marine Containers (Group)
Co., Ltd.
2011
Semi-Annual Report
24 August 2011
Chairman of the Board: Li Jianhong
0
Important Statement
The Board of Directors, the Board of Supervisors, directors, supervisors and senior
executives 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 omissions, and shall assume
individual and joint liabilities for the factuality, accuracy and integrity of the contents in this
report.
Eight directors should be present at the Board meeting and actually all of them did.
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 enclosed in this semi-annual report is true and complete.
The semi-annual financial report 2011 of the Company has been reviewed by KPMG.
English Translation for Reference Only. Should there be any discrepancy between the two
versions, the Chinese version shall prevail.
0
Contents
Ⅰ. Company Profile…………………………………………………………………1
Ⅱ. About Changes in Share Capital and Shares Held by Major Shareholders………3
Ⅲ. Directors, Supervisors and Senior Management Staffs……………………………6
Ⅳ. Report of the Board of Directors…………………………………………………7
Ⅴ. Significant Events………………………………………………………………24
Ⅵ. Financial Report (Reviewed)…………………………………………………31
Ⅶ. Documents for Reference………………………………………………………244
0
Ⅰ. Company Profile
(I) Company Profile
1. Company name: 中国国际海运集装箱（集团）股份有限公司（缩写为 “中集集团”）
In English: CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD
(abbreviated “CIMC”)
2. Registered address: CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan District,
Shenzhen
Office address: CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan District,
Shenzhen
Zip code: 518067
Internet website: http://www.cimc.com
3. Legal representative: Li Jianhong
4. Secretary to the Board: Yu Yuqun
Contact Address: CIMC R&D Center, 2 Gangwan Avenue, Shekou, Nanshan District,
Shenzhen
Tel: (86) 755-2669 1130
Fax: (86) 755-2682 6579
E-mail:shareholder@cimc.com
Representative for securities affairs: Wang Xinjiu
Tel: (86) 755-2680 2706
Fax: (86) 755-2681 3950
5. 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 the semi-annual report is made available: Board secretary’s office and
Financial Management Dept
6. Stock exchange on which the Company are listed: Shenzhen Stock Exchange
Stock short form and code:
CIMC (中集集团) 000039
CIMC B (中集 B) 200039
(II) Key accounting data and financial highlights
Unit: RMB’000
30 Jun. 2011 31 Dec. 2010 Increase/decrease (%)
Total assets 66,163,921 54,130,649 22.23%
Owners’ equity attributable to shareholders of
18,143,875 16,223,057 11.84%
listed company
Share capital (share) 2,662,396,051 2,662,396,051 -
Net asset per share attributable to shareholders
6.81 6.09 11.84%
of listed company (Yuan/share)
Year-on-year
Jan.-Jun. 2011 Jan.-Jun. 2010
increase/decrease (%)
Operating revenue 36,478,098 21,237,889 71.76%
Operating profit 3,729,782 1,129,318 230.27%
Total profit 3,817,519 1,318,665 189.50%
Net profit attributable to shareholders of listed
2,807,629 912,556 207.67%
company
Net profit attributable to shareholders of listed
company after deducting non-recurring gains 2,798,284 736,305 280.04%
and losses
Basic EPS (Yuan/share) 1.0545 0.3428 207.61%
Diluted EPS (Yuan/share) 1.0545 0.3428 207.61%
ROE 15.47% 6.35% 9.12%
1
Net cash flow arising from operating activities -4,161,444 -2,777,738 49.81%
Net cash flow per share arising from operating
-1.5630 -1.0433 49.81%
activities (Yuan/share)
Unit: RMB’000
Items of non-recurring gains and losses Amount
Gains and losses from non-current asset disposal 6,022
Governmental subsidy 83,625
Capital occupation fee from non-financial corporate that written
into current gains and losses 2,184
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 -112,067
financial liabilities and financial assets available for sale besides
valid hedging business relating to normal operating business
Other non-operating income and expenditure 11,153
Impact on income tax 2,285
Impact on equity of minority shareholders 16,143
Total 9,345
Return on equity and earnings per share for the first half of 2011 based on the different
profit indexes:
ROE（%） EPS（RMB Yuan）
Profit for the report period Fully Weighted Weighted
Fully diluted
diluted average average
Net profit attributable to common shareholders
of the Company 15.47% 16.19% 1.0545 1.0545
Net profit attributable to common shareholders
of the Company after deducting non-recurring
gains and losses 15.42% 16.14% 1.0510 1.0510
Net profit and net assets calculated in the light of the two different accounting standards and
accounting systems (PRC GAAP and IFRS) and relevant difference：
Unit: RMB’000
Net profit Net assets
Jan.-Jun. 2011 As at 30 Jun. 2011
Amount under PRC GAAP 2,807,629 18,143,875
Adjustment as per IFRS: 2,745 -3,507
Other
Amount under IFRS 2,810,374 18,140,368
2
Ⅱ. About Changes in Share Capital and Shares Held by Major Shareholders
(I) Change in shares of the Company
Unit: share
Prior to change Increase/decrease (+/-) Subsequent to change
Issuan
Propor
ce of Bonus Proportion
Number tion Other Subtotal Number
New share (%)
(%)
share
I. Shares subject to
620,177 0.02 0 0 0 0 620,177 0.02
trading moratorium
1. Shares held by the
0 0 0 0 0 0 0 0
State
2. shares held by
0 0 0 0 0 0 0 0
state-owned corporation
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
foreign investors
Including: Shares held
0 0 0 0 0 0 0 0
by foreign corporations
Shares held by foreign
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
0 0 0 0 0 0 0 0
foreign 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
(II) About shareholders
1. Total number of shareholders by the end of reporting period
As at 30 June 2011, the Company has 178,113 shares in total, including 146,136 ones of
A-share and 31,977 ones of B-share.
2. About shares held by shareholders as at the end of reporting period
(1) Shares held by the top ten shareholders
Number
Total Number
of shares
number of
Shareholding subject to
Name of shareholder Nature of pledged
ratio (%) trading
shares or frozen
moratoriu
held shares
m
1 CHINA MERCHANTS (CIMC) Foreign
25.00% 665,599,037 0 0
INVESTMENT LIMITED corporation
2 Domestic non
COSCO CONTAINER INDUSTRIES
state-owned 16.23% 432,171,843 0 0
LIMITED
corporation
3
3 Foreign
COSCO Container Industries Limited 5.57% 148,320,037 0 0
corporation
4 CMBLSA RE FTIF TEMPLETON ASIAN Foreign
corporation 3.23% 85,998,058 0 0
GRW FD GTI 5496
5 LONG HONOUR INVESTMENTS Foreign
corporation 0.95% 25,322,106 0 0
LIMITED
6 New China Life Insurance Co., Domestic non
Ltd–Dividend Distribution–Individual state-owned 0.86% 22,970,428 0 0
Dividend-018L-FH002 Shen corporation
7 GUOTAI JUNAN Foreign
0.78% 20,835,255 0 0
SECURITIES(HONGKONG) LIMITED corporation
8 Shanghai Pudong Development Bank–Gf Domestic non
Small-Cap Growth Equity Securities state-owned 0.50% 13,349,827 0 0
Investment Fund corporation
9 TEMPLETON EMERGING MARKETS Foreign
0.48% 12,801,432 0 0
INVESTMENT TRUST corporation
10 INDUSTRIAL & COMMERCIAL BANK
Domestic non
OF CHINA—E FUND VALUE GROWTH
state-owned 0.48% 12,699,999 0 0
MIXED SECURITIES INVESTMENT
corporation
FUND
Note: 1. COSCO Container Industries Limited and Long Honour Investments Limited are
related parties and parties acting in concert. COSCO Container Industries Limited is a
wholly-owned subsidiary of COSCO Pacific Limited, which is a controlled subsidiary under
COSCO. Long Honour Investments Limited is a wholly-owned subsidiary of COSCO (H.K.)
Group (COSCO HK), which is a controlled subsidiary under COSCO. The two
companies—COSCO Container Industries Limited and Long Honour Investments
Limited—and other shareholders are not parties acting in concert as prescribed in the
Administrative Measures for Information Disclosure of Shareholding Changes of Listed
Company Shareholders.
2. It is unknown whether there exists related-party relationship among other shareholders or
whether they are acting-in-concert parties as prescribed in the Administrative Measures for
Information Disclosure of Shareholding Changes of Listed Company Shareholders.
(2) Shares held by the top ten shareholders not subject to trading moratorium
Shares held by the top 10 shareholders of A-share
Number of shares not
Serial subject to trading mora
Name of shareholder
No. torium held by the sha
reholder
1 COSCO CONTAINER INDUSTRIES LIMITED 432,171,843
New China Life Insurance Co., Ltd–Dividend Distribution–Individual
2 Dividend-018L-FH002 Shen
22,970,428
Shanghai Pudong Development Bank–GF SMALL-CAP GROWTH EQUITY
3 SECURITIES INVESTMENT FUND
13,349,827
INDUSTRIAL & COMMERCIAL BANK OF CHINA—E FUND VALUE
4 GROWTH MIXED SECURITIES INVESTMENT FUND
12,699,999
ICBC–CREDIT SUISSE SELECTED BALANCED MIXED SECURITIES
5 INVESTMENT FUND
12,580,635
New China Life Insurance Co., Ltd–Dividend Distribution–Individual
6 Dividend-018L-FH002 Shen
12,140,039
7 Bank of China–E Fund Shenzhen Stock Exchange 100 Exchange Traded Fund 11,633,357
CHINA MINSHENG BANKING CORP., LTD–HUASHANG LEADING
8 ENTERPRISES MIXED OPEN-ENDED SECURITIES INVESTMENT 9,355,700
FUND
9 ICBC–Rongtong SSE 100 Index Fund 9,247,735
10 National Social Security Fund 102 Portfolio 8,000,000
Shares held by the top 10 shareholders of B-share
4
Number of shares not
Serial subject to trading
Name of shareholder
No. moratorium held by
the shareholder
1 CHINA MERCHANTS (CIMC) INVESTMENT LIMITED 665,599,037
2 COSCO Container Industries Limited 148,320,037
3 CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 5496 85,998,058
4 LONG HONOUR INVESTMENTS LIMITED 25,322,106
5 GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 20,835,255
6 TEMPLETON EMERGING MARKETS INVESTMENT TRUST 12,801,432
7 BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND 10,546,598
8 BBH A/C FIDELITY CHINA REGION FUND 8,547,087
DREYFUS PREMIER INVESTMENT FDS INC.-DREYFUS GREATER
9 CHINA FD
7,840,378
10 GOVERNMENT OF SINGAPORE INV. CORP.- A/C C" " 7,667,831
3. Particulars about change in controlling shareholder and actual controller
There exists no controlling shareholder and actual controller in the Company, which are
remained unchanged in the reporting period.
5
Ⅲ. Directors, Supervisors and Senior Management Staffs
(I) Change in shares held by directors, supervisors and senior management staffs during the
reporting period
Name Office title Number of shares held Reason for change
Mai Boliang President 494,702 No change
Li Ruiting Vice-president 329,802 No change
Liu Xuebin Vice-president 2,400 No change
(II) Change in directors, supervisors and senior management staffs
On 13 Jul. 2011, the Board of the Company received written resignation from director Mr.
Xu Minjie. Mr. Xu Minjie resigned from post of director of the 6th Board of Directors of the
Company due to work change.
On 22 Jul. 2011, the 6th Board of Directors of the Company convened the 8th Session of the
6th Board of Directors for Y2011 by method of telecommunication. The meeting reviewed
and approved Proposal on Nominating and Re-electing Candidates for Directors for the 6th
Board of Directors, of which Mr. Sun Jiakang and Mr. Wang Xingru were nominated to be
candidates for the 6th Board of Directors. On 11 Aug. 2011, the Company convened the 1st
Special Shareholders’ General Meeting for Y2011 and decided to elect Mr. Sun Jiakang and
Mr. Wang Xingru as directors of the 6th Board of Directors.
On 16 Aug. 2011, the 6th Board of Directors of the Company convened the 10th Session of the
6th Board of Directors by method of telecommunication. The meeting reviewed and approved
Proposal on Electing Vice President and Re-electing Members of Strategic Committee and
Audit Committee. The Company decided to elect Mr. Sun Jiakang as vice president of the 6th
Board of Directors.
6
IV. Report of the Board of Directors
(I) Discussion and analysis
1. Analysis to operating results and financial data
Unit: RMB’000
Same period of last Increase/decrease ratio
Items Reporting period
year (%)
Operating revenues 36,478,098 21,237,889 71.76%
Operating profit 3,729,782 1,129,318 230.27%
Net profit attributable to shareholders of the
2,807,629 912,556 207.67%
Company
Net cash flows from operating activities -4,161,444 -2,777,738 -49.81%
Net increase in cash and cash equivalents 1,306,970 -373,580 449.85%
For the first half of 2011, the Company achieved operating revenues of RMB 36,478,098,000,
up 71.76% from a year earlier; and net profit attributable to shareholders of the Company
RMB 2,807,629,000, up 207.67% as compared with the same period of last year. This was
mainly because: the Company received sufficient orders for containers, especially dry cargo
containers in the first half of the year, with sharp increase in both the sales volume and the
selling prices, maintaining a relatively high profitability; the energy & chemical business, as
well as the liquefied food equipment business, also showed significant growth while the
vehicle business remained stable.
As compared with the same period of last year, the Company’s dry cargo container
production rose steadily in the first half of 2011, with a distinct rally of accounts receivable
and expense on raw material purchase. Operating fund occupation went up distinctly, so net
cash flows from operating activities for the first half of the year decreased sharply.
Meanwhile, due to an expanding operating scale and a rising capital expenditure, the debt
ratio of the Company increased over that at the end of 2010. As at 30 Jun. 2011, the
Company’s total debt ratio was 68.03%, with the debt/equity ratio at 2.13.
Unit: RMB’000
Closing Opening
amount/amount amount/amount
Increase/decrease
for the for the same Reason for increase/decrease
ratio
reporting period of last
period year
Scale expansion of the
Long-term receivables 3,646,949 1,336,257 172.92%
financial lease business
Dividends payable to
Dividend payable 190,367 16,046 1,086.38%
shareholders of the Company
A new issue of medium term
Bonds payable 3,987,276 - 100% notes of RMB 4 billion in the
reporting period
Foreign exchange Influence of the shift into the
-335,706 -2,055,682 83.67%
difference recording currency
Scale expansion of the
Operating revenues 36,478,098 21,237,889 71.76%
container business
7
Scale expansion of the
Operating costs 29,499,900 18,246,729 61.67%
container business
Expansion of the overall
Selling expense 968,591 558,349 73.47%
business scale
Expansion of the overall
Administrative expense 1,715,951 1,032,191 66.24%
business scale
Scale expansion of all business
lines resulted in increased
Financial expense 399,962 252,090 58.66%
capital occupation, as well as a
rise in the cost of funds
Provisions for intangible asset
Asset impairment loss 73,709 29,344 151.19% impairment in the reporting
period
Fair value changes of
Gain/(loss) on fair value
-88,256 86,341 -202.22% transactional financial assets
changes
and derivative financial tools
Loss on equity disposal was
Investment income 71,207 -57,021 224.88%
included.
Considerable rise of pre-tax
Income tax 1,024,118 233,516 338.56%
profits
Cash received from
Expansion of the overall
selling goods and 30,785,201 17,168,426 79.31%
business scale
services
Tax and fare refunds Expansion of the overall
2,088,686 296,416 604.65%
received business scale
Cash paid for goods and Expansion of the overall
31,152,788 16,810,031 85.32%
services business scale
Expansion of the overall
Cash paid to and for
2,195,235 1,055,284 108.02% business scale and the number
employees
of employees
Expansion of the overall
Taxes and fares paid 1,309,083 838,147 56.19% business scale and profit
growth
Cash paid to acquire
Increase of the capital
fixed assets, intangible
1,083,498 512,040 111.60% expenditure for the reporting
assets and other
period
long-term assets
Net cash paid to acquire Business combination in the
49,936 419,155 -88.09%
subsidiaries same period of last year
Sharp increase of capital
Cash received from
20,968,220 8,700,457 141.00% occupation in the reporting
borrowings
period
More debts were mature and
Cash paid to clear debts 12,913,949 4,760,420 171.28%
repaid.
Cash paid for
Considerable increase of
dividend/profit
1,252,464 450,101 178.26% distributed profit and interest
distribution or interest
expense in the reporting period
reimbursement
8
2. Discussion and analysis of material events
(1) Global economic recovery and its influence
In the first half of 2011, the global economic recovery was imbalanced with wilder
fluctuations. In the first six months, the second quarter in particular, the shipping volume
grew slower than expected. For the Jan.-Jun. period, the container throughput in all main
ports of China increased only 10% as compared with the same period of last year. Despite the
facts above, the demand for containers in the shipping sector maintained a steady growth due
to a high new shipping capacity in the first half of the year, clients’ needs for preparing
containers in advance and other elements. According to customs statistics, the total number of
containers for export of China showed a considerable year-on-year growth in the first half of
the year.
The Company is still optimistic about the overall container demand in the future. It is
expected that despite seasonal fluctuations, the demand will keep rising in the coming two to
three years. Currently, the global economic development is uncertain considering the
American economic slowdown, a looming debt crisis in Europe and high inflation in
emerging economies. Consequently, authoritative institutions have all reduced their growth
expectations for the global container trading volume for this year. The Britain-based Clarkson
has predicted that the global container trading volume may increase to 0.153 billion TEU this
year, representing a growth rate of 9.0%. The demand for common dry cargo containers this
year will be lower than expected. Boosted respectively by development of the global chilled
cargo trade and growth of large equipment export by China, reefer containers and special
containers will maintain great momentum in the second half of the year.
In the coming one to two years, the global economy will continue to recover. Along with the
economic globalization and the global re-division of industries, international trade will
become much more frequent. Emerging economies, with China as a representative, will
continue to take a leading position in the global economic recovery. Urbanization and
industrialization will create continuously-growing demands for the shipping industry and
container transportation. With an over-capacity, shipping companies are expected to stick to
the low speed policy for this year and the next year.
With growing supply and demand imbalance for global energy and resources, stimulated by
the Middle East chaos, the earthquake in Japan and other factors, international prices for
crude oil soared to a high level around US$ 120 per barrel, which boosted the recovery of the
global offshore engineering equipment market. After the deepwater horizon oil platform
accident in the Mexican Gulf, all oil and gas companies, as well as the oil field service
companies, started to increase their input for updating their old drilling platform.
As a whole, the global offshore engineering equipment market in the first half of the year
basically continued to grow since the fourth quarter of last year. In spite of double pressures
from many variations in the global economic recovery and a relatively weak shipping market,
the utilization rate of offshore drilling platforms still continues to grow at present, sometimes
as high as 75%. Survey results of authoritative institutions also showed that investments for
global offshore oil and gas exploitation and production in 2011 would grow 10.8% from last
year, topping the record high of US$ 472.1 billion in 2008. Many international oil and gas
mega companies have a distinctly high capital expenditure. New orders for drilling platforms
9
are mainly for drilling ships and jack-up platforms.
As domestic enterprises starts to set foot in the offshore engineering sector, China’s
advantages over resources and manufacture have begun to show up. In the coming future,
domestic offshore engineering companies will produce more equipment to replace imported
ones step by step. An excellent opportunity for development is put in front of Chinese
offshore engineering equipment makers.
(2) Changes of domestic macro-economic policies, demands and investments, as well as
influence thereof
In the first half of the year, the domestic economy recovered steadily under macro-control
and showed signs of stability. The government continued to carry out a tight credit policy,
with a slower growth in domestic fixed asset investments. In the six months, China’s special
vehicle industry was obviously not as flourish as before. In the coming six months, a great
number of low-income housing projects will be accelerated, which ensures a certain market
demand for self-dumping trucks, agitating trucks and other engineering vehicles.
(3) Changes of government policies and regulations for the industry, as well as the influence
thereof
The Outline for China’s Twelfth Five-Year Plan for Economic and Social Development has
specified the development orientation and goals for the energy industry, high-end equipment
manufacture and offshore engineering equipments.
According to the Outline, China will stick to the energy saving policy, focus on domestic
enterprises, promote diversified development, protect the environment, enhance international
mutual beneficial cooperation, optimize the energy structure and build a safe, stable,
economical and clean modern energy system. The Outline has also put forward emission
reduction requirements. In the country’s twelfth five-year plan, offshore engineering
equipment manufacture is mentioned as an important part in the high-end equipment
manufacture industry, one of the emerging industries. The Development Plan for Offshore
Engineering Equipment Manufacture during the Twelfth Five-year Plan is expected to be
finished and launched within this year. China will try to make breakthroughs in domestic
manufacture of deep sea engineering equipments. Relevant government departments will
unveil specific support policies afterwards. The national development goal for the
petrochemical equipment industry for this five-year period has been specified, i.e. to promote
the big petrochemical equipment industry to a big and at the same time strong one by
promoting high-end equipments, domestic manufacture of large-scale packaged equipments,
equipments for energy saving and environmental protection, the ability of independent
innovation, etc..
60% of oil in China is imported. During the twelfth five-year period, it becomes a necessary
energy strategy for China to focus on domestic oil and gas resources, ensure domestic oil
supply and strengthen exploitation of offshore oil and gas so as to cope with the decreasing
onshore resources. In the long run, China has offshore oil and gas of 24 billion tons and 16
trillion square meters respectively, representing an enormous room for exploitation. During
the twelfth five-year period, China’s investments in offshore oil and gas field exploitation
will increase sharply to RMB 250 billion to 300 billion expectedly. As such, implementation
of the said plans and policies will boost development of the industry and market demands,
10
which will benefit the medium and long-term development of the Company’s offshore
engineering business and energy & chemical equipment business.
In June 2011, the State Council required the formulation of effective supporting policies and
measures for promoting healthy development of the logistics industry, which included:
reducing tax burdens on logistics enterprises, strengthening support in terms of the land
policy, reducing tolls, solving difficulties in intermediate distribution in cities and other four
measures. The Act for Road Safety Protection issued by the State Council has come into
effect on 1 Jul. 2011, which serves as the new regulation for the country to prevent overload
and limit outlines and sizes of special vehicles. The launch and execution of these polices and
measures will further improve the operating environment for China’s logistics-related special
vehicle companies and boost market demands, which will be helpful for the long-term
development of the Group’s vehicle business.
(Ⅱ) Business performance of the Company
1. Major business activities and conditions
(1) Operating income classified according to industries and regions
Unit: RMB’000
Based on business types Operating income Operating cost Gross margin (%)
Container 21,926,873 16,954,563 22.68%
Road transport vehicle 9,692,095 8,306,828 14.29%
Energy chemical equipment 3,731,891 3,090,480 17.19%
Offshore engineering 230,120 588,376 -155.68%
Airport equipment 141,072 94,667 32.89%
Others 1,350,464 991,382 26.59%
Combined offset -594,417 -526,396 -
Total 36,478,098 29,499,900 19.13%
Prop. in the total operating YoY Increase/decrease (+/ -
Based on business regions Operating income
income (%) %)
America 10,134,478 27.78% -6.17%
Europe 10,677,870 29.27% 103.84%
Asia 14,871,751 40.77% 266.30%
Other regions 793,999 2.18% -30.25%
Total 36,478,098 100% 71.76%
(2) The Group’s operation conditions of main business during the reporting period shall be as
follows:
The Company and its subsidiaries (hereinafter referred to as the "Group") is principally
engaged in the modernized transport equipment, energy, chemical, liquid food equipment,
manufacturing of offshore engineering equipment, as well as service business including the
design, manufacturing and services of international standard dry cargo container, reefer
container, regional special container, tank container, container flooring, road tank trucks, gas
equipment and static tanks, road transport vehicles, jack-up drilling platforms,
semi-submersible drilling platforms, special ships and airport equipment. Additionally, the
Group is also specialized in manufacturing of logistics equipment and railway cars, real estate
development and other services. Currently, the volume of production and sales of Group's
standard dry cargo container, reefer container and tank container rank the first place around
the world; the Group is also the largest manufacturer of road transport vehicles in China, as
well as one of China's major offshore engineering equipment enterprises.
The products accounted for more than 10% of the Group’s total operating income or profit
are container products, road transport vehicles, energy, chemical, liquid food equipment. See
11
above table for the main product sales revenue and gross profit in the first half of 2011.
—— Container Service
Benefited from the strong demand for containers in the first half of 2011, the accumulative
sales of general dry cargo container reached up to 977,200 TEU, which increased by 129.76%
compared with the same period of last year. The accumulative sales of reefer containers
totaled 88,500 TEU, which increased by 168.49% over the same period of last year. The
cumulative sales of special containers (not including tank container, pallet boxes) reached to
42,600 units, up by 74.28% compared with the same period of last year. The operating
income of container service in the first half year was RMB 21,926,873,000, which increased
by 176.00% over the same period of last year. The net income was RMB 2,916,482,000,
which jumped 473.48% compared with the same period of last year.
In addition to container manufacturing, the Group is also engaged in container services
including storage, maintenance, refurbishment, as well as the new services such as
old-for-new service and old container modification. The treatment capacity of containers by
terminal handling service was 1,241,000 TEU in the first half year, which grew 23.9 % over
the previous year; the container repair volume was 77,000 TEU, which was 18.6% lower than
the last year.
In the first half of 2011, CIMC received adequate orders for dry cargo containers, with the
price of dry cargo container being on stable rise, and the highest price had reached USD 3000
/TEU, creating the highest record in recent years. The competition situation of the containers
industry remained stable in the first half of 2011, with the effective capacity resuming to the
highest level, utility ratio of capacity at peak time over 95% and the gross profit of dry cargo
container also maintaining the high level of recent years.
By following the concepts of low-carbon, environmental and ecological protection, the Group
continued to promote the application of new technology in terms of container service, where
the “safe, green, intelligence and lightweight” represented the future direction of the products.
For example, the application and development of HTS, environmental wood flooring,
water-based paint, environmental reefer container and RFID technology.
The Group also actively explored the modular construction, modification and recycling of
second-hand containers and other new business models, so as to realize slowing down the
consumption on resources, promote energy saving and carbon emission reduction, realize
recycling economy and meet the low-carbon and environmental development trend in
construction industry. In Jan. 2011, the Group implemented low-carbon modular office
project; In Jun. 2011, the Group won the construction project of anti-seismic housing project
for low-income families in Xinjiang, which will introduce the environmental idea of
container modular house. Besides, in Jul. 2011, the Group’s project as “Recycling to use the
existing container to be modified as a modular environmental architecture” was listed in the
investment plan of National Development and Reform Commission, gaining the national
subsidy for the first time, which will benefit the Company to develop the modular
environmental architecture business within large scale and at deep level.
The Group will continue to dedicate itself to the upgrade of container production mode. The
automatic container production line planned several years ago had been basically finished in
Shenzhen at the first half of this year after six-month construction; the production line with
expected annual capacity of 250,000 TEU is the first automatic production line, which will
significantly enhance the production efficiency and lower the reliance on labor, meeting a
higher environmental standard and lying on the leading level of the industry. Comparing with
the traditional production line, its advantage will be more prominent.
Look into second half of the year, the second and third quarter was the traditional peak period
before, however, it appears dull business in such traditional peak period. As the external
12
demand in the second quarter became weak, the increase of cargo volume in the global
shipping market was slower than expected, the customer’s stock of the purchased new
containers stood at large amount while the speed of picking up the container slowed down
significantly, and the customers need some time to digest such stock. The demand for
containers has turned into dull season since June of this year, the price and profit of container
will decrease accordingly.
The Company believes that market demand for containers will maintain the general tendency
of stable rise in the future one to two years. And the trading volume of global contains
increased with the growth of economy. Now although the global economy recovers slowly,
the trading volume of containers keeps on the rise. Generally, the increasing speed of the
global trading volume of containers is two to three times of that for GDP on average. With
the deepen in global procedure and growing of emerging economies, the subdivision of
container shipping and economy will make the trade volume between different areas keep
rising, and the demand for containers will increase accordingly. Due to the lack and high
price of containers, the replacement and obsoleteness of old containers in the past two years
has been postponed. According to conservative estimate, the amount of the normally replaced
and obsolete containers will stand at more than 1 million TEU. Considering that the freight
capacity will substantially increase in the two years of 2011 and 2012, and 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 benefit in
increasing the turnover of containers to some extent.
——Road Transport Vehicle Manufacturing and Service Business
In the first half of 2011, the Group’s transport vehicle manufacturing and service business
suffered from domestic deflation policy, slower investment and weakened demand from the
downstream, thus the growth of sales volume and operating income was lower than expected.
Basing on the high base of the professional vehicle industry last year, its increasing speed in
China significantly slowed down in the first half of 2011. The demands on the engineering
vehicles such as dump truck, concrete mixing and transporting car and bulk cement truck had
entered the traditional peak period and rose slowly; however, due to the large acquisition
amount in last year and the unchanged situation of domestic deflation policy and the low
freight charge, the market demand of the logistic vehicles such as the dry bulk cargo and
container skeleton semi trailer, etc. experienced a substantial decline. After many years of
recession, the two mainstream markets in Europe and America appeared distinct recovery
indication in the first half of 2011, the order of the Group’s vehicle business overseas factory
was large, which significantly stimulated the export demand for the Group’s logistic vehicles.
The cumulative sales of road transportation vehicles was 88, 800 units (sets) in the first half,
which created a new historical record by 11% higher than the last year; with the sales revenue
of RMB 9,692,095,000, which offered a comparative growth of 6.11%; the net profit was
RMB 344,504,000 , decreasing by 12.57% over the same period last year. And the gross
margin increased slightly when compared with the last year. The vehicles, the overall market
share of the Group still kept the top position in the first half of this year, where the market
share of container transport semi-trailer, bulk cement truck and other major product
categories kept its leading position in domestic market.
In the first half of 2011, CIMC Vehicle Group was dedicated to proper allocation of resources
and improving the assets operating efficiency and enterprise profitability. With respect to
allocation of external resources, it acquired Liangshan Wanshida Trailer Co., Ltd. to further
expand capacity in the nesting zone of Chinese logistic trailer industry, and researched on the
further acquisition and layout; with respect to the optimization of marketing system, it
continued to increase investment on domestic market to pave the direct-sale store marketing
13
network, gave full play to advantage of scale and collaborative effect to expand its
competiveness in marketing channel of vehicle business; it started to plan the investment on
vehicle industrial park, so as to form industrial chain concentration effect and further expand
its brand influence. With regard to the technology, it adhered to promoting product
standardization, and finished the construction of the first generation standardized trailer,
initially introduced the standardized trailer production line, which significantly improved the
production efficiency and set an example for the industry; for the supply chain management,
it continued to vigorously promote the centralized purchase, expand the collaborative
advantage, while strengthen the research on steel and parts industry.
In the second half of 2011, the domestic deflation economic policy will continue, while the
strength is expected to slow down and active fiscal policy will continue, maintaining a certain
investment scale in the respect of water conservancy project, indemnificatory apartments,
area infrastructure investment and urbanization; the promulgation of Rules for Securing the
Road Safety will benefit the industrial development in the long run, however, the customers
will wait and observe in the short time, thus causing the decrease of market demand.
Therefore, it’s expected that Chinese special purpose vehicle market is difficult to appear
reverse increase in the next half year, with the overall market demand keeping stable.
Affected by the European debt and American debt, the recovery of the European and
American mainstream market is likely to slow down substantially, thus the increase of the
demand from overseas market will be lower than expected. There are upgrading and updating
market demands caused by policy opportunity, for example, China increase and require
implementing China IV Compulsory Emission Standards and overall implementing the Rules
for Securing the Road Safety to limit overload and improve safety, etc. The above policies
will have profound influence on Chinese heavy truck and special purpose vehicle industry.
But just because of the significant influence, the execution power and schedule of the policies
will face test.
For the operating strategy in the next half of 2011, the Group will base on the expansion and
upgrade of China logistic equipment market, comprehensively focus on the overall operating
efficiency of vehicle business, vigorously clear up non-active assets, strengthen the market
expansion, supply chain management and collaborative of various production bases for the
key products, so as to further optimize business and products interaction between China and
America as well as between China and Europe. The group will substantially promote the
European project and accelerate the market promotion of standardized trailer; The Group will
implement the parts industry plan and create the industrial platform; The Group will continue
to build up direct-sale store network; The Group will also advance the vehicle industrial park
project.
The investment and production as well as other business of the heavy truck project for the
Group gained smooth progress. Since announcing the launch of the products at the end of last
year, the Group overcame the adverse influence on the operating environment, and
experienced the debugging and run-in of production line and supply chain procedure in the
early period, receiving the order of joint truck totaled over 1000 units for the first half year.
The Group’s investment and production of heavy truck includes the whole truck and engine
project. As respect to the whole truck project, the C & C Trucks Co., Ltd. is jointly invested
by CIMC Vehicle Group Co., Ltd., Wuhu Tederic Investment Co., Ltd. and Shenzhen Just
Investment Co., Ltd. with the total registered capital of RMB 1.2 billion, of which CIMC
Vehicle Group Co., Ltd. and Wuhu Tederic Investment Co., Ltd. occupies 45% equity of C &
C Trucks Co., Ltd. respectively. C & C Trucks Co., Ltd. cut in from the domestic middle and
high end market of heavy truck, and adopted the product development strategy of “leading
the domestic technology while following the overseas advanced technology”, and realized the
strategic requirement of “holding appropriately advanced technology advantages and
14
obtaining more markets shares in domestic high-end heavy truck market”. The heavy truck
products are positioned in the middle and high-end international market and high-end
domestic market. For the road vehicles (such as tractor), the target market is the intercity
transportation and logistics market and port container transportation; for the engineering
vehicles (i.e. dump truck, mixer truck, etc.), the target market is set for the urban construction
and infrastructure. And the leading products include tractor, dump truck, van, special purpose
vehicle and mixer truck, etc., which creates the UE heavy truck platform for C & C Trucks
Co., Ltd.. Up to the No. 226 pubic notice from Ministry of Industry and Information
Technology of the People’s Republic of China, C & C Trucks Co., Ltd. had declared 80
public notices for over 100 types of vehicle, totally sufficient for future market demand..
As respect to the engine project, Y&C Engine was promoted by C & C Trucks Co., Ltd.,
Yuchai Union Power Co., Ltd. and Shenzhen Just Investment Co., Ltd., and founded in Wuhu,
Anhui in Aug. 2009 with the registered capital of RMB 500 million, of which C & C Trucks
Co., Ltd. and Yuchai Union Power Co., Ltd. occupying 45% equity respectively. The project
was divided into three construction phases by one-off plan. The investment for Phase I is
RMB 800 million, and the annual output capacity of the engine is 60,000 units, including the
engine cylinder block, cylinder head and installation/commissioning production line. The
engine adopts the 6K series supporting engine, which is jointly developed by Yuchai and
Austrian’s engine design company. The 6K series supporting engine is independently
developed by taking the new engine model as example, which includes the latest science and
technology achievement with more than 30 patents. It initially adopts reliability growth
technology in the engine industry, breaking through the weakness of reliability for
made-in-China; it also innovatively introduces the precise burning and electronic control
technology to realize less oil consumption and lower emission; the successive innovative
application of reverse cross-flow cooling technology and high strength material for the engine
significantly extend the service life of the engine, its emission has met the Euro VI standard,
possessing the technology level of the latest mass-production engine in 2012 in Europe.
Ministry of Environmental Protection decided to make proper adjustment on the executive
date of China IV Emission Standard: From 1 Jan. 2012, the new vehicles, which does not
meet the requirement of China IV Emission Standard, shall not be sold or registered. China
IV Emission Standard will be implemented from next year, which will intensify the
competition and shuffle of the industry, leading the industry to the development direction of
environment protection and low-carbon. The Y&C Engine was designed to stand on Euro IV
and possessing the upgrading potential of Euro VI at its initial design. There was the public
notice on China IV in the declared public notice by C & C Trucks Co., Ltd., so the execution
of the China IV Emission Standard will play positive role for its Production Design and
Marketing Departments.
Now the execution of Fuel Consumption Standards, issued by Ministry of Transport and
Ministry of Industry and Information Technology respectively, will lead the industry to the
low-carbon and environmental development direction, and eliminate the
high-oil-consumption and uneconomic vehicles. The 6K series supporting engine is newly
developed type by Y&C Engine with strong competitiveness in the aspect of oil consumption,
which adapts to the industrial development. Up to Aug. 2011, Ministry of Transport has
launched No. 15 List of Standard Types of Road Transport Vehicle on Oil Consumption. And
C & C Trucks Co., Ltd. has 95 types of standard vehicles in the list.
Besides, in response to the national requirements of the Development Plan of Energy-saving
and New Energy Vehicles (from 2011 to 2012), C&C Trucks is also actively developing
CNG/LNG heavy trucks using natural gas, and has developed LNG tractor, LNG mixer truck
and LNG dump truck.
In consideration of the industrial and market demand in the first half year, and under the
15
background of governance macro control, suppressing inflation and slowing down the
economic growth, demands for trucks especially semi trailer slumped, and demands for most
products in every divided market tended to decline. However, the market demands for trucks
at home and abroad in the future one year will keep increasing with the main factors as
follows: the economic growth will stimulate the long-term growth in commercial vehicle
market; the continued construction of project in construction from the investment on
domestic fixed assets and the city transformation; the start-up of indemnificatory apartments;
the infrastructure construction such as suburban water conservancy project, highway and
railway construction, etc., which all stimulate the continual growth of demands for heavy
whole trucks, such as dump truck and concrete mixing and transporting car and other
engineering and civil vehicles. Besides, Chinese product has comparative advantage with the
export market starting gradually and strong increasing potential.
—— Energy, Chemical, Liquid Food Equipment and Service Business
As the world is recovering from the recession gradually, China’s import and export, and
commercial manufacturing industry also enjoy a fast recovery. The market demand of tank
containers for transporting chemicals boosted in the first half year, which stimulated the
substantial growth in the operating income of chemical equipment business. The global
demands for natural gas and special gas equipment continue to increase especially the growth
in domestic demands is more substantial, which cause the significant increase in energy
equipment business in the first half year. However, the warming of liquid food industry was
relatively lagged due to weakening European market and slower domestic investment, it still
made every effort to realize the increase of orders and operating income. Therefore, the
Group’s operating income from energy, chemical, liquid food equipment business reaches
RMB 3,731,891,000 in the first half year, a growth of 92.54% over the same period last year.
The net profit amounts to RMB 247,457,000, a large increase over the same period last year,
with operating income from energy (natural gas) equipment business of the Group’s main
controlling subsidiary—CIMC Enric Holding Limited being RMB 1,478,643,000, an increase
of 48.2% over the same period last year; from chemical equipment business, RMB
1,296,914,000, an increase of 200.2% over the same period of previous year; and from liquid
food equipment business, RMB 292,313,000, an increase of 41.0% over the same period last
year. Of which, due to the increase of price and sales volume, the gross margin of energy
equipment business and chemical equipment business had slight increase, while the gross
margin of liquid food equipment business suffered some decline.
The Group’s main enterprises involving in energy, chemical and liquid food equipment
business include CIMC Enric Holding Limited, TGE GAS ENGINEERING GmbH, Nantong
CIMC Tank Equipment Co., Ltd. and Dalian CIMC Heavy Chemical Equipment Co., Ltd.. At
present, the production bases of CIMC’s energy chemical equipment are mainly located in six
cities around China, including Nantong and Zhangjiagang, Shijiazhuang, Langfang, Jingmen
and Bengbu, while the production plants of liquid food equipment are mainly situated in
Emmen and Sneek in Holland, Randers in Danmark, and Menen in Belgium. TGE Gas
Company, whose 60% of shares are held by the Company, is a leading independent contractor
of large-scale contracts for offshore projects in the world. It boasts 27 years of experience in
storage, disposal and transportation of gases like natural gas and petrochemical. Since 2010,
Jingmen Hongtu (CIMC Jingmen Hongtu Special Aircraft Manufacturing Co., Ltd.) has
aggressively entered the domestic low-temperature series product market by taking advantage
of its many years experience in R&D and manufacturing of LNG products, and gained
satisfying progress. Now the market share of the domestic low-temperature series product has
ascended to the domestic forefront.
The energy chemical products and service are available over China, Southeast Asia, Europe,
16
and North America. The liquid food products and service mainly focus on European market.
CIMC is committed to building an extensive and stable customer network, especially keep
good relationship with the heavy industrial giants and customers with huge potential. CIMC’s
key customers include well-known enterprises at home and abroad, such as CNPC, XinAo
Gas (XinAo Gas Holdings Limited.), EXSIF, TAL International, Sinochem International
Corporation, and Stolt.
In the first half of 2011, the capital expenditure of CIMC Enric was more than RMB 200
million, which was mainly used to improve the domestic energy equipment production
facilities, including removing the compressors factory in Bengbu, building light
comprehensive gas bottle production line, expanding LNG production facilities in
Zhangjiagang and LNG factory in Jingmen. In light that the demand for tank container is
expected to rise, the Company will also invest to improve the capacity of Nantong tank
container production base. CIMC Enric input over RMB 300 million to develop new products
and manufacturing technology. Now, the Company develops R&D project and manufacturing
technology upgrading project as follows: CNG ship application project, silane gas container
and 20,000 m LNG tank; and high-capacity and light CNG trailer and large-scale liquid
hydrogen tank have been developed successfully, which are belong to hi-tech low-carbon
product.
The investment on domestic natural gas application equipment and infrastructure construction
has large increase spare at current and in the future, for the consumption of natural gas has
accelerated to increase. Chinese governance has fix the relevant plan to stimulate
consumption, and it 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. In the first half of 2011, the
consumption of the domestic natural gas had increased by 21.0% to 63.1 billion m, and
import of LNG amounted to 7.2 billion m, increased by 27.9% compared with the same
period of last year.
Basing on judgment and prediction on the above basic situation, and in consideration of the
continual deflation currency policy executed in 2011, as well as the uncertain factors existing
in the global economic environment in the next half year, the Group holds cautious and
optimistic attitude on the prospect of the industry it involves in.
Therefore, the Group’s energy equipment business will continue to focus on the development
of natural gas delivery and equipment distribution business. Besides optimizing the current
product and service, the Group will continue to explore the income source, such as rendering
of engineering service and providing one-stop energy supply solution to Chinese gas operator.
In order to meet the increasing demand for LNG equipment, the Group also continues to
expand the capacity of LNG equipment production facilities. Besides, the Group will be
dedicated to strengthening its market share of LNG gas station, natural gas liquefaction
system and LNG trailer as well as other LNG equipment. CNG and LNG has some difference
on the application characteristics: the density of LNG is larger than CNG and more suitable
for long freight, but with higher production cost; the domestic situation is more suitable for
the application of CNG, but the application of LNG will increase with the increase of the
offshore oil-gas development.
Facing the uncertain global economy, the Group will continue to promote budget and control
measurements of cash flow, including accelerating to control operating cash flow and keeping
good relationship with the commercial bank to ensure sufficient capital for investment
activities. Besides, the Group has strengthened the cost control measurement, and will
continue to promote the localization of supporting components, as well as do well the quality
supervision.
—— Offshore Engineering Business
17
Offshore business is one of CIMC’s new key businesses. Singapore CIMC Raffles Offshore
Ltd. (SCRO), a subsidiary company of CIMC, and its subsidiary company is one of the
professional offshore equipment manufacturers in the world, actively taking part in the
competition over international offshore business market. The company’s products range from
jack-up drilling platform, semi-submersible drilling platform to offshore attached ship. The
jack-up drilling platform is the platform for the shallow-sea drilling with the highest usage
rate, which has a large market capacity. The Group has finished the strategic layout of “one
centre and three bases” consisted by LCRO, HCRO and National Resources Offshore Oil
Drilling Rig R&D Center: Yantai base is the design centre, which is responsible for overall
installation, debugging and delivery, etc., Haiyang base is charge for modular building, while
Longkou base is responsible for the production and construction of jack-up platform.
The Group realized a sales income of RMB 230 million in the first half year, down by
86.96% compared with the amount of RMB 1.764 billion at the same period of last year, with
the loss of RMB 583 million. Two projects were delivered in the first half year. The main
reasons of substantial decline of operating income and continual losses are as follows: the
amount of delivered historical orders reduced and existing delayed delivery, what’s worse,
the external orders in construction reduced, and the facilities usage rate declined.
In the first half of 2011, the Group’s offshore engineering business has a significant progress
in terms of construction of production base and investment of significant assets, providing
strong space support and security for offshore engineering equipment manufacture: the
expansive transformation project of fitting-out port for YCRO drilling platform has been
finished, which can be berthed by nine drilling platform at the same time; the Phase I and II
projects for the processing of pile leg semi-chord equipment advanced smoothly, which will
enhance the capacity of pile leg supporting semi-products upon completion; the construction
of LCRO’s port, relevant supporting facilities and project has been advanced smoothly,
which will overall increase the construction ability of LCRO upon completion.
As the key operating management task of offshore engineering business for this year, the
order delivery has been advanced as expectation. Two projects were delivered in the first half
year, while the other nine projects are under construction at current (two semi-submersible
drilling platforms, five jack-up platform and two semi-submersible lifting platforms). Two
semi-submersible drilling platforms constructed for COSL will be delivered after completion
in the next half year. With the successive delivery of deep-water semi-submersible drilling
platform, CIMC Raffles Offshore Ltd. (SCRO) has new improvement for its offshore
engineering equipment in terms of construction ability and efficiency. The customers and
ship classification societies gave high evaluation on the quality and HSE of the platform.
In Apr. 2011, the first deep-water semi- submersible drilling platform established for COSL,
COSL Pioneer 1#, was successfully delivered in the destination of Norway. In Jun. 2011,
COSL Pioneer gained the AOC certificate issued by PSA in Norway. AOC certificate is the
necessary condition to operate in Norway, which means that COSL Pioneer meets the
requirement and standard of continental shelf sea area operation in Norway.
In Apr. 2011, SS Amazonia, the second deep-water semi-submersibles drilling platform
established for Schahin in Brazil by YCRO, which was delivered at Yantai. The main
operating sea area of the SS Amazonia delivered this time and its sister ship, the SS Pantanal
(a semi-submersibles drilling platform) delivered for Brazil in Oct. 2010, were Brazil sea area
and Gulf of Mexico. These two platforms would be leased to Brazil National Petroleum
Corporation by Brazil Schahin Corporation. In Jun. 2011, SS Pantanal platform entered into
Operation area of Brazil Marlin Oil Field to do the dynamic positioning, which is the last test
before drilling.
In May 2011, Super M2 H196, the first jack-up drilling platform constructed by LCRO, was
successful delivered, which is researched and developed by American F&G Corporation,
18
carefully designed by YCRO. It marked that the strategy of Ruffles jack-up drilling platform
construction base was advanced as schedule.
In Jun. 2011, STORNES, the flexible fallpipe vessel constructed for Van Oord Marine
Services BV in Holland by YCRO, was successfully delivered in Yantai. Fallpipe vessel is
one of the necessary tool ships for offshore exploitation, playing important role in high-end
offshore engineering industry. STORNES is the 5th flexible fallpipe vessel in the World. The
successful delivery of STORNES marks a new break-through on the design and construction
of offshore engineering special vessel, meanwhile, a new progress on the design and
construction of high-end offshore engineering vessel for China.
In respect of the new orders and market expansion, CIMC Ruffles made a series market
expansion by attending the industrial exhibitions and visiting target customers as well as
other channels. In the first half year, three sales contracts for the self-constructed jack-up
drilling platform were signed, which is likely to improve the earnings in the next half of the
year. In Jul. 2011, CIMC Ruffles gained a construction main contract agreement for two
50,000-ton multi-function semi-submersible drilling platforms. In the first half year, the
traditional powerful countries on offshore engineering, such as South Korea and Singapore,
etc. still hold the dominant position of gaining new orders in the global market. In the next
half year and the future, the Group will continue to expand market in the areas with active
offshore engineering business, such as the Gulf of Mexico, South America, Northern Europe,
Middle East, Russia and West African, etc.. Meanwhile, the Group will hold the domestic
investment demands and opportunities on offshore engineering equipment during the 12th
five-year-plan period, so as to gain substantial break-through.
In order to promote the development of the Group’s offshore engineering business, the Group
has improved the enterprise management base of CIMC Ruffles and its mechanism, reversed
the current operating management situation and realized the corporation development goal.
And the Board of Directors of CIMC Ruffles made some adjustment on its corporation senior
management in Apr. 2011. The Company’s original President, Mr. Mai Boliang took over the
post of CEO from Mr. Zhang Liren, Mr. Zhang Liren continued to undertake the post of Vice
Chairman of the Board. And the Group’s Vice President Mr. Yu Ya was appointed as
President to assist CEO to be responsible for the Company’s routine operation work. The
Company believes that offshore engineering industry is the national strategic emerging
industry, which is also the Group’s key business to cultivate in the future. CIMC Ruffles has
the production base with favorable conditions and innovative construction mode, possessing
professional technology and management team. By batch delivery of projects in construction
especially initial-construction projects, CIMC Ruffles and its team accumulated construction
experience, and improved the management ability, as well as cultivate the competitive
advantage. In the first half year, CIMC Ruffles fixed the task of enterprise reformation and
goals at various stages. Besides, it started the adjustment and optimization on its organization
structure and personnel structure, so as to solve the problem of redundant personnel and
realize staff reduction but efficiency increases. The management believe that it will lay solid
foundation for the Company’s long development by improving invigoration mechanism,
enhancing management efficiency and improving production organization and management
flow.
In respect of R&D and Design platform, the Group has established Yantai CIMC Offshore
Research Institute and Shanghai CIMC Offshore Research and Development Center. The
Group also owns the National Resources Offshore Oil Drilling Platform R&D (experiment)
Center named by the National Energy Bureau. The Company will continue to enhance the
construction of CIMC Offshore Engineering Research Institute, drawing more high-end
talents, to create an international top offshore engineering equipment design and research
platform.
19
—— Airport Equipment Business
In the first half year, the overall demands of domestic airport equipment industry maintained
fast growth. The large airport expansion or transformation projects in Shenzhen, Hefei,
Shijiazhuang, etc. started successively; overseas aviation industry had entered into the
recovery period, for the airport equipment in the mature market such as Europe, America, etc.
entering into the refresh cycle. The market demands for airport equipment tended to increase
stably. Due to the delivery cycle, in the first half year, Shenzhen CIMC – Tianda Airport
Support Ltd. (CIMC Tianda), whose 70% equity is held by the Company, sold 59 sets of
boarding bridges, 2 food vehicles, etc., realizing sales revenue of RMB 140 million, increased
by 466.02% compared with the amount (RMB 25 million) at the same period of last year,
with the loss of RMB 12,156,000.
Domestic solid garage boosted in the first half of the year, as the biggest vehicle production
and sales country in the world at current, the increasingly serious problem of parking in cities
will stimulate the large domestic demands for solid garage, as well as bring more business
opportunities for the solid garage products by CIMC Tianda.
The boarding bridge orders gained in the first half of 2011 were mainly from domestic
market, and the other foreign orders were from the area markets of Europe, Middle Asia,
Middle America and Africa; In respect of the cargo processing system, there are two supply
contracts for domestic railway rolling stock depot, etc.; and won the solid garage project for
domestic large real estate development project as the supporting item.
Looking forward to the second half year, overseas aviation industry will continue to recover,
while domestic aviation industry will keep continuous growth since government has
increased the investment of infrastructure construction and carried out policies to stimulate
the domestic demands, which keep the airport construction scale at a high level on the whole,
so does the market demands of boarding bridges. Except for the boarding bridge market,
CIMC Tianda has possessed the strong industrial competitive advantage, it is predicted to
gain large increase in its total sales revenue and net profits in 2011.
—— Other Business
Logistic equipment and service business: The Group 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 equipments, such as wind power
product logistic, and commercial car assembly logistic equipment.
In the first half year, CIMC has sold 440,000 units/sets, an increase of 32% over the same
period last year; and achieved the sales revenue of RMB 801 million, up by 86.71%
compared with the same period of last year; while the gross profit had a slight decrease.
The main products in logistic equipment production industry were still pallet container,
synthetic rubber container, offshore container and tank container, and their production kept
with high capacity and efficiency in the first half year; the Group also continued to explore
new customers. Through the transformation and improvement of the logistic rental
information system, the Group had improved its supporting and operating management ability,
decreased the cost. In respect of logistic transport business, the Group actively expanded its
export business for BUSDECK commercial vehicles with good profitability. In respect of
logistic leasing business, the Group adjusted its operating strategy by focusing on the
domestic market and improving the turnover rate of the leased assets.
Chinese logistic equipment and service business falls behind the developed countries and in
the demands for industrial transformation, however, now it faces the long period of overall
20
development with large development space. With the rise of land price and labor cost, more
and more attention on logistic service is paid by various domestic industries, especially from
FMCG, electron, vehicles industries, etc.. Therefore, in the next half year and 2012, in respect
of the logistic equipment manufacturing business, the Group will continue to consolidate its
original overseas market and try its best to explore domestic market, so as to gain large order;
in respect of the logistic service business, the Group will give all out to develop domestic
logistic service projects, find opportunities to realize fast expansion.
Real estate development business: Under the control on the real estate within the whole
country, purchase limited, rate increased and construction of indemnificatory apartments has
caused more and more competitive pressure on the national real estate development
enterprises.
In the first half of 2011, CIMC’ Jiangmen, Yangzhou, Zhenjiang and Shenzhen projects were
all advanced as schedule. Up to 30 Jun. 2011, operating revenue of RMB 51.33 million was
gained with total profit as RMB 17 million, which were mainly from the investment on
associate enterprises.
Railway equipment manufacturing business: Dalian CIMC Railway Equipment Co., Ltd.,
a subsidiary company of CIMC, is devoted to the development of railway equipment business.
In the first half year, its operating income is RMB 68,019,000, representing a large growth as
compared with the same period last year.
2. No share-participating company's investment income has exerted over 10% impacts
on CIMC’s net profit during the reporting period.
3. Problems and Solutions in Operation
(1) Challenges brought by wide economic fluctuations to business decision-making of
enterprises
After the financial crisis, there were still structural contradictions and potential risks,
including imbalance between financial revenue and expenditure, excess liquidity, as well as
the sluggish economic growth, in main developed economies. Moreover, global economic
integration also dragged emerging economies into the swamp with aggravated overheating
risks. Thus, the risk of global economic instability was growing. The overall features of the
shipping market could be concluded as “fluctuations in recovery and development in
fluctuations”. Having experienced economic recovery in 2010, the shipping market witnessed
a tougher environment in 2011.
Therefore, as influenced by fluctuations in world economy and prices of bulky goods,
purchase quantity of raw materials in container industry varied more often, cycle time of
orders gradually shortened, and seasonal fluctuations of capacity utilization rate became
wider, bringing about long-term challenges to business decision-making of enterprises.
Countermeasures: The Group kept playing the role of operating advantages, advanced
research and development of industrial leading technologies; improved its ability to predict
industrial changes and market trends, and enhanced the factory’s operating adaptability in
respects of supply chain and staffing.
(2) Over recent years, especially in 2010, problems such as shortage of workforce, difficulty
of worker recruitment, increasing personnel mobility, and rising labour cost generally came
up in costal areas of China. In future China, labour cost will keep rising, costal land will
gradually run short, and environment protection requirements will be lifted to upper level.
Having been in great demand of resources, container industry (especially dry van container)
will face the pressure from adjustment of policies on national industrial structure and
21
requirements for further improvement of standards.
Countermeasures: The Group timely raised payment for workers by more than 20%. For
long-term concern, the Group launched investment on and construction of new automatic
production line in the second half year of Y2010 to realize upgrade of production mode and
improve efficiency, so as to decrease its dependence on resources such as labour and land,
and make itself more qualified for governmental standards on environment protection and
other issues.
(3) For a long period, appreciation of RMB currency will accelerate, which will, to some
extent, weaken the competitiveness of Chinese manufacturing industry and export businesses.
Countermeasures: The Group will plan ahead, make corresponding arrangements in terms of
investment, asset security, and foreign exchange hedging instrument, and take dynamic
adjustment, so as to control risks.
Global economy will still fluctuate in a short time. Whereas, the trend of recovery of global
economy will remain unchanged, creating little possibility of a double dip. For the purpose of
maintaining healthy development and sustainable growth of core businesses, the Group will
keep adjusting businesses and organization structure, upgrade overall strategy, increase input
on R&D, improve administration, raise operating efficiency, seize opportunities during the
adjusting period of domestic economic structure, and carry on internal risk control.
(Ⅲ) Information about Company’s Investments
1. Use of Raised Fund
None.
2. Non-raised Fund Investments
None.
1) Equity Investment
① Purchase of share: None.
② Registration of new companies
Unit: RMB million
Completion
Registered
Company Currency in the fist Equity Business scope
capital half
year(％)
Investment management,
Shenzhen entrusted asset management,
CIMC Vehicles investment on industries; sales
1 Park Investment RMB 5 100% 100% of vehicles (not including
Management cars), leasing of houses and
Co., Ltd. fields, as well as property
management.
③ Capital increase for subsidiary companies and associated companies
Unit: RMB million
Item Capital increase amount
For subsidiary companies:
Yangzhou Tailee Special Equipment Co., Ltd. 60
Yangzhou Lijun Industry & Trade Co., Ltd. 60
For joint ventures and associated companies:
Super-Refrigeration Equipment (Shanghai) 3.6
22
Co., Ltd.
C＆C Trucks Co., Ltd. 405
2) Other Investment
RMB 672,120,000 of net increase in CIMC fixed assets scale (including projects in
construction)
( Ⅳ ) Comparison between actual business performance in reporting period and
planning at the beginning of the period
In the first half year, there is no significant variance between actual business performance in
reporting period and planning at the beginning of the period.
(Ⅴ) Expected change of net profit from January to September 2011
None.
23
V. Significant Events
(I) Explanation on Corporate Governance
In the reporting period, in strict compliance with related state rules, as well as regulations and
documents newly issued by CSRC, Shenzhen Securities Regulatory Bureau, and Shenzhen
Stock Exchange, the Company kept perfecting corporate governance and maintained
standardized operation.
At the year-begin, in line with the spirit of Internal Control Standards and its Supporting
Indexes issued by the Ministry of Commerce of the People’s Republic of China, CSRC, the
State Administration of Taxation, the State Administration for Industry & Commerce of the
People’s Republic of China, and the State Administration of Foreign Exchange, the Audit and
Supervision Department of the Company set up a work team to compare the 18 operational
indexes with the internal control system previously constructed by the Company and thereby
formed a template file, so as to prepare well for implementation of the aforesaid Internal
Control Standards and its Supporting Indexes. As required by CSRC in experimental projects
of internal control, the Company adjusted and enhanced the Committee for Construction of
Internal Control System, and confirmed members of the committee and related
responsibilities. In Mar. 2011, the Company convened the experimental meeting under
Internal Control Standards of CIMC, launched the testing and improvement system on
internal control from top to bottom, and focused on training the internal control team in
related knowledge of internal control. All functional departments and subsidiaries carried out
self-inspection, self-appraisal, and rectification in compliance with the unified standards set
by the Group, drew up the risk matrix and perfected 35 internal control rules on the basis of
internal-control work plan, and thereby perfected thorough investigation and remediation on
internal control of the whole Group. The Group adapted to new work requirements related to
internal control system, improved the process of rolling work plan (from monthly to weekly),
and internally audited the first-stage software for audit work in IT platform. In accordance
with requirements of the Announcement on Conducting Work Affairs Related to
Experimental Projects of Internal Control Standards of Listed Companies in Shenzhen
Administration Area (Shen-Zheng-Ju-Gong-Si-Zi [2011] No.31), the Company reported the
progress of internal control to Shenzhen Securities Regulatory Bureau on schedule.
During the reporting period, in compliance with requirements of the Announcement on
Further Enhancing Information Disclosure of Listed Companies in Shenzhen Administration
Area and Investor Reception (Shen-Zheng-Ju-Gong-Si-Zi [2011] No.55), the Company
organized related staffs to carefully study laws and regulations related to information
disclosure of listed companies, as well as rules and regulations related to internal information
disclosure and investor reception of the Company, which strengthened the awareness for
standardized information disclosure, enhanced management of investor reception, and
guaranteed the factuality, accuracy, completeness, timeliness, as well as fairness of disclosed
information.
The Company is quite independent of two principal shareholders, namely China Merchants
International Ltd. and COSCO Pacific Ltd. and other related enterprises in business, human
resources, assets, organization and financial affairs, which fully ensured its independent
operation.
There is no discrepancy between actual corporate governance and the requirements specified
in relevant documents of CSRC.
(II) Implementation of profit and dividend distribution plan for 2010 and interim profit
distribution for 2010
The Profit and Dividend Distribution Plan for Year 2010 was approved at the 2010 Annual
Shareholders’ General Meeting on 13 Apr. 2011. According to the Plan, a dividend of RMB
24
3.5 (tax included) will be distributed for every 10 shares based on the total current share
capital of 2,662,396,051 shares.
Up until the end of the reporting period, all dividends had been distributed. For more details,
see the public notice on the dividend distribution implementation published on China
Securities Journal, Shanghai Securities News, Securities Times and Hong Kong Ta Kung Pao
dated 25 May 2011.
The Company will not distribute profit or turn capital reserves into share capital for the first
half of 2011.
(III) Significant arbitration and lawsuit of the Company during the reporting period
There was no significant arbitration or lawsuit of the Company during the reporting period.
(IV) Securities investment and equity of other companies held by the Company
1. Securities investment
Unit: RMB’000
Initial Number of Proportion in Profits and
Book value
N Stock Stock investment shares held at total securities gains in
Name for short at
o. variety code amount period-end investment at reporting
period-end
(RMB’000) (unit: share) period-end (%) period
1 A share 000568 Luzhou Laojiao 30,346 650,000 29,328 9.61% -35,937
Weifu
2 A share 000581 23,494 725,130 27,954 9.16% 1,015
High-Tech
3 A share 000858 Wuliangye 23,520 700,000 25,004 8.19% 763
Weifu
4 B share 200581 59,434 4,134,633 86,547 28.36% -13,507
High-Tech B
Sino-trans
5 H share 00368 20,590 2,996,500 5,731 1.88% -1,595
Shipping H
6 S share G05.SI GoodPack 103,345 13,500,000 130,176 42.66% -9,364
Other securities investment held at the
2,834 - 404 0.13% -1
period-end
Profits or losses of securities sold in the
16,062
reporting period
Total 263,563 - 305,144 100% -42,564
2. Equity of other listed companies held by the Company
Unit: RMB’000
Equity
Initial Profit and loss Change in the owners’
Stock Short form of proportion in Book value at
investment in the reporting equity in the reporting
code stock that of this the period-end
amount period period
company
China Merchants
600036 25,461 0.53% 150,069 0 1,815
Bank
China Merchants
600999 57,518 0.9% 593,511 0 -16,968
Securities
OEL Otto Energy Ltd 13,480 1.19% 8,258 0 0
Total 96,459 - 751,838 0 -15,153
3. Equity of non-listed financial enterprises and companies to be listed held by the Company
Naught
(V) Significant acquisition or sale of assets that occurred in the reporting period
25
There’s no significant acquisition or sale of assets that occurred in the reporting period
(VI) Significant Related transaction
There was no significant related transaction in the Company during the reporting period
(VII) Significant contract and its implementation
1. Significant trusteeship, contracting and leasing in the reporting period
For details about contracted business to affiliated subsidiaries of the Company,
please refer to Notes of the Financial Statements.
2. Significant guarantee contracts
During the reporting period, the Company provided the guarantees to shareholding
subsidiaries and for vehicles business to any other party, which all were the guarantees for the
loans occurred for supporting production and operation of the Company. As of 30 Jun. 2011,
the guarantees are as follow:
Unit: RMB Ten thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Total guarantee amount in the reporting period -13,978.00
Total guarantee balance at the period-end 90,455.00
Guarantees for subsidiaries
Total guarantee amount provided for -63,612.00
subsidiaries in the reporting period
Total balance of the guarantee amount provided 147,997.00
for subsidiaries at the period-end
Total guarantee amount of the Company (Including the guarantee for the
subsidiaries)
Total guarantee amount 238,452.00
Proportion of the total guarantee amount in net
13.14%
assets of the Company
Among which:
Guarantee amount provided for the
shareholders, actual controller and other related 0
parties
Guarantee amount directly and indirectly
provided for the guaranteed with an 70,819.00
assets-liability ratio over 70%
Amount of the total guarantee exceeding 50%
0
net assets of the Company
Total amount of the three types of guarantees
70,819.00
above
CIMC Vehicle Group, the wholly-owned subsidiary of the Company, handled the buyer credit
and loan business for the buyers that purchase special vehicle from its subordinate companies.
As at 30 Jun. 2011, balance of external guarantee that CIMC Vehicle Group and its
subsidiaries for sales of products by means of the buyer credit and loan was RMB
904,550,000.
By 30 Jun. 2011, the Company provided guarantee amounting to RMB 708,190,000 for
controlled subsidiaries whose assets-liability ration is over 70%, which was approved by the
Board of Directors. There is no illegal guarantee. For details, please refer to the Public Notice
on Providing Guarantees for Application of Subsidiaries, Their Dealers and Customers for
Bank Credits in 2011 (Public Notice No.: [CIMC] 2011-006).
3. During the reporting period, there was no case of entrusting the others to manage the cash
assets.
26
(VIII) Special explanation and independent opinion made by independent directors on
relevant matters
1. Independent directors’ opinion on nomination of director candidates of the 6th Board of
Directors:
Nomination procedure and profession qualification of the Company’s directors accord with
laws and regulations in the Company Law and Articles of Association. We agree to nominate
Mr. Sun Jiakang and Mr. Wang Xingru as director candidates to fill in gap of the 6th Board of
Directors.
(IX) 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 Supervisory Committee 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 Supervisory Committee 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 Y2010 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.
On 13 Apr. 2011, the Shareholders’ General Meeting for Y2010 of the Company reviewed
and passed the Scheme on Distribution of Profit and Dividends of the Company for Y2010,
which decided to distribute RMB 3.50 (tax included) for every 10 shares to all shareholders
on the basis of the total current share capital of 2,662,396,051 shares of the Company.
According to the Proposal on Urging the Shareholders’ General Meeting to Authorize the
Board of Directors to Handle Matters Related to the Company’s Stock Option Incentive
Scheme reviewed and passed on the 1st Special Shareholders’ General Meeting in 2010, the
8th Session of the 6th Board of Directors of the Company in 2011 made corresponding
adjustment on exercise price of A-share stock option, which amounted to RMB 12.04 after
the adjustment.
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 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
27
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.
(Ⅹ) Commitments made
Naught
(Ⅺ) Visits, surveys and interviews received by the Company
During the reporting period, the Company the Company received 58 batches of visitors for
visiting, surveying and visiting plants by institutional investors such as funds, investment
companies, securities companies and individual investors etc. The Company did not disclose
or give away unpublicized significant information to the institutional investors and individual
investors.
Topics discussed and
Time Location Means Investors
information provided
The business structure of the
Company, the recent status in the
5 Jan. 2011 The Company Field research China Merchants Securities industry, the main business status,
investment progress, outlook for
the industry in 2011
Shanghai Chongyang Investment
6 Jan. 2011 The Company Field research Ditto
Management Co. Ltd
7 Jan. 2011 The Company Field research Merrill Lynch, Goldman Sachs Ditto
Customer RCM of Deutsche
One-to-many
7 Jan. 2011 Beijing Bank, Fidelity, Neuberger Ditto
conference
Berman, Invesco HK, Be
Tangshan Ruiyin International
12 Jan. 2011 Eastern factory Field research Ditto
Trade Co., Ltd., Bosera Funds
13 Jan. 2011 The Company Field research Triskele Capital Ditto
Daiwa Securities, Nikko Asset
17 Jan. 2011 The Company Field research Ditto
Management Co.,Ltd
Oriental Patron Securities, Great
19 Jan. 2011 The Company Field research Ditto
Wall Securities
Goldman Sachs,
20 Jan. 2011 The Company Field research Ditto
CITIC-PRUDENTIAL FUND
24 Jan. 2011 The Company By telephone UOB Assets Management Ditto
Customer of Guosen Securities,
15 Feb. 2011 The Company Field research Lombarda China Fund, China Ditto
AMC
One-to-many
16 Feb. 2011 Shenzhen China AMC，Harvest Fund Ditto
conference
18 Feb. 2011 The Company Field research Value Partners Ditto
Customers of CICC, Sinolink
23 Feb. 2011 The Company Field research Ditto
Securities
24 Feb. 2011 The Company Field research Morgan Stanley Ditto
Fuh Hwa Securities Investment
23 Mar. 2011 The Company Field research Ditto
Trust
23 Mar. 2011 The Company Field research JP Morgan and its customers Explanation for the Company’s
28
business performance in 2010
China
One-to-many China Merchants Securities and its Explanation for the Company’s
23 Mar. 2011 Merchants
conference fund business performance in 2010
Securities
The business structure of the
Company, the recent status in the
24 Mar. 2011 The Company Field research Bosera Funds industry, the main business status,
investment progress, outlook for
the industry in 2011
CITIC Securities, China
28 Mar. 2011 The Company Field research Ditto
Merchants Fund
29 Mar. 2011 The Company Field research GF Securities Ditto
30 Mar. 2011 The Company Field research Liuhe Capital, Huashang Fund Ditto
31 Mar. 2011 The Company Field research Theleme Parterners Capital Ditto
Taishin Securities Investment
8 Apr. 2011 The Company By telephone Ditto
Trust
14 Apr. 2011 The Company Field research HSBC Ditto
Standard Chartered Bank, Huatai
United Securities, Assets
15 Apr. 2011 The Company Field research Ditto
Management of General Electric
Company
Winnington Capital Assets
27 Apr. 2011 The Company By telephone Ditto
Management
27 Apr. 2011 The Company Field research Morgan Stanley Ditto
Clients of Goldman Sachs:
Changsheng Fund Management,
Business structure of the
China International Fund
Company’s marine industry,
Management Co., Ltd, China Life
5 May 2011 The Company Field research recent industry, main businesses,
Insurance Asset Management
business performance in 2010,
Company Ltd., DACHENG
industry outlook for 2011
FUND MANAGEMENT CO.,
LTD
Business structure of the
Company’s marine industry,
Morgan Stanley, Tangshan Ruiyin recent industry, main businesses,
6 May 2011 The Company Field research
International Trade Co., Ltd. investment progress, business
performance in 2010, industry
outlook for 2011
9 May 2011 The Company By telephone DnB NOR Asset Management Ditto
11 May 2011 The Company Field research DIAM CO., LTD Ditto
13 May 2011 The Company By telephone Target Asset Management Ditto
Mirae Asset Global Investment,
16 May 2011 The Company Field research Ditto
Chang Xin Asset Management
Business structure of the
Company’s marine industry,
17 May 2011 Yantai Field research GE Asset Management recent industry, main businesses,
business performance in 2010,
industry outlook for 2011
Business structure of the
Company’s marine industry,
recent industry, main businesses,
17 May 2011 The Company Field research CICC
investment progress, business
performance in 2010, industry
outlook for 2011
18 May 2011 The Company Field research Merrill Lynch, UBS SDIC Ditto
19 May 2011 The Company One-to-many Jeffries, Shenyin & Wanguo Ditto
29
conference Securities and its customer
23 May 2011 The Company By telephone NOMURA SECURITIES Ditto
27 May 2011 The Company Field research CHINA POST FUND Ditto
30 May 2011 The Company Field research CITIC Securities Ditto
31 May 2011 The Company Field research Hengtai Securities Ditto
1 Jun. 2011 The Company By telephone ROCIM Ditto
1 Jun. 2011 The Company Field research Haitong Securities Ditto
DACHENG FUND
3 Jun. 2011 The Company Field research Ditto
MANAGEMENT CO., LTD
China Southern Fund, Penghua
9 Jun. 2011 The Company Field research Ditto
Fund
One-to-many Strategic committee of HUATAI
10 Jun. 2011 Shanghai Ditto
conference UNITED SECURITIES
UBS Fundmental Investment
13 Jun. 2011 The Company Field research Ditto
Group
Customer INVESCO of Tangshan
20 Jun. 2011 Yantai Field research Ruiyin International Trade Co., Ditto
Ltd.
The Royal Bank of Scotland Asset
21 Jun. 2011 The Company Field research Ditto
Management Limited
One-to-many Haitong ; AllianceBernstein ;
22 Jun. 2011 Eastern factory Ditto
conference Principal ; Shadowfax; UBP ; GS
China International Fund
Management Co., Ltd, China
AMC, DACHENG, Rising
One-to-many Investment, Guotai Securities, Ditto
22 Jun. 2011 Yantai
conference Yingda Securities, BOC, CICC,
Changjin Asset, Hengshenyun ，
Yinhua Fund，Guosen Securities
One-to-many
23 Jun. 2011 Qingdao Customer of UBS Ditto
conference
One-to-many
24 Jun. 2011 Shanghai Customer of Essence Securities Ditto
conference
CLSA Asia-Pacific Markets, KGI,
29 Jun. 2011 The Company Field research Guangzhou Securities Research Ditto
Institute
30 Jun. 2011 The Company By telephone Daiwa Securities Ditto
(XII) Engagement and dismissal of the accounting firm
On 13 Apr. 2011, the Company held the Annual Shareholders’ General Meeting 2010, at
which Proposal on Engagement of Accounting Firms was reviewed and approved and
engaged KPMG Certified Public Accountants as Auditor for auditing accounting statements
for the year 2011.
(XIII) None of the Company, the Company’s Board of Directors and directors were
criticized or condemned by any authority in the reporting period.
30
China International Marine Containers
(Group) Co., Ltd.
ENGLISH VERSION OF FINANCIAL STATEMENTS
FOR THE PERIOD 1 JANURARY 2011 TO 30 JUNE 2011
IF THERE IS ANY CONFLICT OF MEANING BETWEEN THE CHINESE
AND ENGLISH VERSIONS, THE CHINESE VERSION WILL PREVAIL
31
China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 30 June 2011
30 June 2011 31 December 2010
Note RMB’000 RMB’000
Assets
Current assets
Cash at bank and on hand V.1 6,860,768 4,655,696
Financial assets held for trading V.2 385,256 525,661
Bills receivable V.3 430,591 508,585
Accounts receivable V.4 11,953,665 8,129,836
Prepayments V.6 2,011,657 2,433,447
Interest receivable 2,705 4732
Other receivables V.5 3,109,195 2,236,272
Inventories V.7 15,486,058 13,423,747
Non-current assets due within one
V.8
year 1,412,448 1,185,502
Other current assets V.9 729,817 688,030
Total current assets 42,382,160 33,791,508
Non-current assets
Available-for-sale financial assets V.10 751,838 768,467
Long-term receivables V.11 3,646,949 1,336,257
Long-term equity investments V.12 1,949,645 1,548,332
Investment property V.13 88,837 77,356
Fixed assets V.14 10,039,431 10,006,466
Construction in progress V.15 2,336,814 1,697,664
Intangible assets V.16 3,204,935 3,218,571
Goodwill V.17 1,236,394 1,168,594
Long-term deferred expenses V.18 24,158 27,978
Deferred tax assets V.19 502,760 489,456
Total non-current assets 23,781,761 20,339,141
Total assets 66,163,921 54,130,649
32
China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 30 June 2011
(continued)
30 June 2011 31 December 2010
Note RMB’000 RMB’000
Liabilities and shareholders’equity
Current liabilities
Short-term loans V.22 11,534,193 8,309,309
Financial liabilities held for trading V.23 60,365 3,810
Bills payable V.24 2,070,161 2,538,623
Accounts payable V.25 9,573,142 9,117,500
Advances from customers V.26 2,535,551 1,935,731
Employee benefits payable V.27 1,689,917 1,365,532
Taxes payable V.28 880,646 789,155
Interest payable V.29 48,096 13,168
Dividends payable V.30 190,367 16,046
Other payables V.31 3,105,985 2,388,367
Provisions V.32 690,574 649,573
Non-current liabilities due within one V.33 2,382,780 2,844,521
year
Total current liabilities 34,761,777 29,971,335
Non-current liabilities
Financial liabilities held for trading V.23 69,465 154,292
Long-term loans V.34 5,219,372 3,912,148
Special payables V.36 16,913 16,442
Deferred tax liabilities V.19 627,157 572,866
Long-term payable V.37 98,417 118,858
Bond payable V.35 3,987,276 -
Other non-current liabilities V.38 229,374 178,008
Total non-current liabilities 10,247,974 4,952,614
Total liabilities 45,009,751 34,923,949
Shareholders’ equity
Share capital V.39 2,662,396 2,662,396
Capital reserve V.40 940,116 1,349,420
Surplus reserve V.41 2,861,050 3,577,588
Retained earnings V.42 12,016,019 10,689,335
Foreign currency translation
(335,706) (2,055,682)
differences
Total equity attributable to equity
18,143,875 16,223,057
holders of the Company
Minority interests 3,010,295 2,983,643
Total equity 21,154,170 19,206,700
Total liabilities and shareholders’ 66,163,921 54,130,649
33
China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 30 June 2011
Note 30 June 2011 31 December 2010
RMB’000 RMB’000
Assets
Current assets
Cash at bank and on hand XII.1 1,493,881 419,945
Financial assets held for trading XII.2 82,286 162,298
Dividends receivable XII.3 4,332,745 4,243,437
Other receivables XII.4 6,434,470 4,175,168
Bills receivable - 31,000.00
Total current assets 12,343,382 9,031,848
Non-current assets
Available-for-sale financial assets XII.5 743,580 759,401
Long-term equity investments XII.6 3,756,078 3,662,478
Fixed assets 139,787 144,692
Construction in progress 43,229 25,224
Intangible assets 22,518 23,109
Long-term deferred expenses 5,945 4,999
Total non-current assets 4,711,137 4,619,903
Total assets 17,054,519 13,651,751
34
China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 30 June 2011 (continued)
Note 30 June 2011 31 December 2010
RMB’000 RMB’000
Liabilities and shareholders’equity
Current liabilities
Short-term loans XII.7 964,716 480,897
Financial liabilities held for trading XII.8 56,131 556
Bills payable - 200,000
Employee benefits payable XII.9 506,373 368,275
Taxes payable XII.10 82,449 59,080
Interest payable 33,440 5,522
Dividends payable XII.11 151,260 -
Other payables 169,264 9,407
Non-current liabilities due within one year XII.12 786,766 2,729,353
Total current liabilities 2,750,399 3,853,090
Non-current liabilities Financial
liabilities held for trading XII.8 55,831 136,846
Long-term loans XII.13 4,001,196 2,473,381
Bonds Payable XII.14 3,987,276 -
Deferred tax liabilities XII.15 11,942 50,291
Total non-current liabilities 8,056,245 2,660,518
Total liabilities 10,806,644 6,513,608
Shareholders’ equity
Share capital 2,662,396 2,662,396
Capital reserve XII.16 279,973 852,264
Surplus reserve 2,861,050 3,577,588
Retained earnings 444,456 1,579,889
Translation differences of financial statements - (1,533,994)
denominated in foreign currency
Total equity 6,247,875 7,138,143
Total liabilities and Shareholders’ equity 17,054,519 13,651,751
35
China International Marine Containers (Group) Co., Ltd.
Consolidated income statement
for the period ended 30 June 2011
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Note RMB’000 RMB’000
Operating income V.43 36,478,098 21,237,889
Less: Operating costs V.43 29,499,900 18,246,729
Business taxes and surcharges V.44 73,154 19,188
Selling and distribution expenses V.45 968,591 558,349
General and administrative expenses V.46 1,715,951 1,032,191
Financial expenses V.47 399,962 252,090
Impairment loss(reversal) V.50 73,709 29,344
Add: Gain from changes in fair value V.48 (88,256) 86341
Investment income V.49 71,207 (57,021)
(Including: Income from investment in
28,739 22,582
associates and jointly controlled enterprises)
Operating profit 3,729,782 1,129,318
Add: Non-operating income V.51 103,013 194,848
Less:Non-operating expenses V.52 15,276 5,501
(Including:Loss from non-current assets
7,041 47
disposal)
Profit before income tax 3,817,519 1,318,665
Less:Income tax expenses V.53 1,024,118 233,516
Net profit for the period 2,793,401 1,085,149
Attributable to:
Equity shareholders of the Company 2,807,629 912,556
Minority shareholders (14,228) 172,593
Earnings per share
Basic earnings per share V.54 1.0545 0.3428
Diluted earnings per share V.54 1.0545 0.3428
Other comprehensive income V.55 49,193 (506,809)
Total comprehensive income 2,842,594 578,340
Attributable to:
Equity shareholders of the Company 2,794,047 471,475
Minority shareholders 48,547 106,865
36
China International Marine Containers (Group) Co., Ltd.
Income statement for the period ended 30 June 2011
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Note RMB’000 RMB’000
700 61
Ⅰ .Operating income
Less: Operating costs 39 -
General and administrative expenses 285,548 53,534
Financial expenses (36,153) 16,931
Add: Gains/(losses) from changes in
XII.17 (8,719) 7,477
fair value
Investment income XII.18 222,704 98,303
Ⅱ .Operating(loss)/ profit (34,749) 35,376
Add: Non-operating income XII.19 1,186 29,514
Less: Non-operating Expenses 310 -
Including:Losses from disposal of
(608) -
non-current assets
Ⅲ .(Loss)/Profit before income tax (33,873) 64,890
Less:Income tax expenses XII.20 (37,687) (6,039)
3,814 70,929
Ⅳ .Net profit for the period
Ⅴ .Other comprehensive income XII.21 (15,153) (249,793)
Ⅵ .Total comprehensive income (11,339) (178,864)
37
China International Marine Containers (Group) Co., Ltd.
Consolidated cash flow statement
for the period ended 30 June 2011
Note from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB’000 RMB’000
Cash flows from operating activities:
Cash received from sale of goods and rendering of
30,785,201 17,168,426
services
Refund of taxes 2,088,686 296,416
Other cash received relating to operating activities V.56 (1) 227,162 209,210
Sub-total of cash inflows 33,101,049 17,674,052
Cash paid for goods and services 31,152,788 16,810,031
Cash paid to and for employees 2,195,235 1,055,284
Cash paid for all types of taxes 1,309,083 838,147
Other cash paid relating to operating activities V.56 (2) 2,605,387 1,748,328
Sub-total of cash outflows 37,262,493 20,451,790
Net cash (outflow) / inflow from operating activities V.57 (1) (4,161,444) (2,777,738)
Cash flows from investing activities:
Cash received from disposal of investments 68,353 12,112
Cash received from return on investments 24,617 -
Net cash received from disposal of fixed assets,
7,301 797
intangible assets and other long-term assets
Sub-total of cash inflows 100,271 12,909
Cash paid for acquisition of fixed assets, intangible 1,083,498 512,040
assets and other long-term assets
Cash paid for acquisition of investments 295,502 170,255
Cash paid for acquisition of subsidiaries 49,936 419,155
Other cash paid relating to investing activities -
Sub-total of cash outflows 1,428,936 1,101,450
Net cash outflow from investing activities (1,328,665) (1,088,541)
Cash flows from financing activities:
Cash received from investors - 97,499
Including: Cash received from minority shareholders of
- 97,499
subsidiaries
Cash received from borrowings 20,968,220 8,700,457
Other cash received relating to financing activities - -
Sub-total of cash inflows 20,968,220 8,797,956
Cash repayments of borrowings 12,913,949 4,760,420
Cash paid for dividends, profits distribution or interest 1,252,464 450,101
Including: Dividends and profits paid to minority
214 6,860
shareholders of subsidiaries
Other cash paid relating to financing activities
Sub-total of cash outflows 14,166,413 5,210,521
Net cash inflow / (outflow) from financing activities 6,801,807 3,587,435
Effect of foreign exchange rate changes on cash and
(4,728) (94,736)
cash equivalents
Net increase / (decrease) in cash and cash equivalents V.57 (2) 1,306,970 (373,580)
Add:cash and cash equivalents at the beginning of the
3,797,415 4,396,525
period
Cash and cash equivalents at the end of the period 5,104,385 4,022,945
38
China International Marine Containers (Group) Co., Ltd.
Cash flow statement for the period ended 30 June 2011
Note from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB’000 RMB’000
Ⅰ .Cash flows from operating activities:
Other cash received relating to operating activities 5,852,855 3,293,949
Cash paid to and for employees 49,433 36,174
Cash paid for all types of taxes 7,420 210,811
Other cash paid relating to operating activities 7,983,815 3,257,367
Sub-total of cash outflows 8,040,668 3,504,352
Net cash inflow / (outflow) from operating activities XII.22 (2,187,813) (210,403)
Ⅱ .Cash flows from investing activities:
Cash received from disposal of investments 45,853 12,112
Cash received from return on investments 133,002 104,029
Net cash received from disposal of fixed assets,
1,975 -
intangible assets and other long-term assets
Cash received from disposal of subsidiaries - 11,281
Sub-total of cash inflows 180,830 127,422
Cash paid for acquisition of fixed assets, intangible
24,596 1,479
assets and other long-term assets
Cash paid for acquisition of investments 93,600 609,321
Sub-total of cash outflows 118,196 610,800
Net cash inflow /(outflow) from investing activities 62,634 (483,378)
Ⅲ .Cash flows from financing activities:
Cash received from borrowings and subtotal of cash
7,732,083 3,480,788
inflows
Cash repayments of borrowings 3,626,511 2,116,757
Cash paid for dividends, profits distribution or
905,494 333,108
interest
Sub-total of cash outflows 4,532,005 2,449,865
Net cash inflow / (outflow) from financing activities 3,200,078 1,030,923
Ⅳ .Effect of foreign exchange rate changes on cash (919) (1,459)
and cash equivalents
Ⅴ .Net increase / (decrease) in cash and cash 1,073,980 335,683
Add:cash and cash equivalents at the beginning of 417,461 137,680
Ⅵ .Cash and cash equivalents at 30 June 2011 1,491,441 473,363
39
China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the period ended 30 June 2011
RMB'000
RMB'000
from 1 January to 30 June 2011 2010
Item Attributable to equity shareholders of the Company Attributable to equity shareholders of the Company
Share Capital Surplus Retained Foreign currency Minority Share Capital Surplus Retained Foreign currency Minority
Note capital reserve reserve earnings exc.diff interests Total capital reserve reserve earnings exc.diff interests Total
I.Balance at 1 January 2011 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
II.Changes in equity for the period - - - - - - - - - - - - - -
(I) Net profit for the period - - - 2,807,629 - (14,228) 2,793,401 - - - 3,001,851 - (150,992) 2,850,859
(II)Other comprehensive income for
V.55
the year - (3,471) - - (10,111) 62,775 49,193 - (269,122) - - (226,671) (40,561) (536,354)
Sub-total of (I)&(II) - (3,471) - 2,807,629 (10,111) 48,547 2,842,594 - (269,122) - 3,001,851 (226,671) (191,553) 2,314,505
(III) Shareholders’ contributions and
decrease of capital - 0 - - - - - - - - - - - -
1.Contributions by minority - - - - - - - - - - - - 97,548 97,548
2.Acquisition of minority interests of
subsidiary - - - - - - - - 1,274 - - - (1,274) -
3.Increase in minority interests
resulted from acquisition of subsidiary - - - - - - - - - - - - 1,528,694 1,528,694
4.Decrease in minority interests
resulted from disposal of subsidiary - - - - - - - - - - - - (13,956) (13,956)
5.Decrease in retained earnings
resulted from acquisition of minority - - - - - - - - - - (222,560) - (33,803) (256,363)
6.Increase in shareholders’ equity
Ⅶ.1
resulted from share-based payments - 56,339 - - - 1,667 58,006 - 59,565 - - - 10,991 70,556
(IV)Appropriation of profits - - - - - - - - - - - - - -
1.Appropriation for surplus reserve - - - - - - - - - - - - - -
2.Distributions to shareholders V.42（1） - - - (929,568) - (23,562) (953,130) - - - (319,488) - (41,427) (360,915)
(V) Effect of change in functional
currency - (462,172) (716,538) (551,377) 1,730,087 - - - - - - - -
III.Balance at 30 June 2011 2,662,396 940,116 2,861,050 12,016,019 (335,706) 3,010,295 21,154,170 2,662,396 1,349,420 3,577,588 10,689,335 (2,055,682) 2,983,643 19,206,700
40
China International Marine Containers (Group) Co., Ltd.
Statement of changes in shareholders’ equity
for the period ended 30 June 2011
RMB'000
from 1 January to 30 June 2011 2010
Translation Translation
differences of differences of
Item Note financial financial
Share Capital Surplus Retained statements Total Share Capital Surplus Retained statements Total
capital reserve reserve earnings denominated in capital reserve reserve earnings denominated
foreign in foreign
currency currency
Ⅰ.Balance at 1 January 2011 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
Ⅱ.Changes in equity for the period
(Ⅰ)Net profit for the period - - - 3,814 - 3,814 - - - (33,497) - (33,497)
(Ⅱ)Other comprehensive income for
XII.22
the period - (15,153) - - - (15,153) - (219,021) - - (267,693) (486,714)
Sub-total of (Ⅰ)&(Ⅱ) - (15,153) - 3,814 - (11,339) - (219,021) - (33,497) (267,693) (520,211)
(Ⅲ) Shareholders' contributions and
decrease of capital
1.Increase in shareholders equity
resulted from sharebased payment - 50,639 - - - 50,639 26,083 - - - 26,083
(Ⅳ) Appropriation of profits
1.Distributions to shareholders V.40 - - - (929,568) - (929,568) - - - (319,488) - (319,488)
(Ⅳ)Others - (607,777) (716,538) (209,679) 1,533,994 - - - - - - -
Ⅲ.Balance at 30 June 2011 2,662,396 279,973 2,861,050 444,456 - 6,247,875 2,662,396 852,264 3,577,588 1,579,889 (1,533,994) 7,138,143
41
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 30 June 2011, 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.
42
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 No. 32-Interim Financial Reporting”
issued by the Ministry of Finance (MOF) of the People’s Republic of China (PRC),
and “Regulation on the Contents and Formats of Companies Issuing Public Shares,
No. 3: Contents and Formats for Half-year Financial Reports” as revised by the China
Securities Regulatory Commission (CSRC) in 2007.The same accounting policies are
followed in the interim financial statements as compared with financial statements for
the year 2010.According to “Accounting Standards for Business Enterprises No.
32-Interim Financial Reporting”, notes to interim financial statements are properly
compared with annual report.
3. ACCOUNTING PERIOD
The accounting year of the Group is from 1 January to 31 December.
4. FUNCTIONAL CURRENCY
The Group determines its functional currencies based on the major currencies in
business transactions
The functional currency of the Company was USD in 2010 and prior years. As RMB
are used more and more in business transactions of the Company and some domestic
subsidiaries was getting strengthened, the Company will change the functional
currency to RMB since 1 January 2011.
The company’s Hong Kong and certain overseas subsidiaries use local currencies as
their functional currencies. Foreign currencies are defined as currency other than
functional currency.
The financial statements are prepared using 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).
43
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 thenet 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.
44
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.
45
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.
46
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.
47
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.
48
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.
49
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.
50
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:
51
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.
52
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.
53
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.
54
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.
55
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.
56
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.
57
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.
58
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.
59
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.
60
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.
61
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.
62
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.
63
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.
64
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.
65
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.
66
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.
67
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.
68
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.
69
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.
70
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
71
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.
72
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.
73
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.
74
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%.
75
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.
76
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.
77
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.
78
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.
79
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.
80
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.
81
II. BASIS OF PREPARATION (CONTINUED)
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
(CONTINUED)
(6) 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.
(7 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.
82
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:
2011 2010
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% 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
83
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 24% 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 2011
is the fourth profit making year
3 Tianjin CIMC Special Vehicle Co., Ltd 24% 11% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2011
is the fourth 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 2011
is the fourth 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 2011
is the fifth profit making year
6 CIMC Vehicle (Shandong) Co., Ltd. 25% 15% Recognised as high-tech
enterprises, entitled to
15% preferential rate
7 Ianermongolia Holonbuir CIMC Wood 25% 12.5% Entitled to tax holiday of
Co., Ltd “two-year exemption and
three-year reduction”, and 2011
is the fourth profit making year
8 Xinhui CIMC Special Transportation 25% 15% Recognised as high-tech
Equipment Co., Ltd. enterprises, entitled to
15% preferential rate
9 Tianjin CIMC Containers Co., Ltd 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2011
is the fourth profit making year
10 Luoyang CIMC Lingyu Automobile 25% 15% Recognised as high-tech
Co., Ltd. enterprises, entitled to
15% preferential rate
84
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 2011
is the fourth profit making year
12 Zhangjiagang CIMC Sanctum 25% 15% Recognised as high-tech
Cryogenic Equipment Co., Ltd enterprises, entitled
to 15% preferential rate
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 2011
is the fifth 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 2011
is the fourth 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 2011
is the fourth 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 2011
is the fourth 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 2011
is the fourth profit making year
23 Yangzhou CIMC Tong Hua Special 25% 15% Recognised as high-tech enterprises
Vehicles Co., Ltd entitled to 15% preferential rate
85
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
26 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 30 June 2011,
temporary difference caused by the Group’s subsidiaries’ undistributed profits
amounted to RMB 5,118,667,000 accordingly, deferred tax liabilities amounting to
RMB 361,579,000 were recognised by the Group.
86
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 247. Except for the subsidiaries listed as below, the number
of other subsidiaries held by the Group was 112, with paid-in capital amounting to
RMB723,234,000.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.
87
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:
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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
88
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):
s
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
Equipment Co., Ltd China container, semi-finished container
(NTCIMCT) relevant components and parts
Note IV. 1(4)
89
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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 -
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 -
Co., Ltd. (LNVS) China trailer, special-use vehicles as well
as components and parts
90
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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 -
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 -
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 -
Transport Equipment China refrigeration, heat preservation and
Co., Ltd. (QDRV) other transport equipments and spare parts
91
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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
92
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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
93
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
(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
94
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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
95
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):
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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 -
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 -
Vehicle Trading Co.,Ltd China various vehicles, as well
(“HJQM” ) as relevant components
and parts
96
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
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
( “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
97
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
( “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 -
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 -
85 Vela Holding B.V. Holland EUR 18,000 Investment EUR 14,080.00 78.22% 100.00% Yes -
98
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
Holdings Limited
( “CIMC Offshore” )
99
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
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within s
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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
100
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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 -
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 -
Transportation China canvass for cargo; allotment and
Service Co., Ltd. (DHCTS) customs declaration; container
maintenance and stockpiling; supply
of components and parts
101
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
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 -
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 -
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 -
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 -
Energy Equipment China and equipments as well as after sales
Co., Ltd. services; research and development
Note IV.1(4) of energy conservation techniques
102
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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
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
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
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
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
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
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)
103
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
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
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 -
30 Holvrieka Holding B.V. Holland EUR 12,000,000.00 Investment EUR 9,386,400.00 78.22% 100.00% Yes
31 Holvrieka Ido B.V. Holland EUR 136,200.00 Sales of tank equipment EUR 106,535.64 78.22% 100.00% Yes -
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 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
34 Beheermaatschappij Holland EUR 453,780.22 Investment EUR 453,780.22 80.00% 100.00% Yes -
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 -
36 Exploitatiemaatschappij Holland EUR 79,411.54 Trade, financing and leasing EUR 63,529.63 80.00% 100.00% Yes -
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 -
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 -
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 -
40 Holvrieka N.V. Belgium BEF 40,000,000.00 Manufacturing tank equipment BEF 31,288,000.00 78.22% 100.00% Yes -
104
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)
Actual investment and
actual net amount of Shareholding Voting
Investment of the percentage rights Within
company at the end consolidation
Registered capital of the year scope
Currency Amount of Currency Amount of
Entity Registration original original
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 -
42 Holvrieka Danmark A/S Denmark DKr 1,000,000.00 Manufacturing tank equipment DKr 782,200.00 78.22% 100.00% Yes -
43 Direct Chassis LLC USA USD 10,000,000.00 Manufacturing and sales of USD 6,000,000.00 60.00% 100.00% Yes -
( “DCEC” ) special vehicles
44 TGE GASINVESTMENTS Luxemburg EUR 50,000.00 Investment holding EUR 30,000.00 60.00% 60.00% Yes -
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 -
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 -
(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 -
Limited China
48 CIMC Raffles Leasing Pte Ltd. Singapore SGD 2.00 Leasing of marine ship SGD 2.00 50.98% 50.98% Yes -
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 -
105
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.
Subsidiaries newly included in the scope of consolidation mainly comprised Gadidae
AB, Technodyne International Limited, Perfect Victor Investment Limited ，
Dechangyuan（Wuhu）Transportation Limited, Dechangyuan（Qingdao）Transportation
Limited, Dechangyuan（Yangzhou）Transportation Limited, Shenzhen CIMC Vehicle
Investment Management.
106
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 period
(1) Subsidiaries newly included in the scope of consolidation, special purpose entity,
business entities that having control through being enstusted to manage or leasing
Subsidiaries newly included in the scope of consolidation mainly comprised Consafe，
Verbus，Technodyne International Limited，Shenzhen CIMC Vehicle Investment
Management
.(2) There was no significant subsidiary, special purpose entity, business entity that
having control through being entrusted to manage or leasing that was excluded from
the scope of consolidation for the current period.
5. There is no acquisition through combination under common control for
the current period (2010: Nil).
107
IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
6. There is no significant acquisition through combination not under
common control for the current period.
7. There is no loss of control of subsidiaries through significant sales of
interests of the Group for the current period.
8. There is no reverse acquisition of the Group for the current period.
9. There is no consolidation by merger of the Group for the current period.
10. Exchange rate for foreign operating entities’ major financial statement
items
Average exchange rate Benchmark exchange rate
from 1 January to 30 from 1 January to 31
June 2011 December 2010 30-Jun-11 31-Dec-10
USD 6.5242 6.7465 6.4716 6.5897
EUR 9.2896 8.8378 9.3612 8.7979
HKD 0.8384 0.8682 0.8316 0.8477
JPY 7.9900 7.7705 8.0243 8.0984
108
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CASH AT BANK AND ON HAND
2011.06.30 2010.12.31
Original
Original Exchange Exchange
RMB'000 currency RMB'000
currency '000 rate rate
'000
Cash on hand RMB 29,074 1.0000 29,074 RMB 1,866 1.0000 1,866
USD 65 6.4716 423 USD 45 6.5897 298
HKD 63 0.8316 53 HKD 63 0.8477 54
JPY 273 0.0802 22 JPY 678 0.0810 54
AUD 1 6.9395 8 AUD 12 6.7050 83
EUR 65 9.3612 610 EUR 49 8.7979 434
Others - - 83 Others - - 104
30,273 2,893
Deposits with banks
RMB 2,644,124 1.0000 2,644,124 RMB 1,643,202 1.0000 1,643,202
USD 221,905 6.4716 1,436,279 USD 220,781 6.5897 1,454,878
HKD 310,390 0.8316 258,121 HKD 151,076 0.8477 128,071
JPY 1,720,307 0.0802 138,043 JPY 426,769 0.0810 34,562
AUD 7,214 6.9395 50,065 AUD 7,636 6.7050 51,200
EUR 22,371 9.3612 209,466 EUR 45,072 8.7979 396,537
Others - - 92,207 Others - 33,068
4,828,305 3,741,518
Other monetary funds
RMB 1,983,569 1.0000 1,983,569 RMB 844,869 1.0000 844,869
USD 380 6.4716 2,461 USD 10,079 6.5897 66,416
HKD - 0.8316 - HKD - 0.8477 -
JPY - 0.0802 - JPY - 0.0810 -
AUD - 6.9395 - AUD - 6.7050 -
EUR 1,726 9.3612 16,160 EUR - 8.7979 -
Others - - - Others - - -
2,002,190 911,285
Total 6,860,768 4,655,696
As at 30 June 2011, restricted cash at bank and on hand of the Group amounted to
RMB1,756,383 ,000, (2010: RMB 858,281,000). Refer to Note V.21 for details.
As at 30 June 2011, Finance Company, the subsidiary of the Group, had deposit with
banks of RMB 1,401,121,133 (2010：RMB 1,438,988,000). Finance Company is a
finance institution authorised by the People’s Bank of China.
109
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
2. FINANCIAL ASSETS HELD FOR TRADING
(1) Classification
RMB'000
2011.06.30 2010.12.31
1.Equity securities investments
held for trading 305,144 393,491
2.Derivative financial assets
- forward contract 57,190 119,069
3.Hedging instrument 22,922 13,101
Total 385,256 525,661
(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 30 June 2011, 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 780 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 430 million, EUR 50 million, NOK 20
million and AUD 1 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
July 2011 to 25 June 2012.
As at 30 June 2011, the Group recognised the aforesaid forwards contracts in their
fair values of RMB 57,190,000 as held-for-trading financial assets and RMB
4,577,000 as held-for-trading financial liabilities. Transaction costs on realisation
have not been considered when calculating the fair values.
110
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3. BILLS RECEIVABLE
(1) Classification of bills receivable
RMB'000
2011.06.30 2010.12.31
Bank acceptance bills 419,659 396,670
Commercial acceptance bills 10,932 111,915
Total 430,591 508,585
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 period end, the Group had no pledged bills receivable.
111
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE
(1) Accounts receivable disclosed by customer categories:
RM B’000
Category 2011.06.30 2010.12.31
Containers group 5,915,577 3,604,026
Trailers group 2,793,738 1,934,155
Tank equipments group 1,371,810 1,175,611
Offshore engineering group 1,371,789 1,242,446
Airport ground facilities group 190,845 247,412
Others 547,581 158,669
Subtotal 12,191,340 8,362,319
Less:provision for bad and
doubtful debts (237,675) (232,483)
Total 11,953,665 8,129,836
(2) An ageing analysis of accounts receivable is as follows:
RM B’000
Category 2011.06.30 2010.12.31
Within 1 year 11,644,683 7,662,297
1 to 2 years 206,276 388,465
2 to 3 years 120,837 94,341
More than 3 years 219,544 217,216
Subtotal 12,191,340 8,362,319
Less:provision for bad and
doubtful debts (237,675) (232,483)
Total 11,953,665 8,129,836
The ageing is counted starting from the date the accounts receivable is recognised.
112
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories (continued):
2011.06.30 2010.12.31
Gross Provision for bad Gross Provision for bad
Category carrying amount and doubtful debts carrying amount and 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 118,473 0.97% 34,207 28.87% 121,099 1.44% 44,677 36.89%
Individually insignificant but assessed
for inpairment individually 63,943 0.52% 16,700 26.12% 56,718 0.67% 25,232 44.49%
Assessed for impairment collectively
Containers group 5,865,196 48.11% 918 0.02% 3,597,341 43.03% 1,455 0.04%
Trailers group 2,687,672 22.05% 119,472 4.45% 1,827,394 21.85% 92,824 5.08%
Tank equipments group 1,364,488 11.19% 56,840 4.17% 1,168,797 13.98% 59,206 5.07%
Offshore engineering group 1,365,266 11.20% - - 1,230,957 14.72% - -
Airport ground facilities group 190,845 1.57% 9,471 4.96% 247,412 2.96% 8,944 3.62%
Others 535,457 4.39% 67 0.01% 112,601 1.35% 145 0.13%
Subtotal 12,008,924 98.50% 186,768 1.56% 8,184,502 97.89% 162,574 1.99%
Total 12,191,340 100.00% 237,675 1.95% 8,362,319 100.00% 232,483 2.78%
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.
113
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:
2011.06.30 2010.12.31
Original Exchange
Currency Original currency Exchange rate Amount Currency Amount
currency rate
RMB'000 RMB'000 RMB'000 RMB'000
RMB 4,125,612 1.0000 4,125,612 RMB 2,546,871 1.0000 2,546,871
USD 1,110,268 6.7416 7,484,985 USD 808,506 6.5897 5,327,812
HKD 41,708 0.8316 34,685 HKD 20,121 0.8477 17,057
JPY 2,608,686 0.0802 209,217 JPY 53,378 0.0810 4,324
AUD 4,554 6.9395 31,603 AUD 4,160 6.7050 27,893
EUR 23,420 9.3612 219,236 EUR 45,679 8.7980 401,883
Others - - 86,002 Others - - 36,479
Total 12,191,340 Total 8,362,319
(4) An analysis of accounts receivable individually significant and assessed for
impairment individually is as follows:
RM B’000
Provision for
bad and
Category Amount Provision rate Reason
doubtful
debts
Provision was
Containers group 46,022 2,301 5.00% made based on
the credit risk
60,943 26,152 42.91% assessment of
Trailers group
Others 11,508 5,754 50.00% customers and
historical loss
Total 118,473 34,207 28.87% experiences.
114
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
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:
RMB’000
Provision for
bad and
Category Amount Provision rate Reason
doubtful
debts
Containers group 4,359 2,760 63.32% Provision was
Trailers group 45,123 2,766 6.13% made based on
the credit risk
Tank equipments group 7,322 7,322 100.00%
assessment of
Offshore engineering group 6,523 3,613 55.39% customers and
Others 616 239 38.80% historical loss
Total 63,943 16,700 26.12% experiences.
115
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:
RMB’000
2011.06.30 2010.12.31
Provision for Provision for
Ageing Percentage Percentage
Amount bad and Amount bad and
(%) (%)
doubtful debts doubtful debts
Within 1 year 10,322,866 85.96% 108,896 6,432,794 76.93% 62,713
1 to 2 years 182,387 1.52% 9,352 383,213 4.58% 22,117
2 to 3 years 71,298 0.59% 7,622 81,648 0.98% 21,854
More than 3 years 67,107 0.56% 60,898 55,890 0.67% 55,890
Total 10,643,658 88.63% 186,768 6,953,545 83.16% 162,574
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 period (2010: Nil).
(8) Actual written-off of accounts receivable within this year
There were no material actual written-off of accounts receivable during the period
(2010: Nil).
116
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:
Relationship Percentage in
Company Name with the Amount Ageing total accounts
company RMB’000 receivable (%)
Mediterranean Shipping Co. S.A. None
Compagnie Maritime d’ 828,166 Within 1 year 6.79%
Affretement None 673,959 Within 1 year 5.53%
Maersk Line None 483,243 Within 1 year 3.96%
Triton Container International Ltd. None 370,404 Within 1 year 3.04%
Soratu Drilling LLC. None 259,144 Within 1 year 2.13%
Total 2,614,916 21.45%
The total amount of the Group’s top 5 accounts receivable at 31 December 2010 was
RMB2,018,771,000, 24.14% 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 (2010:Nil).
(11) Accounts receivable due from related parties
The Group’s accounts receivable due from related parties amount to
RMB393,899,000(2010: RMB89,035,000), accounting for 3.23% of the total
accounts receivable (2010: 1.06%).
(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 period (2010: 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 period (2010: Nil).
As at 30 June 2011, restricted accounts receivable amounted to RMB 624,017,000
(2010: RMB962,096,000). Refer to Note V.21.
117
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES
(1) Other receivables by categories:
RMB'000
Category 2011.06.30 2010.12.31
Amounts due from related parties 400,832 557,348
Loans 686,899 427,445
Drawback tax receivable 775,634 786,039
Prepayment for land and equipment 752,927 73,336
Others 592,344 493,721
Subtotal 3,208,636 2,337,889
Less: provision for bad and doubtful debts (99,441) (101,617)
Total 3,109,195 2,236,272
(2) The ageing analysis of other receivables is as follows:
RMB'000
Category 2011.06.30 2010.12.31
Within 1 year 2,680,108 1,827,466
1 to 2 years 237,537 253,754
2 to 3 years 38,706 151,166
More than 3 years 252,285 105,503
Subtotal 3,208,636 2,337,889
Less: provision for bad and doubtful debts (99,441) (101,617)
Total 3,109,195 2,236,272
The ageing is counted starting from the date the other receivable is recognised.
118
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
RMB'000
2011.06.30 2010.12.31
Provision for bad and Provision for bad and
Category Note Percentage Percentage
Amount doubtful debts Amount doubtful debts
(%) (%)
Amount Percentage (%) Amount Percentage (%)
Individually significant other receivables (4) 1,875,884 58.46% 58,574 3.12% 950,622 40.66% 58,574 6.16%
Insignificant other receivables (5) 1,332,752 41.54% 40,867 3.07% 1,387,267 59.34% 43,043 3.10%
Total 3,208,636 100.00% 99,441 3.10% 2,337,889 100.00% 101,617 4.35%
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.
119
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:
RMB’000
Provision
Provision
Category Amount for bad and Reasons
rate
doubtful
Individually significant:
Capital increment amount due from subsidiaries 140,449 - - Note 1
Amounts due from associates 163,304 - - Note 1
Receivables arising from transfer of equity investment70,650 - - Note 1
Land-transferring fees 736,393 - - Note 1
Receivables arising from financing to third parties 616,386 - - Note 1
Others 148,702 58,574 39.39% Note 1、Note 2
Total 1,875,884 58,574 3.12%
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.
120
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 RMB 40,867,000.
(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 period (2010: Nil).
(7) The recovery of other receivables by restructuring within this year
There were no other receivables recovered during the period by means of
restructuring (2010: Nil).
(8) Actual written-off of other receivables within this year
There were no material actual written-off of other receivables during the period
(2010: Nil).
121
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:
RMB’000
Relationship Percentage in
Company Name with the Amount Aging total other
company receivables (%)
1. Zhengjiang government None 736,393 Within 1 year 22.95%
2. Sea Biscuit International Inc. None 535,480 Within 1 year 16.69%
3. Shanghai Fengyang Real Estate More than 3
Associate 163,304 5.09%
Development Co., Ltd (“Shanghai years
Minority
4. P.G.M. Holding B.V. (“PGM”) shareholder of 140,449 1 to 2 years 4.38%
the Group’s
5.Marine Subsea Cyprus Holding Ltd. None 80,906 1 to 2 years 2.52%
Total 1,656,532 - 51.63%
The Group’s top 5 other receivables as at 31 September 2010 amounted to
RMB821,398,000, accounting for 35.13% 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 RMB
7,557,000 and RMB 1,850,000 (2010:respectively amounting toRMB 7,704,000元
and RMB 1,886,000).
122
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(11) Other receivables due from related parties
RMB’000
Relationship Percentage in total
Company Name with the Amount other receivables
company (%)
Minority
1.PGM shareholder of 140,449 4.38%
the Group’s
2.Shanghai Fengyang Associate 163,304 5.09%
Controlling
3.Shenzhen Merchant Property
shareholder of 70,650 2.20%
Development Co., Ltd
the Group’s
4.C & C Trucks Associate 10,480 0.33%
Important
5.COSCO Container shareholder of 1,850 0.06%
the Group
Important
6.Merchants International shareholder of 7,557 0.23%
the Group
7.Others 6,542 0.20%
Total 400,832 12.49%
The Group’s other receivables due from related parties as at 31 December 2010
amounted to RMB 557,348,000), accounting for 23.84 % 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 period (2010: 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 period (2010: Nil).
123
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. PREPAYMENTS
(1) Prepayments by category are as follows:
RMB'000
2011.06.30 2010.12.31
Raw material 1,375,564 1,832,516
Construction Cost 727,979 600,546
Other 2,780 97,472
Subtotal 2,106,323 2,530,534
Less: provision for bad and doubtful
debts (94,666) (97,087)
Total 2,011,657 2,433,447
(2) The ageing analysis of prepayments is as follows:
RMB'000
2011.06.30 2010.12.31
Percentage Percentage
Amount Amount
(%) (%)
Within 1 year 1,777,568 84.39% 2,156,578 85.22%
1 to 2 years 90,761 4.31% 57,744 2.28%
2 to 3 years 52,471 2.49% 280,565 11.09%
More than 3 years 185,523 8.81% 35,647 1.41%
Subtotal 2,106,323 100.00% 2,530,534 100.00%
Less: provision for bad and doubtful
debts (94,666) 4.49% (97,087) 3.84%
Total 2,011,657 95.51% 2,433,447 96.16%
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. 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
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.
124
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. PREPAYMENTS (CONTINUED)
(3) The Group’s top 5 prepayments are as follows:
RMB'000
Relationship Percentage of the
Time of
Company Name with the Amount total Reason for unsettlement
recognition
company prepayments(%)
prepayment,contract not yet
Huisman Equipment BV None 161,745 7.68% 2010 settled
THRUSTMASTER OF TEXAS, INC None 133,411 6.33% 2010 materials not yet received
Ben steel None 124,567 5.91% 2011 materials not yet received
materials not yet received
Tian Jin Yinze sheet metal Co., Ltd. None 87,640 4.16% 2008 within due date
STX HEAVY INDUSTRIES CO., LTD. None 85,848 4.08% 2010 materials not yet received
Total 593,211 28.16%
(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 (2010: Nil).
125
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVENTORIES
(1) Inventories by categories
RMB'000
2011.06.30 2010.12.31
Category Provision for Provision for
Cost amount Carrying amount Cost amount Carrying amount
diminution in value diminution in value
Raw materials 5,865,800 (88,218) 5,777,582 5,230,667 (89,821) 5,140,846
Work in progress 1,759,500 (21,280) 1,738,220 1,728,783 (21,816) 1,706,967
Finished goods 2,874,637 (31,575) 2,843,062 3,190,426 (38,106) 3,152,320
Consignment stocks 497,275 (95) 497,180 339,038 (95) 338,943
Spare parts
Low-valued 78,161 - 78,161 43,434 - 43,434
consumables 38,851 - 38,851 21,696 - 21,696
Materials in transit 12,932 - 12,932 12,487 - 12,487
Completed properties
held for sale 598,270 25,835
598,270 - 25,835 -
Properties under 38,331 - 38,331 449,938 - 449,938
developmentconstruction
Ship under 3,397,016 - 3,397,016 1,989,931 - 1,989,931
Offshore engineering 466,453 - 466,453 541,350 - 541,350
equipment
Total 15,627,226 (141,168) 15,486,058 13,573,585 (149,838) 13,423,747
126
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
(2010:Nil).
As at 30 June 2011, t inventories with restricted ownership amounts to RMB
5,705 ,000 (2010: Nil).
(2) Inventories movement for the year is as follows:
RMB'000
Opening balance Effect of foreign Closing balance at
Category at the beginning Additions for the Diminutions for exchange rate the end of the
of the year period the period changes period
Raw materials 5,230,667 29,606,855 (28,916,842) (54,880) 5,865,800
Work in progress 1,728,783 24,211,274 (24,181,788) 1,231 1,759,500
Finished goods 3,190,426 30,646,974 (30,962,666) (97) 2,874,637
Consignment stocks 339,038 2,802,994 (2,644,757) - 497,275
Ship under construction 1,989,931 1,407,085 - - 3,397,016
Other 1,094,740 3,484,223 (3,345,965) - 1,232,998
Subtotal 13,573,585 92,159,405 (90,052,018) (53,746) 15,627,226
Less: provision for
diminution in value of
inventories (149,838) (2,483) 10,931 222 (141,168)
Total 13,423,747 92,156,922 (90,041,087) (53,524) 15,486,058
127
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVENTORIES (CONTINUED)
(3) Provision for diminution in value of inventories
RMB'000
Opening balance Effect of foreign Closing balance
Provision for the Written back during the peirod
Category at the beginning exchange rate at the end of the
period
of the year Reversal Write-off changes period
Raw materials 89,821 2,358 (2,911) (1,401) 351 88,218
Work in progress 21,816 125 - - (661) 21,280
Finished goods 38,106 - (4,836) (1,783) 88 31,575
Consignment stocks 95 - - - - 95
Total 149,838 2,483 (7,747) (3,184) (222) 141,168
128
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
period 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 period is as follows:
Percentage of
provision written
Basis of provision back over total
for diminution in Reasons for written inventories balance at
Category value of inventories back of provision year end
Net realisable value Inventories were
was lower than used or sold and
book value the net realisable
Raw materials value ascended 0.05%
Net realisable value Inventories were
was lower than used or sold and
book value the net realisable
Work in progress value ascended 0.00%
Net realisable value Inventories were
was lower than used or sold and
book value the net realisable
Finished goods value ascended 0.17%
Inventories were
Net realisable value
used or sold and
was lower than
the net realisable
book value
Consignment stocks value ascended 0.00%
129
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8. NON-CURRENT ASSETS DUE WITHIN ONE YEAR
RMB'000
2011.06.30 2010.12.31
Finance leases 1,327,884 758,786
Sales of goods by instalments 108,841 446,031
Others 2,246 -
Subtotal 1,438,971 1,204,817
Less: Provision for impairment (26,523) (19,315)
Total 1,412,448 1,185,502
9. OTHER CURRENT ASSETS
RMB'000
Item 2011.06.30 2010.12.31
Tax deductible/withheld 729,817 684,560
Others - 3,470
Total 729,817 688,030
130
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. AVAILABLE-FOR-SALE FINANCIAL ASSETS
RMB'000
Item 2011.06.30 2010.12.31
Available-for-sale equity instruments 751,838 768,467
During the period, 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 RMB 150,069,000 and RMB
593,511,00. Besides, the Group and the Company held equity investment of Otto
Energy Limited of RMB 8,258,000.
.
131
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
11. LONG-TERM RECEIVABLES
(1) The long-term receivables by categories are as follows:
RMB'000
Item 2011.06.30 2010.12.31
Finance Leases 3,281,415 934,554
including: Unrealised finance income 956,510 75,060
Sales of goods by instalment 391,867 406,161
Car/housing loans to staff 14,652 13,528
Subtotal 3,687,934 1,354,243
Less: Provision for impairment (40,985) (17,986)
Total 3,646,949 1,336,257
(2) Significant changes of provision for bad and doubtful debts during the period:
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 period (2010: Nil).
(3) Derecognition of long-term receivables due to transfer of financial assets
132
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 (2010: Nil).
12. LONG-TERM EQUITY INVESTMENTS
(1) As at 30 June 2011, the Group’s long-term equity investments by categories are as
follows:
RMB'000
Item 2011.06.30 2010.12.31
Investments in joint ventures
25,357 39,812
Investments in associates 1,535,053 1,119,285
Other long-term equity investments 392,300 392,300
Subtotal 1,952,710 1,551,397
Less: Provision for impairment (3,065) (3,065)
Total 1,949,645 1,548,332
133
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:
RMB'000
The Whether voting
Initial Balance at the Additions Balance at the Shareholding Company right is defferent Provision Impairment Dividend
Inves tee investment beginning of during the end of the percentage subs idiaries from the for los s of the receivable/received
cost the year period period (%) voting right shareholding impairment period of the period
(%) interes t
Equity method—Joint ventures
Compos ite Co., Ltd (MST) - 14,497 (14,497) - - - N/A - - -
RuiJi Logistic (Wuhu) Co., Ltd 9,884 10,020 (3,327) 6,693 50.00% 50.00% N/A - - -
North CIMC Logis tic Co., Ltd. 15,000 15,295 (231) 15,064 50.00% 50.00% N/A - - -
Super Cool 3,600 - 3,600 3,600 50.00% 50.00% N/A - - -
Subtotal 28,484 39,812 (14,455) 25,357 - - -
Equity method —Ass ociates - - -
("KYH") 27,625 120,753 5,030 125,783 31.83% 31.83% N/A - - -
Logis tic Co., Ltd (TJCIMCZL) 21,403 41,115 881 41,996 36.00% 36.00% N/A - - -
(DLJLL) 16,844 37,693 858 38,551 30.00% 30.00% N/A - - -
Service Co., Ltd (Xiamen 11,479 13,999 1,790 15,789 45.00% 45.00% N/A - - -
Group Co., Ltd (TJZL) 302,144 467,681 5,245 472,926 38.22% 38.22% N/A - - 11,555
Container Service Co., Ltd 3,579 3,533 - 3,533 21.00% 21.00% N/A - - -
Limited (XYW) 2,916 2,850 (31) 2,819 20.00% 20.00% N/A - - -
Shanghai Fengyang 12,000 84,313 28,267 112,580 40.00% 40.00% N/A - - -
TRS Transportkoeling 12,030 13,133 1,569 14,702 32.00% 32.00% N/A - - -
Eurotank Oy 6,946 8,204 619 8,823 40.00% 40.00% N/A - - -
Ltd (XMHLC) 6,153 5,087 120 5,207 49.00% 49.00% N/A - - -
TRUCKS) 540,000 102,065 380,938 483,003 45.00% 45.00% N/A - - -
Development Co., Ltd. (“XMHJ 4,900 4,900 285 5,185 49.00% 49.00% N/A - - -
Technology Materials Co., Ltd. 6,072 5,125 121 5,246 30.00% 30.00% N/A - - -
Cons afe MSV AB - 6,315 (6,315) - - - N/A - - -
Ltd 9,000 18,884 (3,316) 15,568 36.00% 36.00% N/A - - -
("TSC", NoteV.12(3)) 167,591 167,161 - 167,161 14.60% 14.60% N/A - - -
Company 16,474 16,474 (293) 16,181 25.00% 25.00% N/A - - -
Subtotal 1,167,156 1,119,285 415,768 1,535,053 - - -
Costing method - - -
Management 8,125 8,125 - 8,125 5.00% 5.00% N/A - - 10,000
Donghua Container 270 270 - 270 5.00% 5.00% N/A - - -
China Railway United Logis tics 380,780 380,780 - 380,780 10.00% 10.00% N/A - - -
Guangdong Samsung 1,365 1,365 - 1,365 0.09% 0.09% N/A (1,365) - -
Beihai Yinjian 1,700 1,700 - 1,700 1.01% 1.01% N/A (1,700) - -
Company Limited 60 60 - 60 39.00% 39.00% N/A - - -
Subtotal 392,300 392,300 - 392,300 - - -
Total 1,587,940 1,551,397 401,313 1,952,710 (3,065) - 21,555
134
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(3) As at 30 June 2011, 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.
(4) As at 30 June 2011, the group directly holds 14.60% equity interest in TSC. As Secretary of the Board in the group, Mr Yu Yuqun
has been appointed as Non-Executive Director of TSC on 15 March 2011, the group has significant influence over TSC. Considering
TSC to be its associate company since that date, the Group accounted the equity investment in TSC RMB 167,161,000 as long-term
equity investment using the equity method.
135
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(5) Information for major joint ventures and associates is as follows:
Net profit/
Percentage
Registered capital Total assets Total liabilities Net assets Total revenue (loss) for the period
of voting
Registered Legal Principal Shareholding rights in
Investee Entity type place representative activities Currency RMB'000 percentage the RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
a.Joint ventures
Production
MST
Corporation Yangzhou Li Guisen and sales of RMB 154,634 50.00% 50.00%
RuiJi Logistics Corporation Anhui Li Lizhong composition
Logistic RMB 2,049,210 50.00% 50.00%
GXNFWL Corporation Guangxi Yan Jie Logistic RMB 30,000 50.00% 50.00%
Super Cool Corporation Shanghai Huangtianhua Refrigeration EquipmentRMB 18,000 50.00% 50.00%
b.As sociates
Investment
KYH Corporation BVI Huojinghui Corporation HKD 72,289 31.83% 31.83%
TJCIMCZL Corporation Tianjin Wufapei Logistic RMB 100,000 36.00% 36.00%
DLJLL Corporation Dalian Xu Song Logistic RMB 70,000 30.00% 30.00%
Xianmen Haitou Corporation Xiamen Jiang Jingdong Logistic RMB 25,000 45.00% 45.00%
TJZL Corporation Tianjin Yang Liqiang Logistic USD 51,956 38.22% 38.22%
NBBL Corporation Ningbo Zhu Shuilin Martime auxiliary servicesRMB 4,000 21.00% 21.00%
XYW Corporation HongKong Wu Zhiquan Wood processing RMB 12,500 20.00% 20.00%
Shanghai Fenyang Corporation Shanghai Yang Zhiguang Property development RMB 30,000 40.00% 40.00%
XMHLC Corporation Xiamen Yangxiaobo Logistic USD 12,000 49.00% 49.00%
C&C TRUCKS Corporation Wuhu Yin Tongyao Equipment construction RMB 400,000 45.00% 45.00%
XMHJ Corporation Xiamen Li Qiang Container leasing RMB 10,000 49.00% 49.00%
SJKJ Corporation Jiangmen Zheng Xiande Composite panels manufacturing 3,000 30.00% 30.00%
Haiyang Blue Island Offshore Offshore
Ltd Corporation Yantai Dou Jiangrong Engineering RMB 30,000,000 30.00% 30.00%
TSC Corporation Cayman Islands Jiang Binhua Energy and HKD 2,000,000 14.60% 14.60%
Vostok-Raffles Joint Stock Offshore
Company Corporation Russia Not applicable Engineering USD 10,000,000 25.00% 25.00%
(6) There is no restriction o the ability of the Group to transfer funds to invested enterprise.
136
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
13. INVESTMENT PROPERTY
RMB'000
Balance at the Effect of the foreign
beginning of the exchange rate Balance at the
Item year Additions Disposals changes end of the period
Cost 96,223 12,290 - - 108,513
1.Buildings 32,172 12,290 - - 44,462
2.Land use rights 64,051 - - - 64,051
Accumulated depreciation or
amortisation 18,867 809 - - 19,676
1.Buildings 11,108 223 - - 11,331
2.Land use rights 7,759 586 - - 8,345
Carrying amounts 77,356 11,481 - - 88,837
1.Buildings 21,064 12,067 - - 33,131
2.Land use rights 56,292 (586) - - 55,706
Provision of impairment - - - - -
1.Buildings - - - - -
2.Land use rights - - - - -
Carrying amounts 77,356 11,481 - - 88,837
1.Buildings 21,064 12,067 - - 33,131
2.Land use rights 56,292 (586) - - 55,706
The depreciation and amortisation charged for investment property for the period
ended 30 June 2011 was RMB 809,000. There was no provision for impairment for
investment property for the period ended 30 June 2011.
137
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS
(1) Fixed assets by categories
RMB'000
Effect of the
Balance at the foreign
Item
beginning of the exchange Balance at the
period Additions Disposals rate changes end of the period
Cost: 14,543,128 442,080 (77,920) 62,359 14,969,647
Including: Plant & buildings 5,653,864 163,029 (246) 32,304 5,848,951
Machinery & equipment 5,534,649 193,341 (61,724) 27,143 5,693,409
Other equipment 716,306 55,989 (3,001) 6,460 775,754
Motor vehicles 764,098 22,550 (12,949) 3,569 777,268
Offshore engineering special
equipment 1,324,208 6,954 - (7,019) 1,324,143
Dock and port 550,003 217 - (98) 550,122
Accumulated depreciation: 4,306,449 377,755 (33,101) 44,602 4,695,705
Including: Plant & buildings 1,352,918 84,046 (104) 13,976 1,450,836
Machinery & equipment 2,045,621 201,612 (20,306) 23,063 2,249,990
Other equipment 413,853 33,336 (2,895) 5,300 449,594
Motor vehicles 272,147 19,442 (9,796) 2,650 284,443
Offshore engineering special
equipment 141,279 31,737 - (384) 172,632
Dock and port 80,631 7,582 - (3) 88,210
Carrying amount 10,236,679 64,325 (44,819) 17,757 10,273,942
Including: Plant & buildings 4,300,946 78,983 (142) 18,328 4,398,115
Machinery & equipment 3,489,028 (8,271) (41,418) 4,080 3,443,419
Other equipment 302,453 22,653 (106) 1,160 326,160
Motor vehicles 491,951 3,108 (3,153) 919 492,825
Offshore engineering special
equipment 1,182,929 (24,783) - (6,635) 1,151,511
Dock and port 469,372 (7,365) - (95) 461,912
Provision for impairment 230,213 - (1,746) 6,044 234,511
Including: Plant & buildings 149,699 - - 5,800 155,499
Machinery & equipment 67,050 - (1,467) 246 65,829
Other equipment 573 - (153) - 420
Motor vehicles 158 - (126) - 32
Offshore engineering special
equipment 12,733 - - (2) 12,731
Dock and port - - - - -
Carrying amount 10,006,466 64,325 (43,073) 11,713 10,039,431
Including: Plant & buildings 4,151,247 78,983 (142) 12,528 4,242,616
Machinery & equipment 3,421,978 (8,271) (39,951) 3,834 3,377,590
Other equipment 301,880 22,653 47 1,160 325,740
Motor vehicles 491,793 3,108 (3,027) 919 492,793
Offshore engineering special
equipment 1,170,196 (24,783) - (6,633) 1,138,780
Dock and port 469,372 (7,365) - (95) 461,912
138
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS (CONTINUED)
(1) Fixed assets by categories (continued)
The depreciation charged for the period of the Group was RMB: 377,755,00.
Fixed assets transferred from construction in progress in the period was
RMB309,562,000.
As at 30 June 2011, the fixed assets of the Group restricted in ownership amounted to
RMB97,877,000. 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 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.
139
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS (CONTINUED)
(2) As at 30 June 2011, the Group had no temporarily idle fixed assets.
(3) Fixed assets held under finance leases (2010: Nil)
RMB'000
Accumulated
Item Cost depreciation Carrying amount
As at 30 June 2011
Special equipment for marine
Engineering project 215,152 30,530 184,622
140
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS (CONTINUED)
(4) Fixed assets leased out under operating leases
RMB’000
Item Net book value
Plant & buildings 22,085
Motor vehicles 761
Machinery & equipment 66,370
Other equipment 3,000
Total 92,216
(5) Fixed assets held for sale at the period end
As at 30 June 2011, there were no fixed assets held for sale (2010: Nil).
(6) Fixed assets with pending certificates for ownership
Expected time of
Carrying amoun Reasons for pending getting
Item RMB’000 certificate of
Put to use, ownership
Factory 89,560
certificate being End of 2011
Workshop 67,480 Certificate being End of 2011
Put to use,
Office building 78,089
certificate being End of 2011
Warehouse 56,155 Certificate being November,2011
Put to use,
Dormitory and Canteen 46,843
certificate being End of 2011
Certificate being
Others 74,442 in the progress End of 2011
Total 412,569
141
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
15. CONSTRUCTION IN PROGRESS
(1) Construction in progress
RMB'000
2011.06.30 2010.12.31
Item Carrying Carrying
Cost Impairment amount Cost Impairment amount
DLZH Plant Project - - - 18,774 - 18,774
Nantong CIMC Special Transportation
Equipment Third Workshop Project 13,792 - 13,792 3,367 - 3,367
Enric Roller-type Rotary Machine and
Top-and-bottom Machine 9,998 - 9,998 1,601 - 1,601
KGR Vehicle Installation Project 3,732 - 3,732 3,427 - 3,427
Nantong Sunda Container Complete-line
and Coating-line project 735 - 735 198 - 198
Dalian Heavy Logistics Equipments
Pressure Vessels Project - - - 185 - 185
Enric First Stage Project 8,573 - 8,573 8,672 - 8,672
Dalian Heavy Logistics Production Line 13,749 - 13,749 17,324 - 17,324
CIMC Grand Sky Light Hotel Project - - - 36,337 - 36,337
XHCIMCS Production Line and Power
Facilities Reconstruction Project 8,303 - 8,303 13,298 - 13,298
Enric Heavy Pressure Vessel Workshop 18,674 - 18,674 12,777 - 12,777
Southern Salt Square 2nd Stage Project 41,063 - 41,063 39,815 - 39,815
LYLY vehicle 2nd Phase Project 13,037 - 13,037 8,800 - 8,800
Head office residential facilities for Haigong research center - 19,453 19,453 - 19,453
YZTL Steel Structure Factory Project 22,609 - 22,609 8,218 - 8,218
Enric 3rd Phase Project 18,207 - 18,207 7,213 - 7,213
Eastern Logistic 3rd Phase Project 250,431 - 250,431 36,355 - 36,355
Xinhui Wood Factory 5th and 6th Project 1,470 - 1,470 13,200 13,200
Raffles Offshore Drilling Platform
outfitting quay project 322,213 - 322,213 304,892 - 304,892
Raffles harbor basin project 99,070 - 99,070 82,851 - 82,851
Raffles Dredging Offshore Project 38,576 - 38,576 38,588 - 38,588
Raffles No1 and No 2 slideway project 100,916 - 100,916 99,275 - 99,275
Raffles sea route project 11,939 - 11,939 11,718 - 11,718
Raffles Longmen Crane Project 26,981 - 26,981 22,018 - 22,018
Raffles Plant Road Project 10,783 - 10,783 10,243 - 10,243
Raffles Jack-up Drilling Platform 640,971 - 640,971 541,542 - 541,542
Yantai Offshore Engineering Research Institute R&D Center - 34,593 - - -
Enric Bengbu Factory 73,793 - 73,793 - - -
Shijiazhuang Enric Factory 8,328 - 8,328 - - -
CIMC Raffles Employee Canteen 11,943 - 11,943 - - -
Others 512,882 - 512,882 337,523 337,523
Total 2,336,814 2,336,814 1,697,664 - 1,697,664
142
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 RMB 46,594,000 (2010: RMB17,912,000). The interest
rate adopted for determining capitalised at borrowing cost for the current period was
5.39% (2010: 5.09%).
As at 30 June 2011, there is no construction in progress of the Group with restrictions
in ownership. Refer to Note V.21 for details. (2010: RMB 36,337,000).
(2) Provision for impairment
There was no provision for impairment for work in progress in the period (2010: Nil).
143
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
Percentage of Accumulate Including Effect of the
Balance at the current input d capitalized current year foreign Balance at the
beginning of Transfer to Other over budget borrowing capitalized Capitalized Sources of exchange end of the
Project Budge the year Additions fixed assets deduction (%) Progress cost borrowing cost rate (%) funds rate changes period
DLZH Plant Project 170,705 18,774 14,751 (33,525) - 89.95% 100.00% 5,196 - 4.78% Bank Loan - -
Nantong CIMC Special Transportation Equipment35,519 Workshop3,367 10,425 - - 123.12% 97.26% - - 0.00% Self-funding - 13,792
Enric Roller-type Rotary Machine and Top-and-bottom Machine 1,601 10,404 (2,007) 96.73% 96.73% - - - Self-funding - 9,998
Enric First Stage Project 51,950 8,565 8 - - 88.89% 88.89% - - 0.00% Self-funding - 8,573
Dalian Heavy Logistics Production Line equipment143,392 17,324 7,044 (10,619) - 28.05% 28.05% - - 0.00% Self-funding - 13,749
CIMC Grand Sky Light Hotel Project 86,000 36,337 34,281 (70,618) - 81.91% 79.00% 610 176 5.09% Bank Loan - -
XHCIMCS Production Line and Power Facilities Reconstruction Project 9,565 (14,560) - 84.53% 84.53% - - 0.00% Self-funding - 8,303
Enric Heavy Pressure Vessel Workshop 25,570 12,777 5,897 - - 73.03% 73.03% - - 0.00% Self-funding - 18,674
Southern Salt Square 2nd Stage Project 66,520 39,815 1,248 - - 61.73% 61.73% - - 0.00% Self-funding - 41,063
LYLY vehicle 2nd Phase Project 19,620 8,800 4,237 - - 66.45% 66.45% - - 0.00% Self-funding - 13,037
Head office residential facilities for Haigong research center 19,453 - - - 98.40% 98.40% - - 0.00% Self-funding - 19,453
YZTL Steel Structure Factory Project 19,000 8,218 14,391 - - 119.00% 73.46% - - 0.00% Self-funding - 22,609
Enric 3rd Phase Project 28,132 7,213 10,994 - - 64.72% 25.64% - - 0.00% Self-funding - 18,207
Eastern Logistic 3rd Phase Project 184,512 36,355 214,076 - - 135.73% 89.70% - - 0.00% Self-funding - 250,431
Xinhui Wood Factory 5th and 6th Project 32,831 13,200 2,655 (14,385) - 51.66% 51.66% - - 0.00% Self-funding - 1,470
Raffles Offshore Drilling Platform 400,523 304,892 26,290 - - 80.47% 80.47% 20,894 8,873 5.95% Bank Loan (8,969) 322,213
outfitting quay project 163,859 82,851 21,999 - - 60.46% 60.46% 5,774 5,774 5.91% Self-funding (5,780) 99,070
Raffles harbor basin project 62,445 38,588 - - - 61.78% 61.78% - - 0.00% Self-funding (12) 38,576
Raffles Dredging Offshore Project 119,822 99,275 1,731 - - 84.25% 84.25% - - 0.00% Self-funding (90) 100,916
Raffles No1 and No 2 slideway project 73,737 11,721 225 - - 25.00% 25.00% - - 0.00% Self-funding (7) 11,939
Raffles sea route project 32,772 22,018 4,969 - - 86.68% 90.00% - - 0.00% Self-funding (6) 26,981
Raffles Longmen Crane Project 11,265 10,243 544 - - 95.76% 95.76% - - 0.00% Self-funding (4) 10,783
Raffles Plant Road Project 1,214,370 541,542 113,539 - - 53.58% 53.58% 13,939 13,939 5.96% Self-funding (14,110) 640,971
Raffles Jack-up Drilling Platform 350,000 642 33,951 - - 9.88% 9.88% - - 0.00% Self-funding - 34,593
Enric Bengbu Factory 450,000 - 73,793 - - 16.40% 16.40% - - 0.00% Self-funding - 73,793
Shijiazhuang Enric Factory 341,192 - 8,328 - - 2.44% 2.44% - - 0.00% Self-funding - 8,328
CIMC Raffles Employee Canteen 14,592 9,046 2,897 - - 81.85% 81.85% - - 0.00% Self-funding - 11,943
Total 4,148,235 1,365,915 628,242 (145,714) - 46,413 28,762 (28,978) 1,819,465
144
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
16. INTANGIBLE ASSETS
(1) Intangible assets by categories
RMB'000
Effect of the
Balance at the foreign Balance at the
beginning of exchange rate end of the
Item the year Additions Disposals changes period
Cost 4,191,625 142,071 (8,786) 9,907 4,334,817
Land use rights 2,871,554 118,863 (8,786) - 2,981,631
Technical know-how and trademarks 811,573 23,208 - 5,189 839,970
Timber concession rights 236,992 - - (4,508) 232,484
Customer relationships 108,736 - - 5,429 114,165
Customer contracts 136,128 - - 3,797 139,925
Mairime use rights 26,642 - - - 26,642
Accumulated amortisation 868,220 118,322 (8,601) 3,681 981,622
Land use rights 266,250 39,266 (8,601) - 296,915
Technical know-how and trademarks 368,783 64,044 - (334) 432,493
Timber concession rights 95,425 - - (1,815) 93,610
Customer relationships 48,843 7,692 - 2,033 58,568
Customer contracts 83,864 6,533 - 3,797 94,194
Mairime use rights 5,055 787 - - 5,842
Carrying amount 3,323,405 23,749 (185) 6,226 3,353,195
Land use rights 2,605,304 79,597 (185) - 2,684,716
Technical know-how and trademarks 442,790 (40,836) - 5,523 407,477
Timber concession rights 141,567 - - (2,693) 138,874
Customer relationships 59,893 (7,692) - 3,396 55,597
Customer contracts 52,264 (6,533) - - 45,731
Mairime use rights 21,587 (787) - - 20,800
Provision for impairment 104,834 45,731 - (2,305) 148,260
Land use rights - - - - -
Technical know-how and trademarks - - - - -
Timber concession rights 104,834 - - (2,305) 102,529
Customer relationships - - - - -
Customer contracts - 45,731 - - 45,731
Mairime use rights - - - - -
Carrying amount 3,218,571 (21,982) (185) 8,531 3,204,935
Land use rights 2,605,304 79,597 (185) - 2,684,716
Technical know-how and trademarks 442,790 (40,836) - 5,523 407,477
Timber concession rights 36,733 - - (388) 36,345
Customer relationships 59,893 (7,692) - 3,396 55,597
Customer contracts 52,264 (52,264) - - -
Mairime use rights 21,587 (787) - - 20,800
145
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 RMB: 118,322,000.
As at 30 June 2011, the cost of the Group’s intangible assets with certificates of
ownership to be obtained amounted toRMB41,694,000. The relevant procedures
were under progress and expected to be completed at the end of 2011.
As at 30 June 2011, the Group had intangible assets with restriction in ownership
amounted to RMB 108,441 ,000. (2010: RMB 156,607,000).
The timber concession right amounting to RMB 119,779,000, 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 RMB 13,646,000
was made to this part of timber concession rights.
146
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 RMB 112,859,000. 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 RMB
88,883,000 was made on the carrying value of the above timber concession rights.
According to the actual situation of customer relationship increased through
assessment of the acquired subsidiary, impairment amounting to RMB 45,731,000
was made on the carrying value of the above customer relationship.
As at 30 June 2011, there were no intangible assets with indefinite useful lives.
17. GOODWILL
RMB'000
Balance at the Effect of the Balance at the
Name of investee or Provision for
Note beginning of Additions Deduction foreign exchange end of the
goodwill items impairment
the year rate changes period
Enric (1)(a) 607,004 - - - 607,004 -
TGE SA (1)(b) 180,749 - - 4,901 185,650 -
Gadidae AB - 26,768 - (208) 26,560 -
Technodyne International - 36,068 - 271 36,339 -
Others 380,841 - - - 380,841 11,578
Total 1,168,594 62,836 - 4,964 1,236,394 11,578
(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:
RMB'000
2011.06.30 2010.12.31
Container industry 127,524 127,524
Tailers 77,752 77,752
Tank equipments industry 882,678 841,439
Asset groups with
insignficant allocation
percentage of goodwill 148,440 121,879
Total 1,236,394 1,168,594
147
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
17. GOODWILL
(1) Impairment test for asset group including goodwill
(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.
(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 group conducted impairment test on goodwill attributable to Enric and
TGE. The recoverable amount is determined based on the present value of
expected future cash flows and there was no impairment considered necessary
for the goodwill based on the calculations. Until 30 June 2011, there has been
no adverse trend in Enric and TGE’s business and there has been no adverse
change in key assumptions on which management has made the future cash
projections, the management believe that there was no impairment considered
necessary for the goodwill
148
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
18. LONG-TERM DEFERRED EXPENSES
RMB'000
Balance at Effect of the Balance
the foreign at the end Reasons for
beginning Other exchange of the other
Item of the year Additions Amortisation deduction rate changes period deduction
Water and electricity
capacity enlargement
expenses 1,178 - (236) - - 942 None
Rental 6,038 1,414 (2,337) - - 5,115 None
Others 20,762 5,324 (7,985) - - 18,101 None
Total 27,978 6,738 (10,558) - - 24,158 None
149
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
RMB'000
Deductible/(taxable) Deductible/(taxable)
Item temporary Deferred tax temporary Deferred tax
difference assets/(liabilities) difference assets/(liabilities)
2011.06.30 2011.6.30 2010.12.31 2010.12.31
Deferred tax assets:
Provisions for impairment 622,063 132,013 634,562 133,922
Provisions 468,981 91,276 453,035 91,669
Employee benefits payable 1,188,098 270,693 885,946 198,409
Accrued expenses 461,147 82,401 288,965 46,405
Tax losses carry-forward 905,156 157,113 895,395 153,362
Movement for fair value of financial
assets held for trading/hedge instruments 112,048 28,003 137,488 33,001
Others 73,622 15,674 66,668 21,285
Subtotal 3,831,115 777,173 3,362,059 678,053
Offsetting amount (1,176,181) (274,413) (810,909) (188,597)
Net amount after offsetting 2,654,934 502,760 2,551,150 489,456
Deferred tax liabilities:
Movement for fair value of financial
assets held for trading/hedge instruments (21,804) (5,478) (77,324) (16,046)
Available-for-sale financial assets (661,175) (171,752) (723,531) (172,414)
Movement for fair value of hedging
financial instrument (22,923) (6,400) (14,077) (3,858)
Revaluation gain through combination (960,195) (258,775) (990,755) (276,049)
Estimated dividend income earned for
non-resident foreign enterprises (5,118,667) (361,579) (2,490,010) (187,213)
Others (491,789) (97,586) (591,535) (105,883)
Subtotal (7,276,553) (901,570) (4,887,232) (761,463)
Offsetting amount 1,176,181 274,413 810,909 188,597
Net amount after offsetting (6,100,372) (627,157) (4,076,323) (572,866)
150
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
(2) Unrecognised deferred tax assets
RMB'000
Item 2011.06.30 2010.12.31
Tax losses carry-forward 480,556 361,537
Impairment losses of timber
Concession rights 55,769 55,769
Others 174,517 170,765
Total 710,842 588,071
(3) Expiry dates of tax credit for unrecognised deferred tax assets are as follows:
RMB'000
Year 2011.06.30 2010.12.31
2011 - 89,119
2012 20,351 42,477
2013 203,501 225,447
2014 273,421 289,578
2015 513,085 525,845
2016 646,336 -
More than 5 years 384,625 392,779
Total 2,041,319 1,565,245
At 30 June 2011, the Group had no unrecognised deferred tax liabilities.
Note 1: By the end of the period 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.
151
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20. PROVISIONS FOR IMPAIRMENT
RMB’000
Balance at Decrease foreign Balance at
at the beginning Charge for during the period exchange the end
Item Note of the year the period Reversal Write off rate changes of the period
Receivables V.4-6,8,11 468,488 54,211 -20,969 -3,937 1,497 499,290
Inventories V.7 149,838 2,483 -7,747 -3,184 -222 141,168
Long-term equity 3,065 - - - - 3,065
investment V.12 230,213 - - -1,746 6,044 234,511
Fixed assets V.14 104,834 45,731 - - -2,305 148,260
Intangible assets V.16 11,578 - - - - 11,578
Goodwill V.17
Total 968,016 102,425 -28,716 -8,867 5,014 1,037,872
Please refer to the respective notes of the assets for reasons of the provisions.
152
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
21. RESTRICTED ASSETS
As at 30 June 2011, the Group’s assets with restrictions in their ownership are as
follows:
RMB’000
Balance at Decrease Effect of Balance at
the beginning Additions during foreign the end
Item Note of the year for the period the period exchange of the period
- Cash at bank
and on hand V.1 858,281 1,453,068 (549,003) (5,963) 1,756,383
- Accounts
receivable V.4 962,096 222,284 (547,659) (12,704) 624,017
- Fixed assets V.14 161,120 36,881 (98,539) (1,585) 97,877
-Construction in progress V.15 36,337 - (36,337) - -
- Inventories V.7 - 18,365 (12,660) - 5,705
- Intangible assets V.16 156,607 - - (48,166) 108,441
Total 2,174,441 1,730,598 (1,244,198) -68,418 2,592,423
The above fixed assets, inventories 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.
153
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
22. SHORT-TERM LOANS
(1) Short-term loans by categories:
RMB’000
Item Note 2011.6.30 2010.12.31
Guarantee loans (a)
- RMB 247,641 3,836,026
- USD 963,653 450,471
- JPY 989 10,021
- GBP 38,343
- EUR 76,351
- SGD 4,710
Subtotal 1,212,283 4,415,922
Secured loans (b)
- RMB 56,579 -
- USD 97,087 86,325
- EUR - 17,346
- SGD - 624
Subtotal 153,666 104,295
Pledge loans (c)
- RMB - -
- USD 106,218 962,096
Subtotal 106,218 962,096
Loans on credit
- RMB 6,379,467 672,125
- USD 1,360,287 1,536,746
- EUR 137,921 194,247
- HKD 2,184,351 423,878
- AUD -
Subtotal 10,062,026 2,826,996
Other loans
- RMB - -
Subtotal - -
Total 11,534,193 8,309,309
(a) As at 30 June 2011, guarantee loans of the Group included bank loans
amounting toRMB1,037,489,000 guaranteed by the Company for its
subsidiaries, RMB166,620,000 guaranteed by HI for its subsidiaries,
RMB8,174,000 guaranteed by Enric for its subsidiaries.
(b) As at 30 June 2011, borrowings of Vangurad National Trailer
Corporation(“Vanguard”), a subsidiary of the Group, amounting to USD
15,000,000,equivalent to RMB 97,087,000 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 RMB 56,579,000, raised from bank were
secured by Enric’s property.
154
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
22. SHORT-TERM LOANS (CONTINUED)
(1) Short-term loans by categories (continued):
(c) As at 30 June 2011, the Group’s pledge loans amounting to RMB97,204,000
and RMB 9,014,000 were pledged by the accounts receivable of its
subsidiaries, YZRYL and DLCIMCS.
(d) As at 30 June 2011, 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 30 June 2011, the Group had no past due and un-repaid short-term loans.
23. FINANCIAL LIABILITIES HELD FOR TRADING
RMB’000
Item Note 2011.6.30 2010.12.31
Current:
Derivative financial liabilities
-foreign future contracts 4,577 3,810
-swap contract for interest rate 10,480 -
-foregin exchange option 45,308 -
Subtotal 60,365 3,810
Non-Current:
Derivative financial liabilities
-swap contract for interest rate 69,465 76,066
-foregin exchange option - 78,226
Subtotal 69,465 154,292
Total 129,830 158,102
155
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
23. FINANCIAL LIABILITIES HELD FOR TRADING (CONTINUED)
(1) As at 30 June 2011, the Company and subsidiaries separately had 10 and 5 unsettled
interest rate swap contracts denominated in U.S. dollars. The nominal value of these
contracts amounted to USD 460,000,000. The maturity dates of these interest rate
swap contracts range from 23 May 2012 to 29 December 2018. As at 30 June 2011,
the Group recognised on the foresaid contracts in their fair values of RMB79,945,000
(including RMB 66,311,000 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 30 June 2011, the Company had 2 unsettled forward contracts denominated in
Japanese Yen. The nominal value of these contracts amounted to Japanese Yen
1,830,000,000. 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 30 June 2011, the Company recognised the aforesaid 2 forwards contracts in
their fair values of RMB 45,308,000 as expenses and financial liabilities held for
trading. Transaction costs on realisation haven not been considered when
calculating the fair values.
24. BILLS PAYABLE
RMB’000
2011.6.30 2010.12.31
Bank acceptance bills 1,843,428 2,435,043
Commercial acceptance bills 226,733 103,580
Total 2,070,161 2,538,623
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.
156
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
25. ACCOUNTS PAYABLE
(1) The Group’s accounts payable is as follows:
RMB’000
Item 2011.6.30 2010.12.31
Raw materials suppliers 9,573,142 9,117,500
As at 30 June 2011, there was no individual major accounts payable aged over one
year.
Group’s accounts payable is analysed by currencies as follows:
2011.06.30 2010.12.31
Original Original
Currency currency Exchange RMB currency Exchange RMB
’000 rate ’000 ’000 rate ’000
RMB 6,308,843 1.0000 6,308,843 5,806,328 1.0000 5,806,328
USD 463,233 6.4716 2,997,859 443,815 6.5897 2,924,606
HKD 23,756 0.8316 19,755 200,411 0.8477 169,893
JPY 68,202 0.0802 5,470 43,843 0.0810 3,551
EUR 11,876 9.3612 111,199 17,757 8.7979 156,227
AUD 17,531 6.9395 121,658 8,255 6.7050 55,350
Others - - 8,358 - - 1,545
Total 9,573,142 9,117,500
(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.
157
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
26. ADVANCES FROM CUSTOMERS
(1) The Group’s advances from customers is as follows:
RMB’000
Item 2011.6.30 2010.12.31
Advances for goods 1,080,497 811,674
Advances for construction 865,084 620,826
Advances for property 586,629 502,573
Others 3,341 658
Total 2,535,551 1,935,731
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 30 June 2011, there was no significant advances aged over one year.
27. EMPLOYEE BENEFITS PAYABLE
RMB’000
Effect of
Balance at Accrued Paid foreign Balance at
the beginning during during exchange the end
Item of the year the period the period rate changes of the period
Salaries, bonuses, and allowances 781,343 1,914,752 (1,831,954) 1,874 866,015
Senior management bonus 269,475 100,000 (13,058) - 356,417
Severance payment 79 - - - 79
Social insurances and others 314,635 503,021 (350,306) 56 467,406
Total 1,365,532 2,517,773 -2,195,318 1,930 1,689,917
158
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
27. EMPLOYEE BENEFITS PAYABLE (CONTINUED)
As at 30 June 2011, there was no delayed payment of employee benefits.
As at 30 June 2011, aforesaid “social insurances and others” included labour union
fees and employee education fees amounting to RMB27,588,000. There were no
non-monetary benefits during the period.
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
RMB’000
2011.6.30 2010.12.31
VAT payable 23,771 66,744
Business tax payable 9,755 8,533
Income tax payable 693,943 590,029
Withholding tax 84,691 79,699
Others 68,486 44,150
Total 880,646 789,155
29. INTEREST PAYABLE
RMB’000
2011.6.30 2010.12.31
Interest payable for long-term loan 12,245 3,120
Interest payable for short-term loan 13,631 10,048
Interest payable for bond payable 17,433 -
Other Interest payable 4,787 -
Total 48,096 13,168
159
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
30. DIVIDENDS PAYABLE
RMB'000
2011.6.30 2010.12.31
Minority shareholders
of subsidiaries 39,107 16,046
Public shareholders 151,260 -
Total 190,367 16,046
31. OTHER PAYABLES
(1) The analysis of the Group’s other payables is as follows:
RMB’000
Item 2011.6.30 2010.12.31
Deposits and mortgage
Advance received 772,783 469,371
Transportation expenses 426,514 256,492
Equipment and land use rights 429,094 395,583
Accruals 753,375 532,578
Current account with
253,182 245,728
subsidiaries' minority
Others 471,037 488,615
Total 3,105,985 2,388,367
160
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:
2011.6.30 2010.12.31
Currency Original Original
currency Exchange RMB currency Exchange RMB
’000 rate ’000 ’000 rate ’000
RMB 1,126,972 1.0000 1,126,972 721,950 1.0000 721,950
USD 201,214 6.4716 1,302,177 170,943 6.5897 1,126,461
HKD 257,356 0.8316 214,018 254,149 0.8477 215,448
JPY 2,796 0.0802 224 264,082 0.0810 21,387
EUR 47,738 9.3612 446,881 27,106 8.7979 238,476
AUD 2,086 6.9395 14,473 9,582 6.7050 64,245
Others - - 1,240 - - 400
Total 3,105,985 2,388,367
(2) Other payables due to shareholders or related parties who hold 5% or more of the
voting rights of the Company:
RMB’000
Organization name Relationship with the Group 2011.6.30 2010.12.31
1.Gasfin Minority shareholder of subsidiary 22,143 20,806
2.Bright Touch Minority shareholder of subsidiary 59,160 60,231
3. Leung Kee Minority shareholder of subsidiary 103,053 104,919
4. Yantai Shipyard Minority shareholder of subsidiary 45,670 46,497
Total 230,026 232,453
161
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
31. OTHER PAYABLES (CONTINUED)
(3) Significant other payables aged over one year:
As at 30 June 2011, significant other payables aged over one year represented quality
guarantee, vehicle mortgage guarantee and various deposits.
(4) As at 30 June 2011, there was no significant other payables.
162
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
32. PROVISIONS
RMB’000
Effect of
Balance at Charges Payments Reversal foreign Balance
the beginning for during during exchange at the end
Note of the year the period the period the period rate changes of the period
Current
Warranties for product quality (1) 555,341 126,439 (20,868) (67,322) (1,258) 592,332
Guarantees for third parties (2) 12,478 - (2,272) - 9 10,215
Others 81,754 41,485 (35,584) (74) 446 88,027
Total 649,573 167,924 (58,724) (67,396) (803) 690,574
(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 and
guarantee in respect of banking facilities granted to trailer customer of HI.
163
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:
RMB'000
Note 2011.06.30 2010.12.31
Long-term loans due within one year （2）
-Credit loans 2,031,489 2,729,353
-Guarantee loans 250,448 17,584
Subtotal 2,281,937 2,746,937
Long-term payable due within one year (3) 100,843 97,584
Total 2,382,780 2,844,521
(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:
2011.06.30 2010.12.31
Annual Original Exchange RMB Original Exchange RMB
interest rate currency'000 rate ’000 currency'000 rate ’000
Bank loans
-RMB 3.51%-6.10% 375,507 1.0000 375,507 2,000,000 1.0000 2,000,000
-USD LIBOR+(90-185BP) 283,012 6.4716 1,831,540 100,000 6.5897 658,970
-HKD HIBOR+1.7% - 0.0000 - 20,743 0.8477 17,584
-EUR EURIBOR+65BP 8,000 9.3612 74,890 8,000 8.7979 70,382
Total 2,281,937 2,746,936
As at 30 June 2011, there was no renewal of past due long-term included in the
balance of long-term loans due within one year.
164
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 30 June 2011, the top five long-term loans due within one year are as follows:
2011.06.30 2010.12.31
lender Initial date Maturity date CurrencyInterest rate（%） Original RMB Original RMB
1.China currency'000 ’000 currency'000 ’000
Development 19-Jun-09 21-Jun-12 USD Six-month libor+90bp 80,000 517,728 80,000 527,176
Development 12-Dec-07 21-Jun-12 USD Six-monthlibor+90bp 60,000 388,296 60,000 395,382
China 31-Mar-11 31-Mar-12 USD Six-monthlibor+45bp 50,000 323,580 - -
Development 12-Dec-07 21-Dec-11 USD Six-monthlibor+90bp 50,000 323,580 50,000 329,485
5.The Export-
Import Bank 18-Aug-10 15-Mar-12 RMB 3.76% 200,000 200,000 200,000 200,000
Total 1,753,184 1,452,043
(3) Long-term payables due within one year
As at 30 June 2011, Long-term payables due within one year included net financial leasing payable of RMB 100,843,000, which is total
amount of RMB 110,340,000 minus unrecognised financing expresses ofRMB 9,497,000.
The Group had no financial leasing guaranteed by independent third parties.
165
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 30 June 2011, the top three of long-term payable due within one year were as follows:
2011.06.30 2010.12.31
lender Initial date Maturity date Currency Interest rate（%） Original RMB Original RMB
currency'000 ’000 currency'000 ’000
1.CMB Financial Leasing Co., LTD 19-Sep-13 RMB 4.97% 90,747 90,747 96,726 96,726
2.CIT Finance & Leasing Corporation 31-Dec-11 RMB 5.40% 210 210 784 784
3.Yantai Port Group18-Aug-09 18-Aug-12 RMB 5.80% 37 37 74 74
Total 90,994 90,994 97,584 97,584
166
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:
RMB'000
Note 2011.6.30 2010.12.31
Bank loans
Credit loans 4,759,372 2,534,754
Guarantee loans - 772,202
Secured loans (a) 460,000 460,146
Pledge loans - 145,046
Total 5,219,372 3,912,148
Long-term loans in original currencies are as follows:
2011.06.30 2010.12.31
Exchange Original Exchange RMB Original Exchange RMB
rate currency'000 rate ’000 currency'000 rate ’000
Bank loans
-RMB 3.51%-6.9% 3,082,099 1.0000 3,082,099 1,438,767 1.0000 1,438,767
-USD 6个月LIBOR+(30-185BP) 311,650 6.4716 2,016,874 370,000 6.5897 2,438,189
-HKD HIBOR + 1.7% 3,000 0.8316 2,495 - - -
-EUR EURIBOR+65BP 12,595 9.3612 117,904 4,000 8.7979 35,192
Total 5,219,372 3,912,148
(a) As at 30 June 2011, Rattles, the subsidiary of the Group borrowed RMB
460,000,000 secured with its marine space using right.
(b) 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.
167
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 30 June 2011, the top five long-term loans are as follows:
Initial date of the Maturity date of 2011.06.30 2010.12.31
lender Currency Interest rate（%） Original RMB Original RMB
loans the loans
currency'000 ’000 currency'000 ’000
1.China Development Bank 12-Dec-07 10-Dec-13 USD 6个月libor+90bp 110,000 711,876 110,000 724,867
2.Bank of Communications
Qingdao Branch Sifang RMB 5.81% 500,000 500,000 500,000 500,000
Sub-branch 21-Jul-09 17-Jul-12
3.The Export-Import Bank
RMB 4.76% 400,000 400,000 - -
of China 20-Jan-11 07-Jan-14
4.The Export-Import Bank
RMB 4.51% 400,000 400,000 - -
of China 16-Jun-11 16-Jun-14
5.The Export-Import Bank
RMB 3.76% 200,000 200,000 200,000 200,000
of China Qingdao Branch 18-Aug-10 15-Mar-12
Total 2,211,876 1,424,867
As at 30 June 2011, there was no renewal of past due long-term bank loans included in the above balance of long-term loans.
168
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
35 BONDS PAYABALES
RMB'000
Balance at Additions Settlements Balance
the beginning during during at the end
Item of the year the period the period of the period
Medium Term Note -11 CIMC MTN1 - 3,987,276 - 3,987,276
Total - 3,987,276 - 3,987,276
(1) The analysis of the Company’s Bonds Payables is as follows:
RMB'000
Interest Interest
payable at accrued Interest payable at Balance at the
Final maturity Notional the beginning interest for paid during the end of the end of the
Item Face value Issue date date principal of the period the period the period period period
Medium Term Note -
4,000,000 4,000,000 - (12,724) - (12,724) 3,987,276
11 CIMC MTN1 23 May 2011 23 May 2016
Total 4,000,000 4,000,000 - (12,724) - (12,724) 3,987,276
As at May 20, 2011, the company issued Medium Term Note in the national
inter-bank bond market. The registered amount is RMB 6,000,000,000 and the first
issued 5-year MTN, with issue price and face value at RMB 100 and a fixed interest
of 5.23% per annum, amounts to RMB 4, 000,000,000.Interest is paid at every May
23 during the duration and the repayment date of the principal is May 23, 2016.The
MTN was issued to institutional investor in the inter-bank market with no guarantee.
The managing underwriter is China Merchant Bank. The above MTN is accounted as
Bond payable at amortised cost using effective interest rate method.
36 SPECIAL PAYABLES
RMB'000
Effect of
Balance at Additions Settlements foreign Balance at
the beginning during during exchange the end
of the year the period the period rate changes of the period
Project funds 16,442 471 - - 16,913
Total 16,442 471 - - 16,913
169
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
37. Long-term payable
RMB'000
Item 2011.6.30 2010.12.31
Financial Leasing payable 98,417 118,858
Total 98,417 118,858
(1) The breakdown of financial leasing payable:
RMB'000
Organization Name 2011.6.30 2010.12.31
China Merchant Bank Financial
Leasing Co., Ltd. 89,427 118,858
Others 8,990 -
Total 98,417 118,858
As at 30 June 2011, the unrecognised financing expense of the Group amounted to
RMB 5,164,000. (2010: RMB 6,049,000)
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
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
38. OTHER NON-CURRENT LIABILITIES
RMB'000
Item 2011.6.30 2010.12.31
Deferred income 229,374 178,008
Total 229,374 178,008
39. SHARE CAPITAL
The Company’s share capital status at30 June 2011 is as follows:
RMB'000
Changes of
Balance at the Additions shares subject to Balance at the
beginning of the year during the period selling restrictions end of the period
Shares subject to selling restrictions
-Shares held by - - - -
overseas legal persons
-Shares held by domestic
natural persons 620 - - 620
Shares not subject to selling restrictions
-RMB-denominated
ordinary shares 1,231,297 - - 1,231,297
-Domestically listed
foreign shares 1,430,479 - - 1,430,479
Total 2,662,396 - - 2,662,396
The face value of the aforesaid shares was RMB 1.00 per share.
171
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
40. CAPITAL RESERVE
RMB'000
Balance at Additions Settlements Effect Balance at
the beginning during during of change in the end of
of the period the period the period functional currency the period
Share premiums 201,222 - - - 201,222
Other capital reserves - - - - -
-Property revaluation reserve 54,979 - - (11,225) 43,754
-Exchange reserve on foreign currency capital 866 - - (174) 692
-Donated non-cash assets reserve 324 - - (67) 257
- Net changes in fair value of available-for-
727,466 - (15,815) (28,490) 683,161
sale financial assets
-Effective portion of changes in fair value of
14,070 9,735 - (541) 23,264
cash flow hedges
-Deferred tax effect (176,272) - (1,880) 6,594 (171,558)
-Equity settled share-based payment 82,432 56,339 - (3,283) 135,488
-capital reserves due to minority
88,251 - - (9,227) 79,024
shareholders’ equity
-capital reserves due to acquiring minority
256,078 - - (8,964) 247,114
shareholders' equity
Others 100,004 4,489 (406,795) (302,302)
Total 1,349,420 70,563 (17,695) (462,172) 940,116
172
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
41. Surplus reserve
RMB'000
Balance at the beginning Effect of change in Additions Settlements Balance at the end
Item of the period functional currency during the period during the period of the period
Statutory
surplus reserve 1,331,198 (260,240) - - 1,070,958
Discretionary
surplus reserve 2,246,390 (456,298) - - 1,790,092
3,577,588 (716,538) - - 2,861,050
Total
42. RETAINED EARNINGS
Item Note RMB’000 Appropriation proportion
Retained earnings brought forward 10,689,335
Add: profit attributable to shareholders of the
Company
2,807,629
Less: Dividends of ordinary shares (1) (929,568)
Decrease in retained earnings resulted from
change in functional currency (551,377)
Retained earnings carry forward 12,016,019
(1) Dividends of ordinary shares
(a) Dividends of ordinary shares declared during the period
Pursuant to the shareholders’ approval at the shareholders’ Meeting on 13
April 2011, a cash dividend of RMB 0.35 per share (2009: RMB 0.15 per
share) totaling RMB 929,568,270.6, (2010: RMB 319,487,526.17, equivalent
to USD 58,485,063.51), was declared and paid to the Company’s ordinary
shareholders on 31 May 2011.
173
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
43 OPERATING INCOME AND OPERATING COST
(1)
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Operating income 35,878,407 20,575,020
Other operating income 599,691 662,869
Operating cost 29,499,900 18,246,729
There was no individual construction contract whose revenue amounted for more than
10% of the total operating income in 2010.
(2) Operating income and operating cost (by industries and by products)
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Industry Operating income Operating cost Operating income Operating cost
Containers 21,655,698 17,039,984 7,626,728 6,543,859
Trailers 9,286,027 8,215,605 8,883,894 7,895,716
Tank equipments 3,630,768 2,933,102 1,799,143 1,453,207
Marine engineering 229,950 415,742 1,764,176 1,516,829
Air ground facilities 131,266 91,754 19,528 14,021
Others 944,698 639,482 481,551 361,654
Total 35,878,407 29,335,669 20,575,020 17,785,286
174
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
43. OPERATING INCOME AND OPERATING COST (CONTINUED)
(3) Operating income and operating cost (by regions)
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Regions Operating income Operating cost Operating income Operating cost
P.R China 33,756,565 27,634,416 19,353,284 16,735,332
America 764,090 595,464 365,362 334,587
Europe 1,047,038 934,476 401,311 407,868
Asia 59,969 8,616 80,745 13,632
Others 250,745 162,697 374,318 293,867
Total 35,878,407 29,335,669 20,575,020 17,785,286
The regional operating income and operating cost is determined on the location at
which the services were provided or the goods were delivered.
(3) Operating income of top five customers in 2010 is as follows:
Operating income Percentage of total
Customer RMB'000 operating income(%)
TAL International Container Corporation 2,066,776 5.76%
Mediterranean Shipping Co.S.A. 1,959,834 5.46%
Triton Container Internation Ltd. 1,856,854 5.18%
Compagnie Maritime d’Affretement 1,474,222 4.11%
SeaCube BLIU 1,361,706 3.80%
Total 8,719,392 24.30%
The Group’s operating income of top five customers in the period Jan to June 2010
totaled RMB4,790,493,000, accounting for 22.56% of total operating income.
175
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
44. BUSINESS TAXES AND SURCHARGES
RMB'000
Item Taxation basis and rates from 1 January to 30 June 2011 from 1 January to 30 June 2010
Business tax 3%-5% of operating income 29,092 8,575
Urban maintenance and 5%-7% of VAT and business tax
24,090 3,040
construction tax paid
Education fee and
3% of VAT and business tax paid 16,619 1,847
surcharges
Appreciation amount in
Land appreciation tax transferring property and 1,059 102
applicable tax rate
Others 2,294 5,624
Total 73,154 19,188
45. SELLING AND DISTRIBUTION EXPENSES
RMB'000
Category from 1 January to 30 June 2011 from 1 January to 30 June 2010
Transportation and 200,127
distribution charges 462,321
External sales commission 38,707 29,632
Employ Benefit 99,133 12,544
Warranty 59,117 (11,462)
Others 309,313 327,508
Total 968,591 558,349
176
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
46. GENERAL AND ADMINISTRATIVE EXPENSES
RMB'000
Category from 1 January to 30 June 2011 from 1 January to 30 June 2010
Low- value consumables
and materials consumed 43,853 19,230
Rental 26,754 13,179
Depreciation 76,985 65,560
Employ Benefit 490,693 279,710
Taxes and surcharges 63,702 52,398
Agency fee 48,962 32,667
Technology
development costs 44,054 54,140
Amortisation 85,459 91,019
Performance Bonus and
president bonus 354,999 11,994
Office expenditure,
entertainment fee and others 480,490 412,294
Total 1,715,951 1,032,191
47. FINANCIAL EXPENSES
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Interest expenses from loans and payables 423,058 229,684
Less:Borrowing costs capitalised 28,943 4,410
Interest income from deposits and receivables (111,002) (42,001)
Net exchange (gains)/ losses 88,472 56,459
Other financial expenses 28,377 12,358
Total 399,962 252,090
177
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
48. GAINS / LOSSES FROM CHANGES IN FAIR VALUE
RMB'000
Sources of gain/loss from changes in fair value from 1 January to 30 June 2011 from 1 January to 30 June 2010
Financial assets held for trading
- Changes in fair value during the period
1.Gains from changes in fair value of held for trading
(42,564) 35,117
investments
2.Gains / losses from changes in fair value of derivative
(57,903) 43,474
financial instrument
Subtotal (100,467) 78,591
- Income for derecognised financial assets held for
(16,062) -
trading
Financial liabilities held for trading
- Changes in fair value during the period
1.(Losses)/gains from changes in fair value of derivative 28,273 7,750
financial instrument
Total (88,256) 86,341
178
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
49. INVESTMENT INCOME
(1) The analysis of the Group’s investment income is as follows:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
investments in cost
10,000 -
method
Long-term equity
investments in equity 28,739 22,582
method
long-term equity
13,063 -
investmentsgains of
Investment
available-for-sale
3,343 -
financial(losses) on sale
of held-for-trading
16,062 -
financial assets
Gains on sale of
available-for-sale - 11,240
financial assets
Others - (90,843)
Total 71,207 (57,021)
(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:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Reasons for variances
Investee
between two periods
Cash dividend was
BOCM Schroder Stolt 10,000 5,000 distributed during the
Fund Management period
Total 10,000 5,000
179
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
49. 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
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010 Reasons for variances
Investee
between two periods
Changes in profit and
28,267 3,060
Shanghai Fengyang loss of the investee
Changes in profit and
16,803 14,635
TJCIMCZL loss of the investee
Changes in profit and
6,453 11,410
KYH loss of the investee
Xiamen CIMC Haitou Changes in profit and
1,790
Container Service - loss of the investee
Changes in profit and
881 518
TJCIMCZL loss of the investee
54,194 29,623
Total
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.
50. IMPAIRMENT LOSSES
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Receivables 33,242 27,381
Inventories (5,264) 1,963
Intangible assets 45,731 -
73,709 29,344
Total
180
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
51. NON-OPERATING INCOME
(1) The analysis of the Group’s non-operating income is as follows:
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Gains on disposal of fixed assets 704 423
Gains on disposal of intangible assets 610 -
Compensation income 6,899 20,953
Penalty income 2,658 3,667
Gains on fixed assets surplus - 48
Government grants 83,625 35,492
Amounts no longer payable 3,624 252
Gains on recognition of negative
-
goodwill 110,313
Others 4,893 23,700
Total 103,013 194,848
(2) Government grants
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Financial grants 83,625 27,715
Tax refund - 7,777
Total 83,625 35,492
52. NON-OPERATING EXPENSES
RMB'000
Item Note from 1 January to 30 June 2011 from 1 January to 30 June 2010
Losses on disposal of fixed assets 8,344 470
Losses on disposal of intangible assets 11 -
Donation expenses 1,733 361
Penalty expenses 655 477
Compensation expenses 310 1,356
Others 4,223 2,837
Total 15,276 5,501
181
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
53. INCOME TAX
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Current tax expenses for the period 993,680 158,531
Deferred taxation 30,438 74,985
Total 1,024,118 233,516
(2) Reconciliation between income tax expenses and accounting profits is as follows:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Profits before taxation 3,817,519 1,318,665
Expected income tax expenses at applicable tax
rates 898,681 287,439
Effect of tax incentive (145,724) (46,302)
Tax effect of non-deductible expenses 12,878 14,737
Tax effect of non-taxable income (35,508) (39,023)
Tax effect of utilisation of tax losses not
recognised in prior years (42,265) (10,231)
Tax effect of unrecognised tax losses 159,064 41,136
Deductible temporary differences of
unrecognised deferred tax assets 3,752 5,050
Effect of tax rate change on deferred tax (1,277) (11,942)
Tax refund for income tax annual filing 151 (7,348)
Income tax accruals for profit of foreign holding companies in current period174,366 -
Income tax expenses 1,024,118 233,516
182
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
54. 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 period and the
weighted average ordinary shares in issue:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Consolidated profit attributable to ordinary equity
2,807,629 912,556
shareholders of the Company
Weighted average of ordinary shares in issue (’000) 2,662,396 2,662,396
Basic earnings per share 1.0545 0.3428
Calculation of weighted average number of ordinary
from 1 January to 30 June 2011 from 1 January to 30 June 2010
shares
Issued ordinary shares at 1 January (’000) 2,662,396 2,662,396
Weighted average number of ordinary shares at 30 June
(’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 period and the
adjusted weighted average of ordinary shares in issue:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Consolidated profit attributable to ordinary equity
2,807,629 912,556
shareholders of the Company (diluted)
Weighted average of ordinary shares in issue (diluted) (’
2,662,396 2,662,396
000)
Diluted earnings per share 1.0545 0.3428
Calculation of weighted average number of ordinary
from 1 January to 30 June 2011 from 1 January to 30 June 2010
shares (diluted)
Issued ordinary shares at 1 January (’000) 2,662,396 2,662,396
Weighted average number of ordinary shares at 30 June
(diluted) (’000) 2,662,396 2,662,396
183
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
55. OTHER COMPREHENSIVE INCOME
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
1.Gains/(losses) on available-for -sale financial assets (15,815) (233,278)
Less: Effect of income tax arising from available-for-sale
financial assets (662) (42,268)
Amount recognised in other comprehensive income in
prior period transferred to profit and loss in current
period - 51,643
Subtotal (15,153) (242,653)
2.Gains/(losses) on cash flow hedges financial
instrument 9,735 (19,017)
Less:Effect of income tax arising from cash flow hedges
financial instrument 2,542 (4,151)
Amount recognised in other comprehensive income in prior period transferred to profit and loss in current period -
Subtotal 7,193 (14,866)
3.Effect of foreign exchange rate changes 52,664 (249,290)
4.Others 4,489 -
Total 49,193 (506,809)
56. NOTES TO CASH FLOW STATEMENT
(1) Other cash received from operating activities
from 1 January to 30 June 2011
Item RMB'000
Waste materials revenue 82,283
Deposits 85,876
Financial subsidies 26,684
labor union membership dues and prepaid meal card 12,559
Claims compensation,penalty 6,786
Others 12,974
Total 227,162
184
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
56. NOTES TO CASH FLOW STATEMENT (CONTINUED)
(2) Other cash paid for operating activities
from 1 January to 30 June 2011
Item RMB'000
Cash paid for guarantee deposits 904,065
Cash paid for land transfer 736,393
Cash paid for travelling,office expenses,rental and other
expenses in ordinary operation 245,554
Cash paid for transportation expenses and container
inspection 148,706
Cash paid for insurance,after sales,commission and other
selling expenses 164,744
Cash paid for water ,electricity and other maintenances 203,931
Cash paid for technical development fee,consultation
fee,audit fee,agency fee 125,859
Cash paid for entertainments 27,246
Cash paid for bank charges 39,122
Others 9,767
Total 2,605,387
185
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:
RMB'000
Supplement from 1 January to 30 June 2011 from 1 January to 30 June 2010
Net profit 2,793,401 1,085,149
Add:Impairment for assets 73,709 29,344
Depreciation of fixed assets 377,755 381,571
Amortisation of intangible assets 118,322 83,812
Amortisation of investment property and long-term
11,367 7,252
deferred expenses
Losses / (gains) on disposal of fixed assets, intangible
7,041 47
assets and other long-term assets
Losses/(Gains) on changes in fair value 88,256 (86,341)
Financial expense 394,115 183,273
Losses/(Gains) arising from investments (71,207) 57,021
Share-based payment expenses 58,006
Change in deferred tax assets and liabilities 30,438 74,985
Decrease/(increase) in gross inventories (2,062,311) 3,678,690
Decrease /(increase)in operating receivables (7,699,962) (9,875,209)
Increase/(decrease) in operating payables 1,720,494 1,602,877
Effect of foreign exchange rate changes (868) (209)
Net cash inflow / (outflow) from operating activities (4,161,444) (2,777,738)
186
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
56. INFORMATION TO CASH FLOW STATEMENT (CONTINUED)
(1) Supplement to cash flow statement (continued):
2 Cash and cash equivalents held by the Group is as follows:
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
Closing balance of cash and cash equivalents 5,104,385 4,022,945
Less:Opening balance of cash and cash equivalents 3,797,415 4,396,525
Net increase/(decrease) of cash and cash equivalents 1,306,970 (373,580)
(2) Cash and cash equivalents held by the Group is as follows
RMB'000
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
1.Cash at bank and on hand
Including: Cash 30,273 2,844
Bank deposits available on demand 4,828,305 3,955,777
Other monetary fund available on demand 245,807 64,324
2. Closing balance of cash and cash equivalents 5,104,385 4,022,945
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
187
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
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.
188
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
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Nature of Transaction Percentage on Percentage on
Related party transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
conducted under
Purchase of raw normal non-related
Other related party Purchase material party transaction - - 5,983 0.03%
Key management staff Remuneration commercial terms 25,011 - 18,253 -
The Company
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Nature of Transaction Percentage on Percentage on
Related party Transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
Key management staff Remuneration 25,011 - 18,253 -
189
VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(2) Sales of goods and provision of services
The Group
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Nature of Transaction Percentage on Percentage on
Related party Transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
conducted under
Other related party Sales Sales of containersnormal non-related 1,455,776 6.72% 245,730 3.11%
party transaction
commercial terms
(3) Funding
The Group
RMB'000
Related party Funding Initial date Maturity date Note
Borrowings Shareholder
Gasfin 22,143 19-Sep-08 Not yet agreed Shareholder
Bright Touch 59,160 5-Jul-10 Not yet agreed Shareholder
Leung Kee 103,053 5-Jul-10 Not yet agreed Shareholder
Yantai Shipyard 45,670 5-Jul-10 Not yet agreed loans
Lending Shareholder
Shanghai Fengyang 163,304 25-Dec-07 Not yet agreed loans
XYW 4,054 20-Jun-06 Not yet agreed loans
Advance
payment for
capital injection
PGM 140,449 14-Aug-09 Not yet agreed to subsidiary
The Company
RMB'000
Related party Funding Initial date Maturity date Note
Lending Shareholder
Shanghai Fengyang 163,304 25-Dec-07 Not yet agreed loans
190
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 RMB 353,250,000. As at 30 June 2011, 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
191
VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
6. THE BALANCES WITH RELATED PARTIES AS AT 31 DECEMBER
ARE SET OUT AS FOLLOWS:
Receivables:
RMB’000
Caption Note 2011.06.30 2010.12.31
Accounts receivable V.4 393,899 89,035
Other receivables V.5 400,832 557,348
Payables:
RMB’000
Caption Note 2011.06.30 2010.12.31
Accounts payable - 1,263
Other payables V.31 230,026 232,453
192
VII. SHARE-BASED PAYMENTS
1. INFORMTION ABOUT SHARE-BASED PAYMENTS
Item RMB’000
Total equity instruments granted during the period -
Total equity instruments exercised during the period -
Total equity instruments forfeited during the period -
1. Share options granted by Enric in 2009: HKD4 per
share, the residual life of contract is 8.33 years;
2. Share options granted by Raffles in 2007 and 2008: from
The exercise price of outstanding share options at the end of the period USD 1.64 to USD 4.39 per share, the residual life of
and residual life of the share options contracts contract is 6.22 years.
3. Share options granted by the Company in 2010:
RMB12.04 per share, the residual life of contract is 9.24
years
The price of other outstanding equity instruments at the end of the
period and residual life of relevant contracts Nil
193
VII. SHARE-BASED PAYMENTS (CONTINUED)
1. INFORMTION ABOUT SHARE-BASED PAYMENTS (CONTINUED)
Expenses recognised for the period arising from share-based payments are as follows:
RMB’000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Equity-settled share-based payment 58,006 23,216
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.
Pursuant to the shareholders’ approval at the shareholders’ Meeting on 13 April 2011,
a cash dividend of RMB 0.35 per share totaling RMB 929,568,270.6, was declared
and paid to the Company’s ordinary shareholders on 31 May 2011.Accordingly, the
Board of Directors adjusted the original exercise price under the authorization of the
Shareholders’ General Meeting and in line with Stock Option Incentive Plan of the
Company based on the formula：P＝P0-V（P0：exercise price before adjustment; V:
cash dividend per share; P: exercise price before adjustment）.After the adjustment,
exercise price of the share options =12.39-0.35=12.04 。 Please refer to
《 Announcement on adjusting exercise price of share options 》 disclosed in
http://www.cninfo.com.cn on 2 August 2011 for more details.
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.
194
VII. SHARE-BASED PAYMENTS (CONTINUED)
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
(CONTINUED)
RMB’000
Accumulated amount in capital reserve for
equity-settled share-based payments 135,488
Total expenses recognised for equity-settled
share-based payments 58,006
Including：
- attributable to the Company 50,639
- attributable to Enric 6,671
- attributable to Raffles 696
195
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 period, 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 30 June 2011, the Group has the above outstanding guarantees totaling
RMB 904,546,000.
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 30 June 2011, the Group had bills issued to suppliers but not recorded on books
and outstanding letter of credit totaling RMB 248,890,000。
As at 30 June 2011, Raffles had outstanding balance of performance guarantees
issued by bank totaling to USD 100,850,000, equivalent to RMB 652,751,000.
196
IX. COMMITMENTS
1. SIGNIFICANT COMMITMENTS
(1) Capital commitments
RMB'000
Item 2011.06.30 2010.12.31
Construction contracts entered into but not
exercised or not fully exercised 1,748,459 1,783,657
Total 1,748,459 1,783,657
(2) Operating lease commitments
As at 30 June, the total future minimum lease payments under non-cancellable
operating leases of properties, fixed assets and so on were payable as follows:
RMB'000
2011.06.30 2010.12.31
Within 1 year (inclusive) 64,082 47,578
After 1 year but within 2 years (inclusive) 46,970 46,365
After 2 years but within 3 years (inclusive) 31,037 22,437
After 3 years 91,686 104,998
Total 233,775 221,378
X. NON-ADJUSTING POST BALANCE SHEET EVENTS
There are no significant non-adjusting post balance sheet events during the reporting
period.
197
XI. OTHER SIGNIFICANT MATTERS
1. FINANCE LEASE
(1) The total future minimum lease receivables as finance lease leasor is as follows:
RMB’000
Residual contractual life Minimum lease receivables
Within 1 year (inclusive) 1,836,239
After 1 year but within 2 years (inclusive) 888,307
After 2 years but within 3 years (inclusive) 644,149
After 3 years 2,693,282
Total 6,061,977
(2) The total future minimum lease payables as finance lease leasee is as follows:
RMB’000
Residual contractual life Minimum lease payables
Within 1 year (inclusive) 110,424
After 1 year but within 2 years (inclusive) 71,879
After 2 years but within 3 years (inclusive) 31,619
Total 213,922
198
XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
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.
199
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:
RM B'000
Energy chemistry Elimination
And food Offshore Airport between Unallocated
Item Containers Trailers equipment business facilities others segments items Total
from 1 January to 30 June 2011
External transaction* 21,903,545 9,557,672 3,638,502 230,120 141,072 1,007,187 - - 36,478,098
Inter segment transaction* 23,328 134,423 93,389 - - 547,116 (798,256) - -
Investment income / (losses)
20,587 (23,131) - - - 24,710 - 6,573 28,739
in joint ventures and
241 11,392 311 45,731 527 15,507 - - 73,709
Impairment lossand the period
Depreciation for amortisation
expenses 146,989 149,003 126,365 66,113 1,794 17,181 - - 507,445
Interest income 13,095 5,165 9,357 3,284 85 57,387 - 22,629 111,002
Interest expenses 19,753 51,976 20,663 95,789 9 26,933 - 178,992 394,115
Segment operating profit / (losses) 3,643,847 440,521 301,589 (581,100) (15,497) 529,101 - (500,942) 3,817,519
Income tax expenses 727,365 96,017 54,132 1,544 (3,341) 207,763 - (59,362) 1,024,118
Net profit / (losses) 2,916,482 344,504 247,457 (582,644) (12,156) 321,338 - (441,580) 2,793,401
Segment total assets 18,963,011 11,272,839 8,500,218 13,660,563 495,095 4,319,996 - 8,952,199 66,163,921
Segment total liabilities 8,080,833 5,311,366 3,650,183 11,237,046 265,417 2,743,654 - 13,721,252 45,009,751
Supplementary information:
- Segment expenditures other
than depreciation and 6,671 696 37,576 44,943
amortization
- Long-term equity investment
of joint ventures and 580,800 511,773 - 31,749 - 134,334 - 301,754 1,560,410
associates
- Segment expenditures raising
from additions of non-current 555,920 1,133,087 403,524 106,518 1,120 104,928 - 3,142 2,308,239
assets
200
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):
RMB'000
Energy chemistry Elimination
And food Offshore Airport between Unallocated
Item Containers Trailers equipment business facilities others segments items Total
from 1 January to 30 June 2010
External transaction* 7,939,571 9,134,076 1,879,145 1,764,176 24,920 496,001 - - 21,237,889
Inter segment transaction* 5,092 - 59,123 - - 97,472 -161,687 - -
Segment income subtotal 7,944,663 9,134,076 1,938,268 1,764,176 24,920 593,473 -161,687 - 21,237,889
Segment operating expenses(income)* 7,355,232 8,659,805 1,919,687 1,680,118 58,094 482,928 -123,086 75,312 20,108,090
Segment operating(losses)/profit* 589,431 474,271 18,581 84,057 -33,174 110,545 -38,600 -75,312 1,129,799
Supplementary information
- Interest income* 89,135 39,616 2,352 1,861 130 3,981 -211,617 116,543 42,001
- Interest expenses* 133,563 103,688 11,553 96,279 48 15,350 -211,616 76,410 225,275
- Depreciationa and amortisation
expenses* 245,206 87,786 52,492 62,027 2,181 11,853 - 5,596 467,141
- Impairment loss for the period* -4,437 28,219 2,120 - -300 3,742 - - 29,344
- Segment total assets* 12,019,921 11,907,558 4,836,809 10,263,070 474,957 12,399,899 -314,494 2,992,212 54,579,932
- Segment expenditures raising from
additions of non-current assets* 56,745 369,583 92,177 289,077 65,579 32,507 - 4,560 910,228
-Segment total liabilities 3,755,160 7,166,067 384,321 6,885,981 233,458 8,861,424 -314,495 9,959,941 36,931,857
201
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
RMB'000
Item Revenue from external customers Non-current assets
from 1 January to from 1 January to 30
2011.06.30 2010.12.31
30 June 2011 June 2010
P.R.China 11,117,327 9,261,846 16,593,076 16,177,074
Asia (exclusive of China) 3,754,424 1,539,473 408,257 42,840
America 10,134,478 5,238,277 142,646 295,449
Europe 10,677,870 4,059,940 1,155,329 1,180,426
Others 793,999 1,138,353 580,906 49,166
Total 36,478,098 21,237,889 18,880,214 17,744,955
第 202 页
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 30 June 2011.
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.
第 203 页
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 22.02% (2010: 24.14%) 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.
第 204 页
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 30 June) and the
earliest date the Group can be required to pay:
RMB'000
from 1 January to 30 June 2011
Contractual undiscounted cash flow
More than 1 year More than 2
Within 1 year or but less than 2 years but less More than 5 Balance sheet
Item on demand years than 5 years years Total carrying amount
Financial assets
Cash at bank and on hand 6,860,768 6,860,768 6,860,768
Accounts receivable and
other receivables 15,062,860 15,062,860 15,062,860
Long-term receivables 1,908,196 1,189,159 1,883,229 1,611,963 6,592,547 5,059,397
Subtotal 23,831,824 1,189,159 1,883,229 1,611,963 28,516,175 26,983,025
Financial liabilities
Short-term loans (11,534,193) (11,534,193) (11,534,193)
Accounts payable and other
payables (12,679,127) (12,679,127) (12,679,127)
Long-term loans (2,396,034) (2,270,912) (3,209,428) (7,876,374) (7,501,309)
Bond payables (209,200) (209,200) (4,627,600) (5,046,000) (3,987,276)
Long-term payables (110,424) (71,879) (31,619) - (213,922) (199,260)
Subtotal (26,928,978) (2,551,991) (7,868,647) - (37,349,616) (35,901,165)
Net total (3,097,154) (1,362,832) (5,985,418) 1,611,963 (8,833,441) (8,918,140)
第 205 页
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 30 June) 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)
第 206 页
XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(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.
第 207 页
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 30 June, the Group held the following interest-bearing financial
instruments:
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Item Annual interest rate Amount Annual interest rate Amount
Fixed rates interest-bearing
financial instruments
Financial assets
- Long-term receivables 6.50% - 9.50% 3,646,949 6.63% - 24.17% 1,336,257
-Long-term
receivables due
within one year 6.50% - 9.50% 1,412,448 6.63% - 24.17% 1,185,502
Financial liabilities
-Short-term loans 5.23% - 6.31% (11,534,193) 2.34% - 4.30% (8,309,309)
-Bond payables 5.23% (3,987,276) -
-Long-term payables 5.40% - 6.10% (98,417) 4.97% - 5.80% (118,858)
-Long-term payables
due within one year 5.40% - 6.10% (100,843) 4.97% - 5.80% (97,584)
Total (10,661,332) (6,003,992)
RMB'000
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Item Annual interest rate Amount Annual interest rate Amount
Variable rates interest-
bearing financial instruments
Financial assets
-Cash and cash equivalents 0.50%-4.40% 6,860,768 0.40%-3.90% 4,655,696
Financial liabilities
-Long-term loans due within Refer to Note V.33 Refer to Note V.33
one year (2,281,937) (2,746,937)
- Long-term loans Refer to Note V.34 (5,219,372) Refer to Note V.34 (3,912,148)
Total (640,541) (2,003,389)
第 208 页
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 30 June 2011, 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 and equity by RMB3,603,000 (2010:
RMB 11,269,000).
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 2010.
第 209 页
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
30 June 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
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Item USD EUR HKD JPY USD EUR HKD JPY
Cash at bank and
on hand 1,439,163 226,236 258,174 138,065 1,521,592 396,971 128,125 34,616
Accounts
receivable 7,484,985 219,236 34,685 209,217 5,327,812 401,886 17,054 4,323
Short-term loans -2,527,245 -137,921 -2,184,351 -989 -3,035,638 -287,944 -423,878 -10,021
Long-term loans -2,016,874 -87,405 -3,608 - -2,438,189 -35,189 - -
Accounts payable -2,997,859 -111,199 -19,755 -5,470 -2,924,606 -156,227 -169,893 -3,551
Provisions -151,776 -14,358 -13 - -294,478 -25,644 -23,472 -
Non-current
liabilities due
within one year -1,831,540 -74,906 - -658,970 -70,385 -17,581 -
Gross balance
sheet exposure -601,146 19,683 -1,914,868 340,823 -2,502,477 223,468 -489,645 25,367
(b) Significant exchange rates applied by the Group are as follows at reporting date:
Average exchange rate Benchmark exchange rate
from 1 from 1
January to January to 30-Jun-11 31-Dec-10
USD 6.5242 6.7465 6.4716 6.5897
EUR 9.2896 8.8378 9.3612 8.7979
HKD 0.8384 0.8682 0.8316 0.8477
JPY 7.9900 7.7705 8.0243 8.0984
第 210 页
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 30 June 2011 (4%, 3%, 4% and 10% strengthening of the
RMB against the USD, EUR, HK dollar, and Japanese Yen respectively at 31
December 2010) 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
30-Jun-11
USD 18034 18034
EUR (443) (443)
HKD 57,446 57,446
JPY (25,562) (25,562)
Total 49,475 49,475
RMB'000
Item Equity Net profit
31-Dec-10
USD 75074 75074
EUR (5,028) (5,028)
HKD 14,689 14,689
JPY (1,903) (1,903)
Total 82,832 82,832
4%, 3%, 4% and 10% weakening of the RMB against USD, EUR, HK dollar
and Japanese Yen respectively at 30 June 2011 (1%, 3%, 1% and 1%
weakening of the RMB against the USD, EUR, HK dollar, and Japanese Yen
respectively at 31 December 2010) would have had the equal but opposite
effect on the amounts shown above, on the basis that all other variables
remain constant.
第 211 页
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 2010.
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 30 June 2011, the Group held
32,291,152 tradable shares of China Merchants Securities and 11,526,000 tradable
shares of China Merchants Bank.
As at 30 June 2011, it is estimated that a general increase/decrease of composite index
of Shanghai A-share by 10% (2010: 14.31%),, with all other variables held constant,
would increase/decrease the Group’s shareholders’ equity by RMB 55,769,000
(2010:RMB81,381,000).
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 2010.
第 212 页
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 30 June 2011 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).
RMB'000
Assets Note Level 1 Level 2 Level 3 Total
Financial assets held for trading
Held for trading V、2 305,144 - - 305,144
Derivative financial assets V、2 - 57,190 - 57,190
Hedging Instrument V、2 - 22,922 - 22,922
Subtotal 305,144 80,112 - 385,256
Available-for-sale financial assets V、10 751,838 - - 751,838
Subtotal 751,838 - - 751,838
Total 1,056,982 80,112 - 1,137,094
RMB'000
Liabilities Note Level 1 Level 2 Level 3 Total
Financial liabilities held for trading
Derivative financial liabilities V、23 - (129,830) - (129,830)
Total - (129,830) - (129,830)
第 213 页
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)
there is no change in the fair value measurement of the Group’s financial
instruments in the period
(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 30 June 2011.
第 214 页
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.
第 215 页
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 30June2011 used in 2010
Long-term loans 0.85% - 5.35% 0.85% - 5.23%
Receivables 5.85 %- 6.80% 5.35% - 6.40%
第 216 页
XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
4. ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
RMB'000
Balance at the Change in fair Accumulated Provision of Balance at the
beginning of the value of the change in fair impairment for end of the
Item period period value in equity the period period
Financial assets
1 Financial assets at fair value
through profit or loss (excluding
derivative financial assets) 393,491 (58,626) - - 305,144
2. Derivative financial instrument 119,069 (57,903) - - 57,190
3. Hedging Instrument 13,101 - 23,264 - 22,922
4. Available-for-sale financial assets 768,467 - 683,161 - 751,838
Subtotal 1,294,128 (116,529) 706,425 - 1,137,094
Financial liabilities (158,102) 28,273 - - 129,830
第 217 页
XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
5. FINANCIAL ASSETS AND LIABILITIES IN FOREGIN CURRENCIES
RMB'000
Provision of
Balance at the Change in Accumulated impairment Balance at the
beginning of the fair value of change in fair for the end of the
Item period the period value in equity period period
Financial assets
1.Financial assets at fair value
through profit or loss
(excluding derivative financial 230,231 (24,467) - - 222,454
2.Derivative financial instrument 119,069 (57,903) - - 57,190
3.Hedging Instrument 13,101 - 23,264 - 22,922
4.Loans and receivables 5,815,448 - - (49,522) 11,615,040
5.Available-for-sale financial assets 9,066 - 12,385 - 8,258
Subtotal 6,186,915 (82,370) 35,649 (49,522) 11,925,864
Financial liabilities (12,293,652) 28,273 - - (15,103,165)
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.
第 218 页
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
1. CASH AT BANK AND ON HAND
2011.06.30 2010.12.31
Original Exchange Original Exchange
RMB'000 RMB'000
currency '000 rate currency '000 rate
Cash at bank
RMB 1,187,041 1.000000 1,187,041 293,010 1.000000 293,010
USD 8,853 6.471600 57,292 2,953 6.589700 19,457
HKD 88 0.831620 73 94 0.840426 79
JPY 1,405,816 0.080243 112,807 384,917 0.080984 31,172
EUR 2 9.361200 19 2 8.500000 17
1,357,232 343,735
Other momentary funds
RMB 134,209 1.000000 134,209 73,726 1.000000 73,726
USD 377 6.471600 2,440 377 6.589700 2,484
136,649 76,210
1,493,881 419,945
As at 30 June 2011, restricted cash at bank and on hand of the Company was RMB
2,440,000 (2010: RMB 2,484,000)
第 219 页
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
2. Financial assets held for trading
(1) Financial assets held for trading by categories:
2011.06.30 2010.12.31
RMB'000 RMB'000
Equity securities investments held
for trading 82,286 162,298
Total 82,286 162,298
(2) There is no restriction in liquidity of financial assets held for trading for the current
year.
3. DIVIDENDS RECEIVABLE
2011.06.30 2010.12.31
RMB'000 RMB'000
SCIMC 560,378 560,378
SCIMCEL 149,861 149,861
XHCIMC 1,726 1,726
QDCC - 34,355
DLCIMC 55,361 55,361
NBCIMC 20 32,001
SCRC 155,293 84,097
XHCIMCS 234,739 155,179
QDCSR 22,635 22,635
DLL 46,248 46,248
CIMC(HK) 3,043,365 3,043,364
TCCIMC 23,831 23,831
ZZCIMC 23,333 23,333
TJCIMCLE 6,253 6,253
QDCRC 9,702 4,815
Total 4,332,745 4,243,437
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.
第 220 页
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
4. OTHER RECEIVABLES
(1) Other receivables by customers’ categories:
2011.06.30 2010.12.31
Category
RMB'000 RMB'000
Amounts due from related parties 6,430,307 4,171,470
Deposits 814 804
Others 7,903 7,448
Subtotal 6,439,024 4,179,722
Less:provision for bad and doubtful debts (4,554) (4,554)
Total 6,434,470 4,175,168
(2) The ageing analysis of other receivables is as follows:
2011.06.30 2010.12.31
Category
RMB'000 RMB'000
Within 1 year 6,290,073 4,030,771
1 to 2 years - -
2 to 3 years - -
More than 3 years 148,951 148,951
Subtotal 6,439,024 4,179,722
Less:provision for bad and doubtful debts (4,554) (4,554)
Total 6,434,470 4,175,168
The ageing is counted starting from the date the other receivable is recognized.
第 221 页
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
2011.06.30 2010.12.31
Note Provision for bad and Provision for bad and doubtful
Category
Gross carrying amount doubtful debts Gross carrying amount debts
RMB'000 Percentage（%） Percentage（%） RMB'000 Percentage（%） RMB'000 Percentage（%）
Individually significant other receivables (4) 6,311,712 98.02% - - 4,157,910 99.48% - -
Other insignificant other receivables (5) 127,312 1.98% 4,554 3.58% 21,812 0.52% 4,554 20.88%
Total 6,439,024 100.00% 4,554 0.07% 4,179,722 100.00% 4,554 0.11%
There are no collaterals the Group holds for accounts receivable that made impairment aforesaid.
第 222 页
XII. 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. (2010: 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. (2010: 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 (2010: Nil).
(7) Write-off of other receivables during the year
There was no material write-off of other receivables during the year (2010: Nil).
223
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:
Relationship with Prpportion in total
Debtor RMB'000 Aging
the Company other receivables（%）
1.Total amounts due from subsidiaries Subsidiary 6,255,432 Within 1 year 97.15%
2.Shanghai Fengyang Real Estate
Development Co., Ltd Associates 163,304 1 to 3 years 2.54%
3.China Merchants International Ltd. Shareholder 7,704 Within 1 year 0.12%
4.Nanshan Construction Bureau. Third Party 3,140 2 to 3 years 0.05%
5.Xietong Real Estate Company Third Party 2,000 Within 1 year 0.03%
Total 6,431,580 99.88%
The Group’s top 5 other receivables as at 31 December 2010 amounted to RMB
4,170,753,000, accounting for 99.78% 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 RMB7,704,000 and RMB1,886,000. (2010:
RMB7,704,000 and RMB1,886,000)
(10) Receivables due from related parties
Percentage in total
Relationship with the
Related party RMB'000 other
Company
receivables(%)
Shareholders who hold 5% or more of the
Shareholders
voting rights of the Group
9,590 0.15%
Associated Associates 163,304 2.54%
Subsidiaries Subsidiaries 6,255,432 97.15%
Others Minority shareholders of associates and subsidiaries 0.03%
Total 6,430,307 99.86%
224
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 2011 (2010: 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 (2010: Nil).
5. AVAILABLE-FOR-SALE FINANCIAL ASSETS
2011.6.30 2010.12.31
RMB'000 RMB'000
Available-for-sale equity instruments 743,580 759,401
Detailed analysis for the Group’s available-for-sale financial assets, refer to Note
V.10.
6. LONG-TERM EQUITY INVESTMENTS
(1) As at 30 June 2011, the Company’s long-term equity investments are as follows:
2011.06.30 2010.12.31
RMB'000 RMB'000
Investments in subsidiaries 3,363,573 3,273,573
Other long-term equity investments 395,570 391,970
Subtotal 3,759,143 3,665,543
Less: Provision for impairment (3,065) (3,065)
Total 3,756,078 3,662,478
225
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2011, the Company’s investments on subsidiaries are as follows (continued):
RMB’000
The
Balance Balance Company Notes to Dividend
Initial at the Addition/ at the Shareholding subsidiaries difference between Provision Impairment receivable/
investment beginning (disposal) end Percentage voting shareholdings and for loss of received
Investee cost of the year during period of the period （%） right(%) voting rights impairment the period of the period
Costing method -
Investment in subsidiaries
SCIMC 82,042 82,042 - 82,042 100% 100% - - - -
SCIMCEL 82,042 82,042 - 82,042 100% 100% - - - -
XHCIMC 36,500 36,500 - 36,500 100% 100% - - - -
CIMC Yuandong 114,249 114,249 - 114,249 100% 100% - - - -
TJCIMC 81,333 81,333 - 81,333 100% 100% - - - -
TJCIMCn 75,780 75,780 - 75,780 100% 100% - - - -
QDCC 60,225 60,225 - 60,225 100% 100% - - - -
DLCIMC 48,764 48,764 - 48,764 100% 100% - - - -
NBCIMC 24,711 24,711 - 24,711 100% 100% - - - -
SBWI 66,558 66,558 - 66,558 94.75% 100% IV.1.(4)(ii) - - -
TCCIMC 131,654 131,654 - 131,654 100% 100% - - - -
ZZCIMC 100,597 100,597 - 100,597 100% 100% - - - -
SHYSLE 78,955 78,955 - 78,955 100% 100% - - - -
CQCIMC 39,499 39,499 - 39,499 100% 100% - - - -
SCRC 200,892 200,892 - 200,892 92% 100% - - - 113,471
QDCRC 54,225 54,225 - 54,225 89.30% 89.30% - - - 4,897
XHCIMCS 82,026 82,026 - 82,026 100% 100% - - - 79,718
QDCSR 12,743 12,743 - 12,743 100% 100% - - - -
226
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2011, the Company’s investments on subsidiaries are as follows (continued):
RMB’000
The
Balance Balance Company Notes to Dividend
Initial at the Addition/ at the Shareholding subsidiaries difference between Provision Impairment receivable/
investment beginning (disposal) end Percentage voting shareholdings and for loss of received
Investee cost of the year during period of the period （%） right(%) voting rights impairment the period of the period
Costing method -
Investment in subsidiaries
TJCIMCL 16,459 16,459 - 16,459 100% 100% - - - -
DLL 46,284 46,284 - 46,284 100% 100% - - - -
CIMC(HK) 1,690 1,690 - 1,690 100% 100% - - - -
CIMC(USA) 171,397 171,397 - 171,397 100% 100% - - - -
CIMCSD 162,686 162,686 - 162,686 100% 100% - - - -
HI 276,148 276,148 - 276,148 80% 80% - - - -
SZVL 24 24 - 24 80.20% 80.20% - - - -
CIMC Tech 2,526 2,526 - 2,526 100% 100% - - - -
TCCRC 59,792 59,792 - 59,792 100% 100% - - - -
CIMCWD 108,544 108,544 - 108,544 100% 100% - - - -
CIMC MT 48,102 48,102 - 48,102 100% 100% - - - -
DLZH 111,083 111,083 - 111,083 100% 100% - - - -
YTLRC 111,703 21,703 90,000 111,703 100% 100% - - - -
SZW 3,472 3,472 - 3,472 100% 100% - - - -
TLC 81,548 81,548 - 81,548 100% 100% - - - -
SCIMCL 21,717 21,717 - 21,717 100% 100% - - - -
CIMCIH 72,401 72,401 - 72,401 100% 100% - - - -
CIMCF 482,590 482,590 - 482,590 100% 100% - - - -
CIMCVL 185,700 185,700 - 185,700 100% 100% - - - -
QDSV 26,912 26,912 - 26,912 80% 100% IV.1.(4)(ii) - - -
Total 3,363,573 3,273,573 90,000 3,363,573 100% 100% - - - 198,086
227
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2011, the Company’s investments on subsidiaries are as follows (continued):
RMB'000
The
Balance Balance Company Notes to Dividend
Initial at the Addition/ at the Shareholding subsidiaries difference between Provision Impairment receivable/
investment beginning (disposal) end Percentage voting shareholdings and for loss of received
Investee cost of the year during period of the period （ %） right(%) voting rights impairment the period of the period
Costing method -
Investment in
China Railway United
- -
Logistics 380,780 380,780 - 380,780 10% 10% - -
Beihai Yingjian 1,700 1,700 - 1,700 1.01% 1.01% - (1,700) - -
Guangdong Samsung 1,365 1,365 - 1,365 0.09% 0.09% - (1,365) - -
BOCM Schroder Stolt 8,125 8,125 - 8,125 5% 5% - - - 10,000
Subtotal 391,970 391,970 - 391,970 - - - (3,065) - 10,000
Equity method-Joint ventures
Shanghai Super cool 3,600 - 3,600 3,600 50% 50% - - - -
Total 3,759,143 3,665,543 93,600 3,759,143 - - - (3,065) - 208,086
Information for the Company’s subsidiaries see note IV.
228
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
7. SHORT-TERM LOANS
2011.06.30 2010.12.31
RMB'000 RMB'000
Credit loans
RMB 900,000 480,897
USD 64,716 -
Total 964,716 480,897
8. FINANCIAL LIABILITIES HELD FOR TRADING
2011.06.30 2010.12.31
RMB'000 RMB'000
Current:
Derivative financial liabilities
-Foreign exchange forward contract 343 556
-Swap contract for interest rate 10,480 -
-Foreign exchange option contracts 45,308 -
Subtotal 56,131 556
Non-current:
Derivative financial liabilities
-Swap contract for interest rate 55,831 58,620
-Foreign exchange option contracts - 78,226
Subtotal 55,831 136,846
Total 111,962 137,402
229
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
9. EMPLOYEE BENEFITS PAYABLE
RMB'000
Balance at Additions Settlements Balance
the beginning during during at the end
of the year the period the period of the period
RMB'000 RMB'000 RMB'000 RMB'000
Salaries, bonuses, and allowances 98,857 188,318 137,163 150,012
Senior management bonus 269,475 100,000 13,058 356,417
Social insurances and others (57) 6,076 6,075 (56)
Total 368,275 294,394 156,296 506,373
10. TAXES PAYABLE
2011.06.30 2010.12.31
RMB'000 RMB'000
Income tax payable 18,584 1,743
Withholding individual tax 63,865 58,384
Others - (1,047)
Total 82,449 59,080
11. DIVIDENDS PAYABLE
2011.06.30 2010.12.31
RMB'000 RMB'000
Public shareholders 151,260 -
230
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:
2011.06.30 2010.12.31
RMB'000 RMB'000
Long-term loans due within one year
-Credit loans 786,766 2,729,353
(2) The analysis of the Company’s non-current liabilities by currencies due within one
year is as follows:
Annual 2011.06.30 2010.12.31
interest rate Original Exchange RMB Original Exchange RMB
currency rate ’000 currency rate ’000
Bank loans ’000 ’000
RMB 3.51%-4.23% - - 2,000,000 1.0000 2,000,000
USD LIBOR+90BP 110,000 6.4716 711,876 100,000 6.5897 658,970
EUR EURIBOR+65BP 8,000 9.3612 74,890 8,000 8.7979 70,383
786,766 2,729,353
As at 30 June 2011, there was no renewal of past due long-term bank loans which was
included in the above non-current liabilities due within one year (2010: Nil).
231
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
12. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(a) As at 30 June 2011, the top four long-term loans due within one year is as follows:
2011.06.30 2010.12.31
Original Original
RMB'000 RMB'000
Lender Initial date Maturity date Currency Interest rate(%) currency '000 currency
1.China Development Bank 12 December 2007 21 June 2012 USD Six-month LIBOR+90BP 60,000 388,296 - -
2.China Development Bank 12 December 2007 21 December 2011 USD Six-month LIBOR+90BP 50,000 323,580 - -
3.The Export-Import Bank of China 18 June 2007 18 December 2011 EUR EURIBOR+65BP 4,000 37,445 - -
4.The Export-Import Bank of China 18 June 2007 18 June 2012 EUR EURIBOR+65BP 4,000 37,445 - -
Total 786,766 -
(b) As at 30 June 2011, there was no overdue loan of non-current liabilities due within one year(2010:Nil).
232
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
13. LONG-TERM LOANS
(1) Long-term loans by categories:
2011.06.30 2010.12.31
RMB'000 RMB'000
Bank loans
-Credit loans 4,001,196 2,473,381
(2) The analysis of the Company’s long-term loans by currencies as follows:
Annual 2011.06.30 2010.12.31
interest rate Original Exchange Original Exchange
currency rate RMB currency rate RMB
Bank loans ’000 ’000 ’000 ’000
RMB 4.51%~5.95% 1,995,000 1.0000 1,995,000 - 1.0000 -
USD LIBOR+30~185BP 310,000 6.4716 2,006,196 370,000 6.5897 2,438,189
EUR EURIBOR+65BP - 4,000 8.7979 35,192
Total 4,001,196 2,473,381
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 (2010: Nil).
233
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
13. LONG-TERM LOANS (CONTINUED)
(3) As at 30 June 2011, the top four long-term loans (including all long-term loans) is as follows:
2011.06.30 2010.12.31
Original Original
Currency Currency
Leader Initial date Maturity date Currency Interest rate(%)
'000 RMB'000 '000 RMB'000
1.China Development Bank 12 December 2007 21 June 2013 USD Six-month LIBOR+90BP 110,000 711,876 110,000 724,867
2.The Export-Import Bank of China 1 February 2011 1 February 2014 RMB 4.51% 500,000 500,000 - -
3.The Export-Import Bank of China 20 January 2011 7 January 2014 RMB 4.51% 400,000 400,000 - -
4.The Export-Import Bank of China 15 June 2011 15 June 2014 RMB 4.51% 400,000 400,000 - -
5.China Development Bank 12 December 2007 21 December 2012 USD Six-month LIBOR+90BP 60,000 388,296 60,000 395,382
Total 2,400,172 1,120,249
As at 30 June 2011, there was no renewal of past due long-term bank loans which was include in the above long-term loans (2010:Nil).
234
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
14. BONDS PAYABLES
RMB'000
Balance at Additions Settlements Balance
the beginning during during at the end
Item of the year the period the period of the period
Medium Term Note -11 CIMC MTN1 - 3,987,276 - 3,987,276
Total - 3,987,276 - 3,987,276
(1) The analysis of the Company’s Bonds Payables is as follows:
RM B'000
Interest Interest
payable at accrued Interest payable at Balance at the
Final maturity Notional the beginning interest for paid during the end of the end of the
Item Face value Issue date date principal of the period the period the period period period
Medium Term Note - 4,000,000 4,000,000 - (12,724) - (12,724) 3,987,276
11 CIMC M TN1 23 May 2011 23 May 2016
Total 4,000,000 4,000,000 - (12,724) - (12,724) 3,987,276
15. DEFERRED TAX ASSETS AND LIABILITIES
(1) Deferred tax assets and liabilities after offsetting
RMB'000
Deferred tax Deductible/(taxable) Deferred tax
Deductible/(Taxable)
assets/(liabilities temporary difference assets/(liabilities)
temporary
)2011.6.30 2010.12.31 2010.12.31
Item difference2011.6.30
Deferred tax assets
Employee benefits payable 506,373 126,593 368,275 92,069
Movement for fair value of
111,962 27,991 137,402 32,977
financial assets held for
Subtotal 618,335 154,584 505,677 125,046
Offsetting amount (618,335) (154,584) (505,677) (125,046)
Net amount after offsetting - - - -
Deffered tax liabilities:
Movement for fair value of
financial assets held for (4,926) (1,234) (45,854) (9,383)
trading/derivative financial
Movement for fair value of
available-for-sale financial assets (670,776) (165,292) (723,531) (165,954)
charged to equity
Subtotal (675,702) (166,526) (769,385) (175,337)
Offsetting amount 618,335 154,584 505,677 125,046
Net amount after offsetting (57,367) (11,942) (263,708) (50,291)
As at 30 June 2011, there was no unrecognised deferred tax liabilities for the Company.
235
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
16. CAPITAL RESERVE
Balance at Additions Settlements Balance at
the beginning change in during during the end of
of the year functional currency the period the period the period
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Share premiums 212,656 - - - 212,656
Other capital reserves
-Property revaluation reserve 54,979 (11,225) - - 43,754
-Exchange reserve on foreign currency capital 861 (174) - - 687
-Donated non-cash assets reserve 108 (21) - - 87
- Net changes in fair value of available-for-sale
723,531 (36,940) - (15,815) 670,776
financial assets
-Deferred tax effect (165,954) 8,473 662 - (156,819)
-Amount of share-based payments charged to
26,083 - 50,639 - 76,722
equity
-Others - (567,890) - - (567,890)
Total 852,264 (607,777) 51,301 (15,815) 279,973
17. GAINS FROM CHANGES IN FAIR VALUE
from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Financial assets held for trading:
-Changes in fair value during the period (34,159) (20)
Including:Gains/losses from changes in fair value of
- -
derivative financial instrument
-Transfer to investment losses for derecognition of
- -
financial assets held for trading
Financial liabilities held for trading:
-Changes in fair value during the period 25,440 -
Including:Gains/losses from changes in fair value of
25,440 7,497
derivative financial instrument
Total (8,719) 7,477
236
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
18. INVESTMENT INCOME
(1) The analysis of the Company’s investment income is as follows:
from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Long-term equity investments in cost method 208,086 86,988
Gain on disposal of subsidiaries - 75
Investment gains on available-for-sale financial
3,343 -
assets
Gains on sale of held-for-trading financial assets 11,275 -
Gains on sale of available-for-sale financial
- 11,240
assets
Total 222,704 98,303
(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:
Investee from 1 January to 30 June 2011 from 1 January to 30 June 2010 Reasons for variances between two years
RMB'000 RMB'000
Dividend distributed from 1 January to 30
SCRC
113,471 86,988 June 2011 is more than that in 2010
No dividend distributed from 1 January to 30
XHCIMCS 79,718 - June 2010.
BOCM Schroder Stolt Fund No dividend distributed from 1 January to 30
Management 10,000 - June 2010.
No dividend distributed from 1 January to 30
SCRC 4,897 - June 2010.
Total 208,086 86,988
Note 1: There was no significant restriction on the remittance of investment income
to the investor
237
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
19. NON-OPERATING INCOME
(1) The analysis of the Group’s non-operating income is as follows:
Note from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Gains on disposal of fixed assets 15 -
Gains on disposal of intangible assets 593 21,553
Government grants (2) 578 7,709
Others - 252
Total 1,186 29,514
(2) Government grants
from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Financial subsidies 578 7,709
20. INCOME TAX
from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Current tax expenses for the period - -
Deferred taxation (37,687) (6,039)
Total (37,687) (6,039)
Reconciliation between income tax expenses and accounting profits is as follows:
238
XIII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
20. INCOME TAX (CONTINUED)
Item from 1 January to 30 June 2011 from 1 January to 30 June 2010
RMB'000 RMB'000
Profits before taxation 3,814 64,890
Expected income tax expenses at applicable tax
915 14,276
rates
Effect of tax rate change on deferred tax (912) (9,031)
Tax effect of non-taxable income (37,690) (11,284)
Income tax expenses (37,687) (6,039)
21. OTHER COMPREHENSIVE INCOME/ (LOSSES)
from 1 January to 30 June 2011 from 1 January to 30 June 2010
Item RMB'000 RMB'000
1.Gain/(losses) on available-for-sale financial assets (15,815) (233,278)
Less:Effect of income tax arising from available-for-sale
(662) (42,268)
financial assets
Amount recognised in other comprehensive income in
- 11,240
prior period transferred to profit and loss in current period
2.Effect of foreign exchange rate changes - (47,543)
Total (15,153) (249,793)
239
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
22. INFORMATION TO CHAS FLOW STATEMENT
(1) Supplement to cash flow statement:
from 1 January to 30 June from 1 January to 30 June 2010
RMB'000 RMB'000
1.Reconciliation of net profit to cash flow from
operatiing activities
Net profit 3,814 70,929
Add : Depreciation of fixed assets 8,069 5,600
Amortisation of intangible assets 412 545
Amortisation of long-term deferred expenses 842 1,330
(Gains)/losses on disposal of fixed assets, intangible
assets and other long-term assets (608) (21,553)
(Gains)/losses on changes in fair value 8,719 (7,477)
Financial expense 87,070 (12,658)
(Gains)/losses arising from investments (222,704) (98,303)
Expenses recognized by share-based payments 50,639 -
(Increase)/decrease in defered tax assets - (39)
Increase/(decrease) in defered tax Liabilities 38,350 (6,000)
(Increase)/Decrease in operating receivables (2,259,173) (25,588)
Increase/(decrease) in operating payables 96,757 (117,232)
Effect of foreign exchange rate changes - 43
Net cash outflows from operating activities (2,187,813) (210,403)
2.Net movement in cash and cash equivalents:
Closing balance of cash and cash equivalents 1,491,441 473,363
Less:Opening balance of cash and cash equivalents 417,461 137,680
Net increase of cash and cash equivalents 1,073,980 335,683
240
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
22. INFORMATION TO CHAS FLOW STATEMENT (CONTINUED)
(2) Cash and cash equivalents held by the Group is as follows:
from 1 January to 30 June from 1 January to 30 June 2010
RMB'000 RMB'000
1.Cash at bank and on hand
-Bank deposits available on demand 1,357,232 343,735
-Other monetary fund available on demand 134,209 73,726
2.Closing balance of cash and cash equivalents
1,491,441 417,461
available on demand
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
241
SUPPLEMENTARY INFORMATION
1. EXTRAORDINARY GAIN AND LOSS FOR THE PERIOD
Item RMB'000
Disposal of non-current assets 6,022
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) 83,625
Capital occupied interests from non-financial
enterprises charged into current profit and loss 2,184
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) (112,067)
Other non-operating income / expenses 11,153
Effect of income tax 2,285
Effect of minority shareholder equity (after tax) 16,143
Total 9,345
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:
RMB'000
Profit Equity
from 1 January to 30 June 2011 from 1 January to 30 June 2010 2011.06.30 2010.12.31
Amounts under PRC GAAP 2,807,629 912,556 18,143,875 16,223,057
Adjustments under IFRS GAAP: 2,745 341 (3,507) (3,950)
Others -
Amounts under IFRS GAAP 2,810,374 912,897 18,140,368 16,219,107
Adjustments include current year depreciation and amortisation of fixed assets and
intangible assets revaluated in previous years.
242
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:
RMB'000
Weighted average Earnings per share
Profit
return on net assets Basic earnings per Diluted earnings per
(%) share share
Profit attributable to ordinary equity shareholders 16.19% 1.0545 1.0545
Profit attributable to ordinary equity shareholders net of
extraordinary gain and loss 16.14% 1.0510 1.0510
243
Ⅶ. CONTENTS OF DOCUMENTS FOR REFERENCE
1. Semi-annual report with signature of chairman of shareholders.
2. Finanial report with the signature and seal of the legal representative、responsible
person in charge of accounting and accounting officer.
3. All the original document and the manuscript of the announcement disclosured in the
newspapers specified by the China Securities Regulatory Commission during the reporting
period.
4. Text of .
244
